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Can A Company Have More Than One Principal Executive Office?

The Securities and Exchange Commission's Form 10-K requires disclosure of a company's "principal executive offices".  The SEC, however, provides no definition of what constitutes a company's "principal executive offices".  Until now, this may not have been significant or debatable.  However, California's enactment of a board gender quota bill may cause companies to devote a bit more attention to the location of their principal executive offices.  The reason is that the jurisdictional hook of the law for foreign corporations is that their principal executive offices, according to their Form 10-K, are located in California.  SeeWhere Is Your Corporation's Principal Executive Office (Or Offices)?

Recently, I came across an issuer's Form 10-K that identified two principal executive offices, one in California and the other in New Jersey.  The fact that the Form 10-K requires disclosure of the location of a registrant's "principal executive offices" and not "principal executive office" suggests that a registrant may have multiple principal executive offices.  However, this would render the term an oxymoron because "principal" means the foremost and only one office can be the foremost.  Under this interpretation, a company with two offices at equipose would have no principal executive office because neither would be foremost.  Partisans of this interpretation would likely argue that the use of "offices" is simply a recognition that a registrant's principal executive facility typically consists of multiple offices.

Assuming that a corporation may have multiple principal executive offices, it is unclear how the California law should be applied.  One view might be that the statute applies if one of the principal executive offices is located in California.  A literal reading of the statute, however, would require that all of the principal executive offices be in California ("whose principal executive offices . . . are located in California . . .").  

 

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