LLC Bound by Contract Even Though Contract Was Outside Its Purpose and Signatory Was Technically Not a Manager

The following is the text of an e-bulletin that I authored on apparent authority and that was published by the Corporations Committee of the Business Law Section of the State Bar of California. In  Western Surety Co. v. La Cumbre … Continue reading

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Here’s One Way Not to Pay Taxes – Legally!

California charges a minimum franchise tax of $800 each year. This is a tax on the privilege of being a corporation. It doesn’t matter whether the corporation is profitable or even if it has any revenue. The state wants its … Continue reading

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Misleading Certificate of Status Solicitations

The California Secretary of State has issued warnings about misleading certificate of status solicitations. Directors and officers of corporations and managers and members of limited liability companies (LLCs) should be wary of such solicitations. As a public service, the text … Continue reading

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Out-of-State Business Entity Doing Business in California

An out-of-state business entity is a corporation or limited liability company formed under the law of another state (say, Delaware or Nevada). An out-of-state entity is often referred to as a “foreign” corporation or as a “foreign” LLC. An out-of-state … Continue reading

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Assignee of Suspended Corporation Cannot Sue on Assigned Claim

In Cal-Western Business Services, Inc. v. Corning Capital Group, Inc. (2013) 221 Cal. App. 4th 304, a judgment creditor assigned to Pacific West One Corp. the judgment creditor’s interest in a judgment against Corning Capital. Then, at a time when Pacific West … Continue reading

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Third-Party Liability for Securities Fraud

In some cases, a service provider associated with a business, such as an accountant, banker, broker, or lawyer, can be held liable for untruths or omissions made by the business in connection with the sale of stock (or other securities, … Continue reading

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Supreme Court Decides California Law Does Not Apply to Dissolved Out-of-State Corporation That Did Business in California

In Greb v. Diamond International Corporation (Feb. 21, 2013), the Supreme Court of California held that Delaware law governs the time for bringing an action in California against a dissolved Delaware corporation. In December 2008, plaintiffs Walter Greb (now deceased) … Continue reading

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Home State Law Applied to Dissolved Corporation

In Robinson v. SSW, Inc. (2012), a California court applied Nebraska law to determine the liability of a dissolved Nebraska corporation for injuries the corporation allegedly caused to a California resident. Douglas G. Robinson died in November 2005 from mesothelioma, a … Continue reading

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Ex-CFO Allowed to Sue for Defamatory Innuendo in Press Release

In Hawran v. Hixson (2012), the court allowed a CFO who had resigned from a public company to sue the company and certain directors because the company’s press release implied that he had engaged in misconduct. Sequenom was a publicly … Continue reading

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California has a new LLC Act

S.B. 323, the Revised Uniform Limited Liability Act, has been signed by Governor Brown.  It will be effective January 1, 2014.

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