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California Corporations Code

Allen Matkins

Is A Stake An Unincorporated Association?

Allen Matkins on

I have devoted several posts over the years to California's Unincorporated Association Law. Although many houses of worship are incorporated, some are not.  Even amongst incorporated religious groups, there can be sub-groups...more

Allen Matkins

If The Shares Of A Chinese Company Are Delisted, What Happens To Trading In California?

Allen Matkins on

Yesterday's Wall Street Journal includes a story about the possible delisting of shares of Chinese companies.  Shares of companies that are listed, or authorized for listing, on a national securities exchange (or tier or...more

Patton Sullivan Brodehl LLP

LLCs Can Assert Offensive Claims Against Members

In “business divorce” litigation involving LLCs, it is common to see a disgruntled LLC member asserting claims against the LLC’s manager. Depending on the type of harm alleged, those claims might be asserted directly (by the...more

Patton Sullivan Brodehl LLP

The “Minority Interest Discount” in LLC Statutory Buyouts

A prior post — Statutory LLC Buyouts – “Fair Value” vs. “Fair Market Value” — covered an unpublished opinion filed in 2021 addressing the difference between the statutory buyout processes governing California corporations and...more

Allen Matkins

If A Picture Is Worth A Thousand Words, Should Bylaws Have Pictures?

Allen Matkins on

Nearly 13 years ago, I ruminated on the question of whether corporations are required to have bylaws.  As far as California is concerned, there is no requirement that a corporation in fact have bylaws, although virtually all...more

Allen Matkins

Does The Stock Market Believe That California's Board Diversity Mandates Enhance Firm Value?

Allen Matkins on

In 2018 and 2020, California enacted laws mandating that publicly held corporations (as defined) having their principal executive offices in California have specified minimum numbers of directors who are female and from...more

Allen Matkins

So You Want To Sue "The Board", Is That Even Possible?

Allen Matkins on

A little more than eight years ago, I wrote about U.S. District Court Judge Ronald M. Whyte's ruling that a corporate board of directors lacks the capacity of being sued.  Theta Chi Fraternity, Inc. v. Leland Stanford Junior...more

Allen Matkins

Is A DAO A General Partnership, Unincorporated Association, Or Nothing At All?

Allen Matkins on

According to the Securities and Exchange Commission, a DAO is a "term used to describe a 'virtual' organization embodied in computer code and executed on a distributed ledger or blockchain".  That does not answer the...more

Allen Matkins

What If A Creditor Refuses To Just Take The Money?

Allen Matkins on

When a California corporation has been completely wound up without court proceedings, a majority of the directors then in office must sign and verify a Certificate of Dissolution which must be filed with the California...more

Allen Matkins

Diversity May Be Hard To Find When It Comes To LLCs

Allen Matkins on

Professor Eugene Volokh recently highlighted a decision by U.S. District Judge Brian Cogan taking a plaintiff to task for inadequately pleading diversity jurisdiction when the defendant is a limited liability company. ...more

Allen Matkins

Why Was 25% Chosen As California's Jurisdictional Threshold For Recapitalization Transactions?

Allen Matkins on

California's securities qualification requirements and exemptions depend upon whether the offer and sale of securities is an issuer transaction, a change in rights, exchange, merger, or conversion transaction, or a nonissuer...more

Allen Matkins

What About Acts By Members That Are Not Apparently For Carrying On In The Ordinary Course Of An LLC's Business?

Allen Matkins on

California's version of the Revised Uniform Limited Liability Company Act provides that in the case of a member managed limited liability company provides...more

Allen Matkins

Does Combining Legal And Secretarial Roles Reduce Risk?

Allen Matkins on

The California General Corporation Law requires that a California corporation have a secretary.  Cal. Corp. Code § 312(a)(2).  The CGCL, however, says nothing about a chief legal officer.  Indeed, many corporations do not...more

Allen Matkins

The One Where Everyone Got The Statute Wrong

Allen Matkins on

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

Allen Matkins on

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

Allen Matkins on

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

Allen Matkins on

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

Allen Matkins on

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?

Allen Matkins on

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?

Allen Matkins on

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

Allen Matkins

What About Calexit?

Allen Matkins on

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?

Allen Matkins on

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

Allen Matkins on

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

Allen Matkins on

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

Allen Matkins on

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

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