In California practice, a merger reorganization will typically involve two agreements - one short, the other not. The Corporations Code refers to the shorter agreement as the "agreement of merger". At a minimum it must...more
The Fifth Amendment to the United States Constitution provides that “no person shall be … deprived of life, liberty, or property without due process of law.” A similar due process mandate is imposed on the states by the...more
There are potentially a number of ramifications to classifying a board member as employee, including whether the corporation may be entitled to obtain a workplace violence restraining order petition pursuant to Section 527.8...more
The plaintiffs in Chan v. ArcSOFT, Inc., 2023 WL 2788585, believed that they had been misled in a buyout of their shares and so they sued the company and its Chief Executive officer. One of the plaintiffs, Marc Chan, did not...more
The California legislature meets biennially. Cal. Const. Art. IV, § 3(a). Because this is an odd-numbered year, we are currently in the first year of the session. Thursday, September 14, 2023 will be the last day for each...more
Michael Jackson died in 2009. After his death, two plaintiffs filed complaints against two corporations of which Michael Jackson was the sole shareholder. The trial court sustained the plaintiffs' demurrer setting up...more
Section 309 of the California Corporations Code specifies the standard of performance applicable to directors in performing their duties as directors of corporations organized under the California General Corporation Law. ...more
The possible application of California's Corporate Securities Law of 1968 may not be the first thing that comes to mind when amending charter documents. However, Section 25120 of the California Corporations Code makes it...more
A neophyte to corporate law might ask where is it written in the California General Corporation Law that directors and officers are fiduciaries. The answer is nowhere. In fact, the phrase "fiduciary duty" appears only once...more
One popular theory of the corporation is that it is a nexus of contracts. As Frank Easterbrook and Daniel Fischel pithily pronounced "Corporations are enduring (relational) contracts." F. Easterbrook and D. Fischel, The...more
In February, I wrote that Assembly Member Timothy S. Grayson was taking another run at enacting a Digital Financial Asset Law. His bill, AB 39, has steadily progressed and is now pending in the Senate. According to the...more
Early this week, the California Department of Financial Protection and Innovation issued desist and refrain orders alleging violations by the following individual and entities...more
Law Professors Samantha Prince and Joshua Fershee have recently completed an article on the importance of not conflating limited liability companies with corporations. In An LLC By Any Other Name Is Still Not A...more
Nearly a dozen years ago, I wrote a lengthy post on the meanings of "shall" and "will". In that post, I noted that "shall" is sometimes used, particularly in Bylaws, to mean "may". I did not consider whether "may" could...more
Yesterday's post mentioned mentioned Chapter 17 of the California General Corporation Law which governs service of process in addition to the provisions of the California Code of Civil Procedure. Corporations Code Section...more
The California Code of Civil Procedure sets forth the general rules governing the service of summons. Cal. Code Civ. Proc. §§ 415.10 - 415.95. Chapter 17 of the General Corporation Law adds to these provisions. In some...more
In this post published yesterday, John Jenkins discussed a proposed Nasdaq rule regarding notification and disclosure of reverse stock splits. In light of John's post, I thought a brief refresher on California's treatment of...more
As has been discussed in previous posts, Part 5 of the Corporation Securities Law of 1968 establishes violations and Part 6 prescribes remedies. For example, Corporations Code Section 25401 in Part 5 provides, in part, that...more
Last May, I wrote with some incredulity about AB 853 (Maienschein) which is ostensibly directed at mergers and acquisitions of grocery and drug stores. The bill, however, appears to be progressing toward enactment. As a...more
In 2022, the California legislature amended several provisions of the California Revised Uniform Limited Liability Company Act, including Section 17702.01 which lists what must be included in the articles of organization of a...more
Historically, a meeting necessarily meant a physical encounter. Indeed, the word "meet" can be traced to the Anglo Saxon word metan which means to encounter or meet. So it was that shareholder meetings involved the presence...more
In April, I reported on SB 54 (Skinner), a bill that would have required institutional Investors, securities and real estate brokers, and others to report on the diversity status of "founding teams". At the time, I...more
The Securities and Exchange Commission yesterday adopted new rules requiring registrants to disclose on Form 8-K any cybersecurity incident which they determine to be material. The new Item 1.05 requires description of the...more
UCLA Law Professor Stephen Bainbridge recently answered the question of whether shareholders may remove a corporation's chief executive officer and chairman of the board from a Delaware perspective. Like Delaware, California...more
The California Revised Uniform Limited Liability Company Act defines a "distribution" as a transfer of money or other property from a "limited liability company" (Cal. Corp. Code § 17701.02(k)) to another "person" (Cal. Corp....more