California Law May Determine Critical Corporate Governance Issues Even Though It’s a Delaware, Nevada or Texas Corporation

WARNING: A potential investor should not assume merely because she buys stock in a corporation based in the Golden State, that California’s corporations laws will protect the shareholder from losses if the founders or other insiders defraud the company!

Is There a Shareholder Oppression Remedy in California?

Discover what shareholder oppression remedies are available for shareholders in California.

Shareholder Election of Directors, Cumulative Voting Rules and Annual Shareholder Meeting Requirements for California Corporations

Discover how minority shareholders are protected by California statues that govern the election of directors.

Rules Governing Voting by Directors and the Tallying of the Votes by Corporate Boards in California

Learn about the rules governing voting by directors and the tallying of the votes by corporate boards in California.

Minority Shareholders in California Can Sue Controlling Shareholders for Breach of their Fiduciary Duties Where They Have Paid Themselves Disproportionately as Officers of the Corporation

Learn why minority shareholders can sue the controlling shareholders for breach of fiduciary duty where they compensate themselves excessively as a means to distribute a disproportionate share of the corporation’s profits to themselves and to the exclusion of the minority shareholders.

Distinguishing Between Direct and Derivative Shareholder Actions in California

In California, depending upon the relevant facts presented, a shareholder seeking redress against the corporation is required to pursue one of two distinct types of remedial actions: direct and derivative. Learn the differences between the two.

Directors and Controlling Shareholders Cannot Waive Their Fiduciary Duties to Minority Shareholders

In California, minority shareholders can recover damages from officers or controlling shareholders for breach of their fiduciary duties, despite a purported contract waiving such rights.

Controlling Shareholders Must Act in the Interest of the Corporation and All Shareholders

Where a transaction between a majority shareholder or a director and the corporation is challenged, a court will set it aside unless the interested majority shareholder or director can prove the good faith of the transaction and its fairness from the standpoint of the corporation and all of the shareholders.

Minority Shareholders are Empowered to Sue for Abuse of Control by Majority Shareholders

By Gerald P. (“Jerry”) Burleson, Esq., Member of the California Bar   The Supreme Court of California announced a fundamental rule of fairness that must be respected in all situations where majority shareholders exercise their power to control the corporation: “Any use to which they put the corporation or their power to control the corporation […]