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CALIFORNIA CORPORATE & SECURITIES LAW

What is a Venture Capital Fund? (Part II)

The Securities and Exchange Commission has established a procedure for commenting on rule proposals even before the proposals have been made.    I’ve already taken advantage of this procedure to submit this comment on with respect to the definition of “venture capital fund”.  This process didn’t go well for me as the SEC somehow lost my comment.  However,…

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What if There is No Deficiency?

Yesterday, Broc Romanek reported that the staff of the SEC’s Division of Corporation Finance has issued a new Compliance & Disclosure Interpretation addressing Section 413(a) of the Dodd-Frank Act.  Section 413(a) requires the SEC to adjust the definition of “accredited investor” in its rules under the Securities Act of 1933.  In the first four years…

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Shareholder Approval of Political Contributions – Coming Soon?

On June 22, 2010, I posted an item concerning AB 919 (Nava), a California bill that would require corporations to report political contributions to shareholders and make refunds to those shareholders who don’t agree.  In today’s Proxy Season Blog, Therese Doucet writes about similar legislative efforts in New York, Massachusetts and even in Congress.  Broc…

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“‘Tis Well Consented” Vel Non

On July 19, 2010, I discussed action by written consent of the board pursuant to Corporations Code Section 307.  The statute is remarkably silent on some key points.  For example, while the statute clearly requires that consents be in writing (see Sections 8 and 195), the statute does not specifically require that the consents be…

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A Rara Avis Indeed, The Capital Access Company

More than a decade ago, the California legislature added the Capital Access Company Law to the Corporations Code, Stats. 1998, c. 668 (S.B. 2189).  The intent of the law was to take advantage of an exemption to the Investment Company Act of 1940 that Congress added as part of the National Securities Markets Improvement Act…

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Closing the Barn Door . . .

Yesterday, I wrote about Section 413 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“DF Act”).  You can watch President Obama’s explanation of Wall Street reform here.  As a horse owner, I’m sensitive to expressions involving horses.  Thus, it occurs to me that in some ways the exclusion of an investor’s primary residence…

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Section 307 – No More Sunset

Some readers may have noticed that there are currently two Section 307s in the Corporations Code.  One version of Section 307 provides in subdivision (d) that it remains in effect only until January 1, 2011.  This is commonly referred to as a “sunset provision”.   Subdivision (d) of the other Section 307 provides that it…

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Wasting Trees in California

More than a decade ago, the Securities and Exchange Commission adopted rule amendments that allow for the delivery of a single set of proxy materials to shareholders who share a single address.  This is often referred to as “householding”.  Many publicly traded companies have relied upon these rules to reduce their costs of printing and…

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Will DOC Employees be Reduced to Minimum Wage?

As noted in a post last Friday, employees at the Department of Corporations have returned to working on the first three Fridays of each month.  This is good news for state employees because they will now get paid for those days.  However, this good news is tempered by the fact that Governor Schwarzenegger has ordered…

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Happy New Year!

California began a new fiscal year on July 1 without a budget (again).   The California Constitution (Art. IV, Sec. 12(c)(3)) is very clear:  “The Legislature shall pass the budget bill by midnight on June 15, of each year.” In order for the state to spend money, two conditions must be satisfied.  First, there must be legal…

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