Stock without Certificates

Posted on February 4, 2024 by Richard Burt

Now that we are moving more and more into electronic records, can we dispense with stock certificates? Yes, we can, but for most closely held corporations, it may not be worthwhile to change to certificate-less stock. The failure to issue … Continue reading →

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I Asked ChatGPT a Legal Question–Here’s What It Said

Posted on April 12, 2023 by Richard Burt

I posed the following question to ChatGPT: What is the difference between a corporation and an LLC? Here is the response generated by ChatGPT (with my comments in red): A corporation and a limited liability company (LLC) are two different … Continue reading →

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Administrative Dissolutions

Posted on October 1, 2021 by Richard Burt

As previously posted on this blog, California law was changed (AB 2503) to allow the state to dissolve entities administratively instead of allowing zombie entities to remain on the rolls permanently. A word to the wise:  Abandoning the entity and … Continue reading →

Posted in Alter Ego Liability, Corporate Law, Entity Law, Limited Liability Comanies (LLC's), Piercing the Corporate Veil, S corporations, Suspended Entity | Tagged | Comments Off on Administrative Dissolutions

Officer Liable for Restitution of Corporation’s Gains in Violation of FTC Act

Posted on March 4, 2016 by Richard Burt

In Federal Trade Commission v. Commerce Planet, Inc. (9th Cir. March 3, 2016) 16 C.D.O.S. 2355, the Federal Trade Commission (FTC) sued Commerce Planet, Inc., and three of its top officers for violating § 5(a) of the FTC Act, which … Continue reading →

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Why Bother with Corporate Minutes?

Posted on December 9, 2014 by Richard Burt

The most common reason for a founder or entrepreneur to set up a corporation is to limit his or her exposure to the liabilities of the business. A corporation provides a shield against the debts of the business. In most … Continue reading →

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Filing Requirements and Suspension of Corporate or LLC Powers

Posted on August 4, 2013 by Richard Burt

California limited liability companies (LLCs) and California corporations are creatures of statute, and their failure to comply with statutory requirements can lead to their rights, powers, and privileges being suspended by the state. Annual Report to Secretary of State Each … Continue reading →

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Court Permits Assets of Business Entity to Be Used to Satisfy Creditors of Related Entity

Posted on July 25, 2013 by Richard Burt

In Toho-Towa Co., Ltd., v. Morgan Creek Productions (2013) 217 Cal. App. 4th 1096, the court held that the assets of one business entity could be used to satisfy the obligations of a different, but related, business entity. This case deals … Continue reading →

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Demise of the Notion That Alter Ego Claims Belong to the Bankruptcy Estate

Posted on January 19, 2011 by Richard Burt

Shaoxing County Huayue Import & Export v. Bhaumik In Shaoxing County Huayue Import & Export v. Bhaumik (2011) 191Cal.App. 4th 1189, a creditor of a bankrupt corporation sued in state court to recover payment from an individual based on an … Continue reading →

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Dealing With a Financially Weak Corporation

Posted on January 18, 2011 by Richard Burt

Knowingly dealing with a thinly capitalized corporation and not asking for a guaranty will make it tough to pierce the corporate veil. This is illustrated by the case of Fusion Capital Fund II, LLC, v. Ham, 614 F.3d 698 (7th … Continue reading →

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Alter Ego Claims of Creditors Do Not Belong to Bankruptcy Trustee

Posted on October 25, 2010 by Richard Burt

In Ahcom, Ltd. v. Smeding, 623 F.3d 1248 (9th Cir. 2010), the U.S. Court of Appeals for the Ninth Circuit decided the question whether a creditor of a corporation that is in bankruptcy has standing to pursue a claim against … Continue reading →

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