Contact us with your California corporate & securities law questions (949) 353-6347 or Contact us here

Subsidiaries Domestic Or Foreign?

Yesterday's post parsed the definition of "subsidiary" in Corporations Code Section 189.  Because a subsidiary must be a corporation as defined in Section 162, a subsidiary cannot be a foreign corporation, as defined in Section 171.  The legislature seemed to recognize this fact in some provisions of the General Corporation Law.

Section 1602, for example, provides that a director has the absolute right to inspect and copy all books, records and documents of every kind and to inspect the physical properties of the corporation of which such person is a director and also of its subsidiary corporations, domestic or foreign.  This explicit reference contrasts with other provisions of the GCL that refer only to "subsidiaries" (e.g., Corp. Code §§ 114, 408, 501, & 703).

Strictly interpreting Section 189 undoubtedly leads to absurd results.  For example, did the legislature really intend to exclude foreign subsidiaries from a corporation's consolidated financial statements in Section 114?

Share on:

General Corporation Law

ANY QUESTIONS REGARDING CALIFORNIA CORPORATE AND SECURITIES LAW? CONTACT US DIRECTLY

We offer expert advice with the intricacies of California law.

Our years of experience and expertise allow us to help clients navigate the business laws in California.

CONTACT US

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

ABOUT OUR AUTHOR

30172DBAB0084D3A8F39D7AF0A8E79BC.ashx Keith Paul Bishop
Partner at Allen Matkins
(949) 353-6328
 Contact me
Learn More About Keith

RECOGNITION

NationalLawReview

badge-author-large

nominee-badge

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

CATEGORIES

see all

YOUTUBE

FACEBOOK