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CALIFORNIA CORPORATE & SECURITIES LAW

SEC Alleges LLC Names Were “Deceptively Similar”, But What Would The California SOS Do?

Yesterday, the SEC announced that it had filed a complaint against a securities professional alleging that he had defrauded “two institutions he solicited to invest in a shell company he controlled whose name was deceptively similar to that of a legitimate private equity fund.”  (The SEC likes to say that it “charges” defendants, but it…

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Blasphemous Corporate Names

Yesterday’s post considered the question of whether the California Secretary of State could refuse to accept offensive corporate names.  Blasphemous corporate names constitute a subset of offensive names because they are offensive to believers.  Blasphemous corporate names are also disparaging names because they denigrate religious beliefs or the deity or deities involved. UCLA Law School Professor Eugene…

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Can The Secretary Of State Reject Disparaging Business Entity Names?

Section 2(a) of the Lanham Act bars the Patent and Trademark Office from registering scandalous, immoral, or disparaging marks. 15 U.S.C. § 1052(a).  However, the United States Court of Appeals for the Federal Circuit sitting en banc recently held that the disparagement provision in Section 2(a) is unconstitutional because it violates the First Amendment to the U.S. Constitution.  In…

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Will You Be Gulled By This Notice?

Some Nevada corporations have been receiving the above notice and paying a $150 fee to the Division of Corporate Services.  According to the Nevada Secretary of State: This is not an official notice from the Secretary of State’s office.  Nevada entities are not required to regularly provide to the Secretary of State shareholder information or…

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Nevada To Allow Corporations To Stiff Charon

Unsuccessful corporations often fall into an eternal desuetude.  Having nothing, no one wants to pay the Secretary of State to complete their dissolution.  Because they don’t file the required annual lists and pay the annual fees, their charters are revoked.   They then become like those poor souls with no coin for Charon, they cannot complete the journey to complete…

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June 30 Deadline Looms For Foreign Lending Institutions

California Corporations Code Section 191(d) provides that a “foreign lending institution” will not be considered to be “doing, transacting or engaging in business” in California solely by reason of engaging in specified categories of activities.  Those activities include, for example, the ownership of loans and the enforcement of loans.  Based on this statute, some foreign lending…

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Chairman, Chairwoman, or Chair?

To someone who is not familiar with the English language, many words must seem bizarre.  One such word, is “chairman”.  Does this refer to a chair made into a man or a man made from a chair?  What should be made of a law that solemnly proclaims “All references in this division to ‘chairman’ shall be…

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Victims Of Corporate Fraud Compensation Fund

In the waning days of the 2001-2002 legislative session, then Assemblymember Kevin Shelley gutted and amended AB 55. As introduced, AB 55 would have amended the Elections Code. Instead, AB 55 became the vehicle for the enactment of the deeply flawed California Corporate Disclosure Act, Cal. Corp. Code § 1502.5.   AB 55 also created The…

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Some LLC Names Slip Past California’s Statutory Ban

The California Revised Uniform Limited Liability Company Act explicitly bans a number of different words from being included in LLC names: The name shall not include the words “bank,” “trust,” “trustee,” “incorporated,” “inc.,” “corporation,” or “corp.” and shall not include the words “insurer” or “insurance company” or any other words suggesting that it is in…

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Governor Signs Bill Narrowing Grounds For Business Entity Reinstatement

Over the years, I’ve received several calls asking what can be done when a business entity has been wrongfully terminated.  Answering this question became a bit easier in 2006 with the enactment of AB 2588 (Runner) which authorized a court to reinstate a business entity for any of the following three reasons: The factual representations…

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