citation: CORP § 12620

text:
(a) A complaint for involuntary dissolution of a corporation on any one or more of the grounds specified in subdivision (b) may be filed in the superior court of the proper county by any of the following persons:

(1) One-half or more of the directors in office.

(2) A person or persons holding or authorized in writing by persons holding not less than 3313 percent of the voting power exclusive of memberships held by persons who have personally participated in any of the transactions enumerated in paragraph (5) of subdivision (b).

(3) Any member if the ground for dissolution is that the period for which the corporation was formed has terminated without extension thereof.

(4) Any other person expressly authorized to do so in the articles.

(b) The grounds for involuntary dissolution are that:

(1) The corporation has abandoned its activity for more than one year.

(2) The corporation has an even number of directors who are equally divided and cannot agree as to the management of its affairs, so that its activities can no longer be conducted to advantage or so that there is danger that its property will be impaired or lost or its activities impaired, and the members are so divided into factions that they cannot elect a board consisting of an uneven number.

(3) There is internal dissension and two or more factions of members in the corporation are so deadlocked that its activities can no longer be conducted with advantage.

(4) When during any four-year period or when all voting power has been exercised at two consecutive meetings or in two written ballots for the election of directors, whichever period is shorter, the members have failed to elect successors to directors whose terms have expired or would have expired upon election of their successors.

(5) Those in control of the corporation have been guilty of or have knowingly countenanced persistent and pervasive fraud, mismanagement or abuse of authority or persistent unfairness toward any member or the corporation’s property is being misapplied or wasted by its directors or officers.

(6) The period for which the corporation was formed has terminated without extension of such period.

(c) At any time prior to the trial of the action any member or creditor may intervene therein.

(d) This section does not apply to any corporation subject to:

(1) The Public Utilities Act (Part 1 (commencing with Section 201) of Division 1 of the Public Utilities Code) unless an order is obtained from the Public Utilities Commission authorizing the corporation either (a) to dispose of its assets as provided in Section 851 of the Public Utilities Code or (b) to dissolve.

(2) The provisions of Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1 of the Insurance Code when the application authorized by Section 1011 of the Insurance Code has been filed by the Insurance Commissioner unless the consent of the Insurance Commissioner has been obtained.

title: 1. CORPORATIONS

chapter: 15. Involuntary Dissolution

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 15. Involuntary Dissolution


kind: section

code: CORP

citation: CORP § 12621

text:
(a) The Attorney General may bring an action against any corporation or purported corporation in the name of the people of this state, upon the Attorney General’s own information or upon complaint of a private party, to procure a judgment dissolving the corporation and annulling, vacating or forfeiting its corporate existence upon any of the following grounds:

(1) The corporation has seriously offended against any provision of the statutes regulating corporations.

(2) The corporation has fraudulently abused or usurped corporate privileges or powers.

(3) The corporation has violated any provision of law by any act or default which under the law is a ground for forfeiture of corporate existence.

(4) The corporation has failed to pay to the Franchise Tax Board for a period of five years any tax imposed upon it by the Bank and Corporation Tax Law.

(b) If the ground of the action is a matter or act which the corporation has done or omitted to do that can be corrected by amendment of its articles or by other corporate action, such suit shall not be maintained unless (1) the Attorney General, at least 30 days prior to the institution of suit, has given the corporation written notice of the matter or act done or omitted to be done; and (2) the corporation has failed to institute proceedings to correct it within the 30-day period or thereafter fails to duly and properly make such amendment or take the corrective corporate action.

(c) In any such action the court may order dissolution or such other or partial relief as it deems just and expedient. The court also may appoint a receiver for winding up the affairs of the corporation or may order that the corporation be wound up by its board subject to the supervision of the court.

(d) Service of process on the corporation may be made pursuant to Chapter 17 (commencing with Section 1700) of Division 1 or by written notice to the president or secretary of the corporation at the address indicated in the corporation’s last tax return filed pursuant to the Bank and Corporation Tax Law. The Attorney General shall also publish one time in a newspaper of general circulation in the proper county a notice to the members of the corporation.

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

division: 3. CORPORATIONS FOR SPECIFIC PURPOSES

title: 1. CORPORATIONS


citation: CORP § 12622

text: If the ground for the complaint for involuntary dissolution of the corporation is a deadlock in the board as set forth in paragraph (2) of subdivision (b) of Section 12620 the court may appoint a provisional director. The provisions of subdivision (d) of Section 12365 apply to any such provisional director so appointed.

title: 1. CORPORATIONS


citation: CORP § 12623

text: If, at the time of the filing of a complaint for involuntary dissolution or at any time thereafter, the court has reasonable grounds to believe that unless a receiver of the corporation is appointed the interests of the corporation or its members will suffer pending the hearing and determination of the complaint, upon the application of the plaintiff, and after a hearing upon such notice to the corporation as the court may direct and upon the giving of security pursuant to Sections 566 and 567 of the Code of Civil Procedure (except that the Attorney General shall not be required to give security), the court may appoint a receiver to take over and manage the affairs of the corporation and to preserve its property pending the hearing and determination of the complaint for dissolution.

title: 1. CORPORATIONS


citation: CORP § 12624

text: After hearing the court may decree a winding up and dissolution of the corporation if cause therefor is shown or, with or without winding up and dissolution, may make such orders and decrees and issue such injunctions in the case as justice and equity require.

title: 1. CORPORATIONS


citation: CORP § 12625

text:
(a) Involuntary proceedings for winding up a corporation commence when the order for winding up is entered under Section 12624.

(b) When an involuntary proceeding for winding up has commenced, the board shall conduct the winding up of the affairs of the corporation, subject to the supervision of the court, unless other persons are appointed by the court, on good cause shown, to conduct the winding up. The directors or such other persons may, subject to any restrictions imposed by the court, exercise all their powers through the executive officers without any order of court.

(c) When an involuntary proceeding for winding up has commenced, the corporation shall cease to conduct its activities except to the extent necessary for the beneficial winding up thereof and except during such period as the board may deem necessary to preserve the corporation’s goodwill or going-concern value, pending a sale or other disposition of its assets, or both, in whole or in part. The directors shall cause written notice of the commencement of the proceeding for involuntary winding up to be given by mail to all members and to all known creditors and claimants whose addresses appear on the records of the corporation, unless the order for winding up has been stayed by appeal therefrom or otherwise or the proceeding or the execution of the order has been enjoined.

title: 1. CORPORATIONS


citation: CORP § 12626

text:
When an involuntary proceeding for winding up has been commenced, the jurisdiction of the court includes:

(a) The requirement of the proof of all claims and demands against the corporation, whether due or not yet due, contingent, unliquidated, or sounding only in damages, and the barring from participation of creditors and claimants failing to make and present claims and proof as required by any order.

(b) The determination or compromise of all claims of every nature against the corporation or any of its property, and the determination of the amount of money or assets required to be retained to pay or provide for the payment of claims.

(c) The determination of the rights of members and of all classes of members in and to the assets of the corporation.

(d) The presentation and filing of intermediate and final accounts of the directors or other persons appointed to conduct the winding up and hearing thereon, the allowance, disallowance, or settlement thereof, and the discharge of the directors or such other persons from their duties and liabilities.

(e) The appointment of a commissioner to hear and determine any or all matters, with such power or authority as the court may deem proper.

(f) The filing of any vacancies on the board which the directors or the members are unable to fill.

(g) The removal of any director if it appears that the director has been guilty of dishonesty, misconduct, neglect, or breach of trust in conducting the winding up or if the director is unable to act. The court may order an election to fill the vacancy so caused, and may enjoin, for such time as it considers proper, the reelection of the director so removed; or the court, in lieu of ordering an election, may appoint a director to fill the vacancy caused by such removal. Any director so appointed by the court shall serve until the next regular meeting of members or until a successor is elected or appointed.

(h) The staying of the prosecution of any suit, proceeding, or action against the corporation and requiring the parties to present and prove their claims in the manner required of other creditors.

(i) The determination of whether adequate provision has been made for payment or satisfaction of all debts and liabilities not actually paid.

(j) The making of orders for the withdrawal or termination of proceedings, to wind up and dissolve, subject to conditions for the protection of members and creditors.

(k) The making of an order, upon the allowance or settlement of the final accounts of the directors or such other persons, that the corporation has been duly wound up and is dissolved. Upon the making of such order, the corporate existence shall cease except for purposes of further winding up if needed.

(l) The making of orders for the bringing in of new parties as the court deems proper for the determination of all questions and matters.

(m) The disposition of assets held in charitable trust.

title: 1. CORPORATIONS


citation: CORP § 12627

text:
(a) All creditors and claimants may be barred from participation in any distribution of the general assets if they fail to make and present claims and proofs within such time as the court may direct, which shall not be less than four nor more than six months after the first publication of notice to creditors unless it appears by affidavit that there are no claims, in which case the time limit may be three months. If it is shown that a claimant did not receive notice because of absence from the state or other cause, the court may allow a claim to be filed or presented at any time before distribution is completed.

(b) Such notice to creditors shall be published not less than once a week for three consecutive weeks in a newspaper of general circulation published in the county in which the proceeding is pending or, if there is no such newspaper published in that county, in such newspaper as may be designated by the court, directing creditors and claimants to make and present claims and proofs to the person, at the place and within the time specified in the notice. A copy of the notice shall be mailed to each person shown as a creditor or claimant on the books of the corporation, at such person’s last known address.

(c) Holders of secured claims may prove for the whole debt in order to realize any deficiency. If such creditors fail to present their claims they shall be barred only as to any right to claim against the general assets for any deficiency in the amount realized on their security.

(d) Before any distribution is made the amount of any unmatured, contingent or disputed claim against the corporation which has been presented and has not been disallowed, or such part of any such claim as the holder would be entitled to if the claim were due, established, or absolute, shall be paid into court and there remain to be paid over to the party when the party becomes entitled thereto or, if the party fails to establish a claim, to be paid over or distributed with the other assets of the corporation to those entitled thereto; or such other provision for the full payment of such claim, if and when established, shall be made as the court may deem adequate. A creditor whose claim has been allowed but is not yet due shall be entitled to its present value upon distribution.

(e) Suits against the corporation on claims which have been rejected shall be commenced within 30 days after written notice of rejection thereof is given to the claimant.

title: 1. CORPORATIONS


citation: CORP § 12628

text:
(a) Upon the final settlement of the accounts of the directors or other persons appointed pursuant to Section 12625 and the determination that the corporation’s affairs are in condition for it to be dissolved, the court may make an order declaring the corporation duly wound up and dissolved. The order shall declare:

(1) That the corporation has been duly wound up, that a final franchise tax return, as described by Section 23332 of the Revenue and Taxation Code, has been filed with the Franchise Tax Board, as required under Part 10.2 (commencing with Section 18401) of Division 2 of the Revenue and Taxation Code and that its known debts and liabilities have been paid or adequately provided for, or that those debts and liabilities have been paid as far as its assets permitted, as the case may be. If there are known debts or liabilities for payment of which adequate provision has been made, the order shall state what provision has been made, setting forth the name and address of the corporation, person, or governmental agency that has assumed or guaranteed the payment, or the name and address of the depositary with which deposit has been made or such other information as may be necessary to enable the creditor or other person to whom payment is to be made to appear and claim payment of the debt or liability.

(2) That its known assets have been distributed to the persons entitled thereto or that it acquired no known assets, as the case may be.

(3) That the accounts of directors or such other persons have been settled and that they are discharged from their duties and liabilities to creditors and members.

(4) That the corporation is dissolved.

(b) The court may make such additional orders and grant such further relief as it deems proper upon the evidence submitted.

(c) Upon the making of the order declaring the corporation dissolved, corporate existence shall cease except for the purposes of further winding up if needed; and the directors or such other persons shall be discharged from their duties and liabilities, except in respect to completion of the winding up.

history: (History: Amended by Stats. 2006, Ch. 773, Sec. 33. Effective September 29, 2006.)

title: 1. CORPORATIONS


citation: CORP § 12629

text: Whenever a corporation is dissolved or its existence forfeited by order, decree, or judgment of a court, a copy of the order, decree or judgment, certified by the clerk of court, shall forthwith be filed. The Secretary of State shall notify the Franchise Tax Board of the dissolution.

history: (History: Amended by Stats. 2006, Ch. 773, Sec. 34. Effective September 29, 2006.)

title: 1. CORPORATIONS


citation: CORP § 12630

text:
(a) Any corporation may elect voluntarily to wind up and dissolve (1) by approval of a majority of all members (Section 12223) or (2) by approval of the board and approval of the members (Section 12224).

(b) Any corporation which comes within one of the following descriptions may elect by approval of the board to wind up and dissolve:

(1) A corporation which has been the subject of an order for relief in bankruptcy.

(2) A corporation which has disposed of all of its assets and has not conducted any activity for a period of five years immediately preceding the adoption of the resolution electing to dissolve the corporation.

(3) A corporation which has no members.

(c) If a corporation comes within one of the descriptions in subdivision (b) and if the number of directors then in office is less than a quorum, it may elect to voluntarily wind up and dissolve by any of the following:

(1) The unanimous consent of the directors then in office.

(2) The affirmative vote of a majority of the directors then in office at a meeting held pursuant to waiver of notice by those directors complying with subdivision (a) of Section 12351.

(3) The vote of a sole remaining director.

(d) If a corporation elects to voluntarily wind up and dissolve pursuant to subdivision (c), references to the board in this chapter and Chapter 17 (commencing with Section 12650) shall be deemed to be to a board consisting solely of those directors or that sole director and action by the board shall require at least the same consent or vote as would be required under subdivision (c) for an election to wind up and dissolve.

history: (History: Amended by Stats. 2009, Ch. 631, Sec. 49. (AB 1233) Effective January 1, 2010.)

title: 1. CORPORATIONS

chapter: 16. Voluntary Dissolution

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 16. Voluntary Dissolution


citation: CORP § 12631

text:
(a) Whenever a corporation has elected to wind up and dissolve a certificate evidencing that election shall forthwith be filed.

(b) The certificate shall be an officers’ certificate or shall be signed and verified by at least a majority of the directors then in office or by one or more members authorized to do so by approval of a majority of all members (Section 12223) and shall set forth:

(1) That the corporation has elected to wind up and dissolve.

(2) If the election was made by the vote of members alone, the number of votes for the election and that the election was made by persons holding at least a majority of the voting power.

(3) If the certificate is executed by a member or members, that the subscribing person or persons were authorized to execute the certificate by persons representing at least a majority of the voting power.

(4) If the election was made by the board pursuant to subdivision (b) of Section 12630, the certificate shall also set forth the circumstances showing the corporation to be within one of the categories described in that subdivision.

(c) If an election to dissolve made pursuant to subdivision (a) of Section 12630 is made by the vote of all the members of a corporation with members or by a vote of all members of the board of a corporation without members pursuant to subdivision (b) of Section 12630 and a statement to that effect is added to the certificate of dissolution pursuant to Section 12635, the separate filing of the certificate of election pursuant to this section is not required.

history: (History: Amended by Stats. 2014, Ch. 834, Sec. 19. (SB 1041) Effective January 1, 2015.)

title: 1. CORPORATIONS


citation: CORP § 12632

text:
(a) A voluntary election to wind up and dissolve may be revoked prior to distribution of any assets: (1) if the election was made pursuant to paragraph (1) of subdivision (a) of Section 12630, by the approval of a majority of all members; (2) if the election was made pursuant to paragraph (2) of subdivision (a) of Section 12630, by approval of the board and approval of the members; or (3) if the election was by the board pursuant to subdivision (b) of Section 12630, by approval of the board. Thereupon a certificate evidencing the revocation shall be signed, verified and filed in the manner prescribed by Section 12631.

(b) The certificate shall set forth:

(1) That the corporation has revoked its election to wind up and dissolve.

(2) That no assets have been distributed pursuant to the election.

(3) If the revocation was made by the vote of members alone, the number of votes for the revocation and that the revocation was made by persons representing at least a majority of the voting power.

(4) If the revocation was made by the approval of the board and the approval of the members, the certificate shall so state.

(5) If the revocation was made by the board alone, the certificate shall so state.

title: 1. CORPORATIONS


citation: CORP § 12633

text:
(a) Voluntary proceedings for winding up the corporation commence upon the adoption of the resolution required by Section 12630 by the members or by the board, electing to wind up and dissolve.

(b) When a voluntary proceeding for winding up has commenced, the board shall continue to act as a board and shall have full powers to wind up and settle its affairs, both before and after the filing of the certificate of dissolution.

(c) When a voluntary proceeding for winding up has commenced, the corporation shall cease to conduct its activities except to the extent necessary for the beneficial winding up thereof, to the extent necessary to carry out its purposes, and except during such period as the board may deem necessary to preserve the corporation’s goodwill or going-concern value pending a sale or other disposition of its assets, or both, in whole or in part. The board shall cause written notice of the commencement of the proceeding for voluntary winding up to be given by mail to all its members (except no notice need be given to the members who voted in favor of winding up and dissolving the corporation), to all known creditors, and claimants whose addresses appear on the records of the corporation.

title: 1. CORPORATIONS


citation: CORP § 12634

text: If a corporation is in the process of voluntary winding up, the superior court of the proper county, upon the petition of (a) the corporation, or (b) a member or members possessing 5 percent or more of the voting power, or (c) three or more creditors, and upon such notice to the corporation and to other persons interested in the corporation as members and creditors as the court may order, may take jurisdiction over such voluntary winding up proceeding if that appears necessary for the protection of any parties in interest. The court, if it assumes jurisdiction, may make such orders as to any and all matters concerning the winding up of the affairs of the corporation and the protection of its members and creditors as justice and equity may require. The provisions of Chapter 15 (commencing with Section 12620) (except Sections 12620 and 12621) shall apply to such court proceedings.

title: 1. CORPORATIONS


citation: CORP § 12635

text:
(a) When a corporation has been completely wound up without court proceedings therefor, a majority of the directors then in office shall sign and verify a certificate of dissolution stating:

(1) That the corporation has been completely wound up.

(2) That its known debts and liabilities have been actually paid, or adequately provided for, or paid or adequately provided for as far as its assets permitted, or that it has incurred no known debts or liabilities, as the case may be. If there are known debts or liabilities for payment of which adequate provision has been made, the certificate shall state what provision has been made, setting forth the name and address of the corporation, person or governmental agency that has assumed or guaranteed the payment, or the name and address of the depositary with which deposit has been made or such other information as may be necessary to enable the creditor or other person to whom payment is to be made to appear and claim payment of the debt or liability.

(3) That its known assets have been distributed to the persons entitled thereto or that it acquired no known assets, as the case may be.

(4) That the corporation is dissolved.

(5) That a final franchise tax return, as described by Section 23332 of the Revenue and Taxation Code, has been or will be filed with the Franchise Tax Board, as required under Part 10.2 (commencing with Section 18401) of Division 2 of the Revenue and Taxation Code.

(b) The certificate of dissolution shall be filed and thereupon the corporate existence shall cease, except for the purpose of further winding up if needed. The Secretary of State shall notify the Franchise Tax Board of the dissolution.

history: (History: Amended by Stats. 2006, Ch. 773, Sec. 35. Effective September 29, 2006.)

title: 1. CORPORATIONS


citation: CORP § 12636

text: Except as otherwise provided by law, if the term of existence for which any corporation was organized expires without renewal or extension thereof, the board shall terminate its activities and wind up its affairs; and when the affairs of the corporation have been wound up a majority of the directors shall execute and file a certificate conforming to the requirements of Section 12635.

title: 1. CORPORATIONS


citation: CORP § 12637

text:
(a) The board, in lieu of filing the certificate of dissolution, may petition the superior court of the proper county for an order declaring the corporation duly wound up and dissolved. Such petition shall be filed in the name of the corporation.

(b) Upon the filing of the petition, the court shall make an order requiring all interested persons to show cause why an order shall not be made declaring the corporation duly wound up and dissolved and shall direct that the order be served by notice to all creditors, claimants, and members in the same manner as the notice given under subdivision (b) of Section 12627.

(c) Any person claiming to be interested as member, creditor, or otherwise may appear in the proceeding at any time before the expiration of 30 days from the completion of publication of the order to show cause and contest the petition, and upon failure to appear such person’s claim shall be barred.

(d) Thereafter an order shall be entered and filed and have the effect as prescribed in Sections 12628 and 12629.

title: 1. CORPORATIONS


citation: CORP § 12638

text:
(a) A corporation in the process of winding up may dispose of the known claims against it by following the procedure described in this section.

(b) The written notice to known creditors and claimants required by subdivision (c) of Section 12633 shall comply with all of the following requirements:

(1) Describe any information that must be included in a claim.

(2) Provide a mailing address where a claim may be sent.

(3) State the deadline, which shall not be fewer than 120 days from the effective date of the written notice, by which the corporation must receive the claim.

(4) State that the claim will be barred if not received by the deadline.

(c) A claim against the corporation is barred if any of the following occur:

(1) A claimant who has been given the written notice under subdivision (b) does not deliver the claim to the corporation by the deadline.

(2) A claimant whose claim was rejected by the corporation does not commence a proceeding to enforce the claim within 90 days from the effective date of the rejection notice.

(d) For purposes of this section, “claim” does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.

history: (History: Added by renumbering Section 12637 (as added by Stats. 1996, Ch. 589, Sec. 54) by Stats. 2015, Ch. 303, Sec. 46. (AB 731) Effective January 1, 2016.)

title: 1. CORPORATIONS


citation: CORP § 12650

text:
The powers and duties of the directors (or other persons appointed by the court pursuant to Section 12625) and officers after commencement of a dissolution proceeding include, but are not limited to, the following acts in the name and on behalf of the corporation:

(a) To elect officers and to employ agents and attorneys to liquidate or wind up its affairs.

(b) To continue the conduct of the affairs of the corporation insofar as necessary for the disposal or winding up thereof.

(c) To carry out contracts and collect, pay, compromise, and settle debts and claims for or against the corporation.

(d) To defend suits brought against the corporation.

(e) To sue, in the name of the corporation, for all sums due or owing to the corporation or to recover any of its property.

(f) To collect any amounts remaining unpaid on memberships or to recover unlawful distributions.

(g) To sell at public or private sale, exchange, convey, or otherwise dispose of all or any part of the assets of the corporation for an amount deemed reasonable by the board without compliance with the provisions of Section 12521, and to execute bills of sale and deeds of conveyance in the name of the corporation.

(h) In general, to make contracts and to do any and all things in the name of the corporation which may be proper or convenient for the purposes of winding up, settling, and liquidating the affairs of the corporation.

title: 1. CORPORATIONS

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 17. General Provisions Relating to Dissolution


citation: CORP § 12651

text: A vacancy on the board may be filled during a winding up proceeding in the manner provided in Section 12364.

title: 1. CORPORATIONS

chapter: 17. General Provisions Relating to Dissolution


citation: CORP § 12652

text: When the identity of the directors or their right to hold office is in doubt, or if they are dead or unable to act, or they fail or refuse to act or their whereabouts cannot be ascertained, any interested person may petition the superior court of the proper county to determine the identity of the directors or, if there are no directors, to appoint directors to wind up the affairs of the corporation, after hearing upon such notice to such persons as the court may direct.

title: 1. CORPORATIONS


citation: CORP § 12653

text:
(a) After determining that all the known debts and liabilities of a corporation in the process of winding up have been paid or adequately provided for, the board shall distribute all the remaining corporate assets in the manner provided in Sections 12655, 12656, and 12656.5.

(b) If the winding up is by court proceeding or subject to court supervision, the distribution shall not be made until after the expiration of any period for the presentation of claims that has been prescribed by order of the court.

(c) Anything to the contrary notwithstanding, assets, if any, that are not subject to attachment, execution, or sale for the corporation’s debts and liabilities may be distributed pursuant to Sections 12655, 12656, and 12656.5 even though all debts and liabilities have not been paid or adequately provided for.

history: (History: Amended by Stats. 2015, Ch. 192, Sec. 24. (AB 816) Effective January 1, 2016.)

title: 1. CORPORATIONS


citation: CORP § 12654

text:
The payment of a debt or liability, whether the whereabouts of the creditor is known or unknown, has been adequately provided for if the payment has been provided for by either of the following means:

(a) Payment thereof has been assumed or guaranteed in good faith by one or more financially responsible persons or by the United States government or any agency thereof, and the provision (including the financial responsibility of such persons) was determined in good faith and with reasonable care by the board to be adequate at the time of any distribution of the assets by the board pursuant to this chapter.

(b) The amount of the debt or liability has been deposited as provided in Section 12659.

This section does not prescribe the exclusive means of making adequate provision for debts and liabilities.

title: 1. CORPORATIONS


citation: CORP § 12655

text: After complying with the provisions of Section 12653 assets held by a corporation upon a valid condition requiring return, transfer, or conveyance, which condition has occurred or will occur, shall be returned, transferred, or conveyed in accordance with the condition.

title: 1. CORPORATIONS


citation: CORP § 12656

text:
After complying with the provisions of Section 12653 and except as otherwise provided in Section 12655, assets held by a corporation shall be disposed of on dissolution as follows:

(a) If the articles or bylaws provide the manner of disposition, the assets shall be disposed of in that manner.

(b) If the articles or bylaws do not provide the manner of disposition, the assets shall be distributed among the members in accordance with their respective rights therein.

title: 1. CORPORATIONS


text:
(a) After complying with the provisions of Section 12653, and except as otherwise provided in Section 12655, upon dissolution of a worker cooperative the majority of the unallocated capital account shall be distributed to members on the basis of any of the following, as specified in the articles of incorporation or bylaws of the cooperative:

(1) Patronage.

(2) Capital contributions.

(3) A combination of patronage and capital contributions.

(b) A worker cooperative is authorized to include patronage provided by past and current members in its distribution of the unallocated capital account.

(c) Subdivision (a) shall not apply to any amounts in the indivisible reserve account. Any amount in the indivisible reserve account shall, upon dissolution, be allocated to a cooperative development organization designated in the articles of incorporation or the bylaws.

history: (History: Added by Stats. 2015, Ch. 192, Sec. 25. (AB 816) Effective January 1, 2016.)

title: 1. CORPORATIONS


citation: CORP § 12657

text: Distribution may be made either in money or in property or securities and either in installments from time to time or as a whole, if this can be done fairly and ratably and in conformity with the provisions of the articles and bylaws and shall be made as soon as reasonably consistent with the beneficial liquidation of the corporation assets.

title: 1. CORPORATIONS


citation: CORP § 12658

text:
(a) If a corporation in process of winding up has more than one class of memberships outstanding, a plan of distribution of the memberships, obligations, or securities of any other corporation, domestic or foreign, or assets other than money which is not in accordance with the liquidation rights of any class or classes as specified in the articles or bylaws may nevertheless be adopted if approved by (1) the board and (2) by approval by the members (Section 12224) of each class. The plan may provide that such distribution is in complete or partial satisfaction of the rights of any of such members upon distribution and liquidation of the assets.

(b) A plan of distribution so approved shall be binding upon all the members. The board shall cause notice of the adoption of the plan to be given by mail within 20 days after its adoption to all holders of memberships having a liquidation preference.

title: 1. CORPORATIONS


citation: CORP § 12659

text:
(a) If any members, creditors, or other persons are unknown or fail or refuse to accept their payment or distribution in cash or property or their whereabouts cannot be ascertained after diligent inquiry, or the existence or amount of a claim of a creditor, member, or other person is contingent, contested, or not determined, or if the ownership of any memberships is in dispute, the corporation may deposit any such payment, distribution, or the maximum amount of the claim with the Controller in trust for the benefit of those lawfully entitled to the payment, distribution, or the amount of the claim. The payment or distribution shall be paid over by the depositary to the lawful owners, their representatives or assigns, upon satisfactory proof of title.

(b)For the purpose of providing for the transmittal, receipt, accounting for, claiming, management, and investment of all money or other property deposited with the Controller under subdivision (a), the money or other property shall be deemed to be paid or delivered for deposit with the Controller under Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure, and may be recovered in the manner prescribed in that chapter.

history: (History: Amended by Stats. 1996, Ch. 860, Sec. 4. Effective January 1, 1997.)

title: 1. CORPORATIONS


citation: CORP § 12660

text:
(a) Whenever in the process of winding up a corporation any distribution of assets has been made, otherwise than under an order of court, without prior payment or adequate provision for payment of any of the debts and liabilities of the corporation, any amount so improperly distributed to any person may be recovered by the corporation. Any of such persons may be joined as defendants in the same action or be brought in on the motion of any other defendant.

(b) Suit may be brought in the name of the corporation to enforce the liability under subdivision (a) against any or all persons receiving the distribution by any one or more creditors of the corporation, whether or not they have reduced their claims to judgment.

(c) Members who satisfy any liability under this section shall have the right of ratable contribution from other distributees similarly liable. Any member who has been compelled to return to the corporation more than the member’s ratable share of the amount needed to pay the debts and liabilities of the corporation may require that the corporation recover from any or all of the other distributees such proportion of the amounts received by them upon the improper distribution as to give contribution to those held liable under this section and make the distribution of the assets fair and ratable, according to the respective rights and preferences of the memberships, after payment or adequate provision for payment of all the debts and liabilities of the corporation.

(d) As used in this section, “process of winding up” includes proceedings under Chapters 15 (commencing with Section 12630) and 16 (commencing with Section 12630) and also any other distribution of assets to persons made in contemplation of termination or abandonment of the corporate business.

title: 1. CORPORATIONS


citation: CORP § 12661

text:
(a) A corporation which is dissolved nevertheless continues to exist for the purpose of winding up its affairs, prosecuting and defending actions by or against it, and enabling it to collect and discharge obligations, dispose of and convey its property and collect, and divide its assets, but not for the purpose of continuing its activities except so far as necessary for the winding up thereof.

(b) No action or proceeding to which a corporation is a party abates by the dissolution of the corporation or by reason of proceedings for winding up and dissolution thereof.

(c) Any assets inadvertently or otherwise omitted from the winding up continue in the dissolved corporation for the benefit of the persons entitled thereto upon dissolution of the corporation and on realization shall be distributed accordingly.

title: 1. CORPORATIONS


citation: CORP § 12662

text:
(a) (1) Causes of action against a dissolved corporation, whether arising before or after the dissolution of the corporation, may be enforced against any of the following:

(A) Against the dissolved corporation, to the extent of its undistributed assets; including, without limitation, any insurance assets held by the corporation that may be available to satisfy claims.

(B) If any of the assets of the dissolved corporation have been distributed to other persons, against those persons to the extent of their pro rata share of the claim or to the extent of the corporate assets distributed to them upon dissolution of the corporation, whichever is less.

The total liability of a person under this section may not exceed the total amount of assets of the dissolved corporation distributed to that person upon dissolution of the corporation.

(2) Except as set forth in subdivision (c), all causes of action against a person to whom assets were distributed arising under this section are extinguished unless the claimant commences a proceeding to enforce the cause of action against that person prior to the earlier of the following:

(A) The expiration of the statute of limitations applicable to the cause of action.

(B) Four years after the effective date of the dissolution of the corporation.

(3) As a matter of procedure only, and not for purposes of determining liability, persons to whom assets of a dissolved corporation are distributed may be sued in the name of the corporation upon any cause of action against the corporation. This section does not affect the rights of the corporation or its creditors under Section 2009, or the rights, if any, of creditors under the Uniform Voidable Transactions Act, which may arise against persons to whom those assets are distributed.

This subdivision applies to corporations dissolved on or after January 1, 2000. Corporations dissolved prior to that date are subject to the law in effect prior to that date.

(b) Summons or other process against a dissolved corporation may be served by delivering a copy thereof to an officer, director, or person having charge of its assets or, if that person cannot be found, to any agent upon whom process might be served at the time of dissolution. If none of these persons can be found with due diligence and it is so shown by affidavit to the satisfaction of the court, then the court may make an order that summons or other process be served upon the dissolved corporation by personally delivering a copy thereof, together with a copy of the order, to the Secretary of State or an assistant or deputy secretary of state.

(c) Every dissolved corporation shall survive and continue to exist indefinitely for the purpose of being sued in any quiet title action. Any judgment rendered in any quiet title action shall bind each and all of its members or other persons having any equity or other interest in that corporation, to the extent of their interest therein, and that action shall have the same force and effect as an action brought under the provisions of Sections 410.50 and 410.60 of the Code of Civil Procedure. Service of summons or other process in any quiet title action may be made as provided in Chapter 4 (commencing with Section 413.10) of Title 5 of Part 2 of the Code of Civil Procedure or as provided in subdivision (b).

(d) Upon receipt of that process and the fee therefor, the Secretary of State forthwith shall give notice to the corporation as provided in Section 1702.

history: (History: Amended by Stats. 2019, Ch. 143, Sec. 33. (SB 251) Effective January 1, 2020.)

title: 1. CORPORATIONS


citation: CORP § 12663

text:
Without the approval of 100 percent of the members, any contrary provision in this part or the articles or bylaws notwithstanding, so long as there is any lot, parcel, area, apartment or unit for which an owners’ association, created in connection with any of the forms of development referred to in Section 11004.5 of the Business and Professions Code, is obligated to provide management, maintenance, preservation, or control, the following shall apply:

(a) The owners’ association or any person acting on its behalf shall not do either of the following:

(1) Transfer all or substantially all of its assets.

(2) File a certificate of dissolution.

(b) No court shall enter an order declaring the owners’ association duly wound up and dissolved.

history: (History: Amended by Stats. 2006, Ch. 538, Sec. 81. Effective January 1, 2007.)

title: 1. CORPORATIONS


citation: CORP § 12670

text:
(a) Upon the failure of a corporation to file the statement required by Section 12570, the Secretary of State shall provide a notice of that delinquency to the corporation. The notice shall also contain information concerning the application of this section, and shall advise the corporation of the penalty imposed by Section 19141 of the Revenue and Taxation Code for failure to timely file the required statement after notice of delinquency has been provided by the Secretary of State. If, within 60 days after providing notice of the delinquency, a statement pursuant to Section 12570 has not been filed by the corporation, the Secretary of State shall certify the name of the corporation to the Franchise Tax Board.

(b) Upon certification pursuant to subdivision (a), the Franchise Tax Board shall assess against the corporation a penalty of fifty dollars ($50) pursuant to Section 19141 of the Revenue and Taxation Code.

(c) The penalty herein provided shall not apply to a corporation which on or prior to the date of certification pursuant to subdivision (a) has dissolved, has been converted to another type of business entity, or has been merged into another corporation or other business entity.

(d) The penalty herein provided shall not apply and the Secretary of State need not provide a notice of the delinquency to a corporation the corporate powers, rights, and privileges of which have been suspended by the Franchise Tax Board pursuant to Section 23301, 23301.5, or 23775 of the Revenue and Taxation Code on or prior to, and remain suspended on, the last day of the filing period pursuant to Section 12570. The Secretary of State need not provide notice of the filing requirement pursuant to Section 12570, to a corporation the corporate powers, rights, and privileges of which have been so suspended by the Franchise Tax Board on or prior to, and remain suspended on, the day the Secretary of State prepares the notice for sending.

(e) If, after certification pursuant to subdivision (a) the Secretary of State finds the required statement was filed before the expiration of the 60-day period after providing notice of the delinquency, the Secretary of State shall promptly decertify the name of the corporation to the Franchise Tax Board. The Franchise Tax Board shall then promptly abate any penalty assessed against the corporation pursuant to Section 19141 of the Revenue and Taxation Code.

(f) If the Secretary of State determines that the failure of a corporation to file a statement required by Section 12570 is excusable because of reasonable cause or unusual circumstances which justify the failure, the Secretary of State may waive the penalty imposed by this section and by Section 19141 of the Revenue and Taxation Code, in which case the Secretary of State shall not certify the name of the corporation to the Franchise Tax Board, or if already certified, the Secretary of State shall promptly decertify the name of the corporation.

history: (History: Amended by Stats. 2014, Ch. 834, Sec. 20. (SB 1041) Effective January 1, 2015.)

title: 1. CORPORATIONS

chapter: 18. Crimes and Penalties

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 18. Crimes and Penalties


citation: CORP § 12671

text: Any promoter, director, or officer of a corporation who knowingly and willfully issues or consents to the issuance of memberships or membership certificates with intent to defraud present or future members or creditors is guilty of a misdemeanor punishable by a fine of not more than one thousand dollars ($1,000) or by imprisonment in county jail for not more than one year or by both such fine and imprisonment.

title: 1. CORPORATIONS


citation: CORP § 12672

text: Any director of any corporation who concurs in any vote or act of the directors of the corporation or any of them, knowingly and with dishonest or fraudulent purpose, to make any distribution of assets, except in the case and in the manner allowed by this part, either with the design of defrauding creditors or members or of giving a false appearance to the value of the membership and thereby defrauding purchasers is guilty of a crime. Each such crime is punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or by a fine of not more than one thousand dollars ($1,000), or imprisonment in a county jail for not more than one year, or by both that fine and imprisonment.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 44. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

title: 1. CORPORATIONS


citation: CORP § 12673

text:
(a) Every director or officer of any corporation is guilty of a crime if such director or officer knowingly concurs in making or publishing, either generally or privately, to members or other persons (1) any materially false report or statement as to the financial condition of the corporation, or (2) any willfully or fraudulently exaggerated report, prospectus, account, or statement of operations, financial condition, or prospects, or (3) any other paper intended to give, and having a tendency to give, a membership in such corporation a greater or lesser value than it really possesses.

(b) Every director or officer of any corporation is guilty of a crime who refuses to make or direct to be made any book entry or the posting of any notice required by law in the manner required by law.

(c) A violation of subdivision (a) or (b) of this section shall be punishable by imprisonment in state prison or by a fine of not more than one thousand dollars ($1,000) or imprisonment in the county jail for not more than one year or both such fine and imprisonment.

title: 1. CORPORATIONS


citation: CORP § 12674

text:
(a) Every director, officer or agent of any corporation, who knowingly receives or acquires possession of any property of the corporation, otherwise than in payment of a just demand, and, with intent to defraud, omits to make, or to cause or direct to be made, a full and true entry thereof in the books or accounts of the corporation is guilty of a crime.

(b) Every director, officer, agent or member of any corporation who, with intent to defraud, destroys, alters, mutilates or falsifies any of the books, papers, writings, or securities belonging to the corporation or makes or concurs in omitting to make any material entry in any book of accounts or other record or document kept by the corporation is guilty of a crime.

(c) Each crime specified in this section is punishable by imprisonment in state prison, or by imprisonment in a county jail for not exceeding one year, or a fine not exceeding one thousand dollars ($1,000), or both such fine and imprisonment.

title: 1. CORPORATIONS


citation: CORP § 12675

text: Every director, officer or agent of any corporation, or any person proposing to organize such a corporation who knowingly exhibits any false, forged, or altered book, paper, voucher, security, or other instrument of evidence to any public officer or board authorized by law to examine the organization of such corporation or to investigate its affairs, with intent to deceive such officer or board in respect thereto, is punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or by imprisonment in a county jail for not exceeding one year.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 45. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

title: 1. CORPORATIONS


citation: CORP § 12676

text: Every person who, without being authorized so to do, subscribes the name of another to or inserts the name of another in any prospectus, circular or other advertisement or announcement of any corporation, whether existing or intended to be formed, with intent to permit the document to be published and thereby to lead persons to believe that the person whose name is so subscribed is an officer, agent or promoter of such corporation, when in fact no such relationship exists to the knowledge of such person, is guilty of a misdemeanor.

title: 1. CORPORATIONS


citation: CORP § 12677

text: Nothing in this chapter limits the power of the state to punish any person for any conduct which constitutes a crime under any other statute.

title: 1. CORPORATIONS


citation: CORP § 12678

text: Any person may be enjoined from violating the provisions of Section 12311. Any corporation may be enjoined from carrying on business outside of the purpose for which it was formed.

title: 1. CORPORATIONS


citation: CORP § 12679

text: Any person violating Section 12311, and any corporation carrying on business outside the purpose for which it was formed, is guilty of a misdemeanor punishable by a fine of five hundred dollars ($500), or by imprisonment for not more than one year, or by both such fine and imprisonment.

title: 1. CORPORATIONS


citation: CORP § 12680

text: Foreign corporations transacting intrastate business shall comply with Chapter 21 (commencing with Section 2100) of Division 1, except as to matters specifically otherwise provided for in this part and except that Section 2115 shall not be applicable.

history: (History: Amended by Stats. 1997, Ch. 187, Sec. 10. Effective January 1, 1998.)

title: 1. CORPORATIONS

chapter: 19. Foreign Corporations

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 19. Foreign Corporations


citation: CORP § 12690

text:
As used in Sections 12690 to 12704, inclusive, of this part:

(a) “New law” means Part 2 (commencing with Section 12200) of Division 3 of Title 1 of the Corporations Code enacted by the California Legislature during the 1981–82 Regular Session and operative January 1, 1984.

(b) “Prior law” means Part 2 (commencing with Section 12220) of Division 3 of Title 1 of the Corporations Code in effect on December 31, 1983.

(c) “Subject corporation” means any corporation described in subdivision (a) of Section 12202 and subject to the prior law.

title: 1. CORPORATIONS

chapter: 20. Transition Provisions

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 20. Transition Provisions


citation: CORP § 12691

text:
(a) The new law shall apply to all corporations which are incorporated on or after January 1, 1984, under Part 2 (commencing with Section 12200) of this division or which are expressly governed by Part 2 pursuant to a particular provision of this division or other specific statutory provision.

(b) Except as otherwise expressly provided in this chapter, the new law shall apply to all subject corporations and to all actions taken by the directors, officers, or members of such corporations, on or after January 1, 1984.

(c) Except as otherwise expressly provided in this chapter, all of the sections of the new law governing acts, contracts, or other transactions by a subject corporation or its directors, officers, or members, shall apply only to the acts, contracts, or transactions occurring on or after January 1, 1984, and the prior law shall govern acts, contracts, or transactions occurring before January 1, 1984.

(d) Except as otherwise expressly provided in this chapter, any vote or consent by the directors or members of a subject corporation prior to January 1, 1984, in accordance with the prior law, shall be effective in accordance with that law. If any certificate or document is required to be filed in any public office of this state relating to such vote or consent, it may be filed on or after January 1, 1984, in accordance with the prior law.

title: 1. CORPORATIONS


citation: CORP § 12692

text:
(a) The provisions of Sections 12310 and 12313 of the new law relating to the contents of articles of incorporation do not apply to subject corporations unless and until an amendment of the articles is filed stating that the corporation elects to be governed by all of the provisions of the new law not otherwise applicable to it under this chapter.

(b) The amendment described in subdivision (a) may be adopted by the board alone, except that if such amendment makes any change in the articles other than conforming the statement of purposes of the subject corporation to Section 12310, deleting any references to the location of its principal office, deleting any statement of par value or any statement regarding the number of directors, or conforming any such statement to Section 12331 (subject to Section 12694), the amendment shall also be approved by the members (Section 12224) if such approval is otherwise required for the changes made.

(c) The amendment shall not name the corporation’s initial agent for service of process if a report required by Section 12570 has been filed.

title: 1. CORPORATIONS


citation: CORP § 12693

text: Section 12320 of the new law shall apply to subject corporations, but any statement in the articles of these corporations prior to an amendment thereof pursuant to Section 12692, relating to the powers of the corporation, shall not be construed as a limitation unless it is expressly stated as such.

title: 1. CORPORATIONS


citation: CORP § 12694

text: Subdivision (a) of Section 12353 of the new law shall apply to subject corporations, but the treasurer of these corporations shall be deemed to be the chief financial officer unless otherwise provided in the articles or bylaws.

history: (History: Amended by Stats. 2009, Ch. 631, Sec. 50. (AB 1233) Effective January 1, 2010.)

title: 1. CORPORATIONS


citation: CORP § 12695

text: Section 12377 governs any proposed indemnification by a subject corporation after January 1, 1984, whether the events upon which the indemnification is based occurred before or after January 1, 1984. Any statement relating to indemnification contained in the articles or bylaws of a subject corporation shall not be construed as limiting the indemnification permitted by Section 12377, unless it is expressly stated as so intended.

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

title: 1. CORPORATIONS


citation: CORP § 12696

text:
(a) The provisions of Chapter 5 (commencing with Section 12460) and Chapter 6 (commencing with Section 12480) of the new law shall apply to any meeting of members of a subject corporation, held on or after January 1, 1984, and to any action by such members pursuant to a written ballot, which becomes effective on or after January 1, 1984, and to any vote cast at such a meeting or ballot, given for such action, whether or not a ballot was executed by the member prior to January 1, 1984.

(b) Notwithstanding subdivision (a), the prior law shall apply to any meeting of members and to any vote cast at such a meeting if the meeting was initially called for a date prior to January 1, 1984, and notice thereof was given to members entitled to vote at the meeting.

title: 1. CORPORATIONS


citation: CORP § 12697

text: Section 12490 of the new law shall apply to actions commenced on or after January 1, 1984, with respect to a subject corporation. The prior law shall govern actions which are commenced prior to January 1, 1984, but are still pending on January 1, 1984.

title: 1. CORPORATIONS


citation: CORP § 12698

text: Chapter 9 (commencing with Section 12520) and Chapter 10 (commencing with Section 12530) of the new law shall apply to transactions consummated by a subject corporation on or after January 1, 1984, unless the approval required by the prior law has been given prior to January 1, 1984, or has been given on or after January 1, 1984, at a meeting of members initially called for a date prior to January 1, 1984, in which case the transaction shall be governed by the prior law.

title: 1. CORPORATIONS


citation: CORP § 12699

text: Chapter 15 (commencing with Section 12620) and Chapter 17 (commencing with Section 12650) of the new law shall apply to acts for involuntary dissolution of a subject corporation commenced on or after January 1, 1984. The prior law shall govern any of these actions which are commenced prior to January 1, 1984, but are still pending on January 1, 1984.

title: 1. CORPORATIONS


citation: CORP § 12700

text: Chapter 16 (commencing with Section 12630) and Chapter 17 (commencing with Section 12650) of the new law shall apply to any voluntary dissolution proceeding initiated with respect to a subject corporation by the filing on or after January 1, 1984, of an election to wind up and dissolve. The prior law shall govern any of these proceedings so initiated prior to January 1, 1984.

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

title: 1. CORPORATIONS


citation: CORP § 12701

text: When any corporate agent has been designated for service of process prior to January 1, 1984, and such designation of an agent included a name of a city, town, or village where the corporate agent maintained an office, service on such an agent may be effected at any office of the agent set forth in the certificate of the corporate agent filed pursuant to Section 1505, 6213, 8213, or 12573, or filed pursuant to Section 3301.5, 3301.6, 6403.5, or 6403.6 as in effect prior to January 1, 1977.

title: 1. CORPORATIONS


citation: CORP § 12702

text:
Any subject corporation that existed on the first day of January 1873, was formed under the laws of this state, and which has not already elected to continue its existence under the prior law, may at any time elect to continue its existence under the provisions of this code applicable thereto, (a) by the unanimous vote of all its directors, (b) by the vote of the members representing a majority of the voting power of the corporation at an election held at any annual meeting of the members or at any meeting called by the directors for the express purpose of considering this subject, or (c) by action of the directors upon the written consent of the members representing a majority of the voting power of the corporation.

A certificate of the action of the directors, signed by the directors and the secretary, shall be filed in the office of the Secretary of State when the election is made by the unanimous vote of the directors or upon the written consent of the members. A certificate of the proceedings of the meeting of the members when the election is made at any such meeting, signed by the chairperson and secretary of the meeting and a majority of the directors, shall be filed in the office of the Secretary of State. Thereafter, the corporation shall continue its existence under the provisions of this code which are applicable thereto, and shall possess all the rights and powers, and shall be subject to all the obligations, restrictions, and limitations, prescribed thereby.

history: (History: Amended by Stats. 2022, Ch. 617, Sec. 85. (SB 1202) Effective January 1, 2023.)

title: 1. CORPORATIONS


citation: CORP § 12704

text: If the corporate rights, privileges, and powers of a subject corporation have been suspended and are still suspended immediately prior to January 1, 1984 pursuant to the prior law, as a result of its incorporation of the General Nonprofit Corporation Law (commencing with Section 9000) in effect on December 31, 1979, and the incorporation by the General Nonprofit Corporation Law of Sections 5700 through 5908 of the prior law (Section 2300), such sections and provisions continue to apply to such corporation until restoration by the controller pursuant to such sections.

title: 1. CORPORATIONS


citation: CORP § 13200

text: This part shall be known as “the Fish Marketing Act.”

history: (History: Amended by Stats. 1957, Ch. 2261.)

title: 1. CORPORATIONS

chapter: 1. General Provisions and Definitions

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 1. General Provisions and Definitions


citation: CORP § 13201

text: This part is enacted in order to promote, foster, and encourage the intelligent and orderly marketing of fish and fishery products through cooperation; to eliminate speculation and waste; to make the distribution of fish and fishery products between producer and consumer as direct as can be efficiently done; and to stabilize the marketing of fish and fishery products.

title: 1. CORPORATIONS


citation: CORP § 13202

text:
As used in this part:

(a) “Fishery products” includes fish, crustaceans, mollusks, and marine products for human consumption.

(b) “Member” includes members of associations without capital stock and holders of common stock in associations organized with shares of stock.

(c) “Association” means any corporation organized under this part.

title: 1. CORPORATIONS


citation: CORP § 13203

text: Associations shall be deemed “nonprofit,” inasmuch as they are not organized to make profit for themselves, as such, or for their members, as such, but only for their members as producers of fishery products.

history: (History: Added by Stats. 1953, Ch. 207.)

title: 1. CORPORATIONS


citation: CORP § 13204

text: The provisions of the General Corporation Law and all powers and rights thereunder, apply to associations, except where such provisions are in conflict with or inconsistent with the express provisions of this part.

title: 1. CORPORATIONS


citation: CORP § 13205

text: No association is subject in any manner to the terms of the Corporate Securities Law and all associations may issue their membership certificates or stock or other securities as provided in this division without the necessity of any permit from the Commissioner of Financial Protection and Innovation.

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 61. (SB 1498) Effective January 1, 2023.)

title: 1. CORPORATIONS


citation: CORP § 13206

text: An association shall be deemed not to be a conspiracy nor a combination in restraint of trade nor an illegal monopoly; nor an attempt to lessen competition or to fix prices arbitrarily or to create a combination or pool in violation of any law of the State; and the marketing contracts and agreements between the association and its members and any agreements authorized in this part shall be considered not to be illegal nor in restraint of trade nor contrary to the provisions of any statute enacted against pooling or combinations.

title: 1. CORPORATIONS


citation: CORP § 13207

text: Any provisions of law which are in conflict with this part shall not be construed as applying to associations. Any exemptions under any laws applying to fishery products in the possession or under the control of the individual producer shall apply similarly and completely to such fishery products delivered by its members, in the possession or under the control of the association.

title: 1. CORPORATIONS


citation: CORP § 13208

text: Any two or more associations may be merged into one such constituent association or consolidated into a new association. Such merger or consolidation shall be made in the manner prescribed by the General Corporation Law for domestic corporations.

title: 1. CORPORATIONS


citation: CORP § 13220

text: Five or more persons, a majority of whom are residents of this State, engaged in the production of fishery products, may form an association, with or without shares of stock, under the provisions of this division.

title: 1. CORPORATIONS

chapter: 2. Formation, Articles, and By-laws

article: 1. Formation

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 2. Formation, Articles, and By-laws > 1. Formation


citation: CORP § 13225

text: Articles of incorporation shall be signed, acknowledged, and filed in the manner prescribed by the General Corporation Law for domestic corporations.

title: 1. CORPORATIONS

article: 2. Articles of Incorporation

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 2. Formation, Articles, and By-laws > 2. Articles of Incorporation


citation: CORP § 13226

text:
The articles of incorporation shall state:

(a) The name of the association.

(b) The purposes for which it is formed.

(c) The county where the principal office for the transaction of business of the corporation is to be located.

(d) The number of directors thereof, which shall be not less than three and may be any number in excess thereof; the term of office of such directors; and the names and residence of those who are to serve as directors for the first year, or until election and qualification of their successors.

(e) The initial street address of the association.

(f) The initial mailing address of the association, if different from the initial street address.

(g) The name and street address in this state of the association’s initial agent for service of process in accordance with subdivision (b) of Section 1502.

history: (History: Amended by Stats. 2012, Ch. 494, Sec. 34. (SB 1532) Effective January 1, 2013.)

title: 1. CORPORATIONS

article: 2. Articles of Incorporation


citation: CORP § 13227

text: If the association is organized with shares of stock, the articles shall state the number of shares which may be issued and if the shares are to have a par value, the par value of each share, and the aggregate par value of all shares; and if the shares are to be without par value it shall be so stated.

title: 1. CORPORATIONS

article: 2. Articles of Incorporation


citation: CORP § 13228

text: If the shares are to be classified, the articles shall contain a description of the classes of shares and a statement of the number of shares of each kind or class and the nature and extent of the preferences, rights, privileges and restrictions granted to or imposed upon the holders of the respective classes of stock.

title: 1. CORPORATIONS

article: 2. Articles of Incorporation


citation: CORP § 13229

text: If the association is organized without shares of stock, the articles shall state whether the voting power and the property rights and interest of each member are equal or unequal; and if unequal the general rule or rules applicable to all members by which the voting power and the property rights and interests, respectively, of each member may be and are determined and fixed; and shall also provide for the admission of new members who shall be entitled to vote and to share in the property of the association with the old members, in accordance with such general rule or rules.

title: 1. CORPORATIONS

article: 2. Articles of Incorporation


citation: CORP § 13230

text: The articles of incorporation of any association may be altered or amended in the manner and for the purposes prescribed by the General Corporation Law for domestic corporations.

title: 1. CORPORATIONS

article: 2. Articles of Incorporation


citation: CORP § 13240

text: Each association shall within 30 days after its incorporation, adopt for its government and management, a code of by-laws, not inconsistent with this part. A majority vote of the members or shares of stock issued and outstanding and entitled to vote, or the written assent of a majority of the members or of stockholders representing a majority of all the shares of stock issued and outstanding and entitled to vote, is necessary to adopt such by-laws and is effectual to repeal or amend any by-laws, or to adopt additional by-laws. The power to repeal and amend the by-laws, and adopt new by-laws, may, by a similar vote, or similar written assent, be delegated to the board of directors, which authority may, by a similar vote, or similar written assent, be revoked.

title: 1. CORPORATIONS

article: 3. By-laws

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 2. Formation, Articles, and By-laws > 3. By-laws


citation: CORP § 13241

text: The by-laws shall prohibit the transfer of the common stock or membership certificates of the associations to persons not engaged in the production of the products handled by the association.

title: 1. CORPORATIONS

article: 3. By-laws


citation: CORP § 13242

text:
The by-laws may provide:

(a) The number of members constituting a quorum.

(b) The right of members to vote by proxy or by mail or both, and the conditions, manner, form and effects of such votes; the right of members to cumulate their votes and the prohibition, if desired, of cumulative voting.

(c) The number of directors constituting a quorum.

(d) The qualifications, compensation and duties and term of office of directors and officers and the time of their election.

(e) Penalties for violations of the by-laws.

title: 1. CORPORATIONS

article: 3. By-laws


citation: CORP § 13243

text:
The by-laws may provide:

(a) The amount of entrance, organization and membership fees, if any; the manner and method of collection of the same; and the purposes for which they may be used.

(b) The amount which each member shall be required to pay annually, or from time to time, if at all, to carry on the business of the association; the charge, if any, to be paid by each member for services rendered by the association to him and the time of payment and the manner of collection; and the marketing contract between the association and its members which every member may be required to sign.

(c) The amount of any dividends which may be declared on the stock or membership capital, which dividends shall not exceed 8 percent per annum and which dividends shall be in the nature of interest and shall not affect the nonprofit character of any association organized hereunder.

title: 1. CORPORATIONS

article: 3. By-laws


citation: CORP § 13244

text:
The by-laws may provide:

(a) The number and qualification of members of the association and the conditions precedent to membership or ownership of common stock.

(b) The method, time and manner of permitting members to withdraw or the holders of common stock to transfer their stock.

(c) The manner of assignment and transfer of the interest of members and of the shares of common stock.

(d) The conditions upon which and time when membership of any member shall cease.

(e) For the automatic suspension of the rights of a member when he ceases to be eligible to membership in the association; and the mode, manner and effect of the expulsion of a member.

(f) The manner of determining the value of a member’s interest and provision for its purchase by the association upon the death or withdrawal of a member or upon the expulsion of a member or forfeiture of his membership, or at the option of the association, the purchase at a price fixed by conclusive appraisal by the board of directors; and the conditions and terms for the repurchase by the corporation from its stockholders of their stock upon their disqualification as stockholders.

title: 1. CORPORATIONS

article: 3. By-laws


citation: CORP § 13245

text: The by-laws may provide for the time, place, and manner of calling and conducting meetings of the association.

title: 1. CORPORATIONS

article: 3. By-laws


citation: CORP § 13246

text: The by-laws may provide that the territory in which the association has members shall be divided into districts and that directors shall be elected from the several districts. In such case, the by-laws shall specify the number of directors to be elected by each district, the manner and method of reapportioning the directors and of redistricting the territory covered by the association.

title: 1. CORPORATIONS

article: 3. By-laws


citation: CORP § 13247

text: The by-laws may provide that the territory in which the association has members shall be divided into districts, and that the directors shall be elected by representatives or advisers, who themselves have been elected by the members from the several territorial districts. In such case, the by-laws shall specify the number of representatives or advisers to be elected by each district, the manner and method of reapportioning the representatives or advisers and of redistricting the territory covered by the association.

title: 1. CORPORATIONS

article: 3. By-laws


citation: CORP § 13248

text: The by-laws may provide that primary elections shall be held to nominate directors. Where the by-laws provide that the territory in which the association has members shall be divided into districts, the by-laws may also provide that the results of the primary elections in the various districts shall be final and shall be ratified at the annual meeting of the association.

title: 1. CORPORATIONS

article: 3. By-laws


citation: CORP § 13249

text: The by-laws may provide that one or more directors may be nominated by any public official or commission or by the other directors selected by the members. Such directors shall represent primarily the interest of the general public in such associations. The directors so nominated need not be members of the association, but shall have the same powers and rights as other directors. Such directors shall not number more than one-fifth of the entire number of directors.

title: 1. CORPORATIONS

article: 3. By-laws


citation: CORP § 13250

text: The by-laws may provide that directors shall be elected for terms of from one to five years; provided, that at each annual election the same fraction of the total number of directors shall be elected as one year bears to the number of years of the term of office.

title: 1. CORPORATIONS

article: 3. By-laws


citation: CORP § 13251

text: The by-laws may provide for an executive committee and may allot to such committee all the functions and powers of the board of directors, subject to the general direction and control of the board.

title: 1. CORPORATIONS

article: 3. By-laws


citation: CORP § 13275

text: The affairs of the association shall be managed by a board of not less than three directors, elected by the members from their own number.

title: 1. CORPORATIONS

chapter: 3. Officers

article: 1. Generally

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 3. Officers > 1. Generally


citation: CORP § 13276

text: Meetings of the board of directors may be held at any place within or without the State fixed by a quorum thereof unless otherwise provided in the articles of incorporation or by-laws.

title: 1. CORPORATIONS

article: 1. Generally


citation: CORP § 13277

text: When a vacancy on the board of directors occurs other than by expiration of term, the remaining members of the board, by a majority vote, shall fill the vacancy, provided that when the by-laws provide for an election of directors by districts, the vacancy shall be filled by the election of a director from the district in which the vacancy occurs; or the board of directors may call a special meeting of the members in that district to fill the vacancy.

title: 1. CORPORATIONS

article: 1. Generally


citation: CORP § 13278

text: The directors shall elect from their number a president and one or more vice presidents. They shall also elect a secretary and a treasurer, who need not be directors or members of the association; and they may combine the two latter offices and unite both functions and titles in one person. The treasurer may be a bank or any depository and, as such, shall not be considered as an officer, but as a function of the board of directors. In such case, the secretary shall perform the usual accounting duties of the treasurer, excepting that the funds shall be deposited only as and where authorized by the board of directors. Any vacancy in any office, other than that of director, shall be filled by the board of directors.

title: 1. CORPORATIONS

article: 1. Generally


citation: CORP § 13279

text: An association may provide a fair remuneration for the time actually spent by its officers and directors in its service and for the service of the members of its executive committee.

title: 1. CORPORATIONS

article: 1. Generally


citation: CORP § 13290

text: Any member may bring charges against an officer or director by filing them in writing with the secretary of the association, together with a petition signed by 5 percent of the members, requesting the removal of the officer or director in question.

title: 1. CORPORATIONS

article: 2. Removal of Officers

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 3. Officers > 2. Removal of Officers


citation: CORP § 13291

text: Except as provided in Section 13293, the removal shall be voted upon at the next regular or special meeting of the association and, by a vote of a majority of the members, the association may remove the officer or director.

title: 1. CORPORATIONS

article: 2. Removal of Officers


citation: CORP § 13292

text: The director or officer, against whom such charges have been brought, shall be informed in writing of the charges previous to the meeting and shall have an opportunity at the meeting to be heard in person or by counsel and to present witnesses; and the person or persons bringing the charges against him shall have the same opportunity.

title: 1. CORPORATIONS

article: 2. Removal of Officers


citation: CORP § 13293

text: If the by-laws provide for election of directors by districts with primary elections in each district, the petition for removal of a director shall be signed by 20 percent of the members residing in the district from which he was elected. The board of directors shall call a special meeting of the members residing in that district to consider the removal of the director; and by a vote of the majority of the members of that district, the director in question shall be removed from office.

title: 1. CORPORATIONS

article: 2. Removal of Officers


citation: CORP § 13300

text:
(a) Under the terms and conditions prescribed in the by-laws, an association may admit as members, or issue common stock to, only such persons as are engaged in the production of fishery products to be handled by or through the association, including the lessees and tenants of boats and equipment used for the production of such fishery products and any lessors and landlords who receive as rent all or part of the fish produced by such leased equipment.

(b) If a member of a nonstock association is other than a natural person, such member may be represented by any individual duly authorized in writing.

(c) One association may become a member or stockholder of any other association.

title: 1. CORPORATIONS

chapter: 4. Members

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 4. Members


citation: CORP § 13301

text: When a member of an association established without shares of stock has paid his membership fee in full, he shall receive a certificate of membership.

title: 1. CORPORATIONS


citation: CORP § 13302

text: No member shall be liable for the debts of the association to an amount exceeding the sum remaining unpaid on his membership fee or his subscription to the capital stock, including any unpaid balance on any promissory note given in payment thereof.

title: 1. CORPORATIONS


citation: CORP § 13303

text: Meetings of members shall be held at the place as provided in the by-laws; and if no provision is made, in the city where the principal place of business is located at a place designated by the board of directors.

title: 1. CORPORATIONS


citation: CORP § 13304

text: In case of the expulsion of a member, and where the by-laws do not provide any procedure or penalty, the board of directors shall equitably and conclusively appraise his property interest in the association and shall fix the amount thereof in money, which shall be paid to him within one year after such expulsion.

title: 1. CORPORATIONS


citation: CORP § 13310

text: No association shall issue a certificate for stock to a member until it has been fully paid for. The promissory notes of the members may be accepted by the association as full or partial payment. The association shall hold the stock as security for the payment of the note; but such retention as security shall not affect the member’s right to vote. An association, in its by-laws, may limit the amount of common stock which one member may own.

title: 1. CORPORATIONS

chapter: 5. Stock

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 5. Stock


citation: CORP § 13311

text: One class of stock shall always be known as common stock and voting power may be restricted to holders of common stock.

title: 1. CORPORATIONS


citation: CORP § 13312

text: There shall be printed upon each common stock certificate a statement that the transfer thereof to any person not engaged in the production of the products handled by the association is prohibited by the by-laws of the association.

title: 1. CORPORATIONS


citation: CORP § 13313

text: Except as to the matters and things stated in the articles of incorporation no distinction shall exist between classes of stock or the holders thereof.

title: 1. CORPORATIONS


citation: CORP § 13314

text: If an association issues nonpar value stock the issuance of such stock shall be governed by the terms of the General Corporation Law covering the issuance of nonpar value stock in domestic corporations.

title: 1. CORPORATIONS


citation: CORP § 13315

text: An association may, at any time, as specified in the by-laws, except when the debts of the association exceed 50 percent of its assets, buy in or purchase its common stock at the book value thereof, as conclusively determined by the board of directors and pay for it in cash within one year thereafter.

title: 1. CORPORATIONS


citation: CORP § 13316

text: Whenever an association, organized with preferred shares of stock, purchases the stock or any property, or any interest in any property of any person, it may discharge the obligations so incurred, wholly or in part, by exchanging for the acquired interest, shares of its preferred stock to an amount which at par value would equal the fair market value of the stock or interest so purchased, as determined by the board of directors. In that case the transfer to the association of the stock or interest purchased shall be equivalent to payment in cash for the shares of stock issued.

title: 1. CORPORATIONS


citation: CORP § 13325

text:
An association may:

Engage in any activity in connection with the marketing, selling, preserving, harvesting, drying, processing, manufacturing, canning, packing, grading, storing, handling, or utilization of any fishery products produced or delivered to it by its members; or the manufacturing or marketing of the by-products thereof; or any activity in connection with the purchase, hiring, or use by its members of supplies, machinery, or equipment, or in the financing of any such activities.

title: 1. CORPORATIONS

chapter: 6. Powers

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 6. Powers


citation: CORP § 13326

text: An association may borrow without limitation as to amount of corporate indebtedness or liability and may make advances to members.

title: 1. CORPORATIONS


citation: CORP § 13327

text: An association may act as the agent or representative of any member or members in any of the two next preceding sections.

title: 1. CORPORATIONS


citation: CORP § 13328

text: An association may establish reserves and invest the funds thereof in bonds or in such other property as may be provided in the by-laws.

title: 1. CORPORATIONS


citation: CORP § 13329

text: An association may purchase or otherwise acquire, hold, own, and exercise all rights of ownership in, sell, transfer, pledge, or guarantee the payment of dividends or interest on, or the retirement or redemption of, shares of the capital stock or bonds of any corporation or association engaged in any related activity or in the warehousing or handling or marketing or packing or manufacturing or processing or preparing for market of any of the fishery products handled by the association.

title: 1. CORPORATIONS


citation: CORP § 13330

text: An association may buy, hold and exercise all privileges or ownership, over such real or personal property as may be necessary or convenient for the conduct and operation of any of the business of the association, or incidental thereto.

title: 1. CORPORATIONS


citation: CORP § 13331

text: An association may levy assessments in the manner and in the amount provided in its by-laws.

title: 1. CORPORATIONS


citation: CORP § 13332

text: An association may do each and every thing necessary, suitable or proper for the accomplishment of any one of the purposes or the attainment of any one or more of the objects enumerated in this article; or conducive to or expedient for the interest or benefit of the association; and contract accordingly; and in addition exercise and possess all powers, rights and privileges necessary or incidental to the purposes for which the association is organized or to the activities in which it is engaged; and, in addition, any other rights, powers and privileges granted by the laws of this State to ordinary corporations, except such as are inconsistent with the express provisions of this act; and do any such thing anywhere.

title: 1. CORPORATIONS


citation: CORP § 13333

text: An association may use or employ any of its facilities for any purpose; provided, the proceeds arising from such use and employment go to reduce the cost of operation for its members; but the fishery products of nonmembers shall not be dealt in to an amount greater in value than such as are handled by it for its members.

title: 1. CORPORATIONS


citation: CORP § 13334

text:
An association may organize, form, operate, own, control, have an interest in, own stock of, or be a member of any other corporation or corporations, with or without capital stock and engaged in preserving, drying, processing, canning, packing, storing, handling, shipping, utilizing, manufacturing, marketing, or selling of the fishery products handled by the association, or the by-products thereof.

If such corporations are warehousing corporations, they may issue legal warehouse receipts to the association against the commodities delivered by it, or to any other person and such legal warehouse receipts shall be considered as adequate collateral to the extent of the usual and current value of the commodity represented thereby. In case such warehouse is licensed or licensed and bonded under the laws of this State or the United States, its warehouse receipt delivered to the association on commodities of the association or its members, or delivered by the association or its members, shall not be challenged or discriminated against because of ownership or control, wholly or in part, by the association.

title: 1. CORPORATIONS


citation: CORP § 13335

text: Any association may, upon resolution adopted by its board of directors, enter into all necessary and proper contracts and agreements and make all necessary and proper stipulations, agreements and contracts and arrangements with any other cooperative or other corporation, association, or associations, formed in this or in any other State, for the cooperative and more economical carrying on of its business or any part or parts thereof. Any two or more associations may, by agreement between them, unite in employing and using or may separately employ and use the same personnel, methods, means, and agencies for carrying on and conducting their respective business.

title: 1. CORPORATIONS


citation: CORP § 13350

text: An association and its members may make and execute marketing contracts, requiring the members to sell, for any period of time, not over 15 years, all or any specified part of their fishery products or specified commodities exclusively to or through the association or any facilities to be created by the association.

title: 1. CORPORATIONS

chapter: 7. Marketing Contracts

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 7. Marketing Contracts


citation: CORP § 13351

text: If the members contract a sale to the association, it shall be conclusively held that title to the products passes absolutely and unreservedly, except for recorded liens, to the association upon delivery or at any other time expressly and definitely specified in the contract.

title: 1. CORPORATIONS


citation: CORP § 13352

text: The contract may provide that the association may sell or resell the fishery products delivered by its members, with or without taking title thereto; and pay over to its members the resale price, after deducting all necessary selling, overhead, and other costs and expenses, including interest on preferred stock, not exceeding 8 percent per annum, and reserves for retiring the stock, if any; and other proper reserves; and interest not exceeding 8 percent per annum upon common stock.

title: 1. CORPORATIONS


citation: CORP § 13353

text: The marketing contract may fix, as liquidated damages, specific sums to be paid by the member to the association upon the breach by him of any provision of the marketing contract regarding the sale or delivery or withholding of fishery products; and may further provide that the member will pay all costs, premiums for bonds, expenses and fees, in case any action is brought upon the contract by the association; and any such provisions shall be valid and enforceable in the courts of this State; and such clauses providing for liquidated damages shall be enforceable as such and shall not be regarded as penalties.

title: 1. CORPORATIONS


citation: CORP § 13354

text: In the event of any such breach or threatened breach of such marketing contract by a member the association shall be entitled to an injunction to prevent the further breach of the contract and to a decree of specific performance thereof. Pending the adjudication of such an action and upon filing a verified complaint showing the breach or threatened breach, and upon filing sufficient bond, the association shall be entitled to a temporary restraining order and preliminary injunction against the member.

title: 1. CORPORATIONS


citation: CORP § 13355

text: In any action upon such marketing agreements, it shall be conclusively presumed that a landlord or lessor is able to control the delivery of fishery products produced by his equipment by tenants, or others, whose tenancy or possession or work on such equipment or the terms of whose tenancy or possession or labor thereon were created or changed after execution by the landlord or lessor, of such a marketing agreement; and in such actions, the foregoing remedies for nondelivery or breach shall lie and be enforceable against such landlord or lessor.

title: 1. CORPORATIONS


citation: CORP § 13356

text: A contract entered into by a member of an association, providing for the delivery to such association of products produced or acquired by the member, may be specifically enforced by the association to secure the delivery to it of such fishery products, any provisions contained in the Civil Code to the contrary notwithstanding.

title: 1. CORPORATIONS


citation: CORP § 13400

text: This part shall be known and may be cited as the “Moscone-Knox Professional Corporation Act.”

history: (History: Added by Stats. 1968, Ch. 1375.)

part: 4. PROFESSIONAL CORPORATIONS

title: 1. CORPORATIONS

path: 1. CORPORATIONS > 3. CORPORATIONS FOR SPECIFIC PURPOSES > 7. Marketing Contracts > 4. PROFESSIONAL CORPORATIONS


citation: CORP § 13401

text:
As used in this part:

(a) “Professional services” means any type of professional services that may be lawfully rendered only pursuant to a license, certification, or registration authorized by the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act.

(b) “Professional corporation” means a corporation organized under the General Corporation Law or pursuant to subdivision (b) of Section 13406 that is engaged in rendering professional services in a single profession, except as otherwise authorized in Section 13401.5, pursuant to a certificate of registration issued by the governmental agency regulating the profession as herein provided and that in its practice or business designates itself as a professional or other corporation as may be required by statute. However, any professional corporation or foreign professional corporation rendering professional services by persons duly licensed by the Medical Board of California or any examining committee under the jurisdiction of the board, the Podiatric Medical Board of California, the Osteopathic Medical Board of California, the Dental Board of California, the Dental Hygiene Board of California, the California State Board of Pharmacy, the Veterinary Medical Board, the California Architects Board, the Court Reporters Board of California, the Board of Behavioral Sciences, the Speech-Language Pathology and Audiology and Hearing Aid Dispensers Board, the Board of Registered Nursing, the State Board of Optometry, or the California Board of Occupational Therapy shall not be required to obtain a certificate of registration in order to render those professional services.

(c) “Foreign professional corporation” means a corporation organized under the laws of a state of the United States other than this state that is engaged in a profession of a type for which there is authorization in the Business and Professions Code for the performance of professional services by a foreign professional corporation.

(d) “Licensed person” means any natural person who is duly licensed under the provisions of the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act to render the same professional services as are or will be rendered by the professional corporation or foreign professional corporation of which the person is, or intends to become, an officer, director, shareholder, or employee.

(e) “Disqualified person” means a licensed person who for any reason becomes legally disqualified (temporarily or permanently) to render the professional services that the particular professional corporation or foreign professional corporation of which they are an officer, director, shareholder, or employee is or was rendering.

history: (History: Amended by Stats. 2023, Ch. 131, Sec. 24. (AB 1754) Effective January 1, 2024.)

title: 1. CORPORATIONS


text: As used in this part, “professional services” also means any type of professional services that may be lawfully rendered only pursuant to a license, certification, or registration authorized by the Yacht and Ship Brokers Act (Article 2 (commencing with Section 700) of Chapter 5 of Division 3 of the Harbors and Navigation Code).

history: (History: Amended by Stats. 2001, Ch. 597, Sec. 1. Effective January 1, 2002.)

title: 1. CORPORATIONS