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CALIFORNIA CORPORATE & SECURITIES LAW

Finance Lenders Annual Report Deadline Is Nigh

Lenders and brokers licensed under the California Finance Lenders Law must file an annual report by the Ides of March (i.e., March 15) of each year.  Cal. Fin. Code § 22159.  This is a hard deadline and the Department of Business Oversight does not grant extensions.  The consequences of failure to the file the report can…

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Drafting Bylaws – Four Things To Consider

Four points to consider when drafting these often crucially important, but tiresome, documents: Distinguish among Shall/Will/Must. I often cite Bylaws as an example of how “shall” may sometimes mean “must” while other times may mean “may”.  See When Shall/Will/Must/May We Meet Again? Remember the Articles!  Occasionally, I come across bylaw provisions that are inconsistent with the articles of incorporation. …

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Will The Rise Of Tweener Corporations Increase Focus On California’s Annual Report Statute?

Earlier this week, The Wall Street Journal published two articles by Rolfe Winkler concerning shareholder access to financial information in companies not subject to the reporting requirements of the Securities Exchange Act of 1934.  In one of these pieces, Mr. Winkler describes California’s annual report requirement found in Corporations Code Section 1501. In general, Section 1501…

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Why Some Delaware Corporations Will Want To Waive This California Statute

In yesterday’s post, I commented on a recent ruling by former Vice Chancellor John W. Noble to the effect that “Delaware disclosure law which generally does not require disclosures to shareholders unless shareholder action is sought”.  The Ravenswood Investment Company, L.P. v. Winmill & Co. Inc., C.A. No. 7048-VCN (Transcript) (Del. Ch. Feb. 25, 2016). …

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Why Some Delaware Corporations Should Be Careful About Relying On This Vice Chancellor’s Ruling

Francis Pileggi in his Delaware Corporate & Commercial Litigation Blog recently wrote that there is no per se duty on the part of a closely held company to disclose financial statements .  In The Ravenswood Investment Company, L.P. v. Winmill & Co. Inc., C.A. No. 7048-VCN (Transcript) (Del. Ch. Feb. 25, 2016), former Vice Chancellor John W. Noble wrote:…

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Where To Meet? The Answer May Have Surprising Consequences

In my experience, companies most often hold board and shareholder meetings at or near their principal executive offices.  As a result, many corporations hold their meetings in California even though they may be incorporated in Delaware, Nevada or some other jurisdiction.  Geographical convenience, however, can have unforeseen consequences.  Several provisions of the California General Corporation…

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Who Files The Most Permit Applications?

California Corporations Code Section 25113(d) requires the Commissioner of Business Oversight to prepare and publicize an annual report of the number of permits that it issues for the offer and sale of securities. The report must include the following information: A summary of the general categories of investments for which permits were approved; The minimum, maximum,…

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Does Brewing Beer Positively Impact Society And The Environment?

California, like many other states, has enacted legislation allowing for the formation of benefit corporations.  Cal. Corp. Code § 16400 et seq.  Technically, a benefit corporation is a corporation formed under the General Corporation Law that has elected to be governed by the Benefit Corporation Law.  One requirement of the Benefit Corporation Law is that the corporation…

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Are Corporations Profitable?

Do corporations make a profit?  I think it is beyond peradventure that some corporations make a profit.  But do most (i.e., more than half) make a profit?  If more than half do make a profit, how many more than half? To find an answer (not necessarily the answer), I recently took a look at Table C-1…

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But Wait, California May Require Even More In Annual Reports To Shareholders

Yesterday’s blog discussed California’s requirement that many domestic and foreign corporations send financial statements to their shareholders.  If a corporation has 100 or more holders of record (determined in accordance with Section 605), then the annual report must also provide a brief description of the following: Any transaction during the previous fiscal year involving an amount in excess…

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