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CALIFORNIA CORPORATE & SECURITIES LAW

California Supreme Court Affirms Novel M&A Tax

Suppose Mr. Henry owns all of the outstanding shares of a Virginia corporation that owns all of the issued and outstanding shares of a Massachusetts corporation that owns, among other things, real property in Los Angeles, California.  Suppose further that Mr. Henry sells his shares in the Virginia corporation to a buyer in New York and that the transaction is…

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California’s Ban On Loans To Directors And Officers

California banned loans to directors and officers decades before Congress thought of doing so as part of the Sarbanes-Oxley Act of 2002.  Current Corporations Code Section 315 prohibits corporations (defined in Section 162) from making loans of money or property to, or guaranteeing the obligations of, any director or officer of the corporation or its parent.  However, the…

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New Law Attempts To Clarify Legal Status Of LLC Employee Membership Purchase And Option Plans

California Labor Code Section 407 may be a bit of a surprise to many lawyers both in and outside of the state.  It provides: Investments and the sale of stock or an interest in a business in connection with the securing of a position are illegal as against the public policy of the State and…

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