But Wait, California May Require Even More In Annual Reports To Shareholders
Yesterday’s blog discussed California’s requirement that many domestic and foreign corporations send financial statements to their shareholders. If a corporation has 100 or more holders of record (determined in accordance with Section 605), then the annual report must also provide a brief description of the following: Any transaction during the previous fiscal year involving an amount in excess of $40,000 to which the Read more...
California Requires Many Foreign Corporations To Send Annual Financial Statements To Shareholders
California is a net exporter of corporate charters, but it remains home to many corporations. As a result, the California Corporations Code has a preternatural concern with foreign corporations. One example is Section 1501(a) which requires the board to cause an annual report to be sent to shareholders. This report must include a balance sheet as of year end and Read more...
How Many Ways Can The SEC Describe A “Year”?
It’s not easy to write regulations and lawyers can be a hypercritical group. Nonetheless, the Securities and Exchange Commission’s rules can be maddingly inconsistent. As one small example, I offer Item 405 of Regulation S-K and its many references to “year”. In general, the purpose of Item 405 is to require disclosure of late filers under Section 16(a) of the Securities Read more...
Some Observations On Indemnification Provisions In Articles Of Incorporation
Over the years, I’ve read many articles of incorporation that include provisions relating to indemnification of officers, directors and others. Today’s post will cover a few questions and observations that have occurred to me over the years. I’ll cover more of these “Why is there air?” type questions in future posts. Vice Admiral James Stockdale Asked A Very Good Question: Read more...
Can It Be So? Court Holds That A Nebraska Corporation Is Not A Corporation
Section 2010(b) California Corporations Code provides that no action or proceeding to which a corporation is a party abates by dissolution of the corporation. The statute imposes no time limit on suing dissolved corporations for pre-dissolution activities. In Robinson v. SSW, Inc.,209 Cal. App. 4th 588 (2012), the Court of Appeal considered whether Corporations Code Section 2010 applies to a dissolved Nebraska corporation. Read more...
DOC Calls It Fair
Notes on the Facebook fairness hearing At the conclusion of a hearing held yesterday morning, the Department of Corporations approved the acquisition of Instagram, Inc. by Facebook, Inc. Technically, the Department approved the issuance of a permit to offer and sell the securities. The hearing was was held pursuant to Corporations Code Section 25142. See A Program Guide To The Facebook Read more...
“For Now”, Hiring An Employee And Leasing An Office Doesn’t Necessarily Add Up To Transacting Intrastate Business
An Illinois corporation hires an employee, leases office space in California. A dispute then arises between the corporation and its California employee. The employee sues and the corporation counterclaims. The employee moves to dismiss the counterclaims based on the corporation’s failure to qualify to transact intrastate business. Who wins? If your guess is the employee, guess again. California Corporations Code § Read more...
California Is Ground Zero For Forum Selection
In a forthcoming paper to be published in the Delaware Journal of Corporate Law, former SEC Commissioner Joseph A. Grundfest concludes that the forum selection is a peculiarly California-Delaware pas de deux: The largest percentage of publicly traded entities with intra-corporate forum selection provisions, 31.6% of the sample (42 of 133), are headquartered in California, and all of these entities designate Delaware Read more...
California Bill Threatens Market Exception For Dissenters’ Rights
The California legislature is taking its summer recess and will reconvene on August 6. Joint Rule 51(b)(2). It will then sit until August 31 which is the last day for either the Senate or the Assembly to pass bills. Cal. Const. Art. IV, §10(c) and Joint Rule. 61(b)(17). One bill that has been somewhat of a sleeper is AB 1680 authored Read more...
