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Dorsey & Whitney LLP

Minnesota to Permit Ratification and Validation of Defective Corporate Acts

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On April 30, 2025, Governor Tim Walz signed H.F. No. 747 into law. H.F. No. 747 amends several provisions of the Minnesota Business Corporation Act (Chapter 302A of the Minnesota Statutes)....more

Allen Matkins

Less Cumbrous Conversions In Sight For California Corporations

Allen Matkins on

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

The General Corporation Law's Filioque

Allen Matkins on

The Nicene Creed as approved by the Council of Constantinople in 381 A.D. included the following: "τὸ ἐκ τοῦ πατρὸς ἐκπορευόμενον (who proceeds from the father).  About 200 years later at the Third Council of Toledo, the...more

Allen Matkins

Did The Ninth Circuit Find That Intent Matters In Determining Whether A Partnership Had Been Formed?

Allen Matkins on

Earlier this week, I wrote about a recent article by Professor Douglas K. Moll that argues that treating contractual disclaimers of partnership as dispositive is inconsistent with modern statutes, including the Revised...more

Allen Matkins

When A Business Trust Might Also Be A Foreign Corporation

Allen Matkins on

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

Wilson Sonsini Goodrich & Rosati

California Adopts Ratification and Verification Statute for Corporations

Throughout the life cycle of a company, and especially during the leaner early start-up stages, corporate actions that are defective due to failures to obtain the correct board or shareholder votes, errors in the approval...more

Allen Matkins

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

Allen Matkins on

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

Allen Matkins on

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

Allen Matkins on

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

What's Justice And Reasonableness Got To Do, Got To Do With It?

Allen Matkins on

Section 310 of the California Corporations Code concerns two different types of contracts or transactions.  The first concerns a contract or other transaction between the corporation and one or more of its directors, or...more

Allen Matkins

Where Have All The Articles Gone?

Allen Matkins on

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

A Preference For Minority Rule?

Allen Matkins on

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

Must A Nonprofit Abnegate Private Gain?

Allen Matkins on

The California Corporations Code includes provisions governing a wide variety of nonprofit organizations.  However, the "Big 3" categories of nonprofit corporations are the public benefit, mutual benefit and religious...more

Allen Matkins

Can A Corporation Pledge Its Own Shares?

Allen Matkins on

A "pledge" is a bailment for security.   It is effected by delivery of possession of the pledged property, although title remains in the pledgor.  Hartford v. State Bar,  50 Cal. 3d 1139, 791 P.2d 598, 270 Cal. Rptr. 12...more

Allen Matkins

Section 2115's Peculiar Consolidation Rule

Allen Matkins on

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

Here Is Something A Board Can Do Under Nevada, But Not California, Law

Allen Matkins on

The private corporation laws of both California and Nevada both authorize the formation of committees.  Cal. Corp. Code § 311 & NRS 78.125.  There are some differences, however.  California requires that any committee of the...more

Allen Matkins

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

Allen Matkins on

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

Inspection When The Subsidiary Is A Limited Liability Company

Allen Matkins on

Section 1601 of the California Corporations Code grants any shareholder the right to inspect the accounting books, records, and minutes of board and shareholder meetings for a purpose reasonably related to the shareholder's...more

Allen Matkins

Is Compliance With California's Female Quota Law Voluntary?

Allen Matkins on

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

Can A Corporation Change Its Board Size In Proprio Motu?

Allen Matkins on

As noted in yesterday's post, Secretary of State Shirley N. Weber is asking U.S. District Court Judge R. Gary Klausner to dismiss a challenge to California's board quota statutes.   In her motion to dismiss, the Secretary of...more

Allen Matkins

Why California Requires Notice Of Rights That Shareholders May Not Have

Allen Matkins on

Dissenters' rights under California's General Corporation Law do not exist unless there are "dissenting shares", a term defined in Section 1300(b) of the California Corporations Code.  In order to qualify as "dissenting...more

Allen Matkins

Court Denies Common Law Inspection Rights To Beneficial Owners

Allen Matkins on

Yesterday's post discussed the Court of Appeal's holding in Ramirez v. Gilead Sciences, Inc., 2021 Cal. App. LEXIS 558, that a beneficial owner has no right to inspect corporate records under California Corporations Code...more

Allen Matkins

Court Rules An LLC To Be An Unincorporated Association, But Is That Correct?

Allen Matkins on

Cal. Serv. Emples. Health & Welfare Trust Fund v. Greenbox Servs. LLC, 2021 U.S. Dist. LEXIS 93477 involved a plaintiff's attempt to serve a limited liability company.   After thrice failing to serve personally the LLC's...more

Allen Matkins

Senator Jones Introduces Bill To Provide Cures For Incurable Corporate Acts

Allen Matkins on

Some corporate actions defy a cure.  Other states, notably Delaware and Nevada, have taken action to provide cures for the incurable.  Last year, the Corporations Committee of the Business Law Section of the California...more

Allen Matkins

Court Holds That Corporation Need Not Verify Its Answer

Allen Matkins on

Section 446 of the California Code of Civil Procedure concerns the verification of pleadings.  Subdivision (a) provides that an answer to a complaint generally must be verified in either of two following circumstances...more

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