Officers And The Internal Affairs Doctrine

My guess is that most attorneys would say that the duty of an officer to the corporation are governed by the law of the state of incorporation under the “internal affairs doctrine”.  As explained by the U.S. Supreme Court, the “internal affairs doctrine” is a conflict of laws principle that “recognizes that only one State should

Overcoming A Securities Overissue

I like to remind my colleagues that California has two securities laws. Neither of these laws applies exclusively to corporations or other entities organized under California law.  The Corporate Securities Law of 1968, Cal. Corp. Code § 25000 et seq., is generally concerned with the offer and sale of securities in California.  The Uniform Commercial Code –

In California, A Snail Is Sometimes A Fish And A Goldfish Isn’t

With statutes, it can be dangerous to rely on plain meaning.  Most people, for example, would not consider an amphibian, such as a frog, or a mollusk, such as a snail, to be fish.  However, the California Fish & Game Code considers these and crustaceans (including crabs, lobsters, and barnacles) to be fish.  Oddly, however, the

Grammatical Gender And The General Corporation Law

Many, but not all languages, employ grammatical gender.  Anyone who has studied Spanish or German will know that grammatical gender is essential and can be unrelated to biological sex.  For example, el vestido is a masculine noun even though it denotes an article of clothing historically worn by women.  I still recall my High School Latin teacher explaining that even though a Roman legion was comprised of thousands of

Did You Ever Wonder Whether “Within” Might Be A Superfluous Pleonasm?

Suppose that you hold an option that must be exercised “within 30 days prior to the expiration of the option”.  Does this mean that you must exercise the option no later than thirty days before the expiration date or that you may exercise the option at any time within the 30 days before the expiration

California Enacts Change-in-Control Benefits For Grocery Workers

Last week, Governor Jerry Brown signed AB 359 (Gonzalez) that will impose a worker retention requirement when there has been a change in ownership or control of grocery establishments.  In general, the bill will require the successor grocery employer to retain eligible grocery workers for a 90-day period.  After that period expires, the successor grocery employer will

Nevada Enacts Provisions Permitting Ratification Of Corporate Acts

Etymologically, one might view the meaning of “ratify” as to make as one had thought.  It is derived from two Latin words – ratus (the past participle of the verb meaning to think) and facere (the infinitive of the verb meaning to make).  Two years ago, Delaware added two statutes intended to facilitate ratification of corporate

California Amends Code To Authorize Worker Cooperatives

I’ve written in the past about various efforts to create a workers cooperative law here in California.  See Are Worker Cooperatives A “Sea Water Fish In A Freshwater Pond”? and In The Year 2525, If Man Is Still Alive, If Woman Can Survive, They May Find Limited Liability Worker Cooperatives.  This summer, the California legislature enacted legislation, AB

Court Poised To Decide Whether Directors Are Agents

Not quite four years ago, I wrote about whether directors are agents.  The post was prompted by then Chancellor William B. Chandler III’s assertion: This is because the board’s power – which is that of an agent’s with regard to its principal – derives from the shareholders, who are the ultimate holders of power under

California, Nevada and 38 Other States Have These, But Delaware Doesn’t

According to the National Center for State Courts, forty states, including California and Nevada, have established intermediate courts of appeal.  California’s Court of Appeal was established by a constitutional amendment adopted by the voters in November 1904.  Originally, the Court of Appeal was comprised of three districts, with the First District sitting in San Francisco,