Is An Immoral Contract Unlawful?

Last week, I wrote about a proposal by the Nevada Secretary of State to ban the establishment of  a corporation for an “illicit purpose“.  Currently, Nevada specifically authorizes the formation of corporations to transact any “lawful” business and for “legitimate” purposes, NRS 78.030(1), while California permits corporations to be formed for “lawful” purposes, Cal. Corp. Code §

Court Of Appeal Sends Spot Trailer Bills To The Dog House

For some time, I’ve been critical of that bit of legislative legerdemain known as the “spot bill”.  See See Spot Run.  A spot bill is a bill that is essentially empty of any content, usually because the bill makes some minor, non-substantive change such as changing “a” to “the” in the text of a statute. 

Senator Seeks 24-Hour Advance Notice Of Corporate Political Contributions/Assemblymember Asks For Constitutional Convention

Yesterday, Broc Romanek noted the continuing interest in mandating disclosure of political spending by corporations.   See Battle Lines Being Drawn: Political Spending Disclosures.   We are also seeing activity here in California. Last week, Senator Noreen Evans introduced SB 121 to require any corporation that has shareholders located in California and that makes a contribution or expenditure

A Corporate Governance Lesson From Pericles

Before shareholders may take action at a meeting, a quorum must be established.  See When The Best Offensive Strategy May Simply Be To Stay Home.  The existence of a quorum does not guaranty that action has been validly taken at a shareholders’ meeting because the meeting must also have been properly noticed.  Cal. Corp. Code § 601(a).

SEC Faces A Swarm Of Legal Issues In Considering The Investor Advisory Committee’s Recommendations Concerning General Solicitation

The SEC’s Investor Advisory Committee held another meeting last week with Elisse B. Walter making her first public appearance as SEC Chairman.  She and Commissioner Luis A. Aguilar had many kind words for the Committee’s recommendations with respect to lifting the ban on general solicitations in Rule 506 offerings.  The insouciance of their remarks, however,

Does The Authorization Or Issuance Of A New Class Of Stock Require Qualification?

Corporations often amend their articles of incorporation to create one or more new classes of securities.  These newly created classes often have priority over the previously issued and outstanding shares.  Does the amendment or issuance of these shares require qualification under the Corporate Securities Law?  The answer is “yes” – and “no”. Of course, any

Proposed “Homeless Person’s Bill Of Rights And Fairness Act” Will Have Huge Impact On Government And Business

California’s Unruh Civil Rights Act, Civil Code Section 51, generally provides that all persons within California are free and equal, regardless of their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation, and are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in

Federal Court Upholds Delaware Forum Selection Notwithstanding California Securities Law Claims

Corporations Code Section 25701 is California’s anti-waiver statute.  It provides that “Any condition, stipulation or provision purporting to bind any person acquiring any security to waive compliance with any provision of this law or any rule or order hereunder is void.”  What impact, if any, does this have on a forum selection agreement?  Three decades

Forum Selection Bylaws And The California Constitution

Last December, I briefly discussed whether a forum selection bylaw with respect to officers and directors would pass muster as a contractual choice of law.  See A Forum Selection Clause Issue That You May Not Have Heard About Until Now.  It also occurs to me that forum selection bylaws might run afoul of the California

Nevada Legislature May Prohibit The Establishment of Corporations For “Illicit Purposes”

Nevada’s legislature meets in regular session every other year for 12o consecutive calendar days.  Nev. Const. Art. II, § 4 and NRS 218A.078.  Although the 77th session does not start until February 4, legislators are already introducing bills. Because Nevada is often associated with legalized gaming and prostitution (the latter only in certain counties, see NRS