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CALIFORNIA CORPORATE & SECURITIES LAW

FTB Publishes Disinformation About Corporations

Recently, I happened across a summary of the “key features” of a corporation on the California Franchise Tax Board’s website.  Recognizing that it is always a challenge to summarize accurately complex legal matters, I do beg to differ with some of the FTB’s assertions. A corporation must register with the California Secretary of State before conducting…

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Is Chametz A Good?

The Jewish holiday of Passover begins at sundown this evening.  In preparation for Passover, observant Jews must dispose of absolutely all chametz, which is basically any food that is made with grain and water that has been allowed to leaven (rise).  One way to dispose of chametz, which is also spelt chometz, is to sell it to a non-Jew and…

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Don’t Bank On Being Able To Use “Bank” In Your Corporate Name

“Bank” is a good example of a homonym (same spelling and pronunciation but different meaning), a homograph (same spelling but different meaning) and a homophone (same pronunciation).  I can think of at least three different meanings of the word in its noun form – a place where financial transactions are made, a mound or heap,…

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Is Crowdfunding Subject To The UCC?

In a recently published essay, Professor Joan Heminway asks “What is a Security in the Crowdfunding Era?”  She observes: Over the years, the lines between securities and financial products regulated under commodities, banking and insurance law have become blurred. Moreover, with the advent of the crowdfunding era, financial interests in business enterprises may look less like investment instruments commonly known…

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“For Now”, Hiring An Employee And Leasing An Office Doesn’t Necessarily Add Up To Transacting Intrastate Business

An Illinois corporation hires an employee, leases office space in California.  A dispute then arises between the corporation and its California employee.  The employee sues and the corporation counterclaims.  The employee moves to dismiss the counterclaims based on the corporation’s failure to qualify to transact intrastate business.  Who wins?  If your guess is the employee, guess…

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Is “Corporation” Spelt “LLC”?

When I first started practicing law, the idea of the limited liability company had yet to be birthed.  A decade later, I co-authored an article speculating on whether California would enact a limited liability company law: Are Limited Liability Companies Coming to California? 13 CEB California Business Law Reporter 135 (1991).  Five years later, I participated in the…

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