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Just What Are The Duties Of A Controlling Shareholder And How Should Claims Of Breach Be Brought?

In a recent post, Professor Stephen Bainbridge discusses the question of when a controlling shareholder owes fiduciary duties to minority shareholders.  Knowing when controlling shareholder owes fiduciary duties is one thing,...more

Does Personal Animosity Vitiate The Business Judgment Rule?

Under the business judgment rule, "a director is not liable for a mistaken business judgment which is made in good faith and in what he or she believes to be in the best interest of the corporation, where no conflict of...more

Does Combining Legal And Secretarial Roles Reduce Risk?

The California General Corporation Law requires that a California corporation have a secretary.  Cal. Corp. Code § 312(a)(2).  The CGCL, however, says nothing about a chief legal officer.  Indeed, many corporations do not...more

California May Soon Define "Corporation" To Include That Are Not Corporations

The California Corporations Code is a misnomer.  While the Corporations Code does in fact govern corporations, it also governs a wide variety of unincorporated entities, including general partnerships, limited partnerships,...more

Does Amending A Shareholders Agreement Require Qualification Under The California Corporate Securities Law?

A significant amount of background is required to answer the question of whether amending a shareholders agreement is subject to qualification under the California Corporate Securities Law.  As an initial matter, the CSL...more

Professor Bainbridge Queries Whether SB 313 Eviscerates Omnicare, But Does That Question Have Any Relevance To California...

Delaware practitioners and legal scholars are digesting the implications of SB 313 which adds a new Section 122(18) to the Delaware General Corporation.  According to the bill's synopsis, this new provision...more

Nevada's Secretary Of State Urges Delaware Supreme Court To Eschew "Exit Tax"

In a May post, I observed: As a long-time beneficiary of corporations fleeing other jurisdictions, Delaware may be tempted to put the brakes on its own corporations wishing to flee to the sunny uplands of other states. ...more

Israel Headquarted Company Approves Move From Delaware To Nevada

As the debate continues regarding DExit, I have been on the lookout for companies making the move from Delaware to Nevada.  Recently, I came across this information statement filed by Viewbix Inc., a digital advertising...more

Is A Notitia Congregationis Valid In California?

California is a very linguistically diverse state with an estimated 200 plus different languages being spoken.  Within my own family, English is not the primary language spoken at home by any of my grandchildren.  Yet, the...more

Directors Removing Directors

Seven years ago, I addressed the question of whether the board of directors of a California corporation could remove a fellow director...more

Can Shareholders Elect Corporate Officers?

The classic model of corporate governance is that the board of directors appoints and removes the principal corporate officers.  This is consistent with the general principle that the business and affairs of a corporation...more

Knowingly Offering A False Annual Statement For Filing With The Secretary Of State Is A Felony

The Statement of Information required pursuant to California Corporations Code Section 1502 is not required to be signed under penalty of perjury.  However, the statute does require that the corporation (not the individual...more

Does Revlon Make Nevada Tense?

In Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173, 182 (1986), the Delaware Supreme Court famously held that when the sale of a corporation becomes inevitable,  the board of directors' duty changed from the...more

Are Recent Delaware Decisions Causing Corporations To Look For The Exit?

Delaware's website boldly asserts "The DGCL [Delaware General Corporation Law] offers predictability and stability."  I have somewhat waggishly observed, however, that you can read the DGCL cover to cover and still no very...more

How Would Nevada Decide Moelis?

In West Palm Beach Firefighters Pension Fund v. Moelis & Co.,  2024 WL 747180, at *2 (Del. Ch. Feb. 23, 2024),  Vice Chancellor J. Travis Laster ruled that Section 141(a) of the Delaware General Corporation Law trumps most of...more

When A California Corporation Converts To A California Limited Liability Company, What Happens To Its Nevada Business License?

NRS 107.028(1)(d) requires that a trustee under a deed of trust be a "domestic or foreign entity which holds a current state business license issued by the Secretary of State pursuant to chapter 76 of NRS".   In Mahban v....more

Nevada Supreme Court Clarifies Alter Ego Liability Of LLC Members

Laura Graham was injured when she tripped over a sprinkler box located on property owned by a single member limited liability company.  She sued the LLC and asserted that its member was the alter ego of the LLC and the case...more

Not Every California Corporation Is Governed By The California General Corporation Law

The California General Corporation Law is part of the California Corporations Code, but not every corporation incorporated in California is formed or governed by the General Corporation Law.   In fact, the Corporations Code...more

What Egregious Error Have Courts Made Nearly 9,000 Times (And Counting)?

In a recently published article, Professors Samantha J. Prince & Joshua P. Fershée focus on the propensity to conflate corporations with limited liability companies...more

Does Delaware Discriminate Against The Deaf And Hearing Impaired?

I recently addressed the question of whether the exchange of emails might constitute a corporate board meeting.  Recently, Professor Stephen Bainbridge pointed out that he discussed this question more than two decades ago.   ...more

Is There Any Repose For A Dissolved Nevada Corporation?

NRS 78.585 bars any cause of action against a dissolved Nevada corporation or its directors, officers, or stockholders if it is commenced within...more

Reverse Stock Splits And The California Corporate Securities Law

Meredith Ervine recently wrote about reverse stock splits and Nasdaq listed issuers.  A reverse stock split is the "go to" solution for many listed issuers whose share prices fall below the minimum continued stock exchange...more

Can A Member Bring A Derivative Action On Behalf Of A California Nonprofit Corporation?

Like many questions in the law, the answer to the question of whether a member of a California nonprofit corporation may maintain a derivative action is "it depends"....more

What Are The Damages?

In yesterday's post, I discussed Vice Chancellor J. Travis Laster's recent ruling in Palkon v. Maffeii, 2024 WL 678204 (Del. Ch. Feb. 20, 2024).  The case concerned a challenge to the proposed redomestications of TripAdvisor,...more

Is The General Counsel Ipso Facto A Corporate Officer?

One difficulty of answering the question of whether a general counsel is a corporate officer is that the California General Corporation Law does not define "officer".  Corporations Code Section 312(a) requires a corporation...more

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