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CALIFORNIA CORPORATE & SECURITIES LAW

A Field Guide To Distinguishing Directors From Officers

A colleague who is not a corporate lawyer recently noted that in common parlance directors and officers are often simply lumped together as the “same thing”.   He suggested that I devote a post to a primer on the differences between directors and officers.  As requested, here is my take on the subject: Directors can not act alone…

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California Lags Behind The SEC In Permitting Testing Of The Waters In Regulation A Offerings

In 2015, the Securities and Exchange Commission adopted amendments to Regulation A and other rules and forms to implement Section 401 of the Jumpstart Our Business Startups (JOBS) Act.  One significant enhancement to Regulation A was to permit issuers and persons acting on their behalf to “test the waters” with all potential investors and to use solicitation…

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Nevada’s Constitutional Limitation On Shareholder Liability

Article 8, Section 3 of the Nevada Constitution provides: Dues from corporations shall be secured by such means as may be prescribed by law; Provided that corporators in corporations formed under the laws of this State shall not be individually liable for the debts or liabilities of such corporation. Remarkably, the Nevada Supreme Court has…

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California Proposes To End Bylaw Amendment Reviews

Credit Unions got their start in Nineteenth Century Germany.  In 1909, Roman Catholic textile workers opened the first credit union in the United States, St. Mary’s Cooperative Credit Association (later, renamed La Caisse Populaire Ste.-Marie).  At first, the credit union operated out of the home of its first president, Joseph Boivin.  Today, that building is the site of America’s Credit Union Museum. …

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California Supreme Court Affirms Novel M&A Tax

Suppose Mr. Henry owns all of the outstanding shares of a Virginia corporation that owns all of the issued and outstanding shares of a Massachusetts corporation that owns, among other things, real property in Los Angeles, California.  Suppose further that Mr. Henry sells his shares in the Virginia corporation to a buyer in New York and that the transaction is…

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Even If Enacted, The CHOICE Act May Not Repeal The SEC’s Pay Ratio Rule

While prognosticators continue to place odds on whether the Financial CHOICE Act of 2017, H.R. 10, will be enacted, many commentators are claiming that it will “repeal” the Securities and Exchange Commission’s pay ratio rule.  Even if H.R. 10 is enacted, I’m not so sure that it would “repeal” the pay ratio rule. It is certainly true…

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Is A Racial Or Ethnic Group A “Person”?

Yesterday’s post concerned the U.S. Supreme Court’s holding in Matal v. Tam, 2017 U.S. LEXIS 3872 (June 19, 2017) that the “disparagement clause” of the Lanham Act violates the Free Speech Clause of the First Amendment.  As far as most legal commentators were concerned, that was the one and only headline holding of the case.  Before addressing…

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Incorporating Under A Disparaging Name

In Matal v. Tam, 2017 U.S. LEXIS 3872 (June 19, 2017), the U.S. Supreme Court found the “disparagement clause” of the Lanham Act violates the Free Speech Clause of the First Amendment.  The “disparagement clause” prohibits the registration of trademarks that may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons,…

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The Taxpayer Transparency And Fairness Act Is Anything But

Recently, I wrote about the stealth with which the California legislature enacted AB 102, which it ironically named the Taxpayer Transparency and Fairness Act of 2017.  Having been birthed in opacity, AB 102 will operate with even less transparency. The bill transfers certain of the responsibilities of the State Board of Equalization to a newly…

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Does Work Product Belong To The Lawyer Or The Law Firm?

California has codified the attorney work product doctrine in Section 2018.030 of the California Code of Civil Procedure.  That statute establishes two categories of protected work product.   Under subdivision (a), a “writing that reflects an attorney’s impressions, conclusions, opinions, or legal research or theories is not discoverable under any circumstances”.  Under subdivision (b), other work product of an…

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