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Corporate Counsel General Corporation Law

Wilson Sonsini Goodrich & Rosati

Significant Amendments to the Delaware General Corporation Law Are Set to Become Effective

On August 1, 2024, an extensive and important set of amendments to the Delaware General Corporation Law (the DGCL) will become effective. The amendments, which will apply both prospectively and retrospectively, were largely...more

Allen Matkins

Is Falsifying A Business Record A Crime In California?

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As has been widely reported today, a New York Grand Jury has indicted former President Donald J. Trump on multiple counts of "falsifying business records" in violation of New York Penal Law Section 175.10.  That statute...more

Allen Matkins

Dissenters' Rights And Conversions

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Chapter 13 of the California General Corporation Law provides for statutory dissenters' rights.  In general, dissenters' rights are rights granted to shareholders to require the corporation to buy their shares for cash at an...more

Allen Matkins

In This Case It May Have Been Better To Have Never Registered At All

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Section 2105 of the California Corporations Code prohibits a foreign corporation from transacting intrastate business in California without having first registered with the California Secretary of State.  A foreign...more

Allen Matkins

Less Cumbrous Conversions In Sight For California Corporations

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Conversions will soon be less cumbrous for California corporations.  Current law authorizes various types of California business entities to convert in a one-step process into business entities organized under the laws of...more

Allen Matkins

When A Business Trust Might Also Be A Foreign Corporation

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I recently wrote about the California Supreme Court's decision not to decide whether a bumblebee is a fish.  It there fore may be no surprise that in California a business trust may be a foreign corporation.  Corporations...more

Pillsbury - Policyholder Pulse blog

Strengthening Corporate Officer Protection: Delaware’s Updated Corporate Exculpation Law and Its Impact on D&O Liability Insurance

As the preferred place of incorporation for most U.S. companies, Delaware has long been a leader in the development of statutory and common law on corporate governance. In keeping with this role, the Delaware legislature...more

Allen Matkins

Alleged Corporate Murder Merits A Jury Trial

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The California Constitution declares that trial by jury is an "inviolate right" that "shall be secured to all".  Cal. Const. Art. I, §16.  Despite this expansive language, this right in the civil context is generally limited...more

Allen Matkins

Does A California Corporation Have The Power To Indemnify Corporate Employee Benefit Plan Fiduciaries?

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Section 317 of the California Corporations Code authorizes, limits and  in one circumstance even mandates the indemnification of a person by reason of the fact that the person is, or was, an "agent" of the corporation.   The...more

Allen Matkins

Court Finds No Right To Prejudgment Interest In Buy-Out Of Shares

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Section 1800 of the California Corporations Code authorizes specified persons to file a complaint for involuntary dissolution of the corporation based on specified grounds.   Section 2000 provides an "escape hatch" by which...more

Allen Matkins

A Key Difference Between Corporate And LLC Buyout Rights That You May Have Missed

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Both the California General Corporation Law and the California Revised Uniform Limited Liability Company Act include provisions granting shareholders/members the right to avoid a dissolution of the corporation/LLC under...more

Allen Matkins

Where Have All The Articles Gone?

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The term "article" has an interesting etymology.  It is derived (via Latin) from the Ancient Greek word, ἄρθρον, meaning a bodily joint.  Articles, like joints, connect things together....more

Allen Matkins

Are Your Bylaws Demode?

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While the California General Corporation Law contemplates that corporations will have bylaws but does not explicitly require that they do.  In my experience, it is extremely rare to come across a corporation that has not...more

Allen Matkins

A Preference For Minority Rule?

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Section 204(a)(9) of the California Corporations Code allows the articles of incorporation to include a provision requiring the approval of the shareholders (Section 153) or the approval of the outstanding shares (Section...more

Allen Matkins

Why A River Runs Through Every Derivative Action

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I was perplexed by Judge Cindee F. Mayfield's repeated references to "derivate claims" in a recent unpublished opinion - JBB Investment Partners v. Fair, Cal. Ct. of Appeal Case No. No. A160098 (June 9, 2022).  Was this a...more

Allen Matkins

Section 2115's Peculiar Consolidation Rule

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Section 2115 of the California Corporations Code famously purports to impose numerous provisions of the General Corporation Law on foreign corporations if two tests are met.  One of these tests, the so-called "business...more

Allen Matkins

California Bill Aims To End The Asymmetry Of Corporate Time

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For the last eight years, Delaware corporations have been been able to escape the "asymmetry of time" through either ratifying past corporate acts or obtaining validation from the Delaware Court of Chancery.  Del. Gen. Corp....more

Allen Matkins

In This Case, Bylaws By Any Other Name Are Still Bylaws

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The California General Corporation Law authorizes the adoption of bylaws, but does not purport to define the term.  Cal. Corp. Code § 110.  The Nonprofit Corporation Law defines "Bylaws" not by description but by stating what...more

Allen Matkins

When Merging What Must The Board And Shareholders Approve?

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The California General Corporation Law recognizes three subsets of a "reorganization" - a "merger reorganization", an "exchange reorganization", or "sale-of-assets reorganization".  Cal. Corp. Code § 181.  Chapter 11 of the...more

Allen Matkins

Must Board Meeting Notices Be Ingenuous?

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Yesterday's post briefly discussed former Chancellor William Chandler's ruling in Fogel v. U.S. Energy Systems, Inc., 2007 Del. Ch. LEXIS 178.  In finding that no valid board meeting had occurred, Chancellor Chandler stated...more

Allen Matkins

Some Information That You Won't Find On The Secretary Of State's Website

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The California Secretary of State's website provides certain information with respect to a wide range of domestic and foreign entities registered to transact intrastate business, including corporations, limited liability...more

Allen Matkins

Why No Change Is Not An Option

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California permits foreign and domestic corporations to file a statement of statement of "No Change" (Form SI 550NC) if the following three conditions are met...more

Allen Matkins

No File Number, No Filing

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Several provisions of the California General Corporation Law that require filing with the Secretary of State specify that the filed instrument must include the Secretary of State's file number.  E.g., Cal. Corp. Code §§...more

Allen Matkins

Is Compliance With California's Female Quota Law Voluntary?

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California's female director quota law was on trial last week.  According to Brian Melley, a reporter for the Associated Press, a witness from the Secretary of State's office testified "It’s required but there’s no penalty,...more

Allen Matkins

Another Example Of California Imposing Its Will On Foreign Corporations

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As has been discussed many times in this space, the California General Corporation law purports to govern foreign corporations in a number of respects.  One such provision is Section 208 of the Corporations Code which apples...more

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