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Close Corporation Or Simply A Closely Held Corporation?

A corporation may have a single shareholder or tens of thousands of shareholders.  The former is often referred to as a "closely held corporation".  The California Corporations Code does not use or define the term "closely held corporation" although...

Corporate Governance, General Corporation Law

A Different Sort Of Standing Is At Issue In Federal Court Challenge To California Female Director Quota

Last November, a shareholder of OSI Systems, Inc. filed a complaint in the U.S. District Court for the Eastern District of California challenging California's law imposing female director quotas on publicly traded corporations headquartered in...

Corporate Governance, General Corporation Law

What Makes Common Stock, Common?

Suppose that the articles of incorporation provide that a corporation will have two classes of shares, with one class entitled to 90% of all dividends declared and assets upon liquidation and the other class to the remaining 10%.  Clearly, an...

General Corporation Law

Bill Threatens Further Obfuscation Of California's Board Quota Law

Two years ago, California State Senator Hannah-Beth Jackson introduced a bill imposing gender quotas on publicly held domestic or foreign corporations having their principal executive offices in California.  Then Governor Brown admitted "I don't...

General Corporation Law

Four Decades After Being Abolished, Some California Corporations Continue To Refer To "Treasury Stock"

Treasury shares are shares that a corporation has issued and then reacquired but not retired.  Hence, they are shares that have been issued but are no longer outstanding.  In some states, treasury shares retain some legal significance but not so in...

General Corporation Law

What Happens When A Board Fails To Determine The Fair Value Of The Consideration For Shares?

California Corporations Code Section 409(e) imposes a duty on the board of directors to determine "the fair value to the corporation in monetary terms of any consideration other than money for which shares are issued".  Does a board's failure to...

General Corporation Law

California Board Gender Quota Law Challenged In Federal Court

Cydney Posner at Cooley LLP wrote last week about a new challenge to California's Board Gender Quota law.  The lawsuit, Creighton Meland v. Alex Padilla, Secretary of State of California,was reportedly filed in federal district court in California...

Corporate Governance, General Corporation Law

State Law And Shareholder Representatives

As noted yesterday, the Securities and Exchange Commission has proposed to amend Rule 14a-8 to modernize "the process for shareholder proposals to be included in a company’s proxy statement".  Among other things, the SEC is proposing  to amend the...

Corporate Governance, General Corporation Law

Did The SEC Misstate State Law In Proposing Changes To Shareholder Proposal Rule?

Yesterday, the Securities and Exchange Commission proposed amendments to Rule 14a-8, which requires companies subject to the federal proxy rules to include shareholder proposals in their proxy statements, subject to certain procedural and...

General Corporation Law

When Signing A Subscription Agreement Is A Crime

Chapter 22 of the California General Corporation Law is devoted to crimes and penalties.  Some of these crimes are surprising.  Section 2252, for example, imposes criminal liability on every person who "signs to any subscription or agreement the...

General Corporation Law

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30172DBAB0084D3A8F39D7AF0A8E79BC.ashxKeith Paul Bishop
Partner at Allen Matkins
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