Representing minority shareholders of privately held corporations who have been treated inequitably, ripped off, denied their shareholder rights, or otherwise in some way denied the benefit of their investment in a corporation.
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Levy of Assessments by the Board against its Shareholders to pay the Corporation’s Debts: When is it Unlawful?
By Gerald P. Burleson, Member of the California Bar, and Dylan Contreras, J.D., 2019, California Western School of Law, and 2019 candidate for the California Bar © 2019 by Gerald P. Burleson, all rights reserved Under California law, a corporation is permitted to...read more
By Gerald P. Burleson, Member of the California Bar, and Dylan Contreras, J.D., 2019, California Western School of Law, and 2019 candidate for the California Bar © 2019 by Gerald P. Burleson, all rights reserved An S corporation is a corporation that has made an...read more
How Do You Know if a Particular Section of California’s Corporation Code Applies to a Foreign Corporation Doing Business in California?
So how can you know whether or not California law applies in specific instances? Unfortunately, the answer is about as consistent as most peoples’ New Years Resolutions.read more
The California Corporation Code imposes statutory restrictions on the ability of corporations to make loans and guaranties to their directors and officers.read more
Involuntary Dissolution of a California Corporation: The Nuclear Option for Mistreatment of Minority Shareholders
Unlike a partner in a partnership, a minority shareholder has no right to dissolve a corporation merely by withdrawing her interest. Absent judicial intervention, corporate dissolution occurs only at the consent of all shareholders.read more
The impact in California of forum selection clauses contained in a corporation’s bylaws or in its articles of incorporation has been the subject of an earlier article at this blog. The law in California concerning such forum selection clauses has continued to evolve and change, particularly in light of developments in Delaware.read more
In its broadest sense, the business judgment rule is a policy of respect by the courts for the business judgment of corporate directors in exercising their discretion in making corporate decisions.read more
I use the term “shareholder oppression” to refer to the denial of any realistic benefit to a shareholder for their investment in the company. So, how do the people in control of a privately held company oppress minority shareholders? I will discuss that in this article.read more
Shareholders Rights to Corporate Annual Financial Reports Under California Corporations Code §1501(a)
Corporations have a statutory and fiduciary duty to provide shareholders with an annual report containing an up-to-date balance sheet, income statement, and a statement of cash flows accompanied by any independent auditors’ reports, within 120 days of the end of the previous fiscal year.read more
Shareholders have limited rights to inspect the records of California corporations. While statutory laws governing the types of records shareholders may examine are complex and may appear unwieldy, an experienced attorney may assist the shareholder to take full advantage of broader common law shareholder rights of inspectionread more
Federal Court in California Nixes Forum Selection Clause in Delaware Corporation’s Bylaws that Would Require Shareholders Outside Delaware to Bring Suit Against the Corporation in Delaware.
In recent years, several Delaware corporations have either adopted or proposed exclusive forum selection bylaw provisions. These provisions generally require that stockholder suits relating to the internal affairs of a corporation be brought exclusively in the company’s state of incorporation, Delaware. However, a minority shareholder in California might prefer to bring suit hereread more
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!read more
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.read more
Learn about the rules governing voting by directors and the tallying of the votes by corporate boards in California.read more
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.read more
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.read more
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.read more
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.read more