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...

What Is A "Known Liability" And Why Does It Matter?

My last several posts have for the most part concerned the liability of shareholders when a corporation voluntarily or involuntarily dissolves.  Directors may also face liability under Section 316(a)(2) of the Corporations Code.   That statute makes...

Actions Against Shareholders Of Dissolved Corporations (Part III)

Today's post follows up on two prior posts addressing actions by creditors of dissolved corporations.  This post discusses the non-applicability of Chapter 5 of the California General Corporation Law to proceedings for winding up under Chapters 18...

Recovering Improper Distributions From Shareholders When Winding Up The Corporation

Yesterday's  post observed that Chapter 5 of the California General Corporation Law does not apply to proceedings for winding up and dissolution of a California corporation under either Chapter 18 (involuntary dissolutions) or Chapter 19 (voluntary...

Dissolution And Limitations On Distributions To Shareholders

Chapter 5 of the California General Corporation Law imposes specific limitations on distributions to shareholders, as defined in Section 166.  When a corporation is wound up and dissolved, whether the dissolution is involuntary under Chapter 18 or...

What Is So Special About A "Special Proceeding"?

Several provisions of the California General Corporation Law provide for "special proceedings" in the Superior Court.  One such provision is Section 1800 which allows certain persons to bring an action for the involuntary dissolution of the...

When Half A Loaf May Not Suffice

Section 1900(a) is the only provision of the California General Corporation Law that authorizes action by an exactly 50% vote of shareholders.  This action, moreover, may be taken without any action on the part of a corporation's board of...

Court Rules Share Repurchase Is Not Subject To CGCL Limitations

Chapter 5 of the California General Corporation Law imposes certain limitations on a corporation's distributions to its shareholders.  Section 166 of the Corporations Code defines "distribution to its shareholders" to include the purchase or...

Referring To Extraneous Agreements In The Articles of Incorporation

I didn't take note of AB 1535 (Maienschein) when it was introduced earlier this year because I thought it was a "spot" bill.  See "See Spot Run". As introduced, the bill simply added "which may include a reference to a separate shareholder...

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