News & Analysis as of

Corporations Code

Plaintiffs File Amended Complaint Against Yahoo! But Is Something Missing?

by Allen Matkins on

Last spring, a derivative suit was filed in California Superior Court against certain of current and former directors and officers of Yahoo!, Inc. alleging breach of fiduciary duty in connection with the company's widely...more

Does The Sheriff Need A Permit To Sell Shares?

by Allen Matkins on

Last week, I wrote about a recent Court of Appeal decision allowing for the possibility that a sale of shares at a sheriff’s sale could amount to conversion. Duke v. Superior Court, 2017 Cal. App. LEXIS 1116. A fundamental...more

Did The Legislature Grant A License To Lie To The Cannabis Industry?

by Allen Matkins on

An entire division of California’s Business & Professions Code is devoted to a single plant genus – Cannabis. The official name of the division is the “Medicinal and Adult-Use Cannabis Regulation and Safety Act” aka the...more

Would Glass Lewis Have Anything To Do If It Were Consistent?

by Allen Matkins on

If there is a foolish consistency might there also be a foolish inconsistency? Compare the following two statements by Glass, Lewis & Co., LLC in its 2018 Proxy Paper Guidelines...more

Of Touting, Tweets and Advertising

by Allen Matkins on

Last month, the Securities and Exchange Commission issued this public statement warning about touting of securities by celebrities...more

Home On The Grange

by Allen Matkins on

As a child, I was always puzzled when I saw a Grange Hall. Was Grange a misspelling of “range”? If not, what was a “grange”? Only later did I learn that “grange” was derived from the Latin word, granum, meaning a seed. ...more

Can A Corporation Be An Officer?

by Allen Matkins on

William & Mary Law Review recently published Professor Stephen Bainbridge’s article, Corporate Directors in the United Kingdom. The abstract begins withe following observation...more

FTB Publishes Disinformation About Corporations

by Allen Matkins on

Recently, I happened across a summary of the “key features” of a corporation on the California Franchise Tax Board’s website. Recognizing that it is always a challenge to summarize accurately complex legal matters, I do beg...more

Shareholders Sues Officer Of Delaware Corporation In California State Court, Should Texas Law Apply?

by Allen Matkins on

Our November 16, 2017 post discussed one aspect of the California Court of Appeal’s opinion in Central Laborers’ Pension Fund v. McAfee, Inc., 2017 Cal. App. LEXIS 1008. The case arose from Intel Corporation’s acquisition of...more

California Securities Law Claims Founder On Personal Jurisdiction

by Allen Matkins on

Establishing personal jurisdiction may seem mundane, but without it a plaintiff may soon find itself out of court, as did the plaintiff in Marshall v. Galvanoni, 2017 U.S. Dist. LEXIS 185530....more

Judge Rules Internal Affairs Doctrine Governs California Insider Trading Statute

by Allen Matkins on

As I have mentioned on numerous occasions, California has its own insider trading statute – California Corporations Code Section 25402. The statute is included in the California Corporate Securities Law of 1968. In general,...more

Corp Fin’s New Rule 701 C&DI And California’s Compensation Plan Exemption

by Allen Matkins on

Yesterday, Broc Romanek reported that Corp Fin has published a new C&DI addressing the permissibility of electronic delivery of disclosures under Rule 701(e). Readers will recall that Rule 701 is an exemption from the...more

Promoters And California’s Limited Offering Exemption

by Allen Matkins on

I was admitted to the bar the same year that the legislature completed its parturition of a new limited offering exemption under the Corporate Securities Law of 1968 – California Corporations Code Section 25102(f). AB 1518,...more

What Every Delaware Unicorn Needs To Know About The California General Corporation Law

by Allen Matkins on

Recently, I came across a list of unicorns. These are private companies with valuations of $1 billion or more. I can’t vouch for the accuracy of the list, but I did recognize many of the names. Many of the companies on the...more

New York Judge Considers Meaning Of “Voting Power” In California Contract

by Allen Matkins on

Chapter 1 of the California General Corporation Law includes a large number of definitions, beginning with “Acknowledged” (Section 149) and ending with “Written, in writing” (Section 195). It is easy to gloss over these...more

Professor Bainbridge Precises Corporate Philanthropy

by Allen Matkins on

Earlier this week, UCLA Law School Professor Stephen Bainbridge precised the question of corporate philanthropy. He notes “Virtually all states have adopted statutes specifically granting corporations the power to make...more

California And Virtual Annual Meetings

by Allen Matkins on

Seventeen years ago, Delaware amended Section 211 of the Delaware General Corporation Law to permit corporations to hold electronic meetings of stockholders. 72 Del. Laws, c. 343, §§ 7, 8. In the ensuing years, an...more

What Kind Of California Corporation Must Include A Salary Limitation In Its Articles Or Bylaws?

by Allen Matkins on

I suspect that at least a few California corporate lawyers are unaware of a provision in the California Corporations Code requiring the articles or bylaws of certain corporations to contain a limitation on the salaries paid...more

Filing Statements Of Information Online

by Allen Matkins on

Last June, the California Secretary of State’s office announced bizfile California, which it described as “a new online portal to help businesses file, search, and order business records quickly and conveniently from one...more

Nevada Legislature Reinforces Internal Affairs Doctrine and Emphasizes Transparency in 2017 Business Law Amendments

The 79th Session of the Nevada Legislature enacted several meaningful amendments to Title 7 of the Nevada Revised Statutes (NRS), which governs business entities, including corporations, limited liability companies and...more

Section 25401 – Does No One Know Its History?

by Allen Matkins on

A few years back, I criticized the amendment of California Corporations Code Section 25401 to conform to Rule 10b-5 under the Securities Exchange Act of 1934. See California Creates Complete Chaos By Rewriting Anti-Fraud...more

Binary Options And Securities Regulation

by Allen Matkins on

Recently, the North American Securities Administrators Association (NASAA) updated and expanded its 2015 advisory warning investors about online binary option schemes. NASAA offers the following explanation of “binary...more

California Bill May Spur Rewriting Gender Boilerplate

by Allen Matkins on

On the penultimate day of the current session, the California legislature passed SB 179 (Atkins & Wiener). If signed into law by Governor Brown, this bill would enact the California Gender Recognition Act. In general, SB...more

Nevada Favors New York Over Delaware Precedent For SLC Review

by Allen Matkins on

Nevada law endows a board of directors “full control over the affairs of the corporation”. NRS 78.120(1). This control is subject only to such limitations as may be provided by NRS chapter 7, or the articles of...more

This California Court Held That A Limited Partnership Is No Person

by Allen Matkins on

In preceding posts, I commented on the multifarious definitions of “person” in the Securities Act of 1933, the Exchange Act of 1934 and various laws within the California Corporations Code. As noted, the Corporations Code’s...more

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