The Investment Company Act - "We Didn't Start The Fire . . ."

The big news in SPAC world has been the attempts of two law professors (Robert Jackson and John Morley) to define them as investment companies.  They argue that SPACs meet the definition of an "investment company" because their primary business is...

Untangling California's Shareholder Vote Requirements For Filling Vacancies On The Board

Section 305 of the California Corporations Code sets forth the rules for filling vacancies on the board of directors.  Today's post discusses the somewhat confusing requirements of the statute as it pertains to the filling of of vacancies by the...

SPACS And Tonopah

Yesterday, John Jenkins writing for DealLawyers.com noted that 49 law firms had signed on to a statement that special purpose acquisition companies (SPACs) are not investment companies subject to registration under the Investment Company Act of...

How To Determine Whether A Foreign Corporation Is A "Pseudo-Foreign" Corporation

California famously purports to impose numerous provisions of its General Corporation Law on corporations formed in other states when two tests are met.  Cal. Corp. Code § 2115.  The first of these tests is determined by averaging the corporation's...

Law Firm Does Not Purposely Avail Itself Of The "Benefits" Of California As A Forum

The issue of where an attorney is practicing law is a vexing one in light of modern technology which allows attorneys and their clients to be located just about anywhere in the world.  The Covid-19 pandemic has exacerbated matters because so many...

Your Contract Is Voidable, What Now?

When a corporation or limited liability company fails to pay its taxes, penalties, fees or interest or file a return with the Franchise Tax Board, it will be suspended.  If the suspended corporation or LLC enters into a contract while suspended by...

Professor Bainbridge's Quibble Might Be No Quillet

In this post, UCLA Law School Professor Stephen Bainbridge quibbles my description of Delaware's two-step approach to the special litigation committee defense in derivative suits.  In particular, he points out that Delaware not only adds a second...

Is A Restriction Tantamount To A Prohibition?

The Davis-Stirling Common Interest Development Act, Cal. Civ. Code § 4000 et seq., regulates condominium developments and other common interest developments (CIDs) in California.    Section 4740(a) states that an owner of a property in a CID shall...

Why A Dissolved Corporation May Sue While A Suspended Corporation May Not

Under the California General Corporation Law a corporation which is dissolved nevertheless continues to exist for the purpose, among others, of prosecuting actions.  Cal. Corp. Code § 2010(a).   Further, no action to which a dissolved corporation is...

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