Recently, I gave a brief presentation concerning various provisions of the California General Corporation Law that could apply to corporations incorporated outside of California. I emphasized that the CGCL defines the terms “corporation”, “domestic corporation”, “foreign corporation” and “foreign association” and that it is important to pay attention to these definitions when reading the CGCL.
I noticed the following description of California’s principal “pseudo-foreign” corporation statute in a recently filed registration statement: Section 2115(b) of the California Corporations Code imposes certain requirements of California corporate law on corporations organized outside California that, in general, are doing more than 50% of their business in California and have more than 50% of
I have often written about numerous provisions of the California Corporations Code that expressly apply to foreign corporations meeting specified tests. The most famous, but not the only, statute of this breed is Section 2115. Although Section 2115 entraps many foreign corporations, I continue to be surprised by corporations that mistakenly claim to be subject
The Ninth Circuit Court of Appeals’ recent holding in Sender v. Franklin Res., Inc., 2015 U.S. App. LEXIS 10113 (9th Cir. Cal. June 16, 2015) is reasonably clear and yet there is much about the case that puzzles me. The case involved the seemingly quixotic quest of Mr. Sender to obtain stock certificates that he allegedly
California continues to hemorrhage corporate charters to Delaware and Nevada. The most recent potential emigrant is SJW Corp. which filed this proxy statement last week seeking shareholder approval of a reincorporation from California to Delaware. Can California and other states stanch the flow by offering licenses only to domestic corporations? Surely, there must be some
California courts may exercise personal jurisdiction over nonresidents “on any basis not inconsistent with the Constitution of this state or of the United States”. Code Civ. Proc. § 410.10. Seventy years ago, Chief Justice Harlan Fiske Stone described the constitutional standard in terms of whether the out-of-state person had certain minimum contacts with the forum state such that the maintenance
The Opinions Committee of the Business Law Section of the California State Bar recently published a sample opinion for venture capital financing transactions. In a sad testament to the lowly status of the California General Corporation Law, the committee chose the model of a Delaware, not California, corporation issuing preferred stock. The sample opinion
Recently, I came across a prospectus that included a description of California Corporations Code Section 2115 under the caption “Description of Capital Stock”. The description began: We are a Delaware corporation, governed by the Delaware General Corporation Law; however, our headquarters, property and officers are located in California. Section 2115 of the California Corporations Code
Yesterday’s post mentioned the recent Delaware Supreme Court decision in United Techs. Corp. v. Treppel, 2014 Del. LEXIS 608 (Del. Dec. 23, 2014). The case involved an inspection demand under Section 220 of the Delaware General Corporation Law. The corporation sought to require the stockholder to agree to a confidentiality provision that essentially required that all
In United Techs. Corp. v. Treppel, 2014 Del. LEXIS 608 (Del. Dec. 23, 2014), the Delaware Supreme Court held that the Court of Chancery had authority to condition a stockholder’s inspection under Section 220 of the Delaware General Corporation Law upon the stockholder’s agreement that “any claim, dispute, controversy or causes of action . . .