California is famously hostile to covenants not to compete. In fact, Section 16600 of the California Business & Professions Code provides "Except as provided in this chapter, every contract by which anyone is restrained...more
The private corporation laws of both California and Nevada both authorize the formation of committees. Cal. Corp. Code § 311 & NRS 78.125. There are some differences, however. California requires that any committee of the...more
In 2005, Nevada stopped issuing ceremonial charters to corporations when it introduced its e-SOS processing system. A ceremonial charter is basically a charter printed by the Nevada Secretary of State's office on colored...more
The California Secretary of State's website provides certain information with respect to a wide range of domestic and foreign entities registered to transact intrastate business, including corporations, limited liability...more
California permits foreign and domestic corporations to file a statement of statement of "No Change" (Form SI 550NC) if the following three conditions are met...more
Last month, Institutional Shareholder Services published its Americas 2022 Proxy Voting Guidelines. As part of its updated guidelines, ISS has removed the "grace" period for board diversity so that its policy now reads as...more
Several provisions of the California General Corporation Law that require filing with the Secretary of State specify that the filed instrument must include the Secretary of State's file number. E.g., Cal. Corp. Code §§...more
The Securities and Exchange Commission recently proposed to amend its rules to require issuers to disclose share repurchases on a new Form SR which must be furnished "before the end of the first business day on which the...more
Semper Midas Fund, Ltd was formed for to invest primarily in mortgage-related instruments. Five months after investing over $300,000 in the fund, the Alan Kalin was told that that the fund had lost over 50% of its value. ...more
Section 1601 of the California Corporations Code grants any shareholder the right to inspect the accounting books, records, and minutes of board and shareholder meetings for a purpose reasonably related to the shareholder's...more
California's female director quota law was on trial last week. According to Brian Melley, a reporter for the Associated Press, a witness from the Secretary of State's office testified "It’s required but there’s no penalty,...more
A California Court of Appeal opinion published yesterday highlights the importance of understanding how and when a contract is formed. The case from an attorney's letter to an insurance offering to settle his client's claim...more
California pressures corporations to pay their taxes by suspending their corporate powers, rights and privileges when they fail to do so. Cal. Rev. & Tax Code § 23301. Consequently a suspended corporation may not...more
As has been discussed many times in this space, the California General Corporation law purports to govern foreign corporations in a number of respects. One such provision is Section 208 of the Corporations Code which apples...more
Reverse veil piercing involves subjecting an entity to the liabilities of its owner. As Professor Bainbridge has noted, there are two types of reverse veil piercing...more
UCLA Law School Professor Stephen Bainbridge recently commented Vice Chancellor Glasscock's recent memorandum opinion in In re The Chemours Co. Deriv. Litig., (Del. Ch. Case No. 2020-0786-SG, Nov. 1, 2021). Professor...more
As has been previously discussed in this space, California Secretary of State Shirley N. Weber is seeking dismissal of a federal court challenge to California's director quota mandates - SB 826 and AB 979. Alliance For Fair...more
After Vice Chancellor Morgan Zurn's in September issued his opinion in In re Boeing Company Derivative Litigation, UCLA Professor Stephen Bainbridge declaimed that "After Boeing, Caremark is no longer 'the most difficult...more
Although the first email was reportedly sent four years before the enactment in 1975 of the California General Corporation Law, the GCL has only a handful of references to "electronic mail" (Sections 118, 1502 and 2117). ...more
As noted in yesterday's post, Secretary of State Shirley N. Weber is asking U.S. District Court Judge R. Gary Klausner to dismiss a challenge to California's board quota statutes. In her motion to dismiss, the Secretary of...more
And these are the names of California companies who came out of California . . . . The California Policy Center, which describes itself as "an educational non-profit working for the prosperity of all Californians by...more
As 2021 begins drawing to close, the Department of Financial Protection & Innovation has released its 2020 Annual Report of Finance Lenders, Brokers, and PACE Administrators Licensed Under the California Financing Law. ...more
An "other constituency statute" permit, but do not require, boards of directors to consider non-shareholder interests (such as the interests of employees, the environment, et cetera) when making decisions. California and...more
Under California's former general partnership law, a partner was a "coowner with the other partners of specific partnership property holding as a tenant in partnership." Former Cal. Corp. Code § 15025(1). Whether this was...more
The anomalously named California Uniform Partnership Act of 1994 specifies when a partner in a general partnership "dissociates". Cal. Corp. Code § 16601. Upon dissociation, a general partner loses the right to participate...more