Occasionally, a corporation may find itself with no directors and no management. Yet, the corporation does not cease to exist. One might wonder what use can there be in a corporation deprived of head and limb. In Melendrez v. Superior Court, 2013 Cal. App. LEXIS 343 (April 30, 2013), the corporation was maintained as a shell through which personal injury Read more...
The PUHCA, Chenery & The Run For The Roses
Earlier this week, I mentioned the former Public Utility Holding Company Act (aka PUHCA). Although it was repealed several years ago, the PUHCA remains important as the legal substrate upon which the famous, and still important, Chenery cases were decided. Trading by Insiders, But No Insider Trading The Chenery cases involved the SEC’s authority under the PUHCA to approve utility reorganizations. In the Read more...
Before This Corporation Was Formed, This Contract Knew It
In Section 4.13 of Bishop & Zucker on Nevada Corporations and Limited Liability Companies, we discuss who may be liable on pre-incorporation contracts. In Hotel Last Frontier Corp., v. Universal Match Co., 358 P.2d 896 (Nev. 1961), the Nevada Supreme Court held that a corporation could be held liable to a seller of matchbooks when it signed a purchase agreement Read more...
No Happy Trails For Victorville Tax Increment Bond Financing
For more than thirty years, I’ve driven by, but never stopped at, the Roy Rogers and Dale Evans Museum in Victorville, California. The museum eventually relocated to Missouri but reportedly did not survive for long. Despite this notable defection, Victorville has grown remarkably in the last three decades. Unfortunately, it now finds itself accused of a variety of securities law Read more...
Why Incorporation May Be Unconstitutional
Section 25018 of the California Corporations Code provides a definition of several of the better known federal securities laws: “Securities Act of 1933,” “Securities Exchange Act of 1934,” “Public Utility Holding Company Act of 1935,” “Investment Advisers Act of 1940,” and “Investment Company Act of 1940” mean the federal statutes of those names as amended before or after the effective Read more...
The California Taxpayer and Shareholder Protection Act of 2003
Ten years ago, there was concern about so-called “expatriate corporations”. These were corporations that incorporated in foreign jurisdictions to minimize their tax liability. In reaction to this phenomenon, the legislature added The California Taxpayer and Shareholder Protection Act of 2003 to the Public Contract Code. 2003 Cal. Stats. ch. 657. In general, this act prohibits a state agency from contracting with Read more...
Thoughts of Tsukiji, the California Constitution and the Corporations Code
Lately, I’ve been reading Theodore C. Bestor’s, Tsukiji: The Fish Market at the Center of the World. Thus, it is no surprise that my thoughts of late have been on piscatorial matters. For example, I’ve always been encouraged by the fact that the California Constitution explicitly guarantees the right to fish. It’s right there in the Declaration of Rights (Article Read more...
Bill Proposes Significant Changes To Finance Lenders Law
If you are in the business of making loans in California, there’s a good chance that you need a license. Some lenders are licensed under the Real Estate Law while others are licensed under laws governing banks, credit unions or residential mortgage lending. If a lender doesn’t fall within any of these categories, that lender may be subject to the Read more...
Law Mandates CalPERS/CalSTRS Support For Shareholder Resolutions Supporting Religious Minorities
In 1999, the legislature enacted SB 105 (Burton) which obligates CalPERS and CalSTRS to support, whenever feasible, shareholder resolutions at domestic and international corporations in which those funds have invested that are designed to encourage, among other things: Increased representation of individuals from underrepresented religious groups in the work force, including managerial, supervisory, administrative, clerical, and technical jobs; and Banning of provocative Read more...
Defining “Qualified Client” – Uff Da!
Corporations Code Section 25234 generally prohibits an investment adviser registered in California to be compensated on the basis of a share of capital gains. This prohibition is analogous to the prohibition found in Section 205(a)(1) of the Investment Advisers Act of 1940 (IAA). Congress included this prohibition because it was believed that performance fees might induce advisers in search or higher Read more...
