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To Gyre In Section 2115

Section 2115 is California's (in)famous pseudo-foreign corporation statute.  In general, the statute subjects a corporation that is not incorporated in California to numerous provisions of the California General Corporation law if the corporation satisfies a business test and a shareholder test.  But how is a shareholder to know whether the corporation is subject to Section 2115?

Section 2115(f) seems to supply the answer - just ask:

"Any foreign corporation that is subject to the requirements of subdivision (b) shall advise any shareholder of record, any officer, director, employee, or other agent (within the meaning of Section 317) and any creditor of the corporation in writing, within 30 days of receipt of written request for that information, whether or not it is subject to subdivision (b) at the time the request is received."

On closer inspection, however, the statute isn't entirely sensical.  A foreign corporation that fails to meet the business and shareholder test is not subject to Section 2115(b).  Therefore, it has no obligation under Section 2115(f) to respond whether or not it is subject to Section 2115(b).  Conversely, a foreign corporation that is subject to Section 2115(b) can only have one response - that it is subject to Section 2115(b).  

The statute does provide for the possibility of an award of reasonable attorneys' fees and costs for failing to provide the information or providing incorrect information.  Bizarrely, however, the statute refers to a corporation (not a foreign corporation).  Corporations, as defined in Corporations Code 162 are never subject to Section 2115 because they are either organized under the California General Corporation Law or subject to it under the provisions of Section 162(a). 

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Pseudo-Foreign Corporations

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