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CALIFORNIA CORPORATE & SECURITIES LAW

California’s D&O Loan Ban And Advancement Of Expenses

Yesterday’s post outlined the general scope of the ban on loans to directors and officers found in Section 315 of the California Corporations Code.  Because Section 315 doesn’t define “loan”, it may not always be clear whether an arrangement is a verboten loan.  Fortunately, no time need be wasted on the question of routine travel and…

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California’s Ban On Loans To Directors And Officers

California banned loans to directors and officers decades before Congress thought of doing so as part of the Sarbanes-Oxley Act of 2002.  Current Corporations Code Section 315 prohibits corporations (defined in Section 162) from making loans of money or property to, or guaranteeing the obligations of, any director or officer of the corporation or its parent.  However, the…

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