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California May Soon Define "Corporation" To Include That Are Not Corporations

The California Corporations Code is a misnomer.  While the Corporations Code does in fact govern corporations, it also governs a wide variety of unincorporated entities, including general partnerships, limited partnerships,...more

Another Delaware Publicly Traded Company Proposes A Nevada Move

Last week, Chromocell Therapeutics Corporation filed preliminary proxy materials that included a proposal to reincorporate in Nevada.  Rather than convert, the company is proposing to effect the reincorporation by means of a...more

Is Your Directors And Officers Liability Coverage Illusory?

Many corporations pay significant amounts for directors and officers liability policies.  Commonly referred to as D&O policies, these policies usually involve three sides.  Directors and officers are likely to have the most...more

After More Than A Year, Questions Remain Regarding Caremark and Officers

Last year, Vice Chancellor J. Travis Laster famously held that officers could be subject to liability under the Caremark doctrine.  In re McDonald’s Corp., 289 A.3d 343 (Del. Ch. Jan. 26, 2023).    The Caremark doctrine...more

Still More On Whether The SEC Exceeded Its Authority In Adopting Rule 21F-17

Yesterday's post again discussed whether the Securities and Exchange Commission exceeded its authority in adopting Rule 21F-17(a), which provides...more

SEC Settles More Rule 21F-17(a) Cases, But Has It Exceeded Its Authority?

In a blog post this morning, Liz Dunshee notes that the Securities and Exchange Commission has recently announced the settlement seven more cases involving Rule 21F-17(a), which provides...more

California Court Upholds Daily Transaction Limits On Bitcoin ATMs

A year ago, Governor Gavin Newsom signed two bills,  Assembly Bill 39 and Senate Bill 401, that created the California Digital Financial Assets Law.  SB 401 added Section 3902 to the Financial Code to prohibit an operator of...more

Does The SEC's Jurisdiction Really Extend To Any Person?

Last week, the Securities and Exchange Commission announced that it had settled charges against a broker-dealer and two investment advisers for impeding their clients from reporting securities law violations to the SEC. ...more

Looking For A Drink At 3 A.M.? Soon, You May Find One Here

California law provides that any licensee of the Department of Alcoholic Beverage Control or agent or employee of the licensee, who sells, gives or delivers to any person any alcoholic beverage between the hours of 2 a.m. and...more

Foreign Corporations Filing Actions In California May Be Required To Post Bonds When Domestic Corporations Are Not

Under Section 1030 of the California Code of Civil Procedure, a defendant may at any time apply to the court by noticed motion for an order requiring the plaintiff to file an undertaking to secure an award of costs and...more

California Caps Legislative Session By Sending A Weird Hedge Fund Bill To The Governor For A Possible Signature

Last month, I commented on the "weird" definition of "hedge fund" in AB 3129 (Wood).  On the last day of the current session, the legislature passed the bill.  It is now on Governor Newsom's desk....more

When Two Corporate Laws Diverge, Does Choosing One Make All The Difference?

In a new article, professor of law Wendy Gerwick Couture aims for "a fuller understanding of Nevada corporate law, both substantively and theoretically, as compared with Delaware corporate law".  For the title and them of her...more

The Importance Of Calling

The validity of a board meeting hinges on three things - a quorum, notice and call.  Many lawyers focus on the first two and may overlook the third.   For California and Nevada corporations, the question of who may call a...more

Why Taking A Doughnut, A Danish, and A Bagel Might Or Might Not Invite Gluttony - How Should The List Of Exceptions In Section...

Yesterday's post concerned the exemption from the qualification requirement of the California Corporate Securities Law for most changes in the rights, preferences, privileges, or restrictions of outstanding securities found...more

Is A Change In Transfer Restrictions In A Shareholder Agreement Subject To Qualification?

A recent post discussed whether amending a shareholders agreement is subject to qualification under the California Corporate Securities Law of 1968.  For the purpose of that discussion, it is important to recognize that not...more

Another Delaware Corporation Announces Stockholder Approval Of Nevada Reincorporation

I continue to be on the lookout for Delaware corporations that have made the decision to reincorporate in Nevada.  Last Friday, Elevai Labs Inc. filed a preliminary information statement with the Securities and Exchange...more

California Court Opines On Fiduciary Duties Of LLC Members And Covenants Not To Compete

Yesterday, the Fourth District Court of Appeal issued a noteworthy opinion addressing at least two significant questions.  Samuelian v. Life Generations Healthcare, LLC, 2024 WL 3878448....more

Does Amending A Shareholders Agreement Require Qualification Under The California Corporate Securities Law?

A significant amount of background is required to answer the question of whether amending a shareholders agreement is subject to qualification under the California Corporate Securities Law.  As an initial matter, the CSL...more

California's Legislature Mulls Weird Definition Of "Hedge Fund"

As the California legislature approaches its final recess of the current session, it is continuing to move AB 3129 (Wood), a bill that would according to the bill's digest "require a private equity group or a hedge fund, as...more

Is Nevada's Corporate Law "One Of The Most Comprehensive And Progressive State Corporate Acts"?

In May, I took note of this Form 8-K filed by P.A.M. Transporation Services, Inc. announcing board approval of a plan to convert the company's state of incorporation from Delaware to Nevada.  The company has now filed...more

Is Due Process Denied When The DFPI Isn't Required To Read Or Become Familiar With The Record?

In  S.E.C. v. Jarkesy, 2024 WL 3187811 (June 27, 2024), the United States Supreme Court held that when the Securities and Exchange Commission seeks civil penalties against a defendant for securities fraud, the Seventh...more

Can The President Fire Chairman Gensler?  Professor Bainbridge Is "Pretty Sure" That He Can

In a recent post, Professor Stephen Bainbridge expounds on the question of whether the President may fire Chairman Gary Gensler.  He concludes...more

Cave Delaware Aut Bene Dormi Delaware?

I began writing about Nevada Corporate Law more than three decades ago with an article entitled "The Nevada Corporation: Is It A Good Bet?".  14 CEB California Business Law Reporter 259 (1992).  In the ensuing decades, I have...more

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