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CALIFORNIA CORPORATE & SECURITIES LAW

Incorporating Under A Disparaging Name

In Matal v. Tam, 2017 U.S. LEXIS 3872 (June 19, 2017), the U.S. Supreme Court found the “disparagement clause” of the Lanham Act violates the Free Speech Clause of the First Amendment.  The “disparagement clause” prohibits the registration of trademarks that may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons,…

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Disclaiming Proper Appointment With The Secretary Of State – “All You Have To Do Is Ask”

A lot of things in life may upset you.  One these might be discovering that you have been improperly appointed as an agent for service of process, director or officer of a California corporation.  Corporations Code Section 1503(b) somewhat oddly provides: The resignation of an agent may be effective if, on a form prescribed by…

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Looking For A Deceased Celebrity’s Successor-In-Interest? The Secretary Of State Has An Answer

The California Secretary of State’s office is the repository for a vast a disparate number of filings.  Few people, for example, may be aware that they may register with the Secretary of State’s office as a successor-in-interest to a deceased personality pursuant to California Civil Code Section 3344.1.  A person registering as a successor-in-interest must provide…

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This Foreign Corporation’s Status May Be Forfeited, But The Resident Agent Remains

A recent ruling by U.S. District Court Judge Otis D. Wright II illustrates how it may be easier to enter California than to leave it.  Real v. St. Jude Med., Inc., 2017 U.S. Dist. LEXIS 47081 (C.D. Cal. Mar. 29, 2017) In 1996, St. Jude Medical, Inc., a Minnesota corporation, qualified with the California Secretary of State’s…

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I Deliver Some Round Observations About California’s Rounding Rule

Yesterday’s post concerned various actions that a California corporation may pursue in lieu of issuing fractional shares.  I left for today the subject of rounding.  Section 407 of the Corporations Code expressly permits rounding to the nearest whole share if the fraction of a share that any person would otherwise be entitled to receive is less than .005…

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California Secretary Of State Upgrades Business Searches

For some time, the California Secretary of State’s office has offered a business search application on its website.  Although the function provided only limited information, the application received more than 5 million views per month.  On St. Lucia’s day, the Secretary of State announced a new and improved search application. From my perspective, one of the…

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Why The Location Of The Principal Executive Office Matters

The California General Corporation Law does not require that a California corporation have a principal executive office located in California.  In fact, Section 177 explicitly contemplates that a corporation’s PEO may be located elsewhere or that the corporation may have no PEO at all.  The location of the PEO is not without significance, however.  Numerous…

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The Charging Order – How The Nevada Secretary Of State Doesn’t Get It Quite Right

In 2007, Nevada imposed an interesting limitation, the charging order, on the ability of creditors to foreclose on shares of closely-held Nevada corporations.  Here’s how the Nevada Secretary of State’s website describes the statute, NRS 78.746: Charging order protection for stock of closely-held corporations protects stockholders of all Nevada corporations with between 2 and 75…

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Court Allows An Exhausted FTC To Serve Summons On The California Secretary Of State

The Federal Trade Commission is not pleased with Discountmetalbrokers, Inc.  In fact, the FTC is so unhappy with the company that it filed a complaint alleging that the company held itself out as a legitimate seller of gold and silver but would often fail to deliver product.  According to the the FTC, the company has “scammed…

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How To Revive A Suspended Corporation

Yesterday’s post concerned the circumstances that will cause the California Franchise Tax Board to suspend a corporation’s rights, powers, and privileges to conduct business in California.  Suspension, however, is reversible, although it isn’t necessarily easy.  First, is the matter of delinquent returns.  The Franchise Tax Board requires that all delinquent tax returns be filed.  Second,…

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