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Corporate Governance Nonprofits California

Allen Matkins

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

Allen Matkins on

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

Allen Matkins

For How Long Is That Proxy Valid?

Allen Matkins on

Section 705(a) of the California Corporations Code provides that no proxy is valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy.  This is a reflection of the fact that proxies...more

Allen Matkins

This Corporation Was Harmed Even Before It Was Incorporated!

Allen Matkins on

The Church of the Celestial Heart is a California nonprofit religious corporation seeks to import and use a sacramental tea.  It so happens that this tea, which is also called Daime or ayahuasca, carries trace amounts of a...more

Allen Matkins

Is It Possible That Some Possibilities Are Unreasonable?

Allen Matkins on

Section 5342(e) of the California Corporations Code requires a nonprofit public benefit corporation to provide, upon the request of a member, to either allow inspection and copying of all members' names, addresses or voting...more

Allen Matkins

When Cumulative Voting Precludes Election Of Directors By Ballot

Allen Matkins on

The California Nonprofit Mutual Benefit Corporation Law contemplates three different methods for members to take action: at a meeting, by ballot, and by unanimous written consent.  Cal. Corp. Code §§ 7512(a), 7513 & 7516. ...more

Allen Matkins

California Nonprofit and Cooperative Corporations Will Soon Be Able To Fix Otherwise Lawful Corporate Actions

Allen Matkins on

In 2022, the California legislature enacted amendments to the California General Corporation Law allowing corporations formed under that law to ratify or validate otherwise lawful corporate actions.   2022 Cal. Stats.  Ch....more

Farella Braun + Martel LLP

Nonprofit Basics: How To Wind up a California Charity

Welcome to EO Radio Show – Your Nonprofit Legal Resource. I'm Cynthia Rowland, and episode 49 of EO Radio Show summarizes the steps to wind up a charity that is a nonprofit corporation registered and operating in California....more

Allen Matkins

Are Directors Employees And Are Their Homes Their "Workplaces"?

Allen Matkins on

There are potentially a number of ramifications to classifying a board member as employee, including whether the corporation may be entitled to obtain a workplace violence restraining order petition pursuant to Section 527.8...more

Allen Matkins

What Are The Duties Of Directors In Electing, Selecting, Or Nominating Directors?

Allen Matkins on

Section 309 of the California Corporations Code specifies the standard of performance applicable to directors in performing their duties as directors of corporations organized under the California General Corporation Law. ...more

Allen Matkins

Articles Of Incorporation Doom Representational Standing

Allen Matkins on

The Short Term Rental Alliance of San Diego is an advocacy and education organization whose members include landlords and hosts with at least one single-family short-term rental property located in the “San Diego Coastal...more

Allen Matkins

California And Vice Chancellor Laster Are 180˚  Apart On The "Circle Of Confidentiality"

Allen Matkins on

In Hyde Park Venture Partners Fund III, L.P. v. FairXchange, LLC,  2023 WL 2417273 (Del. Ch. Mar. 9, 2023), Vice Chancellor J. Travis Laster ruled that two investment funds were within the "circle of confidentiality" that...more

Allen Matkins

The Jurisdictional Hole At The Center Of California's Proposed Decentralized Nonprofit Association Law

Allen Matkins on

Yesterday's post focused on a California bill, AB 1229 (Haney),  that would create a new Decentralized Nonprofit Association Law.  Today's post drills down on what I see as fundamental flaw in the bill.  In addition to...more

Allen Matkins

California Bill Would Create Decentralized Nonprofit Association Law

Allen Matkins on

As discussed in this recent post, Judge Larry Alan Burns recently ruled that the plaintiffs in class action had adequately pled that a distributed autonomous organization (DAO) was a partnership under California law.  Sarcuni...more

Allen Matkins

The Superior Court Has The Authority To Determine The Validity Of Board Elections, But What About Recalls?

Allen Matkins on

Section 709 of the California Corporations Code provides a mechanism for "any shareholder" or "any person who claims to have been denied the right to vote" to obtain a determination by the Superior Court of the validity of...more

Allen Matkins

Don't Even Think About Trying To Enforce These Voting Agreements

Allen Matkins on

The California Nonprofit Corporation Law is actually three different laws - the Nonprofit Public Benefit Corporation Law (Part 2), the Nonprofit Mutual Benefit Corporation Law (Part 3), and the Nonprofit Religious Corporation...more

Allen Matkins

Are Religious Corporations Constitutional?

Allen Matkins on

Like Gaul, the California Nonprofit Corporation Law has three major parts ("Gallia est omnis divisa in partes tres').  These three parts govern the formation and operation of three different types of nonprofit corporations:...more

Allen Matkins

How A Corporation Can Become Religious Without Converting

Allen Matkins on

Although I have yet to encounter the situation, California provides a mechanism for a corporation formed under the General Corporation Law to become a nonprofit religious corporation.  Since religion is involved, it may come...more

Allen Matkins

For A Limited Time Only - California Is Giving Away Corporations, LLCs And More!

Allen Matkins on

 As a result of the recent enactment of California's 2022-2023 Budget Bill, the California Secretary of State's office as announced a temporary waiver of many business entity filing fees.  This waiver will last until June 30,...more

Allen Matkins

Must A Nonprofit Abnegate Private Gain?

Allen Matkins on

The California Corporations Code includes provisions governing a wide variety of nonprofit organizations.  However, the "Big 3" categories of nonprofit corporations are the public benefit, mutual benefit and religious...more

Allen Matkins

Don't Go Out On A Limb And Seek Enforcement Of These Voting Agreements

Allen Matkins on

California has multiple types of nonprofit corporations.  The "Big Three" are the public benefit corporation, mutual benefit corporation and religious corporation.  The statutes applicable to these three entities are similar...more

Allen Matkins

For These Directors, There May Be No Way Out

Allen Matkins on

The California General Corporation Law provides that any director may resign effective upon giving notice to certain specified persons, unless the notice specifies a later time for the effectiveness of his or her...more

Allen Matkins

May A Director Properly Rely On Her Rabbi?

Allen Matkins on

In prescribing the duties of directors, California Corporations Code Section 309 provides that a director is entitled to rely on information, opinions, reports or statements prepared or presented by "counsel, independent...more

Allen Matkins

Want To Sell Your Membership In A Nonprofit Corporation?

Allen Matkins on

California's Nonprofit Corporation Law consists of three separate laws - the Nonprofit Public Benefit Corporation Law, the Mutual Benefit Corporation Law, and the Religious Corporation Law.  Each of these laws authorizes a...more

Allen Matkins

A Corporation May Get Religion, But Not Easily

Allen Matkins on

Section 206 of the California Corporations Code provides that a corporation organized under the General Corporation Law may engage in any "business activity", subject to any limitation contained in its articles of...more

Allen Matkins

Court Of Appeal Imposes "Continuous Directorship" Requirement For Standing

Allen Matkins on

Several provisions of California's Nonprofit Public Benefit Corporation Law confer standing on an officer, director, or member.   See Sections 5142,  5223, 5233, and/or 5710.   In an opinion issued yesterday, the Court of...more

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