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CALIFORNIA CORPORATE & SECURITIES LAW

May A Director Resign By Telling Another Director “I Quit”?

Suppose in a fit of pique, a director telephones a fellow director and announces that she is quitting the board.  Has the director resigned?  California Corporations Code Section 305(d) provides: Any director may resign effective upon giving written notice to the chairman of the board, the president, the secretary or the board of directors of…

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Court Of Appeal Holds Section 25504 And Section 15 Claims Are Bis In Idem

Section 15 of the Securities Act of 1933 imposes liability on control persons for violations of Sections 11 and 12 of that act.  Section 25504 of the California Corporations Code imposes liability on persons who control persons liable under either Section 25501 (liability for violation of Section 25401 (false statements or omissions) or Section 25503 (liability for…

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When Shall/Will/Must/May We Meet Again?

Lawyers are very fond of using the word “shall” in articles of incorporation, bylaws and agreements.  Using “shall” instead of “will” seems to add a certain level of formality (or perhaps pretension).  It may also be intended to convey the meaning that something must happen and not simply that it may happen in the future. Indeed, there is…

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