The Problem Of The Deceased Incorporator (Part II) And A Greek Remark

Yesterday, I wrote about the unfortunate situation of an incorporator dying before the articles of incorporation are filed.  In response, at least two people asked about a different situation.  What do you do when the incorporator dies after the articles are filed and before taking action to appoint directors (assuming that the initial directors are not

What Happens When The Incorporator Dies?

One or more natural persons may form a corporation under the California General Corporation Law “by executing and filing articles of incorporation”.  Cal. Corp. Code § 200(a).   A corporation’s existence begins upon the second of these acts – the filing of the articles.  Cal. Corp. Code § 200(b).  What happens if a natural person executes articles of

For Foreign Corporations Doing Business In Nevada, It’s Publish Or Perish

I like newspapers, especially the hard copy versions.  I subscribe to three and usually buy a fourth during the course of the day.  Nevada also seems to like newspapers because for more than a century it has imposed a publication requirement on foreign corporations doing business in the state.  The required contents of the annual statement

How Nevada Surpasses Delaware In Limiting The Liability Of Directors And Officers

It is hard to believe that it has been more than a quarter century since the Delaware Supreme Court dropped the bombshell of Smith v. Van Gorkom, 488 A.2d 858 (Del. 1985).  Suddenly, incorporation in Delaware no longer looked like a good idea (at least from the perspective of a director).  At the time, Chicago

The Latin Lawyer – How To Write Like Cicero!

Our legal vocabulary is overladen with Latin words and phrases.  Often, I find that they are misspelled.  Today’s blog is devoted to some of the more common errors that I’ve noticed over the years. De Minimus.  Many Latin words end in “us”.  “Minimus”, meaning the smallest, is one such word.  In Section 202 of the Sarbanes-Oxley Act (P.L. 107-204), Congress

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

Use A Form S-8, Go To Jail! (Really)

One might not expect that filing a registration statement on Form S-8 could result in a criminal conviction.  However, that is what happened to the CEO and CFO of a small public company.  They were both convicted of selling securities without registration under the Securities Act of 1933. A company required to file reports with the Securities and Exchange

1 For 3 Million Reverse Split Fraud Claim Survives Motion To Dismiss

Nancy Wojtas at Cooley LLP alerted me to an interesting ruling case decided last week by the U.S. District Court for the Eastern District of New York, Gardner v. Major Auto. Cos., 2012 U.S. Dist. LEXIS 118191 (E.D. N.Y. Aug. 21, 2012). According to a complaint, Bruce Bendell was the Chairman, Chief Executive Officer, and Chief

No Surprises Here – California Court Won’t Enforce Non-Compete

Employers like covenants not to compete; California doesn’t.  Anyone who doubts these two propositions should read the opinion issued last Friday by the Fourth District Court of Appeal in Fillpoint, LLC v. Maas, 2012 Cal. App. LEXIS 914 (Aug. 24, 2012). The facts of the case are relatively straightforward.  When Michael Maas sold his stock in a corporation,

A Program Guide To The Facebook Fairness Hearing

As discussed in this earlier post, Facebook, Inc. has requested a fairness hearing before the California Department of Corporations.  Technically, the hearing is being held pursuant to Corporations Code Section 25142 in connection with Facebook’s application for a permit authorizing the issuance of securities to effect its proposed acquisition of Instagram, Inc.   Since a permit may