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CALIFORNIA CORPORATE & SECURITIES LAW

Section 307 – No More Sunset

Some readers may have noticed that there are currently two Section 307s in the Corporations Code.  One version of Section 307 provides in subdivision (d) that it remains in effect only until January 1, 2011.  This is commonly referred to as a “sunset provision”.   Subdivision (d) of the other Section 307 provides that it…

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ICC – Requiescat in Pacem

The Interstate Commerce Commission was created in 1887 when Grover Cleveland was president.  Over the years, Congress greatly expanded the ICC’s authority.  At one time, the ICC had thousands of employees.  In 1995, President Clinton signed legislation abolishing the ICC and it has disappeared from the regulatory scene.  Strangely, however, the ICC lives on in…

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Counting Votes – Not As Easy As It May Seem

Determining whether shareholder approval of a proposal has been obtained can be tricky.  This is all the more difficult in California because the Corporations Code includes a variety of voting rules.  One of these is Section 153 which defines “approval by (or approval of) the shareholders” in part as follows: approved or ratified by the…

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How to Avoid a Filing Fee

When forming a subsidiary corporation, many lawyers rely on the exemption contained in Corporations Code Section 25102(f) or upon federal preemption via Corporations Code Section 25102.1(d).  Both of these sections require the filing of a notice with the Commissioner of Corporations (although the failure to file a notice of exemption under Section 25102(f) does not affect the availability…

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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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