California And Nevada Secretaries Of State Propose Rule Changes
California Secretary of State Debra Bowen recently gave notice of proposed amendments to the regulations governing the Victims of Corporate Fraud Compensation Fund. California corporations and foreign corporations qualified to transact intrastate business here pay an annual $2.50 fee that is deposited into the VCFC Fund. In 2004, the Secretary of State adopted regulations governing the the VCFC Fund. According Read more...
Nevada New Entity Filings Are Up From Prior Quarter
Each quarter, the Nevada Secretary of State releases a quarterly business report. The report includes, among other things, data concerning the number of new entity filings with that office. The report for the first quarter of 2012 discloses that the overall number of new entity filings is nearly the same as in the first quarter of 2011. However, the number Read more...
Initiative Seeks To Dehumanize Corporations In California
Are corporations “persons”? The California Corporations Code answers this question quite directly in Section 18 which defines “person” as including corporations and natural persons. The Corporate Securities Law of 1968 goes even further – defining “person” to mean an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint stock company, a trust, an unincorporated organization, Read more...
Shareholder Inspection Rights – Another Nevada “Advantage”?
Thanks to Kevin LaCroix’s The D&O Diary, I was alerted to a recent article by Boris Feldman, a member of Wilson Sonsini Goodrich & Rosati, P.C., in Palo Alto, California discussing developments in class action and other shareholder litigation. Among other things, Boris notes that litigation under Delaware’s stockholder inspection statute, Section 220, has “caught fire” in the last year. He Read more...
Nevada Enacts New Default Standard For Calling Into Board and Stockholder Meetings
Formerly, Nevada permitted members of boards of directors and board committees to participate in meetings by means of a telephone conference or similar methods of communication. Stockholders were likewise permitted to participate in stockholder meetings. Both statutes included the requirement that all persons participating in the meeting had to be able to “hear each other”. California imposes a similar condition on director participation in meetings by Read more...
When Shall/Will/Must/May We Meet Again?
Lawyers are very fond of using the word “shall” in articles of incorporation, bylaws and agreements. Using “shall” instead of “will” seems to add a certain level of formality (or perhaps pretension). It may also be intended to convey the meaning that something must happen and not simply that it may happen in the future. Indeed, there is an etymological basis for a Read more...
Failure To Determine Board Meeting Formalities Leads To Six Figure Court Sanctions Against Attorney
The fundamentals of corporate action can seem about as interesting as flossing. Yet, the failure to attend to either is likely to result in unpleasant consequences as one lawyer recently discovered in Winterton v. Humitech of No. Cal., LLC, 2011 Bankr. LEXIS 4164 (9th Cir. BAP 2011). The case began with a lawsuit in California. That lawsuit resulted in one Read more...
Common Shares Are Commonplace And, In California, Well Defined
Corporate lawyers are very familiar with the terms “common” and “preferred” in describing classes of corporate stock. The use of these terms is so habitual that many lawyers may be unaware that the California legislature has taken the time to define them. ”Common shares” are shares that “have no preference over any other shares with respect to distribution of assets Read more...
Court Can’t Appoint Unwilling Director To Defend Post Winding-Up Claims
The directors of a Nevada corporation become trustees upon its dissolution. NRS 78.590(1). The creditors or stockholders may apply to the district court either to continue the directors trustees [sic] in office or appoint one or more persons to act as receivers. NRS 78.600. What happens when a director has resigned and is unwilling to continue service? This was the question addressed Read more...
