California Corporate & Securities Law

The California legislature was so upset by the Supreme Court's decision in Citizens United v. Federal Election Commission, 558 U.S. 310 (2010) that it passed a resolution memorializing its disagreement and asseverating that "Corporations are not...

Until I happened upon a working paper by Professors Martin Gelter and Lécia Vicente, I had not encountered the notion of abusing a corporation merely by choosing where to incorporate it.  The authors describe abuse as follows:

I suspect that many lawyers do not give a great deal of thought to the application of the California Corporate Securities Law of 1968 to the issuance of shares in connection with the incorporation of a wholly owned subsidiary. Section 25102(i)(2) is...

Yesterday's post concerned the application Section 2115 of the California Corporations Code to parent and subsidiary corporations. A foreign corporation that satisfies the business and shareholder tests of the statute will be subject to numerous...

California famously applies many of the provisions of its General Corporation Law to foreign corporations that meet the specific tests set forth in Corporations Code Section 2115. The first of these tests is a business test - the average of the...

Section 25401 of the Corporations Code is California's securities fraud statute.  Readers of this space will know that that scienter was not required under the former version of the statute but that the legislature rewrote Section 25401 to conform to...

The Depository Trust Company provides depository and book-entry services and operates a securities settlement system. The DTC's nominee is CeDe & Co. which is generally pronounced as the letters "C" and "D". The name is an abbreviation of...

Yesterday's post raised the question whether California Corporations Code Section 400(a) precludes tenured voting. That statute requires that all shares of any one class have the "same voting, conversion and redemption rights . . . unless the class...

A recent post by Broc Romanek linked to a MarketWatch article critiquing the new Long Term Stock Exchange.  The article mentions that "The LTSE has also proposed 'long-term voting rights,' wherein a shareholder’s voting power is commensurate with how...