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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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Why Some Delaware Corporations Will Want To Waive This California Statute

In yesterday’s post, I commented on a recent ruling by former Vice Chancellor John W. Noble to the effect that “Delaware disclosure law which generally does not require disclosures to shareholders unless shareholder action is sought”.  The Ravenswood Investment Company, L.P. v. Winmill & Co. Inc., C.A. No. 7048-VCN (Transcript) (Del. Ch. Feb. 25, 2016). …

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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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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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California Requires Many Foreign Corporations To Send Annual Financial Statements To Shareholders

California is a net exporter of corporate charters, but it remains home to many corporations. As a result, the California Corporations Code has a preternatural concern with foreign corporations. One example is Section 1501(a) which requires the board to cause an annual report to be sent to shareholders.  This report must include a balance sheet…

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Choice Of Law And Derivative Suits

The California Corporations Code carefully defines the the terms “corporation” (Section 162), “domestic corporation” (Section 167), “foreign corporation” (Section 171); and “foreign association” (Section 170).  For example, when the legislature provided in Section 1500 that “[e]ach corporation shall keep adequate and correct books and records . . . “, the legislature imposed a mandatory obligation…

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