A Miscellany For The Head Of The Year
Unincorporated Associations Earlier this week, I wrote this post about California’ unincorporated association law. An unincorporated association is a group of two or more “persons” (Section 18030) joined by mutual consent for a common lawful purpose, whether organized for profit or not. Corporations Code Section 18035(a). Joint tenancy, tenancy in common, community property or other form or property tenure does Read more...
Does California’s Anti-Waiver Statute Void Choice Of Forum Agreements?
California Corporations Code Section 25701 is derived from Section 410(g) of the Uniform Securities Act (1956). Section 25701 voids any condition, stipulation or provision purporting to bind any person acquiring any security to waive compliance with any provision of the Corporate Securities Law or any rule thereunder. Does this statute prevent investors from agreeing that disputes will be decided by courts in other states? Earlier Read more...
Court of Appeal Decides Buy-Out Questions Under Re-RULPA
California’s Uniform Limited Partnership Act of 2008, commonly known as Re-RULPA, established a mechanism by which partners can avoid a judicial dissolution of the partnership by purchasing for cash the partnership interest owned by the partners initiating the judicial dissolution proceeding. Cal. Corp. Code § 15908.02. This procedure was modeled after the buy-out procedures in the Beverly-Killea Limited Liability Company Read more...
Thinking About Joining A Club? You May Want To Consider These Corporations Code Provisions First
In Democracy in America, Alexis de Tocqueville devoted an entire chapter to the propensity of Americans to form associations. In particular, he observed: The Americans make associations to give entertainments, to found seminaries, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; in this manner they found hospitals, prisons, and schools. If it is proposed to Read more...
Without Knowing The Reasons, Issuers Can’t Take Account Of Say-on-Pay Votes
The recently completed proxy season has yielded a virgin crop of shareholder “say-on-pay” votes, as required by Section 951 of the Dodd-Frank Act. Although not required by Congress, the Securities and Exchange Commission amended Item 402(b)(1) of Regulation S-K to require an issuer to address in its Compensation Discussion and Analysis whether and, if so, how its compensation policies and decisions have taken into Read more...
Confession Is Good For Soul And Equilibrium But Maybe Not Justice
Recently, I read this article about how the Department of Labor, the Internal Revenue Service and states are targeting pay practices of home builders. This got me thinking about how industry enforcement sweeps can be a very effective enforcement tool. Suppose, for example, an enforcement sweep involves only two firms that do not communicate with each other. If both firms Read more...
The Missing Link In LLC Formations
When a corporation is formed under the California General Corporation Law, an incorporator (or incorporators) signs the initial articles of incorporation and files them with the California Secretary of State. Corporations Code § 200(a). The articles may, but are not required to, name the initial directors. Corporations Code § 204(c). If directors are named, then they proceed with the necessary steps Read more...
Why Corporations Receive Shareholder Proposals
Recently, I spoke at an ”essentials” program presented by the Society of Corporate Secretaries and Governance Professionals. I was asked to speak on “what is corporate governance”? In my view, practitioners are so caught up in the details of corporate governance that they can easily lose sight of why people are arguing about corporate governance. Like many, I trace the origins of Read more...
Should A Proxy Card Specify A Choice Of Law?
One of the jobs of an inspector of election is to determine the validity and effect of proxies. See, e.g., Cal. Corp. Code § 707(b) and 8 Del. Code § 231(b)(2). However, the validity and effect of proxies will depend upon state law. I’m guessing that many people assume that the law of the state of incorporation governs proxies. However, I’m Read more...
