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CALIFORNIA CORPORATE & SECURITIES LAW

What, Pray Tell, Is A “Foreign Corporation”?

Earlier this week, I wrote about Wellisch v. Pa. Higher Educ. Assistance Agency, 2017 U.S. Dist. LEXIS 40831 (N.D. Cal. Mar. 21, 2017).  The issue was whether the defendant, Pennsylvania Higher Education Assistance Agency, was required to register as a foreign corporation in the State of California.  The case turned on whether the defendant was…

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Replacement Of Lost Stock Certificate Is Not An Internal Affair, But So What?

U.S. District Court Judge Edward M. Chen recently ruled that a stockholder could maintain an action under California Corporations Code Section 419 for replacement of a lost, stolen or destroyed certificate.  As just described, the ruling shouldn’t be a surprise.  Section 419 provides that if “a corporation refuses to issue a new share certificate or other certificate in…

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Some California General Corporation Law Nonsense

Recently, I gave a brief presentation concerning various provisions of the California General Corporation Law that could apply to corporations incorporated outside of California.  I emphasized that the CGCL defines the terms “corporation”, “domestic corporation”, “foreign corporation” and “foreign association” and that it is important to pay attention to these definitions when reading the CGCL.…

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Court Of Appeals Holds No ERISA Preemption Of Section 419(b)

The Ninth Circuit Court of Appeals’ recent holding in Sender v. Franklin Res., Inc., 2015 U.S. App. LEXIS 10113 (9th Cir. Cal. June 16, 2015) is reasonably clear and yet there is much about the case that puzzles me. The case involved the seemingly quixotic quest of Mr. Sender to obtain stock certificates that he allegedly…

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When A Corporation May Not Be A Corporation At All

The California General Corporation Law separately defines “corporation” and “domestic corporation”.   The definition of “domestic corporation” is straightforward, the definition of “corporation” is not.  In most cases, a corporation will also be a domestic corporation, but in some cases a “corporation” may not even be a corporation at all! A “domestic corporation” is simply a corporation formed under the laws of the State…

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“Wherever You Go, There You Are”, But Will You Be In The Proper County?

The California General Corporation Law makes numerous references to the “proper county”.  For example, Corporations Code Section 304 empowers the superior court of the proper county to remove a director in specified circumstances at the suit of shareholders holding at least 10 percent of the number of outstanding shares of any class.  Other sections referring to…

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Senators Pass Gender Diversity Resolution – Have They Read Ecclesiazusae?

In late August, the California Senate approved SCR 62 which encourages “equitable and diverse gender representation on corporate boards”.  The resolution also urges: [W]ithin a three-year period from January 2014 to December 2016, inclusive, every publicly held corporation in California with nine or more director seats have a minimum of three women on its board,…

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Corporations Code Reaches Contracts And Conveyances By Foreign Corporations

Corporations Code Section 313 generally provides that in the absence of actual knowledge of lack of authority, a contract executed by a corporation is not invalidated by any lack of authority of the signing officers provided the contract has been signed  by the chairman of the board, the president or any vice president and the secretary, any assistant secretary, the…

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If You’re Relying On The Signature Of Two Officers, You May Want To Think Again

It is widely assumed that if a contract, note or other instrument is signed by a corporation’s president and its secretary, it will not be invalidated as to the corporation by any lack of authority of the signing officers.  After all, Section 313 of the California Corporations Code provides: Subject to the provisions of subdivision (a)…

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Can It Be So? Court Holds That A Nebraska Corporation Is Not A Corporation

Section 2010(b) California Corporations Code provides that no action or proceeding to which a corporation is a party abates by dissolution of the corporation.  The statute imposes no time limit on suing dissolved corporations for pre-dissolution activities. In Robinson v. SSW, Inc.,209 Cal. App. 4th 588 (2012), the Court of Appeal considered whether Corporations Code Section…

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