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CALIFORNIA CORPORATE & SECURITIES LAW

FTB Publishes Disinformation About Corporations

Recently, I happened across a summary of the “key features” of a corporation on the California Franchise Tax Board’s website.  Recognizing that it is always a challenge to summarize accurately complex legal matters, I do beg to differ with some of the FTB’s assertions. A corporation must register with the California Secretary of State before conducting…

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Attorney General Opines On Lay Representation At Administrative Hearings

Over three years ago, I wrote that California’s Office of Administrative Hearings had requested the California Attorney General provide an opinion answering the following question: Does the Administrative Procedure Act (Gov. Code, §§ 11340-11529) authorize a party to a proceeding conducted by the Office of Administrative Hearings to be represented by a person who is not…

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When A Share Rescission Is Not A Distribution

Section 166 of the California Corporations Code defines “distribution to its shareholders”.  Knowing what constitutes a distribution to shareholders is important because Chapter 5 of the General Corporation Law imposes various restrictions on such distributions.  Shareholders and directors may be liable when these restrictions are violated.  Cal. Corp. Code §§ 316 & 506.  Under Section…

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California Dividend Statutes Found To Preempt Common Law Claims

Chapter 5 of the California Corporations Code imposes specific limitations on “distributions to shareholders”, a term defined in Corporations Code section 166.  Directors who approve the making of any distribution to shareholders in violation of the provisions of Sections 500 to 503 may be jointly and severally liable to the corporation.  Cal. Corp. Code § 316.  The…

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