Some Publicly Traded Corporations Have The Right To Remain Silent When They Are Publicly Held

Allen Matkins
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Allen Matkins

Readers of this space will know that the California's board diversity statutes apply to "publicly held corporations" and that California's corporate disclosure law applies to "publicly traded corporations".   Although these two terms are maddeningly similar, they have distinct definitions.  See Cal. Corp. Code §§ 301.3(f)(2), 301.4(e)(2), 1502.1(b)(1), & 2117.1(b)(1).   Publicly held corporations incorporated under the California General Corporation Law or qualified to transact intrastate business here must file an annual corporate disclosure statement (Form SI-PT) with the California Secretary of State's office.   The instructions make it clear that a publicly traded corporation that is not a publicly held corporation is not required to respond to Question #5 in the form (see below).   That instruction is appropriate as far as it goes, but fails to address those publicly held corporations that are not subject to California's board diversity statutes because their principal executive offices are not located here.  Not too long ago, I asked the Secretary of State's office whether these corporations were required to respond to the board diversity questions on the form and was advised that responses to Question #5 was voluntary for these corporations as well.  

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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