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Just What Is An Initial Transaction Statement?

When shares of a California corporation are subject to a restriction on transfer or other specified conditions, Section 418 of the California Corporations Code requires that this fact “appear on the certificate, the initial transaction statement, and written statements”.  This, of course, raises the question of what the Code is talking about when it refers to…

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The Internal Affairs Doctrine – California May Not Be Standing Alone

Delaware lawyers undoubtedly regard the Delaware Supreme Court’s decision in VantagePoint v. Examen, Inc., 871 A. 2d 1108 (Del. 2005) as the last word on the internal affairs doctrine.  In that case, the Delaware Supreme Court held that the internal affairs doctrine trumps a California statute, Corp. Code § 2115, imposing specified provisions of the California General Corporation Law…

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Time To Reevaluate The Meaning Of Director Qualifications

In 2003, the Securities and Exchange Commission began requiring companies to disclose “any specific, minimum qualifications that the nominating committee believes must be met by a nominating committee-recommended nominee for a position on the company’s board of directors, and a description of any specific qualities or skills that the nominating committee believes are necessary for…

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Proxy Access and Director Qualification Requirements

Last week, the Securities and Exchange Commission adopted its final changes to the federal proxy rules.  These new rules will require public companies, under specified circumstances, to include in their proxy materials information about, and the ability to vote for, a shareholder’s (or shareholder group’s) nominee(s) for director.  In adopting these rule changes, the SEC expressly…

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“‘Tis Well Consented” Vel Non

On July 19, 2010, I discussed action by written consent of the board pursuant to Corporations Code Section 307.  The statute is remarkably silent on some key points.  For example, while the statute clearly requires that consents be in writing (see Sections 8 and 195), the statute does not specifically require that the consents be…

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Enforcing this Bylaw Could Land You in Jail!

Out-of-state practitioners are frequently surprised by some of California’s laws, but I’m guessing that very few, if any, California lawyers are familiar with Business & Professions Code Section 16801. That section provides in part: It is unlawful for any corporation organized under the laws of this State [i.e., California], or the board of directors, trustees,…

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