California Corporations Code Section 204(a)(4) permits the articles of incorporation to include a provision limiting the duration of a corporation's existence to a specified date. I very seldom encounter such as provision in...more
In a recent post, UCLA Professor Stephen Bainbridge concludes: "And the law is that suits claiming woke directors breached their fiduciary duties by their decisions about how the corporation behaves in the political arena are...more
Under the California General Corporation Law, a shareholder whose shares are pledged is entitled to vote those shares until the shares have been transferred into the name of the pledgee. Cal. Corp. Code § 702(c). There are...more
Last week, I wrote about legislation, 2022 Cal. Stats. ch. 617, that among other things eliminated the word "executive" from the numerous sections of the California Corporations Code containing the phrase "principal executive...more
During the 2021-2022 legislative session, the California Secretary of State sponsored legislation, 2022 Cal. Stats. ch. 617, making numerous changes to the Corporations Code in anticipation of the implementation of its...more
It is sometimes said that California Corporations Code section 2116 "codifies" the internal affairs doctrine. See, e.g., Drulias v. 1st Century Bancshares, Inc., 30 Cal. App. 5th 696, 705, 241 Cal. Rptr. 3d 843, 851...more
In Chapter 9 of James Joyce's Ulysses, Stephen Dedalus proclaims "A man of genius makes no mistakes. His errors are volitional and are the portals of discovery". Alas, not every person filing a corporate record is a "man of...more
Section 800 of the California Corporations Code applies to actions brought in the name of any domestic or foreign corporation, aka derivative actions. It is similar, but not the same as, Delaware Court of Chancery Rule 23.1...more
As mentioned earlier this week, Nevada's regular legislative session ended on June 6. During the session, the legislature enacted, and the Governor approved, AB 126 which makes numerous changes to Nevada's business entity...more
Over the years, I have commented on the fact that the California Court of Appeal has yet to apply In re Caremark International Inc., 698 A.2d 959 (Del. Ch. 1996) to the directors of a California corporation. Last Friday,...more
On occasion, someone might perceive that they have been improperly appointed as a director or officer of a corporation. If this unfortunate circumstance occur, is there any mechanism for publicly disclaiming the...more
I have recently written about TripAdvisor's proposal to redomesticate, by conversion, from Delaware to Nevada. The first reason given for the move in TripAdvisor's proxy statement is saving money...more
The word "emoji" is the romanization of two Japanese words (絵 and 文字) that together mean picture character. Emojis essentially marry an ancient form of writing, pictography, to a modern technology, smart phones....more
I have a particular fondness for Thomas Wolfe because like him I lived in Asheville, North Carolina and later attended Harvard. In his masterwork, Look Homeward Angel, Wolfe writes about the fictional town of Altamont which...more
A little over a year ago, I wrote that California Superior Court Judge Terry Green had found that AB 979 facially violates the Equal Protection Clause of the California Constitution, Cal. Const. Art. I, § 7. Crest v....more
The California Corporations Code includes provides for the formation of corporations as well as limited liability companies. However, it does not provide for the formation of limited liability corporations. Oddly, however,...more
Last week, I wrote about a pending challenge to the proposed redomestications of TripAdvisor, Inc. and Liberty TripAdvisor Holdings, Inc. from Delaware to Nevada. The plaintiffs are claiming that these redomestications would...more
In Hyde Park Venture Partners Fund III, L.P. v. FairXchange, LLC, 2023 WL 2417273 (Del. Ch. Mar. 9, 2023), Vice Chancellor J. Travis Laster ruled that two investment funds were within the "circle of confidentiality" that...more
Earlier this month, TripAdvisor, Inc. filed preliminary proxy materials that include a proposal to redomesticate the company from Delaware to Nevada. Within days a lawsuit was filed in the Delaware Court of Chancery...more
The California General Corporation Law entitles directors in performing their duties to rely upon information, opinions, reports or statements of others. Cal. Corp. Code § 309(b). Does the statute protect a director who...more
Artificial intelligence (AI) has attracted a great deal of attention of late. Last week, for example, CNN headlined a recent story "Elon Musk warns AI could cause ‘civilization destruction’ even as he invests in it". If AI...more
The last several posts have been examining the definition, or lack thereof, of the term "officer". The term is widely used, but is not necessarily defined by in corporation laws. As noted in the first of these posts,...more
In yesterday's post, I posited that Delaware does and doesn't define "officer". For the proposition that Delaware defines the term, I cited Delaware's deemed consent statute - 10 Del. Code § 3114. That statute, however,...more
Yesterday's post discussed the meaning of the term "officer" under the California General Corporation Law. It may surprise no one that Delaware's statute, 8 Del. Code § 142, is different. Unlike Section 312 of the...more
The word officer is used widely in the law. For example, there are judicial officers, peace officers, and constitutional officers. Even lawyers are often described as "officers of the court". See, e.g., Hickman v. Taylor,...more