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California Corporations Code

Allen Matkins

The One Where Everyone Got The Statute Wrong

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In yesterday's post, I discussed the Court of Appeal's unpublished opinion in Milks v. Affirmed Techs., LLC,  2024 WL 1502944 (Cal. Ct. App. Apr. 5, 2024), reh'g denied (Apr. 30, 2024).  That case involved claims against a...more

Allen Matkins

A California LLC Endures Forever, A Nevada LLC Not So Long

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California's Revised Uniform Limited Liability Company Act endows limited liability companies with a certain level immortality.  Corporations Code Section 17707.06(a) provides...more

Allen Matkins

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

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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

Allen Matkins

The Importance Of Calling

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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

Allen Matkins

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

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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

Allen Matkins

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

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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

Allen Matkins

Is This Statute The Most Anodyne And Meaningless Provision Of The California Corporations Code?

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In 1989, the California legislature added Section 14200 to the California Corporations Code...more

Allen Matkins

What About Calexit?

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My last several posts have discussed the current debate on the phenomenon referred to as "DExit", which refers to Delaware corporations that choose to reincorporate in other states.  In a recent article, Professor Bainbridge...more

Allen Matkins

Is A Notitia Congregationis Valid In California?

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California is a very linguistically diverse state with an estimated 200 plus different languages being spoken.  Within my own family, English is not the primary language spoken at home by any of my grandchildren.  Yet, the...more

Allen Matkins

Directors Removing Directors

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Seven years ago, I addressed the question of whether the board of directors of a California corporation could remove a fellow director...more

Allen Matkins

Don't Be Caught Inquorate! Some Key, But Subtle, Differences In California's And Nevada's Board Quorum Requirements

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California Corporations Code Section 307(a)(7) provides that a "majority of the authorized number of directors constitutes a quorum for the transaction of business".  Thus, if the authorized number of directors is 7 and there...more

Allen Matkins

Selling Unqualified Securities?  There's Are/Were Apps For That

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If someone told my younger self that someday people would take photographs with their phones, I would have wondered where you would insert the film.*  Today, the question would be "What is film?"  When I headed the Department...more

Allen Matkins

Beneficial Ownership Reporting May Soon Be Coming To California With A Brobdingnagian Price Tag!

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Beginning January 1, 2024, many companies became subject to the beneficial ownership reporting requirements of the Corporate Transparency Act.   The Financial Crimes Enforcement Network (FinCEN) estimated that the total costs...more

Allen Matkins

Federal Judge Finds Exception To Exclusivity Of California Dissenters' Rights Remedy To Be "Likely" Even Though The Statute Says...

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California Corporations Code Section 1312(a) provides: No shareholder of a corporation who has a right under this chapter...more

Allen Matkins

Is There A California Connection To Kirschner?

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Last summer, bankers and the lawyers who advise them breathed a collective sigh of relief when the Second Circuit Court of Appeals  upheld a U.S. District Court's opinion that notes in a bank syndicated loan were not...more

Allen Matkins

Not Every California Corporation Is Governed By The California General Corporation Law

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The California General Corporation Law is part of the California Corporations Code, but not every corporation incorporated in California is formed or governed by the General Corporation Law.   In fact, the Corporations Code...more

Allen Matkins

What Egregious Error Have Courts Made Nearly 9,000 Times (And Counting)?

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In a recently published article, Professors Samantha J. Prince & Joshua P. Fershée focus on the propensity to conflate corporations with limited liability companies...more

Allen Matkins

Do E-mail Exchanges Constitute A Meeting Of The Board?

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I recently discussed whether chat messages constitute "minutes" of a meeting.  A related question is whether emails constitute a meeting....more

Allen Matkins

Judge Rules That A Front For Mexican Cartel Had The Capacity To Protect Its Own Interests

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California Corporations Code Section 25118(b) provides an exemption from the state's usury limitations for loans.  The exemption is subject to several conditions.  One condition is the existence of either a preexisting...more

Allen Matkins

Reverse Stock Splits And The California Corporate Securities Law

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Meredith Ervine recently wrote about reverse stock splits and Nasdaq listed issuers.  A reverse stock split is the "go to" solution for many listed issuers whose share prices fall below the minimum continued stock exchange...more

Allen Matkins

Judge Rules Plaintiff Lacked Standing To Claim Damages Whilst Still Holding Securities

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Part 5 of the California Corporate Securities Law of 1968 sets forth a number of fraudulent and prohibited practices.  One of these practices is to "to offer or sell a security in this state, or to buy or offer to buy a...more

Allen Matkins

California Legislator Proposes To Enhance Criminal Fines For California, But Not Delaware, Business Entities

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In February of this year, California Assembly Member Jesse Gabriel introduced a bill making certain technical, nonsubstantive changes to a provision of the Penal Code concerning the removal of prison inmates for court...more

Allen Matkins

Does The State Make Or Beget Corporations?

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To non-lawyers, a "person" is usually understood to refer to a human being.  At law, entities such as corporations and limited liability persons are often endowed with personhood.  See, e.g., Cal. Corp. Code § 18 ("'Person'...more

Allen Matkins

Can Any Superior Court Judge Access Your Church's Books?

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The California Corporations Code allows for the incorporation of a corporation sole by the bishop, chief priest, presiding elder, or other presiding officer of any religious denomination, society, or church, for the purpose...more

Allen Matkins

Bill Would Vest Secretary Of State With Broad Powers To Cancel Business Entities

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Last month, California State Senator Monique Limón introduced a bill, SB 1168,  that would endow the California Secretary of State with the power to cancel the articles of a domestic corporation or the filing of a statement...more

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