For These Directors, There May Be No Way Out

The California General Corporation Law provides that any director may resign effective upon giving notice to certain specified persons, unless the notice specifies a later time for the effectiveness of his or her resignation.  Cal. Corp. § 305(d). ...

Mark Your Ballot With Care Because There May Be No Taking It Back

Section 603 of the California Corporations Code provides generally for shareholder action by written consent, unless otherwise prohibited in the articles of incorporation.  Subdivision (c) of that statute provides that a consent may be revoked...

Want To Sell Your Membership In A Nonprofit Corporation?

California's Nonprofit Corporation Law consists of three separate laws - the Nonprofit Public Benefit Corporation Law, the Mutual Benefit Corporation Law, and the Religious Corporation Law.  Each of these laws authorizes a corporation to admit...

Incorporating Your Club Requires No Conversion

Often a club or other  will begin informally without formal incorporation.  In California, such an unincorporated club or group, whether organized for profit or not, is classified as an "unincorporated association" and it will be governed by...

"Refusal To Acquiesce" To Director's Removal Results In Multimillion Dollar Damage Award

A recent holding by the Second District Court of Appeal is a cautionary tale for directors who fail to acquiesce to a director's removal from the board.  Association for Los Angeles Deputy Sheriffs v. Macias, 63 Cal. App. 5th 1007 (2021).  The case...

Is A Breach Of Fiduciary Duty A Violation Of State Law?

California Labor Code Section 1102.5 protects employees from certain retaliatory acts by their employers.  Subdivision (b) of the statute provides:

Court Finds This Triptych Sufficient To Establish A Director's Breach Of Fiduciary Duty

Yesterday's post discussed one aspect of the Court of Appeal's holding in Coley v. Eskaton, 2020 Cal. App. LEXIS 629.  The case involved a homeowner's lawsuit against two directors of the homeowner's association and their employers.  Among other...

Director Found To Have Breached His Fiduciary Duty By Sharing Corporation's Privileged Information With His Personal Attorney

A homeowner in a common interest development sued the homeowner association and two of its directors and the directors employers.  The directors were employed by two related companies engaged in the development and support of common interest...

Court Interprets Bylaw Qualification Requirement For Directors

The California Corporations Code authorizes the bylaws to include a provision specifying the qualifications of directors.  Cal. Corp. Code § 212(b)(4).  A similar provision can be found in the Nonprofit Corporation Law.  Cal. Corp. Code §...

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