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CALIFORNIA CORPORATE & SECURITIES LAW

Can A Corporation Be An Officer?

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

In the United States, state corporation law uniformly provides that only natural persons may serve as directors of corporations.

I haven’t surveyed every state, but I concur as to California and Nevada.  See Cal. Corp. Code § 164 (“‘Directors’ means natural persons designated in the articles as such or elected by the incorporators and natural persons designated, elected or appointed by any other name or title to act as directors, and their successors.”) and NRS 78.115 (“The business of every corporation must be managed under the direction of a board of directors or trustees, all of whom must be natural persons who are at least 18 years of age.”).

What about officers?  The answer in Nevada is clear.  NRS 78.130(3) provides “All officers must be natural persons and must be chosen in such manner, hold their offices for such terms and have such powers and duties as may be prescribed by the bylaws or determined by the board of directors. Any natural person may hold two or more offices.”  I have always assumed that the same is true for California, but the General Corporation Law is less explicit.  First, it does not define the term “officer” as it does “director”.  Second the statute, Cal. Corp. Code § 312, specifying what officers a corporation must, or may, have does not expressly state that these officers must be natural persons. In fact, the statutory use of the term “person” is ambiguous the Corporations Code defines “person” as including a corporation as well as a natural person.  Cal. Corp. Code § 18.

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