citation: CORP § 10250

text:
(a) Any corporation organized under the provisions of or for the purposes set forth in Part 6 (commencing with Section 10000) of this division or organized on or prior to December 31, 1979, under the provisions of or for purposes set forth in Part 3 (commencing with Section 10200) of this division, then in effect, or organized under or subject to Part 2 (commencing with Section 5110), or organized under or subject to Part 4 (commencing with Section 9110), may, if authorized so to do by its articles of incorporation, establish one or more common trust funds for the purpose of furnishing investments to such corporation or to any church, parish, congregation, society, chapel, mission, religious, beneficial, charitable or educational institution affiliated with it, or to any organization, society or corporation holding funds or property for the benefit of any of the foregoing, or holding funds for the purpose of supporting a bishop, priest, religious pastor, or teacher or any building or buildings used by or owned by any of the foregoing, whether holding such funds or property as fiduciary or otherwise. Notwithstanding the provisions of any general or special law in any way limiting the right of any of the foregoing or the officers or directors thereof, as fiduciary or otherwise, to invest funds held by them, it shall be lawful for any of the foregoing to invest any or all of their funds or property in shares or interests of such common trust fund or trust funds; provided, that, in the case of funds or property held as fiduciary, such investment is not prohibited by the wording of the will, deed or other instrument creating such fiduciary relationship.

(b) The directors or trustees of any such common trust fund, or trust funds, so organized, may employ such officers or agents as they think best, define their duties, and fix their compensation. They may also appoint a trust company or bank as custodian of the trust estate and may employ an investment adviser or advisers, define their duties, and fix their compensation. Securities which constitute part or all of the trust estate may be deposited in a securities depository, as defined in Section 30004 of the Financial Code, which is licensed under Section 30200 of the Financial Code or exempted from licensing thereunder by Section 30005 or 30006 of the Financial Code, and such securities may be held by such securities depository in the manner authorized by Section 775 of the Financial Code.

(c) The directors or trustees of any such common trust fund, or trust funds, shall pay ratably among the holders of shares or beneficial certificates then outstanding, semiannual dividends which shall approximately equal, in each fiscal year, the net income of the trust, or trusts.

(d) The provisions of the Corporate Securities Law (Division 1 (commencing with Section 25000) of Title 4) shall not apply to the creation, administration, or termination of common trust funds created hereunder, nor to participation therein.

history: (History: Amended by Stats. 1981, Ch. 570, Sec. 14.)

part: 8. TRUST FUNDS

title: 1. CORPORATIONS

path: 1. CORPORATIONS > 2. NONPROFIT CORPORATION LAW > 6. Miscellaneous Provisions > 8. TRUST FUNDS


kind: section

code: CORP

citation: CORP § 10251

text:
(a) “Educational institution,” as used in this section, means any nonprofit corporation organized under Chapter 4 (commencing with Section 94400) or Chapter 7 (commencing with Section 94700) of Part 59 of the Education Code or organized under Part 1 (commencing with Section 9000) of this division in effect on December 31, 1979, and designated on or after January 1, 1980, as a nonprofit public benefit corporation, or organized for charitable or eleemosynary purposes under Part 2 (commencing with Section 5110) of this division, or Part 3 (commencing with Section 10200) of this division in effect on December 31, 1979, and designated on or after January 1, 1980, as a nonprofit public benefit corporation for the purpose of establishing, conducting or maintaining an institution offering courses beyond high school and issuing or conferring a diploma or for the purpose of offering or conducting private school instruction on the high school or elementary school level and any charitable trust organized for such purpose or purposes. “Educational institution,” as used in this section, also means the University of California, the California State University, the California Community Colleges, and any auxiliary organization, as defined in Section 89901 of the Education Code, established for the purpose of receiving gifts, property and funds to be used for the benefit of a state college.

(b) It shall be lawful for any educational institution to become a member of a nonprofit corporation incorporated under the laws of any state for the purpose of maintaining a common trust fund or similar common fund in which nonprofit organizations may commingle their funds and property for investment and to invest any and all of its funds, whenever and however acquired, in the common fund or funds; provided that, in the case of funds or property held as fiduciary, the investment is not prohibited by the wording of the will, deed, or other instrument creating the fiduciary relationship.

(c) An educational institution electing to invest in a common fund or funds under this section may elect to receive distributions from each fund in an amount not to exceed for each fiscal year the greater of the income, as determined under the Uniform Principal and Income Act, Chapter 3 (commencing with Section 16320) of Part 4 of Division 9 of the Probate Code, accrued on its interest in the fund or 10 percent of the value of its interest in the fund as of the last day of its next preceding fiscal year. The educational institution may expend the distribution or distributions for any lawful purpose notwithstanding any general or special law characterizing the distribution, or any part thereof, as principal or income; provided that, in the case of funds or property invested as fiduciary, the expenditure is not prohibited by the wording of the will, deed, or other instrument creating the fiduciary relationship. No such prohibition of expenditure shall be deemed to exist solely because a will, deed, or other instrument, whether executed or in effect before or after the effective date of this section, directs or authorizes the use of only the “income,” or “interest,” or “dividends” or “rents, issues or profits,” or contains words of similar import.

(d) The Corporate Securities Law of 1968 shall not apply to the creation, administration, or termination of common trust funds authorized under this section, or to participation therein.

(e) This section shall become operative on January 1, 1997.

history: (History: Amended by Stats. 1999, Ch. 145, Sec. 1. Effective January 1, 2000.)

division: 2. NONPROFIT CORPORATION LAW

title: 1. CORPORATIONS

chapter: 6. Miscellaneous Provisions


citation: CORP § 10400

text: Corporations for the prevention of cruelty to animals may be formed under the Nonprofit Public Benefit Corporation Law (Part 2 (commencing with Section 5110)) by 20 or more persons, who shall be citizens and residents of this state. If the corporation is formed on or after January 1, 2011, its articles of incorporation shall specifically state that the corporation is being formed pursuant to this section.

history: (History: Amended by Stats. 2011, Ch. 296, Sec. 43. (AB 1023) Effective January 1, 2012.)

title: 1. CORPORATIONS

path: 1. CORPORATIONS > 2. NONPROFIT CORPORATION LAW > 6. Miscellaneous Provisions > 9. SOCIETIES FOR PREVENTION OF CRUELTY TO ANIMALS


citation: CORP § 10403

text: Every such corporation may take by gift, purchase, devise, or bequest, any property, real or personal, and hold it or dispose thereof at its pleasure; but no such corporation shall hold real property the annual income of which exceeds fifty thousand dollars ($50,000).

history: (History: Enacted by Stats. 1947, Ch. 1038.)

part: 9. SOCIETIES FOR PREVENTION OF CRUELTY TO ANIMALS

title: 1. CORPORATIONS


citation: CORP § 10404

text: Any such corporation, or humane officer thereof, may proffer a complaint against any person, before any court or magistrate having jurisdiction, for the violation of any law relating to or affecting animals and may aid in the prosecution of the offender before the court or magistrate.

history: (History: Amended by Stats. 2011, Ch. 296, Sec. 44. (AB 1023) Effective January 1, 2012.)

title: 1. CORPORATIONS


citation: CORP § 10405

text: All magistrates, sheriffs, and officers of police shall, as occasion may require, aid any such corporation, its officers, members, and agents, in the enforcement of all laws relating to or affecting animals.

history: (History: Amended by Stats. 2010, Ch. 652, Sec. 5. (SB 1417) Effective January 1, 2011.)

title: 1. CORPORATIONS


citation: CORP § 10406

text: This part applies to all corporations for the prevention of cruelty to animals, whether formed prior to or after May 20, 1905, but does not apply to any association, society, or corporation that uses or specifies a name or style the same, or substantially the same, as that of any previously existing society or corporation in this state organized for a like purpose.

history: (History: Amended by Stats. 2010, Ch. 652, Sec. 6. (SB 1417) Effective January 1, 2011.)

title: 1. CORPORATIONS


citation: CORP § 10700

text: As used in this part, “public agency” includes every port district, river port district, municipal port district, harbor district, harbor improvement district, joint harbor improvement district, Board of State Harbor Commissioners, board of harbor commissioners, city, county, and city and county in this state.

history: (History: Repealed and added by Stats. 1978, Ch. 1305.)

title: 1. CORPORATIONS

path: 1. CORPORATIONS > 2. NONPROFIT CORPORATION LAW > 6. Miscellaneous Provisions > 10. PORT AND TERMINAL PROTECTION AND DEVELOPMENT CORPORATIONS


citation: CORP § 10701

text: Every public agency owning or operating any port or marine terminal and every public agency organized for such purposes may associate itself with other public agencies, private corporations or individuals owning or operating, or organized for the purpose of owning or operating, ports or marine terminals located on the same harbor, bay, or other waterway or on communicating or related waterways, of this state and with other public agencies and with private corporations and individuals, or any of them, in the formation under the Nonprofit Mutual Benefit Corporation Law, Part 3 (commencing with Section 7110) of this division, and may become and remain a member of a nonprofit corporation organized under the Nonprofit Mutual Benefit Corporation Law for the purpose of, or the principal powers and purposes of which include carrying on a program of nonregulatory activities in the common interests of its members, including but not limited to any or all of the following activities: studies and research into traffic conditions, cargo volume, rate structures, cost factors, commercial transportation practices, and similar fields; the acquisition and dissemination of information relative to the said and similar subjects; the representation of the common interests of its members before federal, state, and local legislative and administrative authorities; and service as a facility for the cooperation of its members and the coordination of their activities toward the maintenance and improvement of the commercial welfare and competitive position of the ports and terminals owned or operated by its members, the maintenance of equitable and nondiscriminatory rate structures, and the elimination of inequitable, unfair, or discriminatory trade practices adversely affecting the interests of its members; and the undertaking or coordination of any other program of related activities or in related fields for the mutual benefit of its members as may be desired by the membership. Every such public agency may pay the dues and assessments required of its members by such nonprofit mutual benefit corporation out of any funds available to it for that purpose or for its support; may make contracts; may enter into agreements; may appoint an individual as its representative to such nonprofit mutual benefit corporation to exercise the voting power of such public agency and to act in its behalf with respect to such nonprofit mutual benefit corporation; and may do or perform all acts necessary and proper to carry out the purposes of this part; but no public agency shall become or remain a member of any such nonprofit mutual benefit corporation unless the articles of incorporation or the bylaws of the nonprofit mutual benefit corporation include at all times a provision limiting the liability of members to assessments to a specified or ascertainable amount.

part: 10. PORT AND TERMINAL PROTECTION AND DEVELOPMENT CORPORATIONS

title: 1. CORPORATIONS


citation: CORP § 10702

text: For the purposes of this part, of the Nonprofit Mutual Benefit Corporation Law, and of the General Corporation Law of this state, every public agency and private corporation qualifying under this part shall be deemed to be a “person” and shall have the legal capacity to act as incorporator and as member of any nonprofit mutual benefit corporation formed under the provisions of this part.

title: 1. CORPORATIONS


citation: CORP § 10703

text:
If, when, and during such times as public agencies or individuals duly authorized to represent them and act in their behalf constitute a majority of the incorporators or of the directors and are entitled to exercise a majority of the voting power of a nonprofit mutual benefit corporation pursuant to this part:

(a) The Corporate Securities Law (Division 1 (commencing with Section 25000) of Title 4) shall not apply to memberships nor to membership certificates issued by the corporation; and

(b) The corporation shall be exempt from payment of any taxes under the Bank and Corporation Tax Law (Part 11 of Division 2 of the Revenue and Taxation Code), except as provided in Article 2 of Chapter 4 thereof.

title: 1. CORPORATIONS


citation: CORP § 10810

text:
A nonprofit corporation may be formed under Part 2 (commencing with Section 5110) or Part 3 (commencing with Section 7110) of this division for the purposes of defraying or assuming the cost of professional services of licentiates under any chapter of Division 2 (commencing with Section 500) of the Business and Professions Code or of rendering any such services, but it may not engage directly or indirectly in the performance of the corporate purposes or objects unless all of the following requirements are met:

(a) At least one-fourth of all licentiates of the particular profession residing in California become members.

(b) Membership in the corporation and an opportunity to render professional services upon a uniform basis are available to all licensed members of the particular profession.

(c) Voting by proxy and cumulative voting are prohibited.

(d) A certificate is issued to the corporation by the particular professional board whose licentiates have become members, finding compliance with the requirements of subdivisions (a), (b), and (c).

Any such corporation shall be subject to supervision by the particular professional board under which its members are licensed and shall also be subject to the part under which it is formed, either Part 2 (commencing with Section 5110) or Part 3 (commencing with Section 7110) of this division, except as to matters specifically otherwise provided for in this article.

history: (History: Added by Stats. 1978, Ch. 1305.)

title: 1. CORPORATIONS

path: 1. CORPORATIONS > 2. NONPROFIT CORPORATION LAW > 6. Miscellaneous Provisions > 11. NONPROFIT MEDICAL, HOSPITAL, OR LEGAL SERVICES CORPORATIONS > 1. Nonprofit Corporations for Medical Services


citation: CORP § 10811

text: Any nonprofit corporation described in Section 10810 which defrays or assumes some portion or all of the costs of refractions or eye appliances shall offer an equal opportunity to render professional services upon a uniform basis to all licentiates expressly authorized by law to render such services.

part: 11. NONPROFIT MEDICAL, HOSPITAL, OR LEGAL SERVICES CORPORATIONS

title: 1. CORPORATIONS

article: 1. Nonprofit Corporations for Medical Services


citation: CORP § 10812

text: The provisions of Sections 10810 and 10811 of this article apply to corporations formed on or after January 1, 1980, under Part 2 or Part 3 of this division and pursuant to this article and to corporations existing on December 31, 1979, and formed under Section 9201 or 9201.1 of the Corporations Code then in effect.

title: 1. CORPORATIONS


citation: CORP § 10820

text:
(a) “Health care service plan,” as used in this section means a corporation which is a health care service plan defined in the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code), other than a corporation which is exempted from that act by subdivision (d) of Section 1343 of the Health and Safety Code.

(b) A health care service plan may be formed under or subject to Part 2 (commencing with Section 5110) of this division or Part 3 (commencing with Section 7110) of this division.

history: (History: Amended by Stats. 1983, Ch. 1085, Sec. 8.5.)

title: 1. CORPORATIONS

article: 2. Nonprofit Health Care Service Plans

path: 1. CORPORATIONS > 2. NONPROFIT CORPORATION LAW > 6. Miscellaneous Provisions > 11. NONPROFIT MEDICAL, HOSPITAL, OR LEGAL SERVICES CORPORATIONS > 2. Nonprofit Health Care Service Plans


citation: CORP § 10821

text: Notwithstanding any other provision of this division, as to a health care service plan which is formed under or subject to Part 2 (commencing with Section 5110) or Part 3 (commencing with Section 7110) of this division, all references to the Attorney General contained in Part 2 or Part 3 of this division shall, in the case of health care service plans, be deemed to refer to the Director of the Department of Managed Health Care.

history: (History: Amended by Stats. 2000, Ch. 857, Sec. 6. Effective January 1, 2001.)

title: 1. CORPORATIONS

article: 2. Nonprofit Health Care Service Plans


citation: CORP § 10830

text:
A nonprofit corporation may be formed under Part 3 (commencing with Section 7110) of this division for the purposes of administering a system or systems of defraying the cost of professional services of attorneys, but any such corporation may not engage directly or indirectly in the performance of the corporate purposes or objects unless all of the following requirements are met:

(a) The attorneys furnishing professional services pursuant to such system or systems are acting in compliance with the Rules of Professional Conduct of the State Bar of California concerning such system or systems.

(b) Membership in the corporation and an opportunity to render professional services upon a uniform basis are available to all active members of the State Bar.

(c) Voting by proxy and cumulative voting are prohibited.

(d) A certificate is issued to the corporation by the State Bar of California, finding compliance with the requirements of subdivisions (a), (b) and (c).

Any such corporation shall be subject to supervision by the State Bar of California and shall also be subject to Part 3 (commencing with Section 7110) of this division except as to matters specifically otherwise provided for in this article.

title: 1. CORPORATIONS

path: 1. CORPORATIONS > 2. NONPROFIT CORPORATION LAW > 6. Miscellaneous Provisions > 11. NONPROFIT MEDICAL, HOSPITAL, OR LEGAL SERVICES CORPORATIONS > 3. Nonprofit Corporation to Administer System of Defraying Cost of Professional Services of Attorneys


citation: CORP § 10831

text: The provisions of this article apply to corporations formed on or after January 1, 1980, under Part 3 of this division and pursuant to this article and to corporations existing on December 31, 1979, and formed under Section 9201.2 of the Corporations Code then in effect.

title: 1. CORPORATIONS

article: 3. Nonprofit Corporation to Administer System of Defraying Cost of Professional Services of Attorneys


citation: CORP § 10840

text:
(a) “Hospital service plan,” as used in this section means a corporation which is a nonprofit hospital service plan defined in Chapter 11a (commencing with Section 11491) of Part 2 of Division 2 of the Insurance Code.

(b) A hospital service plan may be formed under or subject to Part 2 (commencing with Section 5110) or Part 3 (commencing with Section 7110).

history: (History: Amended by Stats. 1983, Ch. 1085, Sec. 14.5.)

title: 1. CORPORATIONS

article: 4. Hospital Service Plans

path: 1. CORPORATIONS > 2. NONPROFIT CORPORATION LAW > 6. Miscellaneous Provisions > 11. NONPROFIT MEDICAL, HOSPITAL, OR LEGAL SERVICES CORPORATIONS > 4. Hospital Service Plans


citation: CORP § 10841

text: Notwithstanding any other provision of this division, as to a hospital service plan which is formed under or subject to Part 2 (commencing with Section 5110) or Part 3 (commencing with Section 7110) of this division, all references to the Attorney General contained in Part 2 or Part 3 of this division shall, in the case of hospital service plans, be deemed to refer to the Insurance Commissioner.

history: (History: Repealed and added by Stats. 1983, Ch. 1085, Sec. 16.)

title: 1. CORPORATIONS

article: 4. Hospital Service Plans


citation: CORP § 12000

text:
Every corporation organized or existing under Part 1 (commencing with Section 12000) in effect on December 31, 1979, is subject to and deemed to be organized under:

(a) The General Corporation Law (Division 1 (commencing with Section 100) of this title), if the corporation is organized with capital stock.

(b) The Nonprofit Mutual Benefit Corporation Law (Part 3 (commencing with Section 7110) of Division 2 of this title) if the corporation is organized without capital stock.

division: 3. CORPORATIONS FOR SPECIFIC PURPOSES

title: 1. CORPORATIONS

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 1. CHAMBERS OF COMMERCE, BOARDS OF TRADE, MECHANICS' INSTITUTES, ETC.


citation: CORP § 12200

text: This part shall be known as the Cooperative Corporation Law. This part is intended primarily to apply to the organization and operation of cooperatives, including, but not limited to, consumer cooperatives, worker cooperatives, and cooperatives formed for the purpose of recycling or treating hazardous waste that elect to incorporate under its provisions.

history: (History: Amended by Stats. 2015, Ch. 192, Sec. 3. (AB 816) Effective January 1, 2016.)

title: 1. CORPORATIONS

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 1. General Provisions, Organization and Bylaws > 1. Title, Purposes and Application of Part


citation: CORP § 12201

text:
Subject to any other provision of law of this state applying to the particular class of corporation or line of activity, a corporation may be formed under this part for any lawful purpose provided that it shall be organized and shall conduct its business primarily for the mutual benefit of its members as patrons of the corporation. The earnings, savings, or benefits of the corporation shall be used for the general welfare of the members or shall be proportionately and equitably distributed to some or all of its members or its patrons, based upon their patronage (Section 12243) of the corporation, in the form of cash, property, evidences of indebtedness, capital credits, memberships, or services.

Such corporations are democratically controlled and are not organized to make a profit for themselves, as such, or for their members, as such, but primarily for their members as patrons (Section 12243).

history: (History: Repealed and added by Stats. 1982, Ch. 1625, Sec. 3. Operative January 1, 1984.)

title: 1. CORPORATIONS

chapter: 1. General Provisions, Organization and Bylaws

article: 1. Title, Purposes and Application of Part


text:
(a) Notwithstanding Section 12201, the net earnings and losses of a worker cooperative shall be apportioned and distributed at the time and in the manner specified in the articles of incorporation or bylaws.

(b) Net earnings declared as patronage distributions with respect to a period of time, and paid to a creditor or member, shall be apportioned among the members in accordance with the ratio that each member’s patronage during the period bears to total patronage by all members during the period.

(c) The apportionment, distribution, and payment of net earnings required by subdivision (a) may be paid in cash, credits, written notices of allocation, or capital stock issued by the worker cooperative.

history: (History: Added by Stats. 2015, Ch. 192, Sec. 4. (AB 816) Effective January 1, 2016.)

title: 1. CORPORATIONS


citation: CORP § 12202

text:
(a) The provisions of this part apply to corporations existing pursuant to Part 2 (commencing with Section 12200) of Division 3 of Title 1 in effect immediately prior to January 1, 1984.

(b) The existence of corporations formed or existing on the date of enactment of this part shall not be affected by the enactment or reenactment of this part or by any change in the requirements for the formation of corporations or by the amendment or repeal of the laws under which they were formed or created.

(c) Neither the repeal of Part 2 (commencing with Section 12200) of Division 3 of Title 1 as in effect immediately prior to January 1, 1984, nor the reenactment or amendment of this part shall impair or take away any existing liability or cause of action against any corporation, its members, shareholders, directors, or officers incurred prior to the enactment of this part.

title: 1. CORPORATIONS


citation: CORP § 12203

text: Unless the provisions or the context otherwise requires, the definitions set forth in this part govern the construction of this part.

title: 1. CORPORATIONS


citation: CORP § 12210

text: A corporation may be sued as provided in the Code of Civil Procedure.

history: (History: Added by Stats. 1982, Ch. 1625, Sec. 3. Operative January 1, 1984.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 1. General Provisions, Organization and Bylaws > 2. General Provisions and Definitions


citation: CORP § 12211

text: Any corporation shall, as a condition of its existence as a corporation, be subject to the provisions of the Code of Civil Procedure authorizing the attachment of corporate property.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12212

text: The fees of the Secretary of State for filing instruments by or on behalf of corporations are prescribed in Article 3 (commencing with Section 12180) of Chapter 3 of Part 2 of Division 3 of Title 2 of the Government Code.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12213

text:
Any agreement, certificate, or other instrument filed pursuant to the provisions of this part, may be corrected with respect to any misstatement of fact contained therein, any defect in the execution thereof or any other error or defect contained therein, by filing a certificate of correction entitled “Certificate of Correction of ____ (insert here the title of the agreement, certificate or other instrument to be corrected and the name of the corporation or corporations).” However, no such certificate of correction shall alter the wording of any resolution which was in fact adopted by the board or the members or delegates or effect a corrected amendment of articles which amendment as so corrected would not in all respects have complied with the requirements of this part, at the time of filing of the agreement, certificate or other instrument being corrected. Such certificate of correction shall be signed and verified or acknowledged as provided in this part with respect to the agreement, certificate or other instrument being corrected. It shall set forth the following:

(a) The name or names of the corporation or corporations.

(b) The date the agreement, certificate or other instrument being corrected was filed.

(c) The provision in the agreement, certificate or other instrument as corrected and, if the execution was defective, wherein it was defective.

The filing of the certificate of correction shall not alter the effective time of the agreement, certificate or other instrument being corrected, which shall remain as its original effective time, and such filing shall not affect any right or liability accrued or incurred before such filing, except that any right or liability accrued or incurred by reason of the error or defect being corrected shall be extinguished by such filing if the person having such right has not detrimentally relied on the original instrument.

history: (History: Amended by Stats. 1983, Ch. 792, Sec. 1.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12214

text:
(a) Upon receipt of any instrument by the Secretary of State for filing pursuant to this part, if it conforms to law, it shall be filed by, and in the office of the Secretary of State and the date of filing endorsed thereon. Except for instruments filed pursuant to Section 12570 the date of filing shall be the date the instrument is received by the Secretary of State unless the instrument provides that it is to be withheld from filing until a future date, other than instruments filed pursuant to Section 12220.5, or, unless in the judgment of the Secretary of State, the filing is intended to be coordinated with the filing of some other corporate document which cannot be filed. The Secretary of State shall file a document as of any requested future date not more than 90 days after its receipt, including a Saturday, Sunday, or legal holiday, if the document is received in the Secretary of State’s office at least one business day prior to the requested date of filing. An instrument does not fail to conform to law because it is not accompanied by the full filing fee if the unpaid portion of the fee does not exceed the limits established by the policy of the Secretary of State for extending credit in these cases.

(b) If the Secretary of State determines that an instrument submitted for filing or otherwise submitted does not conform to law and returns it to the person submitting it, the instrument may be resubmitted accompanied by a written opinion of the member of the State Bar of California submitting the instrument, or representing the person submitting it, to the effect that the specific provision of the instrument objected to by the Secretary of State does conform to law and stating the points and authorities upon which the opinion is based. The Secretary of State shall rely, with respect to any disputed point of law, other than the application of Section 12302, upon that written opinion in determining whether the instrument conforms to law. The date of filing in that case shall be the date the instrument is received on resubmission.

(c) Any instrument filed with respect to a corporation, other than original articles or instruments filed pursuant to Section 12220.5, may provide that it is to become effective not more than 90 days subsequent to its filing date. In case such a delayed effective date is specified, the instrument may be prevented from becoming effective by a certificate stating that by appropriate corporate action it has been revoked and is null and void, executed in the same manner as the original instrument and filed before the specified effective date. In the case of a merger agreement, the certificate revoking the earlier filing need only be executed on behalf of one of the constituent corporations. If no revocation certificate is filed, the instrument becomes effective on the date specified.

(d) Any instrument submitted to the Secretary of State for filing pursuant to this part by a domestic corporation or foreign corporation that is qualified to transact business in California under Section 2105 shall include the entity name and number as they exist on the Secretary of State’s records.

history: (History: Amended by Stats. 2024, Ch. 80, Sec. 32. (SB 1525) Effective January 1, 2025.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


text: The Secretary of State may cancel the filing of articles if a check or other remittance accepted in payment of the filing fee or franchise tax is not paid upon presentation. Within 90 days of receiving written notification that the item presented for payment has not been honored for payment, the Secretary of State shall give written notice of the applicability of this section and the cancellation date which shall be not less than 20 days from the date of mailing the written notice as certified by the Secretary of State, to the agent for service of process or to the person submitting the instrument. Thereafter, if the amount has not been paid by cashier’s check or equivalent before the date of cancellation as stated in the written notice of cancellation, the cancellation shall thereupon be effective.

history: (History: Amended by Stats. 2022, Ch. 617, Sec. 73. (SB 1202) Effective January 1, 2023.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


text:
(a) A corporation that (1) fails to file a statement pursuant to Section 12570 for an applicable filing period, (2) has not filed a statement pursuant to Section 12570 during the preceding 24 months, and (3) was certified for penalty pursuant to Section 12670 for the same filing period of the prior year, shall be subject to suspension pursuant to this section rather than to a penalty under Section 12670.

(b) When subdivision (a) is applicable, the Secretary of State shall mail a notice to the corporation informing the corporation that its corporate powers, rights, and privileges will be suspended 60 days from the date of the notice if the corporation does not file the statement required by Section 12570.

(c) If the 60-day period expires without the delinquent corporation filing the required statement, the Secretary of State shall notify the Franchise Tax Board of the suspension, and mail a notice of the suspension to the corporation. Following completion of these notification requirements, except for the purpose of amending the articles of incorporation to set forth a new name or filing an application for exempt status, the corporate powers, rights, and privileges of the corporation are suspended.

(d) A statement required by Section 12570 may be filed, notwithstanding suspension of the corporate powers, rights, and privileges under this section or under provisions of the Revenue and Taxation Code. Upon the filing of a statement under Section 12570, by a corporation that has been suspended pursuant to this section, the Secretary of State shall certify that fact to the Franchise Tax Board and the corporation may, in accordance with Section 23305a of the Revenue and Taxation Code, be relieved from suspension, unless the corporation is held in suspension by the Franchise Tax Board pursuant to Section 23301, 23301.5, or 23775 of the Revenue and Taxation Code.

history: (History: Added by Stats. 1996, Ch. 589, Sec. 45. Effective January 1, 1997.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12215

text: Except as otherwise permitted, any reference in this part to mailing means first-class mail, postage prepaid, unless registered or some other form of mail is specified or permitted. Registered mail includes certified mail.

history: (History: Amended by Stats. 1983, Ch. 792, Sec. 2.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12216

text: If the articles provide for more than one vote for any member on any matter, the references in Sections 12223 and 12224 to a majority or other proportion of members mean, as to such matters, a majority or other proportion of the votes entitled to be cast. Whenever members are disqualified from voting on any matter, they shall not be counted for the determination of a quorum at any meeting to act upon, or the required vote to approve action upon, that matter under any other provision of this part or the articles or bylaws.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12217

text: All references in this part to financial statements of a corporation mean statements prepared in conformity with generally accepted accounting principles or some other basis of accounting which reasonably sets forth the assets and liabilities and the income and expenses of the corporation and discloses the accounting basis used in their preparation.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12218

text: As used in this part, “independent accountant” means a certified public accountant or public accountant who is independent of the corporation as determined in accordance with generally accepted auditing standards and who is engaged to audit financial statements of the corporation or perform other accounting services.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12219

text: Any reference in this part to the time a notice is given or sent means, unless otherwise expressly provided, the time a written notice by mail is deposited in the United States mails, postage prepaid; or the time any other written notice is personally delivered to the recipient or is delivered to a common carrier for transmission, or actually transmitted by the person giving the notice by electronic means, to the recipient; or the time any oral notice is communicated, in person or by telephone or wireless, to the recipient or to a person at the office of the recipient who the person giving the notice has reason to believe will promptly communicate it to the recipient.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12220

text: A notice or report mailed or delivered as part of a newsletter, magazine or other organ regularly sent to members shall constitute written notice or report pursuant to this part when addressed and mailed postage prepaid by first or second class mail or delivered to the member, or in the case of members who are residents of the same household and who have the same address on the books of the corporation, when addressed and mailed postage prepaid by first or second class mail or delivered to one of such members, at the address appearing on the books of the corporation.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


text:
(a) (1) Otherwise lawful corporate actions not in compliance, or purportedly not in compliance, with this division or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of the corporate action, may be ratified, or validated by the superior court, in accordance with the provisions of this section.

(2) Except as otherwise determined by the superior court pursuant to subdivision (e), a ratification or validation of a corporate action in accordance with this section is conclusive in the absence of fraud.

(3) This section does not limit the authority of the board, the members, or the corporation to effect any other lawful means of ratification or validation of a corporate action or correction of a record.

(4) No corporate action may be ratified under subdivision (b) by a dissolved corporation or a foreign corporation, and no petition may be filed under subdivision (e) in respect of any corporate action of such a corporation.

(5) This section shall not be used to ratify or validate any corporate action in respect of any of the following:

(A) Noncompliance with subdivision (a) of Section 12371.

(B) Noncompliance with subdivision (a) or (b) of Section 12373.

(C) Noncompliance with Section 12375.

(b) (1) A ratification of a corporate action pursuant to this section, other than a ratification relating to the election of the initial directors pursuant to paragraph (2) of this subdivision, shall be approved by the board and, as applicable, approved by the members in accordance with any provision set forth in this division or the articles, bylaws, or a plan or agreement to which the corporation is a party that is applicable to the type of corporate action proposed to be ratified and in effect at the time of the ratification, unless there are no members entitled to vote on the ratification at the time of the ratification, in which case the ratification shall be approved solely by the board, or a higher approval standard that was or would have been applicable to the original taking or purported taking of the corporate action, in which case the ratification shall be approved in accordance with such higher approval standard. In order to approve a ratification of a corporate action pursuant to this paragraph, the board and, as applicable, the members shall adopt resolutions setting forth all of the following:

(A) Each corporate action to be ratified.

(B) The date when each such corporate action was purportedly taken, and the date any such corporate action shall be deemed to have become effective pursuant to this section if different than the date the corporate action was purportedly taken.

(C) The nature of the noncompliance or purported noncompliance of each such corporate action.

(D) A statement that the ratification of each such corporate action is approved.

(2) If the corporate action to be ratified relates to the election of the initial directors pursuant to Section 12316, a majority of the persons who, at the time of the ratification, are exercising the powers of directors may approve that ratification by adopting resolutions setting forth all of the following:

(A) The name of the person or persons who first took action in the name of the corporation as the initial directors of the corporation.

(B) The earlier of the date on which such persons first took such action or were purported to have been elected as the initial directors, and the date on which such person or persons shall be deemed to have become the initial directors of the corporation pursuant to this section if different than the date of such first action or purported election, as applicable.

(C) That the ratification of the election of such person or persons as the initial directors is approved.

(c) Notice of any ratification of a corporate action pursuant to this section shall be given promptly after ratification pursuant to subdivision (b) to each member, regardless of whether approval of the members is required for the ratification. The notice shall be given as provided in subdivision (b) of Section 12461 and shall include a copy of any resolutions adopted pursuant to subdivision (b) and a copy of this section.

(d) (1) If a corporate action ratified pursuant to this section would have required the filing of an instrument with the Secretary of State pursuant to the provisions of this division, or if such ratification would cause any instrument previously filed with the Secretary of State to be inaccurate or incomplete in any material respect after giving effect to the ratification, the corporation shall file a certificate of ratification to make, amend, or correct each such instrument. The certificate of ratification shall have the effect as specified therein, and shall be filed with the Secretary of State. A certificate of ratification shall consist of an officers’ certificate setting forth all of the following:

(A) The name of the corporation and the Secretary of State’s file number of the corporation.

(B) The title of any such instrument whose making, amendment, or correction is being effected by the certificate of ratification.

(C) The date any such instrument was filed with the Secretary of State, or a statement that any such instrument was not previously filed with the Secretary of State and, as applicable, a statement that the ratification approved pursuant to the resolutions set forth in the certificate of ratification would cause any such instrument to be inaccurate or incomplete in any material respect after giving effect to the ratification.

(D) The date any such instrument shall be deemed to have become effective pursuant to this section, which may be prior to or after the filing date.

(E) A statement that the certificate of ratification is making, amending, or correcting any such instrument, as applicable, and a copy of any such instrument containing all of the information required to be included under this division for such instrument to be so made, amended, or corrected. An instrument attached to a certificate of ratification pursuant to this subparagraph need not be separately executed and acknowledged and need not include any statement required by any other section of this division that such instrument has been approved and adopted in accordance with the provisions of such other section.

(F) A statement that the ratification has been approved pursuant to subdivision (b), a copy of the resolutions adopted pursuant to subdivision (b) in respect of the ratification.

(2) The office of the Secretary of State may, in its discretion, refuse to file any certificate of ratification if the instrument would render prior filings with the Secretary of State inaccurate, ambiguous, or unintelligible. Upon refusal of the Secretary of State to file a certificate of ratification pursuant to this subdivision, the corporation shall seek validation pursuant to subdivision (e).

(e) (1) Upon the filing of a petition by an authorized person, the superior court of the proper county shall have jurisdiction in equity to determine the validity of any corporate action (whether or not such corporate action is a ratification or has been the subject of any ratification), validate and declare effective any such corporate action, and declare the date any such corporate action shall be deemed to have become effective or valid, as applicable, pursuant to this section.

(2) This section does not prescribe or circumscribe the facts and circumstances the superior court may consider or which remedies the superior court may grant in exercising its jurisdiction under this section, except as described in this subdivision. The superior court may make any order concerning the corporate action as justice and equity may require.

(3) Any petition relating to a ratification taken or proposed to be taken pursuant to this section shall be filed not later than 180 days after the notice required by subdivision (c) is given, except this paragraph shall not apply to an action asserting that a ratification was not accomplished in accordance with this section or to any person to whom notice of the ratification was required to have been given pursuant to subdivision (c), but to whom such notice was not given.

(4) For purposes of this subdivision, the proper county shall be the county where the principal office of the corporation is located or, if the principal office is not located in this state, in the county in which the corporation’s agent for service of process is located.

(5) Service of the petition under paragraph (1) upon the registered agent of the corporation shall be deemed to be service upon the corporation, and no other party need be joined in order for the superior court to adjudicate the matter. The superior court may require notice of the action to be provided to other persons specified by the court and permit those other persons to intervene in the action.

(6) For purposes of this subdivision, “authorized person” means the corporation, any successor entity to the corporation, any director, any member, or any other person, so long as the other person claims to be substantially and adversely affected by the ratification of a corporate action pursuant to this section.

(7) Any petition seeking validation of a corporate action shall identify every pending legal proceeding of which the petitioner is aware and in which (A) the validity of the corporate action is being directly challenged or (B) the validation of the corporate action would result in the dismissal of the proceeding in whole or in part. If the petitioner becomes aware of any additional such legal proceeding, the petitioner shall amend, or, to the extent required by applicable rules, move for leave to amend, the petition within 10 court days to identify each such proceeding. Identification of a proceeding shall include the venue or forum in which the proceeding was filed, any case number or other unique identifier assigned to the proceeding in that venue or forum, the names of the parties to the proceeding, and the date on which the proceeding was filed.

(f) If a corporate action validated by the superior court pursuant to this section would have required the filing of an instrument with the Secretary of State pursuant to the provisions of this division, or if such validation would cause any instrument previously filed with the Secretary of State to be inaccurate or incomplete in any material respect after giving effect to the validation, the corporation shall file a certificate of validation to make, amend, or correct each such instrument. The certificate of validation shall have the effect as specified therein, and shall be filed with the Secretary of State. A certificate of validation shall consist of an officers’ certificate setting forth all of the following:

(1) The name of the corporation and the Secretary of State’s file number of the corporation.

(2) The title of any such instrument whose making, amendment, or correction is being effected by the certificate of validation.

(3) The date any such instrument was filed with the Secretary of State, or a statement that any such instrument was not previously filed with the Secretary of State and, as applicable, a statement that the validation ordered pursuant to the superior court order set forth in the certificate of validation would cause any such instrument to be inaccurate or incomplete in any material respect after giving effect to the validation.

(4) The date any such instrument shall be deemed to have become effective pursuant to this section, which may be prior to or after the filing date.

(5) A statement that the certificate of validation is making, amending, or correcting any such instrument, as applicable, and a copy of any such instrument containing all of the information required to be included under this division for such instrument to be so made, amended, or corrected. An instrument attached to a certificate of validation pursuant to this paragraph need not be separately executed and acknowledged and need not include any statement required by any other section of this division that such instrument has been approved and adopted in accordance with the provisions of such other section.

(6) A statement that the validation has been ordered pursuant to subdivision (e), and a copy of the superior court order issued pursuant to subdivision (e) in respect of such validation.

(g) Unless otherwise stated in resolutions adopted pursuant to subdivision (b) or determined by the superior court pursuant to subdivision (e), a corporate action or security of the corporation ratified or validated in accordance with this section relates back to the date of the original corporate action.

(h) As used in this section:

(1) “Corporate action” means any of the following:

(A) Any action or purported action of the board.

(B) Any action or purported action of the members.

(C) Any other action or transaction taken, or purportedly taken, by or on behalf of the corporation.

(2) “Higher approval standard” means any provision set forth in this division or the articles, bylaws, or a plan or agreement to which the corporation was a party in effect at the time of the original taking or purported taking of a corporate action:

(A) Requiring action of the board or members, at a meeting or by written consent, to be taken by a proportion greater than would have been required pursuant to this division or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of the ratification of the corporate action pursuant to this section.

(B) Requiring a greater proportion of the directors or members to constitute a quorum for the transaction of business at a meeting than would have been required pursuant to this division or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of the ratification of the corporate action pursuant to this section.

(C) Requiring, prohibiting, or prescribing conditions on action of the board or members at a meeting or by written consent, which would not have been required, prohibited, or prescribed pursuant to this division or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of the ratification of the corporate action pursuant to this section.

(D) Requiring separate action of any specified person or persons, which would not have been required pursuant to this division or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of the ratification of the corporate action pursuant to this section.

(i) The corporation shall retain all records related to the ratification or validation of a corporate action under this section in accordance with Section 12590.

(j) If the corporation is a party to a pending legal proceeding in which (1) the validity of a corporate action sought to be ratified or validated pursuant to this section is at issue or (2) the ratification or validation of a corporate action pursuant to this section would result in the dismissal in whole or in part of the proceeding, the corporation shall notify the judge, arbitrator, or other person presiding over the proceeding at least 10 court days prior to adopting resolutions pursuant to subdivision (b) or filing a petition pursuant to subdivision (e) with respect to that corporate action. That person shall have power to stay the ratification or validation as justice and equity may require.

history: (History: Added by Stats. 2023, Ch. 151, Sec. 4. (SB 446) Effective January 1, 2024.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12221

text:
“Acknowledged” means that an instrument is either:

(a) Formally acknowledged as provided in Article 3 (commencing with Section 1180) of Chapter 4 of Title 4 of Part 4 of Division 2 of the Civil Code; or

(b) Accompanied by a declaration in writing signed by the persons executing the same that they are such persons and that the instrument is the act and deed of the person or persons executing the same.

Any certificate of acknowledgment taken without this state before a notary public or a judge or clerk of a court of record having an official seal need not be further authenticated.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12222

text: “Approved by (or approval of) the board” means approved or ratified by the vote of the board or by the vote of a committee authorized to exercise the powers of the board, except as to matters not within the competence of the committee under Section 12352.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12223

text: “Approval by (or approval of) a majority of all members” means approval by an affirmative vote (or written ballot in conformity with Section 12463) of a majority of the votes entitled to be cast. Such approval shall include the affirmative vote of a majority of the outstanding memberships of each class, unit, or grouping of members entitled, by any provision of the articles or bylaws of this part to vote as a class, unit, or grouping of members on the subject matter being voted upon and shall also include the affirmative vote of such greater proportion, including all of the votes of the memberships of any class, unit, or grouping of members if such greater proportion is required by the bylaws or by this part.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12224

text: “Approval by (or approval of) the members” means approved or ratified by the affirmative vote of a majority of the votes represented and voting at a duly held meeting at which a quorum is present (which affirmative votes also constitute a majority of the required quorum) or written ballot in conformity with Section 12463 or by the affirmative vote or written ballot of such greater proportion of the votes of the memberships of any class, unit, or grouping of members as may be provided in the bylaws or in this part for all or any specified member action.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12225

text: “Articles” includes the articles of incorporation, amendments thereto, amended articles, restated articles, and certificates of incorporation.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12226

text: “Bylaws” includes amendments thereto and amended bylaws.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12227

text: “Board” means the board of directors of the corporation.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12228

text: “Business corporation” means a corporation as defined in Section 162 of the General Corporation Law.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


text: “Capital account cooperative” is a worker cooperative in which the entire net book value is reflected in member capital accounts, one for each member, and an unallocated capital account, if any.

history: (History: Added by Stats. 2015, Ch. 192, Sec. 5. (AB 816) Effective January 1, 2016.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


text: For the purposes of this part, all references to “chairperson of the board,” other than in Section 12353, shall be deemed to refer to all permissible titles for a chair of the board, as permitted by Section 12353.

history: (History: Amended by Stats. 2022, Ch. 617, Sec. 74. (SB 1202) Effective January 1, 2023.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12229

text: “Chapter” refers to a chapter of this part unless otherwise expressly stated.

history: (History: Amended by Stats. 1983, Ch. 792, Sec. 3.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12230

text: “Class” refers to those memberships which: (a) are identified in the articles or bylaws as being a different type of membership; or (b) have the same rights with respect to voting, dissolution, redemption, distributions and transfer. For the purpose of this section, rights shall be considered the same if they are determined by a formula applied uniformly.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


text: “Collective board worker cooperative” means a worker cooperative in which there is only one class of members consisting of worker-members, all of whom are members of the board.

history: (History: Added by Stats. 2015, Ch. 192, Sec. 6. (AB 816) Effective January 1, 2016.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12231

text: “Constituent corporation” means a corporation which is merged with one or more other corporations and includes the surviving corporation.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12232

text: “Corporation” as used in this part means a corporation which is organized under, or subject to this part, including a central organization.

history: (History: Amended by Stats. 1983, Ch. 792, Sec. 4.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12233

text: “Directors” means natural persons, designated in the articles or bylaws or elected by the incorporators, and their successors and natural persons designated, elected, or appointed by any other name or title to act as members of the governing body of the corporation. “Directors” also means alternate directors described in Section 12331. A person who does not have authority to act as a member of the governing body of the corporation, including through voting rights as a member of the governing body, is not a director as that term is used in this part regardless of title. However, if the articles or bylaws designate that a natural person is a director or a member of the governing body of the corporation by reason of occupying a specified position within or outside the corporation, that person shall be a director for all purposes and shall have the same rights and obligations, including voting rights, as the other directors.

history: (History: Amended by Stats. 2009, Ch. 631, Sec. 38. (AB 1233) Effective January 1, 2010.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12234

text: “Disappearing corporation” means a constituent corporation which is not the surviving corporation.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12235

text: “Distribution” means the distribution of any gains, profits or dividends to any member as such, but does not include patronage distributions.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12236

text: “Domestic corporation” means a corporation formed under the laws of this state.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12237

text: “Foreign corporation” means a foreign corporation as defined in Section 171.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12238

text:
(a) “Member” means any person who, pursuant to a specific provision of a corporation’s articles or bylaws, has the right to vote for the election of a director or directors, or possesses proprietary interests in the corporation.

(b) The articles or bylaws may confer some or all of the rights of a member, set forth in this part, upon any person or persons who do not have any of the voting rights referred to in subdivision (a).

(c) Where a member of a corporation is not a natural person, such member may authorize in writing one or more natural persons to vote on its behalf on any or all matters which may require a vote of the members.

(d) A person is not a member by virtue of any of the following:

(1) Any rights such person has as a delegate.

(2) Any rights such person has to designate or select a director or directors.

(3) Any rights such person has as a director.

(e) “Worker-member” means a member of a worker cooperative who is a natural person and also a patron of a worker cooperative.

(f) “Community investor” means a person who is not a worker-member and who holds a share or other proprietary interest in a worker cooperative.

(g) “Worker” means a natural person contributing labor or services to a worker cooperative. “Candidate” means a worker who is being considered for membership in a worker cooperative, as defined in the corporation’s articles or bylaws.

history: (History: Amended by Stats. 2015, Ch. 192, Sec. 7. (AB 816) Effective January 1, 2016.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12239

text: A “membership” refers to the rights a member has pursuant to a corporation’s articles, bylaws and this part.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12240

text: “Membership certificate,” as used in this part, means a document evidencing a proprietary interest in a corporation.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12241

text: “Officers’ certificate” means a certificate signed and verified by the chair of the board, the president, or any vice president, and by the secretary, the chief financial officer, the treasurer, or any assistant secretary or assistant treasurer.

history: (History: Amended by Stats. 2009, Ch. 631, Sec. 39. (AB 1233) Effective January 1, 2010.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12242

text: “On the certificate,” as used in this part means that a statement appears on the face of a certificate or on the reverse thereof with a reference thereto on the face.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


text: “Other business entity” means a domestic or foreign limited liability company, limited partnership, general partnership, business trust, real estate investment trust, unincorporated association, or a domestic reciprocal insurer organized after 1974 to provide medical malpractice insurance as set forth in Article 16 (commencing with Section 1550) of Chapter 3 of Part 2 of Division 1 of the Insurance Code. As used herein, “general partnership” means a “partnership” as defined in Section 16101; “business trust” means a business organization formed as a trust; “real estate investment trust” means a “real estate investment trust” as defined in subsection (a) of Section 856 of the Internal Revenue Code of 1986, as amended; and “unincorporated association” has the meaning set forth in Section 18035.

history: (History: Amended by Stats. 2024, Ch. 361, Sec. 8. (AB 1862) Effective January 1, 2025.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


text: “Parent party” means the corporation in control of any constituent domestic or foreign corporation or other business entity and whose equity securities are issued, transferred, or exchanged in a merger pursuant to Section 12540.1.

history: (History: Added by Stats. 1999, Ch. 437, Sec. 23.7. Effective January 1, 2000.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12243

text:
(a) (1) If the corporation is organized to provide goods or services to its members, the corporation’s “patrons” are those who purchase those types of goods from, or use those types of services of, the corporation. If the corporation is organized to market, process, or otherwise handle its members’ products or services, the corporation’s “patrons” are those persons whose products or services are so marketed, processed, or handled by the corporation.

(2) “Patronage” of a patron is measured by the volume or value, or both, of a patron’s purchases of products from, and use of services furnished by, the corporation, and by products and services provided by the patron to the corporation for marketing.

(b) (1) If the corporation is organized as a worker cooperative, the corporation’s “patrons” are its worker-members.

(2) If the corporation is organized as a worker cooperative, “patronage” may be measured by work performed, including, but not limited to, wages earned, number of hours worked, number of jobs created, or some combination of these measures.

history: (History: Amended by Stats. 2015, Ch. 192, Sec. 8. (AB 816) Effective January 1, 2016.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12244

text: “Patronage distribution” means any transfer made to a patron of the corporation the amount of which is computed with reference to the patron’s patronage of the corporation.

history: (History: Added by Stats. 1982, Ch. 1625, Sec. 3. Operative January 1, 1984.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12245

text: “Person,” unless otherwise expressly provided, includes any association, company, domestic or foreign corporation, corporation sole, estate, individual, joint stock company, joint venture, partnership, domestic or foreign limited liability company, government or political subdivision, agency or instrumentality of a government.

history: (History: Amended by Stats. 1994, Ch. 1010, Sec. 66. Effective January 1, 1995.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


text: “Preferred memberships” means memberships that have a preference over any other memberships with respect to distribution of assets on liquidation or with respect to payment of distributions.

history: (History: Added by Stats. 2013, Ch. 538, Sec. 1. (AB 1255) Effective January 1, 2014.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12246

text: “Proper county” means the county where the corporation’s principal office in this state is located or, if the corporation has no such office, the County of Sacramento.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


text: “Series” of memberships means memberships within a class of memberships that have the same rights, privileges, preferences, restrictions, and conditions, but that differ in one or more rights, privileges, preferences, restrictions, or conditions from other memberships within the class. Certificated securities and uncertificated securities do not constitute a different series if the only difference is certificated and uncertificated status.

history: (History: Added by Stats. 2013, Ch. 538, Sec. 2. (AB 1255) Effective January 1, 2014.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12247

text: “Shareholder” shall have the same meaning as “member” as defined in Section 12238.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12248

text: “Share certificate” shall have the same meaning as “membership certificate” as defined in Section 12240.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12249

text: “Surviving corporation” means a corporation into which one or more other corporations are merged.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12250

text: “Vacancy” when used with respect to the board means any authorized position of director which is not then filled, whether the vacancy is caused by death, resignation, removal, change in the number of directors authorized in the articles or bylaws (by the board or the members), or otherwise.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12251

text:
“Verified” means that the statements contained in a certificate or other document are declared to be true of the own knowledge of the persons executing the same in either:

(a) An affidavit signed by them under oath before an officer authorized by the laws of this state or of the place where it is executed to administer oaths; or

(b) A declaration in writing executed by them under penalty of perjury and stating the date and place (whether within or without this state) of execution.

Any affidavit sworn to without this state before a notary public or a judge or clerk of a court of record having an official seal need not be further authenticated.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12252

text: “Vote” includes, but is not limited to, authorization by written consent pursuant to subdivision (b) of Section 12351 and authorization by written ballot pursuant to Section 12463.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12253

text:
(a) “Voting power” means the power to vote for the election of directors at the time any determination of voting power is made and does not include the right to vote upon the happening of some condition or event that has not yet occurred.

(b) If different classes of memberships are entitled to vote as separate classes for different members of the board, the determination of percentage of voting power shall be made on the basis of the percentage of the total number of authorized directors that the memberships in question (whether of one or more classes) have the power to elect in an election at which all memberships then entitled to vote for the election of any directors are voted.

(c) Community investor voting power in a worker cooperative shall be provided in the articles or bylaws, and is limited to approval rights only over a merger, sale of major assets, reorganization, or dissolution. Approval rights shall not include the right to propose any action.

history: (History: Amended by Stats. 2015, Ch. 192, Sec. 9. (AB 816) Effective January 1, 2016.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


text: “Worker cooperative” or “employment cooperative” means a corporation formed under this part that includes a class of worker-members who are natural persons whose patronage consists of labor contributed to or other work performed for the corporation. Election to be organized as a worker cooperative or an employment cooperative does not create a presumption that workers are employees of the corporation for any purposes. At least 51 percent of the workers shall be worker-members or candidates.

history: (History: Added by Stats. 2015, Ch. 192, Sec. 10. (AB 816) Effective January 1, 2016.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12254

text: “Written” or “in writing” includes facsimile, telegraphic, and other electronic communication as authorized by this code.

history: (History: Amended by Stats. 2004, Ch. 254, Sec. 35. Effective January 1, 2005.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12255

text: “Written ballot” does not include a ballot distributed at a special or regular meeting of members.

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12256

text: A central organization is a corporation whose membership is composed, in whole or in part, of other corporations organized under this part.

history: (History: Added by Stats. 1983, Ch. 792, Sec. 7.)

title: 1. CORPORATIONS

article: 2. General Provisions and Definitions


citation: CORP § 12300

text:
(a) One or more persons may form a corporation under this part by executing and filing articles of incorporation.

(b) Where initial directors are named in the articles, each director named in the articles shall sign and acknowledge the articles. Where initial directors are not named in the articles, the articles shall be signed by a person or persons described in subdivision (a) who thereupon are the incorporators of the corporation.

(c) The corporate existence begins upon the filing of the articles and continues perpetually, unless otherwise expressly provided by law or in the articles.

history: (History: Amended by Stats. 1983, Ch. 792, Sec. 8.)

title: 1. CORPORATIONS

article: 3. Formation

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 1. General Provisions, Organization and Bylaws > 3. Formation


citation: CORP § 12301

text:
(a) In the case of an existing unincorporated association, the association may change its status to that of a corporation upon a proper authorization for such by the association in accordance with its rules and procedures.

(b) In addition to the matters required to be set forth in the articles pursuant to Section 12310, the articles in the case of an incorporation authorized by subdivision (a) shall set forth that an existing unincorporated association, stating its name, is being incorporated by the filing of the articles.

(c) The articles filed pursuant to this section shall be accompanied by a verified statement of any two officers or governing board members of the association stating that the incorporation of the association by means of the articles to which the verified statement is attached has been approved by the association in accordance with its rules and procedures.

(d) Upon the change of status of an unincorporated association to a corporation pursuant to subdivision (a), the property of the association becomes the property of the corporation and the members of the association who have any voting rights of the type referred to in Section 12238 become members of the corporation.

(e) The filing for record in the office of the county recorder of any county in this state in which any of the real property of the association is located, of a copy of the articles of incorporation filed pursuant to this section, certified by the Secretary of State, shall evidence record ownership in the corporation of all interests of the association in and to the real property located in that county.

(f) All rights of creditors and all liens upon the property of the association shall be preserved unimpaired. Any action or proceeding pending by or against the unincorporated association may be prosecuted to judgment, which shall bind the corporation, or the corporation may be proceeded against or substituted in its place.

(g) If a corporation is organized by a person who is or was an officer, director or member of an unincorporated association and such corporation is not organized pursuant to subdivision (a), the unincorporated association may continue to use its name and the corporation may not use a name which is the same as or similar to the name of the unincorporated association.

title: 1. CORPORATIONS

article: 3. Formation


citation: CORP § 12302

text:
(a) The Secretary of State shall not file articles setting forth a name in which “bank,” “trust,” “trustee,” or related words appear, unless the certificate of approval of the Commissioner of Financial Protection and Innovation is attached thereto.

(b) The name of a corporation shall not be a name that the Secretary of State determines is likely to mislead the public and shall be distinguishable in the records of the Secretary of State from all of the following:

(1) The name of any corporation.

(2) The name of any foreign corporation authorized to transact intrastate business in this state.

(3) Each name that is under reservation pursuant to this title.

(4) The name of a foreign corporation that has registered its name pursuant to Section 2101.

(5) An alternate name of a foreign corporation under subdivision (b) of Section 2106.

(6) A name that will become the record name of a domestic or foreign corporation upon a corporate instrument when there is a delayed effective or file date.

(c) The use by a corporation of a name in violation of this section may be enjoined notwithstanding the filing of its articles by the Secretary of State.

(d) Any applicant may, upon payment of the fee prescribed therefor in the Government Code, obtain from the Secretary of State a certificate of reservation of any name not prohibited by subdivision (b), and upon the issuance of the certificate the name stated therein shall be reserved for a period of 60 days. The Secretary of State shall not, however, issue certificates reserving the same name for two or more consecutive 60-day periods to the same applicant or for the use or benefit of the same person; nor shall consecutive reservations be made by or for the use or benefit of the same person of names so similar as to fall within the prohibitions of subdivision (b).

history: (History: Amended by Stats. 2022, Ch. 617, Sec. 75. (SB 1202) Effective January 1, 2023.)

title: 1. CORPORATIONS

article: 3. Formation


text: The Secretary of State shall not file articles for a corporation the name of which would fall within the prohibitions of Section 18104 of the Financial Code. This section shall not apply to articles filed for a corporation organized in accordance with Section 18100 of the Financial Code.

history: (History: Added by Stats. 1999, Ch. 453, Sec. 23. Effective January 1, 2000.)

title: 1. CORPORATIONS

article: 3. Formation


citation: CORP § 12310

text:
The articles of incorporation of a corporation formed under this part shall set forth:

(a) The name of the corporation.

(b) The following statement: “This corporation is a cooperative corporation organized under the Cooperative Corporation Law. The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the law.”

[The articles may include a further description of the corporation’s purpose.] (c) The name and street address in this state of the corporation’s initial agent for service of process in accordance with subdivision (b) of Section 12570.

(d) The initial street address of the corporation.

(e) The initial mailing address of the corporation, if different from the initial street address.

(f) Whether the voting power or the proprietary interests of the members are equal or unequal. If the voting power or proprietary interests of the members are unequal, the articles shall state either (i) the general rule or rules by which the voting power and proprietary interests of the members shall be determined or (ii) that such rule or rules shall be prescribed in the corporation’s bylaws. Equal voting power means voting power apportioned on the basis of one vote for each member. Equal proprietary rights means property rights apportioned on the basis of one proprietary unit for each member.

(g) Pursuant to Section 12310.5, the articles of incorporation may state whether the cooperative has elected to be governed as a worker cooperative.

history: (History: Amended by Stats. 2015, Ch. 192, Sec. 11. (AB 816) Effective January 1, 2016.)

title: 1. CORPORATIONS

article: 4. Articles of Incorporation

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 1. General Provisions, Organization and Bylaws > 4. Articles of Incorporation


text:
(a) A corporation organized under this part may elect to be governed as a worker cooperative by making the following statement in its articles of incorporation or its amended articles of incorporation:

“This corporation is a worker cooperative corporation organized under the Cooperative Corporation Law.”

(b) A corporation that makes the election to be governed as a worker cooperative, unless expressly exempted, shall be governed by all the provisions of this part.

history: (History: Added by Stats. 2015, Ch. 192, Sec. 12. (AB 816) Effective January 1, 2016.)

title: 1. CORPORATIONS

article: 4. Articles of Incorporation


citation: CORP § 12311

text:
(a) The names of all corporations formed under this part shall include “cooperative.” No corporation shall be formed under this part unless there is affixed or prefixed to its name some word or abbreviation which will indicate that it is a corporation, as distinguished from a natural person, a firm, or an unincorporated association.

(b) No person shall adopt or use the word “cooperative” or any abbreviation or derivation thereof, or any word similar thereto, as part of the name or designation under which it does business in this state, unless incorporated as provided in this part or unless incorporated as a nonprofit cooperative association under Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code, as a stock cooperative, as defined in Section 11003.2 of the Business and Professions Code, as a limited-equity housing cooperative, as defined in Section 817 of the Civil Code, as a credit union or organization owned for the mutual benefit of credit unions, or under some other law of this state enabling it to do so. However, the foregoing prohibition shall be inapplicable to any credit union or organization owned for the mutual benefit of credit unions, any housing cooperative, the financing of which is insured, guaranteed, or provided, in whole or in part, by a public or statutorily chartered entity pursuant to a program created for housing cooperatives, a nonprofit corporation, a majority of whose membership is composed of cooperative corporations, or an academic institution that serves cooperative corporations.

(c) A domestic or foreign corporation or association which did business in this state under a name or designation including the word “cooperative” prior to September 19, 1939, and which conducts business on a cooperative basis substantially as set forth in this part, may continue to do business under that name or designation.

(d) Any person, firm, individual, partnership, trust, domestic corporation, foreign corporation, or association which did business in this state under a name or designation including the word “cooperative” prior to September 19, 1939, but which does not conduct business on a cooperative basis as contemplated by Section 12201 of this part, may continue to do business under that name or designation if the words “not organized under the law relating to cooperative corporations” are always placed immediately after the name or designation wherever it is used.

(e) Any foreign corporation, organized under and complying with the cooperative law of the state or other jurisdiction of its creation, may use the term “cooperative” in this state if it has complied with the laws of this state applicable to foreign corporations, insofar as those laws are applicable to it, and if it is doing business on a cooperative basis as contemplated by Section 12201.

history: (History: Amended by Stats. 2011, Ch. 442, Sec. 28. (AB 1211) Effective January 1, 2012.)

title: 1. CORPORATIONS

article: 4. Articles of Incorporation


citation: CORP § 12312

text: The articles of incorporation may set forth a further statement limiting the purposes or powers of the corporation.

title: 1. CORPORATIONS

article: 4. Articles of Incorporation


citation: CORP § 12313

text:
(a) The articles of incorporation may set forth any or all of the following provisions, which shall not be effective unless expressly provided in the articles:

(1) A provision limiting the duration of the corporation’s existence to a specified date.

(2) A provision providing for the distribution of the remaining assets of the corporation, after payment or adequate provision for all of its debts and liabilities, to a charitable trust.

(b) Nothing contained in subdivision (a) shall affect the enforceability, as between the parties thereto, of any lawful agreement not otherwise contrary to public policy.

(c) The articles of incorporation may set forth any or all of the following provisions:

(1) The names and addresses of the persons appointed to act as initial directors.

(2) Provisions concerning the transfer of memberships, in accordance with Section 12410.

(3) The classes of members, if any, and if there are two or more classes, the rights, privileges, preferences, restrictions, and conditions attaching to each class.

(4) Any other provision, not in conflict with law, for the management of the activities and for the conduct of the affairs of the corporation, including any provision which is required or permitted by this part to be stated in the bylaws.

(5) A provision conferring upon members the right to determine the consideration for which memberships shall be issued.

(6) A provision authorizing the board of directors, within any limits or restrictions stated, to fix the rights, privileges, preferences, restrictions, and conditions attaching to any wholly unissued class of memberships authorized in the bylaws or the articles.

(7) If the bylaws or articles authorize a class of memberships to be divisible into series, a provision authorizing the board of directors, within any limits or restrictions stated, to fix the rights, privileges, preferences, restrictions, and conditions attaching to any wholly unissued series of a membership class authorized to be divisible into series, and to fix the number of memberships in the series and the designation of the series. As to any series, the number of which is authorized to be fixed by the board, the articles may also authorize the board to increase or decrease, but not below the number of memberships then outstanding, the number of memberships of any such series subsequent to the issuance of that series. Unless the articles or bylaws provide otherwise, in case the number of memberships of any series is decreased, the memberships constituting this decrease shall resume the status which they had prior to the adoption of the board resolution originally fixing the number of memberships of the series.

history: (History: Amended by Stats. 2013, Ch. 538, Sec. 3. (AB 1255) Effective January 1, 2014.)

title: 1. CORPORATIONS

article: 4. Articles of Incorporation


citation: CORP § 12314

text: The articles of incorporation of a central organization, as defined in Section 12256, organized under or subject to this part may provide for unequal voting power of its members based upon the number of its members’ members, the patronage of its members, or both. In no event shall any member have less than one vote.

history: (History: Amended by Stats. 1983, Ch. 792, Sec. 10.)

title: 1. CORPORATIONS

article: 4. Articles of Incorporation


citation: CORP § 12315

text: For all purposes other than an action in the nature of quo warranto, a copy of the articles of a corporation duly certified by the Secretary of State is conclusive evidence of the formation of the corporation and prima facie evidence of its corporate existence.

title: 1. CORPORATIONS

article: 4. Articles of Incorporation


citation: CORP § 12316

text: If initial directors have not been named in the articles of incorporation, the incorporators may do whatever is necessary and proper to perfect the organization of the corporation, including the adoption and amendment of bylaws of the corporation and the election of directors and officers, until the directors are elected.

history: (History: Added by Stats. 1983, Ch. 792, Sec. 11.)

title: 1. CORPORATIONS

article: 4. Articles of Incorporation


citation: CORP § 12317

text:
(a) A worker cooperative may, in its articles or bylaws, establish itself as a capital account cooperative.

(b) The articles or bylaws of a capital account cooperative may authorize assignment of a portion of retained net earnings and net losses to an unallocated capital account. The unallocated capital account in a capital account cooperative shall reflect any paid-in capital and retained net earnings not allocated to individual members. Earnings assigned to the unallocated capital account may be used for any and all corporate purposes, as determined by the board of directors.

(c) The system of member and unallocated capital accounts may be used to determine the redemption price of member shares, capital stock, and written notices of allocation. The articles or bylaws may provide for the capital account cooperative worker cooperative to pay or credit interest on the balance in each member’s capital account.

(d) The articles or bylaws of a capital account cooperative may permit the periodic redemption of written notices of allocation and capital stock and shall provide for recall and redemption of membership shares upon termination of membership in the cooperative. However, no redemption may occur that would result in the liability of any director or officer pursuant to Article 3 (commencing with Section 12370) of Chapter 2.

(e) As used in this section, “written notice of allocation” has the same meaning as defined in Section 1388 (b) of the Internal Revenue Code.

history: (History: Amended by Stats. 2018, Ch. 92, Sec. 48. (SB 1289) Effective January 1, 2019.)

title: 1. CORPORATIONS

article: 4. Articles of Incorporation


citation: CORP § 12320

text:
Subject to any limitations contained in the articles or bylaws and to compliance with other provisions of this part and any other applicable laws, a corporation, in carrying out its activities, shall have all of the powers of a natural person, including, without limitation, the power to:

(a) Adopt, use, and at will alter a corporate seal, but failure to affix a seal does not affect the validity of any instrument.

(b) Adopt, amend, and repeal bylaws.

(c) Qualify to conduct its activities in any other state, territory, dependency, or foreign country.

(d) Issue, purchase, redeem, receive, take or otherwise acquire, own, sell, lend, exchange, transfer or otherwise dispose of, pledge, use, and otherwise deal in and with its own memberships, bonds, debentures, notes, and debt securities.

(e) Pay pensions, and establish and carry out pension, deferred compensation, saving, thrift, and other retirement, incentive, and benefit plans, trusts, and provisions for any or all of its directors, officers, employees, and persons providing services to it or any of its subsidiary or related or associated corporations, and to indemnify and purchase and maintain insurance on behalf of any fiduciary of such plans, trusts, or provisions.

(f) Issue certificates evidencing membership in accordance with the provisions of Section 12401 and issue identity cards to identify those persons eligible to use the corporation’s facilities.

(g) Levy dues, assessments, and membership and transfer fees.

(h) Make donations for the public welfare or for community funds, hospital, charitable, educational, scientific, civic, religious, or similar purposes.

(i) Assume obligations, enter into contracts, including contracts of guarantee or suretyship, incur liabilities, borrow or lend money or otherwise use its credit, and secure any of its obligations, contracts, or liabilities by mortgage, pledge, or other encumbrance of all or any part of its property and income.

(j) Participate with others in any partnership, joint venture, or other association, transaction, or arrangement of any kind whether or not such participation involves sharing or delegation of control with or to others.

(k) Act as trustee under any trust incidental to the principal objects of the corporation, and receive, hold, administer, exchange, and expend funds and property subject to such trust.

(l) Carry on a business at a profit and apply any profit that results from the business activity to any activity in which it may lawfully engage.

(m) (1) In anticipation of or during an emergency, take either or both of the following actions necessary to conduct the corporation’s business operations and affairs, unless emergency bylaws provide otherwise pursuant to subdivision (h) of Section 12331:

(A) Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent resulting from the emergency.

(B) Relocate the principal office, designate alternative principal offices or regional offices, or authorize the officers to do so.

(2) During an emergency, take either or both of the following actions necessary to conduct the corporation’s business operations and affairs, unless emergency bylaws provide otherwise pursuant to subdivision (h) of Section 12331:

(A) Give notice to a director or directors in any practicable manner under the circumstances, including, but not limited to, by publication and radio, when notice of a meeting of the board cannot be given to that director or directors in the manner prescribed by the bylaws or Section 12351.

(B) Deem that one or more officers of the corporation present at a board meeting is a director, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum for that meeting.

(3) In anticipation of or during an emergency, the board may take any action that it determines to be necessary or appropriate to respond to the emergency, mitigate the effects of the emergency, or comply with lawful federal and state government orders, but shall not take any action that requires the vote of the members, unless the required vote of the members was obtained prior to the emergency.

(4) Any actions taken in good faith in anticipation of or during an emergency under this subdivision bind the corporation and shall not be used to impose liability on a corporate director, officer, employee, or agent.

(5) For purposes of this subdivision, “emergency” means any of the following events or circumstances as a result of which, and only so long as, a quorum of the corporation’s board of directors cannot be readily convened for action:

(A) A natural catastrophe, including, but not limited to, a hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, drought, epidemic, pandemic, or disease outbreak, or, regardless of cause, any fire, flood, or explosion.

(B) An attack on or within this state or on the public security of its residents by an enemy of this state or on the nation by an enemy of the United States of America, or upon receipt by this state of a warning from the federal government indicating that any such enemy attack is probable or imminent.

(C) An act of terrorism or other manmade disaster that results in extraordinary levels of casualties or damage or disruption severely affecting the infrastructure, environment, economy, government functions, or population, including, but not limited to, mass evacuations.

(D) A state of emergency proclaimed by the Governor of this state, including any person serving as Governor in accordance with Section 10 of Article V of the California Constitution and Section 12058 of the Government Code, or by the President of the United States of America.

history: (History: Amended by Stats. 2021, Ch. 523, Sec. 19. (AB 663) Effective January 1, 2022.)

title: 1. CORPORATIONS

article: 5. Powers

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 1. General Provisions, Organization and Bylaws > 5. Powers


citation: CORP § 12321

text:
(a) No limitation upon the activities, purposes, or powers of the corporation or upon the powers of the members, officers, or directors, or the manner of exercise of such powers, contained in or implied by the articles or by Chapters 15 (commencing with Section 12620), 16 (commencing with Section 12630) and 17 (commencing with Section 12650) shall be asserted as between the corporation or member, officer or director and any third person, except in a proceeding: (1) by a member or the state to enjoin the doing or continuation of unauthorized activities by the corporation or its officers, or both, in cases where third parties have not acquired rights thereby, (2) to dissolve the corporation, or (3) by the corporation or by a member suing in any representative suit against the officers or directors of the corporation for violation of their authority.

(b) Any contract or conveyance made in the name of a corporation which is authorized or ratified by the board, or is done within the scope of authority, actual or apparent, conferred by the board or within the agency power of the officer executing it, except as the board’s authority is limited by law other than this part, binds the corporation, and the corporation acquires rights thereunder whether the contract is executed or wholly or in part executory.

history: (History: Added by Stats. 1982, Ch. 1625, Sec. 3. Operative January 1, 1984.)

title: 1. CORPORATIONS

article: 5. Powers