Nonprofit Corporation Law

Home Page

PART 3 NONPROFIT MUTUAL BENEFIT CORPORATIONS

CORPORATIONS CODE
SECTION 7110-7111


7110. This part shall be known and may be cited as the Nonprofit
Mutual Benefit Corporation Law.



7111. Subject to any other provision of law of this state applying
to the particular class of corporation or line of activity, a
corporation may be formed under this part for any lawful purpose;
provided that a corporation all of the assets of which are
irrevocably dedicated to charitable, religious, or public purposes
and which as a matter of law or according to its articles or bylaws
must, upon dissolution, distribute its assets to a person or persons
carrying on a charitable, religious, or public purpose or purposes
may not be formed under this part.


CORPORATIONS CODE
SECTION 7120-7122.3


7120. (a) One or more persons may form a corporation under this
part by executing and filing articles of incorporation.
(b) If initial directors are named in the articles, each director
named in the articles shall sign and acknowledge the articles; if
initial directors are not named in the articles, the articles shall
be signed by one or more persons who thereupon are the incorporators
of the corporation.
(c) The corporate existence begins upon the filing of the articles
and continues perpetually, unless otherwise expressly provided by
law or in the articles.



7121. (a) In the case of an existing unincorporated association,
the association may change its status to that of a corporation upon a
proper authorization for such by the association in accordance with
its rules and procedures.
(b) In addition to the matters required to be set forth in the
articles pursuant to Section 7130, the articles in the case of an
incorporation authorized by subdivision (a) shall set forth that an
existing unincorporated association, stating its name, is being
incorporated by the filing of the articles.
(c) The articles filed pursuant to this section shall be
accompanied by a verified statement of any two officers or governing
board members of the association stating that the incorporation of
the association by means of the articles to which the verified
statement is attached has been approved by the association in
accordance with its rules and procedures.
(d) Upon the change of status of an unincorporated association to
a corporation pursuant to subdivision (a), the property of the
association becomes the property of the corporation and the members
of the association who had any voting rights of the type referred to
in Section 5056 become members of the corporation.
(e) The filing for record in the office of the county recorder of
any county in this state in which any of the real property of the
association is located, of a copy of the articles of incorporation
filed pursuant to this section, certified by the Secretary of State,
shall evidence record ownership in the corporation of all interests
of the association in and to the real property located in that
county.
(f) All rights of creditors and all liens upon the property of the
association shall be preserved unimpaired. Any action or proceeding
pending by or against the unincorporated association may be
prosecuted to judgment, which shall bind the corporation, or the
corporation may be proceeded against or substituted in its place.
(g) If a corporation is organized by a person who is or was an
officer, director or member of an unincorporated association and such
corporation is not organized pursuant to subdivision (a), the
unincorporated association may continue to use its name and the
corporation may not use a name which is the same as or similar to the
name of the unincorporated association.



7122. (a) The Secretary of State shall not file articles setting
forth a name in which "bank," "trust," "trustee" or related words
appear, unless the certificate of approval of the Commissioner of
Financial Institutions is attached thereto.
(b) The Secretary of State shall not file articles pursuant to
this part setting forth a name which may create the impression that
the purpose of the corporation is public, charitable or religious or
that it is a charitable foundation.
(c) The Secretary of State shall not file articles which set forth
a name which is likely to mislead the public or which is the same
as, or resembles so closely as to tend to deceive, the name of a
domestic corporation, the name of a foreign corporation which is
authorized to transact intrastate business or has registered its name
pursuant to Section 2101, a name which a foreign corporation has
assumed under subdivision (b) of Section 2106, a name which will
become the record name of a domestic or foreign corporation upon the
effective date of a filed corporate instrument where there is a
delayed effective date pursuant to subdivision (c) of Section 110, or
subdivision (c) of Section 5008, or a name which is under
reservation pursuant to this section, Section 201, Section 5122, or
Section 9122 except that a corporation may adopt a name that is
substantially the same as an existing domestic or foreign corporation
which is authorized to transact intrastate business or has
registered its name pursuant to Section 2101, upon proof of consent
by such corporation and a finding by the Secretary of State that
under the circumstances the public is not likely to be misled.
The use by a corporation of a name in violation of this section
may be enjoined notwithstanding the filing of its articles by the
Secretary of State.
(d) Any applicant may, upon payment of the fee prescribed therefor
in the Government Code, obtain from the Secretary of State a
certificate of reservation of any name not prohibited by subdivision
(c), and upon the issuance of the certificate the name stated therein
shall be reserved for a period of 60 days. The Secretary of State
shall not, however, issue certificates reserving the same name for
two or more consecutive 60-day periods to the same applicant or for
the use or benefit of the same person; nor shall consecutive
reservations be made by or for the use or benefit of the same person
of names so similar as to fall within the prohibitions of subdivision
(c).



7122.3. The Secretary of State shall not file articles for a
corporation the name of which would fall within the prohibitions of
Section 18104 of the Financial Code. This section shall not apply to
articles filed for a corporation organized in accordance with
Section 18100 of the Financial Code.

CORPORATIONS CODE
SECTION 7130-7135


7130. The articles of incorporation of a corporation formed under
this part shall set forth the following:
(a) The name of the corporation.
(b) (1) Except as provided in paragraph (2), the following
statement:
"This corporation is a nonprofit mutual benefit corporation organized
under the Nonprofit Mutual Benefit Corporation Law. The purpose of
this corporation is to engage in any lawful act or activity, other
than credit union business, for which a corporation may be organized
under such law."
(2) In the case of a corporation formed under this part that is
subject to the California Credit Union Law, the articles shall set
forth a statement of purpose that is prescribed in the applicable
provisions of the California Credit Union Law.
(3) The articles may include a further definition of the
corporation's purposes.
(c) The name and address in this state of the corporation's
initial agent for service of process in accordance with subdivision
(b) of Section 8210.



7131. The articles of incorporation may set forth a further
statement limiting the purposes or powers of the corporation.



7132. (a) The articles of incorporation may set forth any or all of
the following provisions, which shall not be effective unless
expressly provided in the articles:
(1) A provision limiting the duration of the corporation's
existence to a specified date.
(2) A provision conferring upon the holders of any evidences of
indebtedness, issued or to be issued by a corporation the right to
vote in the election of directors and on any other matters on which
members may vote under this part even if the corporation does not
have members.
(3) A provision conferring upon members the right to determine the
consideration for which memberships shall be issued.
(4) In the case of a subordinate corporation instituted or created
under the authority of a head organization, a provision setting
forth either or both of the following:
(i) That the subordinate corporation shall dissolve whenever its
charter is surrendered to, taken away by, or revoked by the head
organization granting it.
(ii) That in the event of its dissolution pursuant to an article
provision allowed by subdivision (a), paragraph (4), clause (i), of
this section, or, in the event of its dissolution for any reason, any
assets of the corporation after compliance with the applicable
provisions of Chapters 15 (commencing with Section 8510), 16
(commencing with Section 8610), and 17 (commencing with Section 8710)
shall be distributed to the head organization.
(b) Nothing contained in subdivision (a) shall affect the
enforceability, as between the parties thereto, of any lawful
agreement not otherwise contrary to public policy.
(c) The articles of incorporation may set forth any or all of the
following provisions:
(1) The names and addresses of the persons appointed to act as
initial directors.
(2) Provisions concerning the transfer of memberships, in
accordance with Section 7320.
(3) The classes of members, if any, and if there are two or more
classes, the rights, privileges, preferences, restrictions and
conditions attaching to each class.
(4) A provision which would allow any member to have more or less
than one vote in any election or other matter presented to the
members for a vote.
(5) A provision that requires an amendment to the articles or to
the bylaws, and any amendment or repeal of that amendment, to be
approved in writing by a specified person or persons other than the
board or the members.
(6) Any other provision, not in conflict with law, for the
management of the activities and for the conduct of the affairs of
the corporation, including any provision which is required or
permitted by this part to be stated in the bylaws.



7133. For all purposes other than an action in the nature of quo
warranto, a copy of the articles of a corporation duly certified by
the Secretary of State is conclusive evidence of the formation of the
corporation and prima facie evidence of its corporate existence.



7134. If initial directors have not been named in the articles, the
incorporator or incorporators, until the directors are elected, may
do whatever is necessary and proper to perfect the organization of
the corporation, including the adoption and amendment of bylaws of
the corporation and the election of directors and officers.




7135. Nothing in Section 7130 or 7131 or in any provision of the
articles of a mutual benefit corporation shall be construed to limit
the equitable power of a court to impress a charitable trust upon any
or all of the assets of a mutual benefit corporation or otherwise
treat it as a public benefit corporation.

CORPORATIONS CODE
SECTION 7140-7142


7140. Subject to any limitations contained in the articles or
bylaws and to compliance with other provisions of this division and
any other applicable laws, a corporation, in carrying out its
activities, shall have all of the powers of a natural person,
including, without limitation, the power to:
(a) Adopt, use, and at will alter a corporate seal, but failure to
affix a seal does not affect the validity of any instrument.
(b) Adopt, amend, and repeal bylaws.
(c) Qualify to conduct its activities in any other state,
territory, dependency or foreign country.
(d) Issue, purchase, redeem, receive, take or otherwise acquire,
own, sell, lend, exchange, transfer or otherwise dispose of, pledge,
use and otherwise deal in and with its own memberships, bonds,
debentures, notes and debt securities.
(e) Pay pensions, and establish and carry out pension, deferred
compensation, saving, thrift and other retirement, incentive and
benefit plans, trusts and provisions for any or all of its directors,
officers, employees, and persons providing services to it or any of
its subsidiary or related or associated corporations, and to
indemnify and purchase and maintain insurance on behalf of any
fiduciary of such plans, trusts, or provisions.
(f) Issue certificates evidencing membership in accordance with
the provisions of Section 7313 and issue identity cards.
(g) Levy dues, assessments, and admission and transfer fees.
(h) Make donations for the public welfare or for community funds,
hospital, charitable, educational, scientific, civic, religious or
similar purposes.
(i) Assume obligations, enter into contracts, including contracts
of guarantee or suretyship, incur liabilities, borrow or lend money
or otherwise use its credit, and secure any of its obligations,
contracts or liabilities by mortgage, pledge or other encumbrance of
all or any part of its property and income.
(j) Participate with others in any partnership, joint venture or
other association, transaction or arrangement of any kind whether or
not such participation involves sharing or delegation of control with
or to others.
(k) Act as trustee under any trust incidental to the principal
objects of the corporation, and receive, hold, administer, exchange,
and expend funds and property subject to such trust.
(l) Carry on a business at a profit and apply any profit that
results from the business activity to any activity in which it may
lawfully engage.



7141. Subject to Section 7142:
(a) No limitation upon the activities, purposes, or powers of the
corporation or upon the powers of the members, officers, or
directors, or the manner of exercise of such powers, contained in or
implied by the articles or by Chapters 15 (commencing with Section
8510), 16 (commencing with Section 8610), and 17 (commencing with
Section 8710) shall be asserted as between the corporation or member,
officer or director and any third person, except in a proceeding:
(1) by a member or the state to enjoin the doing or continuation of
unauthorized activities by the corporation or its officers, or both,
in cases where third parties have not acquired rights thereby, (2) to
dissolve the corporation, or (3) by the corporation or by a member
suing in a representative suit against the officers or directors of
the corporation for violation of their authority.
(b) Any contract or conveyance made in the name of a corporation
which is authorized or ratified by the board, or is done within the
scope of authority, actual or apparent, conferred by the board or
within the agency power of the officer executing it, except as the
board's authority is limited by law other than this part, binds the
corporation, and the corporation acquires rights thereunder whether
the contract is executed or wholly or in part executory.



7142. (a) Notwithstanding Section 7141, in the case of a
corporation holding assets in charitable trust, any of the following
may bring an action to enjoin, correct, obtain damages for or to
otherwise remedy a breach of the charitable trust: (1) The
corporation, or a member in the name of the corporation pursuant to
Section 7710. (2) An officer of the corporation. (3) A director
of the corporation. (4) A person with a reversionary,
contractual, or property interest in the assets subject to such
charitable trust. (5) The Attorney General, or any person granted
relator status by the Attorney General. The Attorney General shall
be given notice of any action brought by the persons specified in
paragraphs (1) through (4), and may intervene.
(b) In an action under this section, the court may not rescind or
enjoin the performance of a contract unless:
(1) All of the parties to the contract are parties to the action;
or
(2) No party to the contract has, in good faith, and without
actual notice of the trust restriction, parted with value, under the
contract or in reliance upon it; and
(3) It is equitable to do so.


CORPORATIONS CODE
SECTION 7150-7153


7150. (a) Except as provided in subdivision (c) and Sections 7151,
7220, 7224, 7512, 7613, and 7615, bylaws may be adopted, amended or
repealed by the board unless the action would:
(1) Materially and adversely affect the rights of members as to
voting, dissolution, redemption, or transfer;
(2) Increase or decrease the number of members authorized in total
or for any class;
(3) Effect an exchange, reclassification or cancellation of all or
part of the memberships; or
(4) Authorize a new class of membership.
(b) Bylaws may be adopted, amended or repealed by approval of the
members (Section 5034); provided, however, that such adoption,
amendment or repeal also requires approval by the members of a class
if such action would:
(1) Materially and adversely affect the rights, privileges,
preferences, restrictions or conditions of that class as to voting,
dissolution, redemption, or transfer in a manner different than such
action affects another class;
(2) Materially and adversely affect such class as to voting,
dissolution, redemption, or transfer by changing the rights,
privileges, preferences, restrictions or conditions of another class;

(3) Increase or decrease the number of memberships authorized for
such class;
(4) Increase the number of memberships authorized for another
class;
(5) Effect an exchange, reclassification or cancellation of all or
part of the memberships of such class; or
(6) Authorize a new class of memberships.
(c) The articles or bylaws may restrict or eliminate the power of
the board to adopt, amend or repeal any or all bylaws, subject to
subdivision (e) of Section 7151.
(d) Bylaws may also provide that the repeal or amendment of those
bylaws, or the repeal or amendment of specified portions of those
bylaws, may occur only with the approval in writing of a specified
person or persons other than the board or members.




7151. (a) The bylaws shall set forth (unless such provision is
contained in the articles, in which case it may only be changed by an
amendment of the articles) the number of directors of the
corporation; or that the number of directors shall be not less than a
stated minimum nor more than a stated maximum with the exact number
of directors to be fixed, within the limits specified, by approval of
the board or the members (Section 5034), in the manner provided in
the bylaws, subject to subdivision (e) of Section 7151. The number
or minimum number of directors may be one or more.
(b) Once members have been admitted, a bylaw specifying or
changing a fixed number of directors or the maximum or minimum number
or changing from a fixed to a variable board or vice versa may only
be adopted by approval of the members (Section 5034).
(c) The bylaws may contain any provision, not in conflict with law
or the articles, for the management of the activities and for the
conduct of the affairs of the corporation, including but not limited
to:
(1) Any provision referred to in subdivision (c) of Section 7132.

(2) The time, place and manner of calling, conducting and giving
notice of members', directors' and committee meetings, or of
conducting mail ballots.
(3) The qualifications, duties and compensation of directors; the
time of their election; and the requirements of a quorum for
directors' and committee meetings.
(4) The appointment of committees, composed of directors or
nondirectors or both, by the board or any officer and the authority
of any such committees.
(5) The appointment, duties, compensation and tenure of officers.

(6) The mode of determination of members of record.
(7) The making of reports and financial statements to members.
(8) Setting, imposing and collecting dues, assessments, and
admission and transfer fees.
(d) The bylaws may provide for the manner of admission,
withdrawal, suspension, and expulsion of members, consistent with the
requirements of Section 7341.
(e) The bylaws may require, for any or all corporate actions
(except as provided in paragraphs (1) and (2) of subdivision (a) of
Section 7222, subdivision (c) of Section 7615, and Section 8610) the
vote of a larger proportion of, or all of, the members or the members
of any class, unit, or grouping of members or the vote of a larger
proportion of, or all of, the directors, than is otherwise required
by this part. Such a provision in the bylaws requiring such greater
vote shall not be altered, amended or repealed except by such greater
vote, unless otherwise provided in the bylaws.
(f) The bylaws may contain a provision limiting the number of
members, in total or of any class, which the corporation is
authorized to admit.


7152. A corporation may provide in its bylaws for delegates having
some or all of the authority of members. Where delegates are
provided for, the bylaws shall set forth delegates' terms of office,
any reasonable method for delegates' selection and removal, and any
reasonable method for calling, noticing and holding meetings of
delegates and may set forth the manner in which delegates may act by
written ballot similar to Section 7513 for written ballot of members.
Delegates may only act personally at a meeting or by written ballot
and may not act by proxy. Delegates may be given a name other than
"delegates."


7153. A corporation may provide in its bylaws for voting by its
members or delegates on the basis of chapter or other organizational
unit, or by region or other geographic grouping.


CORPORATIONS CODE
SECTION 7160


7160. Every corporation shall keep at its principal office in this
state the original or a copy of its articles and bylaws as amended to
date, which shall be open to inspection by the members at all
reasonable times during office hours. If the corporation has no
office in this state, it shall upon the written request of any member
furnish to such member a copy of the articles or bylaws as amended
to date.


CORPORATIONS CODE
SECTION 7210-7215


7210. Each corporation shall have a board of directors. Subject to
the provisions of this part and any limitations in the articles or
bylaws relating to action required to be approved by the members
(Section 5034), or by a majority of all members (Section 5033), the
activities and affairs of a corporation shall be conducted and all
corporate powers shall be exercised by or under the direction of the
board. The board may delegate the management of the activities of
the corporation to any person or persons, management company, or
committee however composed, provided that the activities and affairs
of the corporation shall be managed and all corporate powers shall be
exercised under the ultimate direction of the board.




7211. (a) Unless otherwise provided in the articles or in the
bylaws, all of the following apply:
(1) Meetings of the board may be called by the chair of the board
or the president or any vice president or the secretary or any two
directors.
(2) Regular meetings of the board may be held without notice if
the time and place of the meetings are fixed by the bylaws or the
board. Special meetings of the board shall be held upon four days'
notice by first-class mail or 48 hours' notice delivered personally
or by telephone, including a voice messaging system or by electronic
transmission by the corporation (Section 20). The articles or bylaws
may not dispense with notice of a special meeting. A notice, or
waiver of notice, need not specify the purpose of any regular or
special meeting of the board.
(3) Notice of a meeting need not be given to a director who
provided a waiver of notice or consent to holding the meeting or an
approval of the minutes thereof in writing, whether before or after
the meeting, or who attends the meeting without protesting, prior
thereto or at its commencement, the lack of notice to that director.
These waivers, consents and approvals shall be filed with the
corporate records or made a part of the minutes of the meetings.
(4) A majority of the directors present, whether or not a quorum
is present, may adjourn any meeting to another time and place. If the
meeting is adjourned for more than 24 hours, notice of an
adjournment to another time or place shall be given prior to the time
of the adjourned meeting to the directors who were not present at
the time of the adjournment.
(5) Meetings of the board may be held at a place within or without
the state that has been designated in the notice of the meeting or,
if not stated in the notice or if there is no notice, designated in
the bylaws or by resolution of the board.
(6) Members of the board may participate in a meeting through use
of conference telephone, electronic video screen communication, or
electronic transmission by and to the corporation (Sections 20 and
21). Participation in a meeting through use of conference telephone
or electronic video screen communication pursuant to this subdivision
constitutes presence in person at that meeting as long as all
members participating in the meeting are able to hear one another.
Participation in a meeting through use of electronic transmission by
and to the corporation, other than conference telephone and
electronic video screen communication, pursuant to this subdivision
constitutes presence in person at that meeting if both of the
following apply:
(A) Each member participating in the meeting can communicate with
all of the other members concurrently.
(B) Each member is provided the means of participating in all
matters before the board, including, without limitation, the capacity
to propose, or to interpose an objection to, a specific action to be
taken by the corporation.
(7) A majority of the number of directors authorized in the
articles or bylaws constitutes a quorum of the board for the
transaction of business. The articles or bylaws may not provide that
a quorum shall be less than one-fifth the number of directors
authorized in the articles or bylaws, or less than two, whichever is
larger, unless the number of directors authorized in the articles or
bylaws is one, in which case one director constitutes a quorum.
(8) Subject to the provisions of Sections 7212, 7233, 7234, and
subdivision (e) of Section 7237 and Section 5233, insofar as it is
made applicable pursuant to Section 7238, an act or decision done or
made by a majority of the directors present at a meeting duly held at
which a quorum is present is the act of the board. The articles or
bylaws may not provide that a lesser vote than a majority of the
directors present at a meeting is the act of the board. A meeting at
which a quorum is initially present may continue to transact business
notwithstanding the withdrawal of directors, if any action taken is
approved by at least a majority of the required quorum for that
meeting, or a greater number required by this division, the articles
or bylaws.
(b) An action required or permitted to be taken by the board may
be taken without a meeting, if all members of the board shall
individually or collectively consent in writing to that action. The
written consent or consents shall be filed with the minutes of the
proceedings of the board. The action by written consent shall have
the same force and effect as a unanimous vote of the directors. For
purposes of this subdivision only, "all members of the board" does
not include an "interested director" as defined in Section 5233,
insofar as it is made applicable pursuant to Section 7238.
(c) This section applies also to incorporators, to committees of
the board, and to action by those incorporators or committees mutatis
mutandis.


7212. (a) The board may, by resolution adopted by a majority of the
number of directors then in office, provided that a quorum is
present, create one or more committees, each consisting of two or
more directors, to serve at the pleasure of the board. Appointments
to such committees shall be by a majority vote of the directors then
in office, unless the articles or bylaws require a majority vote of
the number of directors authorized in the articles or bylaws. The
bylaws may authorize one or more committees, each consisting of two
or more directors, and may provide that a specified officer or
officers who are also directors of the corporation shall be a member
or members of such committee or committees. The board may appoint
one or more directors as alternate members of any committee, who may
replace any absent member at any meeting of the committee. Any such
committee, to the extent provided in the resolution of the board or
in the bylaws, shall have all the authority of the board, except with
respect to:
(1) The approval of any action for which this part also requires
approval of the members (Section 5034) or approval of a majority of
all members (Section 5033).
(2) The filling of vacancies on the board or in any committee
which has the authority of the board.
(3) The fixing of compensation of the directors for serving on the
board or on any committee.
(4) The amendment or repeal of bylaws or the adoption of new
bylaws.
(5) The amendment or repeal of any resolution of the board which
by its express terms is not so amendable or repealable.
(6) The appointment of committees of the board or the members
thereof.
(7) The expenditure of corporate funds to support a nominee for
director after there are more people nominated for director than can
be elected.
(8) With respect to any assets held in charitable trust, the
approval of any self-dealing transaction except as provided in
paragraph (3) of subdivision (d) of Section 5233.
(b) Subdivision (a) shall not apply to any committee which does
not exercise the authority of the board.
(c) Unless the bylaws otherwise provide, the board may delegate to
any committee, appointed pursuant to paragraph (4) of subdivision
(c) of Section 7151 or otherwise, powers as authorized by Section
7210, but may not delegate the powers set forth in paragraphs (1)
through (8) of subdivision (a) of this section.



7213. (a) A corporation shall have a chairman of the board or a
president or both, a secretary, a chief financial officer and such
other officers with such titles and duties as shall be stated in the
bylaws or determined by the board and as may be necessary to enable
it to sign instruments. The president, or if there is no president
the chairman of the board, is the general manager and chief executive
officer of the corporation, unless otherwise provided in the
articles or bylaws. Any number of offices may be held by the same
person unless the articles or bylaws provide otherwise.
(b) Except as otherwise provided by the articles or bylaws,
officers shall be chosen by the board and serve at the pleasure of
the board, subject to the rights, if any, of an officer under any
contract of employment. Any officer may resign at any time upon
written notice to the corporation without prejudice to the rights, if
any, of the corporation under any contract to which the officer is a
party.


7214. Subject to the provisions of subdivision (a) of Section 7141
and Section 7142, any note, mortgage, evidence of indebtedness,
contract, conveyance or other instrument in writing, and any
assignment or endorsement thereof, executed or entered into between
any corporation and any other person, when signed by any one of the
chairman of the board, the president or any vice president and by any
one of the secretary, any assistant secretary, the chief financial
officer or any assistant treasurer of such corporation, is not
invalidated as to the corporation by any lack of authority of the
signing officers in the absence of actual knowledge on the part of
the other person that the signing officers had no authority to
execute the same.



7215. The original or a copy in writing or in any other form
capable of being converted into clearly legible tangible form of the
bylaws or of the minutes of any incorporators', members', directors',
committee or other meeting or of any resolution adopted by the board
or a committee thereof, or members, certified to be a true copy by a
person purporting to be the secretary or an assistant secretary of
the corporation, is prima facie evidence of the adoption of such
bylaws or resolution or of the due holding of such meeting and of the
matters stated therein.


CORPORATIONS CODE
SECTION 7220-7225


7220. (a) Except as provided in subdivision (d), directors shall be
elected for such terms, not longer than four years, as are fixed in
the articles or bylaws. However, the terms of directors of a
corporation without members may be up to six years. In the absence
of any provision in the articles or bylaws, the term shall be one
year. The articles or bylaws may provide for staggering the terms of
directors by dividing the total number of directors into groups of
one or more directors. The terms of office of the several groups and
the number of directors in each group need not be uniform. No
amendment of the articles or bylaws may extend the term of a director
beyond that for which the director was elected, nor may any bylaw
provision increasing the terms of directors be adopted without
approval of the members (Section 5034).
(b) Unless the articles or bylaws otherwise provide, each
director, including a director elected to fill a vacancy, shall hold
office until the expiration of the term for which elected and until a
successor has been elected and qualified.
(c) The articles or bylaws may provide for the election of one or
more directors by the members of any class voting as a class.
(d) Subdivisions (a) through (c) notwithstanding, all or any
portion of the directors authorized in the articles or bylaws of a
corporation may hold office by virtue of designation or selection as
provided by the articles or bylaws rather than by election by a
member or members. Such directors shall continue in office for the
term prescribed by the governing article or bylaw provision, or, if
there is no term prescribed, until the governing article or bylaw
provision is duly amended or repealed, except as provided in
subdivision (e) of Section 7222. A bylaw provision authorized by
this subdivision may be adopted, amended, or repealed only by
approval of the members (Section 5034).
(e) If a corporation has not issued memberships and (1) all the
directors resign, die, or become incompetent, or (2) a corporation's
initial directors have not been named in the articles and all
incorporators resign, die, or become incompetent before the election
of the initial directors, the superior court of any county may
appoint directors of the corporation upon application by any party in
interest.



7221. (a) The board may declare vacant the office of a director who
has been declared of unsound mind by a final order of court, or
convicted of a felony, or, in the case of a corporation holding
assets in charitable trust, has been found by a final order or
judgment of any court to have breached any duty arising as a result
of Section 7238, or, if at the time a director is elected, the bylaws
provide that a director may be removed for missing a specified
number of board meetings, fails to attend the specified number of
meetings.
(b) As provided in paragraph (3) of subdivision (c) of Section
7151, the articles or bylaws may prescribe the qualifications of the
directors. The board, by a majority vote of the directors who meet
all of the required qualifications to be a director, may declare
vacant the office of any director who fails or ceases to meet any
required qualification that was in effect at the beginning of that
director's current term of office.



7222. (a) Subject to subdivisions (b) and (f) of this section, any
or all directors may be removed without cause if:
(1) In a corporation with fewer than 50 members, the removal is
approved by a majority of all members (Section 5033).
(2) In a corporation with 50 or more members, the removal is
approved by the members (Section 5034).
(3) In a corporation with no members, the removal is approved by a
majority of the directors then in office.
(b) Except for a corporation having no members, pursuant to
Section 7310:
(1) In a corporation in which the articles or bylaws authorize
members to cumulate their votes pursuant to subdivision (a) of
Section 7615, no director may be removed (unless the entire board is
removed) when the votes cast against removal, or not consenting in
writing to the removal, would be sufficient to elect the director if
voted cumulatively at an election at which the same total number of
votes were cast (or, if the action is taken by written ballot, all
memberships entitled to vote were voted) and the entire number of
directors authorized at the time of the director's most recent
election were then being elected.
(2) When by the provisions of the articles or bylaws the members
of any class, voting as a class, are entitled to elect one or more
directors, any director so elected may be removed only by the
applicable vote of the members of that class.
(3) When by the provisions of the articles or bylaws the members
within a chapter or other organizational unit, or region or other
geographic grouping, voting as such, are entitled to elect one or
more directors, any director so elected may be removed only by the
applicable vote of the members within the organizational unit or
geographic grouping.
(c) Any reduction of the authorized number of directors or any
amendment reducing the number of classes of directors does not remove
any director prior to the expiration of the director's term of
office.
(d) Except as provided in this section and Sections 7221 and 7223,
a director may not be removed prior to the expiration of the
director's term of office.
(e) Where a director removed under this section or Section 7221 or
7223 was chosen by designation pursuant to subdivision (d) of
Section 7220, then:
(1) Where a different person may be designated pursuant to the
governing article or bylaw provision, the new designation shall be
made.
(2) Where the governing article or bylaw provision contains no
provision under which a different person may be designated, the
governing article or bylaw provision shall be deemed repealed.
(f) When by the provisions of the articles or bylaws a person or
persons are entitled to designate one or more directors, then:
(1) Unless otherwise provided in the articles or bylaws at the
time of designation, any director so designated may be removed
without cause by the designating person or persons.
(2) Any director so designated may only be removed under
subdivision (a) with the written consent of the designating person or
persons.


7223. (a) The superior court of the proper county may, at the suit
of one of the parties specified in subdivision (b), remove from
office any director in case of fraudulent or dishonest acts or gross
abuse of authority or discretion with reference to the corporation or
breach of any duty arising as a result of Section 7238 and may bar
from reelection any director so removed for a period prescribed by
the court. The corporation shall be made a party to such action.
(b) An action under subdivision (a) may be instituted by any of
the following:
(1) A director.
(2) In the case of a corporation where the total number of votes
entitled to be cast for a director is less than 5,000, twice the
authorized number (Section 5036) of members, or 20 members, whichever
is less.
(3) In the case of a corporation where the total number of votes
entitled to be cast for a director is 5,000 or more, twice the
authorized number (Section 5036) of members, or 100 members,
whichever is less.
(c) In the case of a corporation holding assets in charitable
trust, the Attorney General may bring an action under subdivision
(a), may intervene in such an action brought by any other party and
shall be given notice of any such action brought by any other party.



7224. (a) Unless otherwise provided in the articles or bylaws and
except for a vacancy created by the removal of a director, vacancies
on the board may be filled by approval of the board (Section 5032)
or, if the number of directors then in office is less than a quorum,
by (1) the unanimous written 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 notice or waivers of notice
complying with Section 7211, or (3) a sole remaining director.
Unless the articles or a bylaw approved by the members (Section 5034)
provide that the board may fill vacancies occurring in the board by
reason of the removal of directors, or unless the corporation has no
members pursuant to Section 7310, such vacancies may be filled only
by approval of the members (Section 5034).
(b) The members may elect a director at any time to fill any
vacancy not filled by the directors.
(c) Any director may resign effective upon giving written notice
to the chairman of the board, the president, the secretary or the
board of directors of the corporation, unless the notice specifies a
later time for the effectiveness of such resignation. If the
resignation is effective at a future time, a successor may be elected
to take office when the resignation becomes effective.



7225. (a) If a 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, activities, or business will
be impaired or lost, the superior court of the proper county may,
notwithstanding any provisions of the articles or bylaws and whether
or not an action is pending for an involuntary winding up or
dissolution of the corporation, appoint a provisional director
pursuant to this section. Action for such appointment may be brought
by any director or by members holding not less than 331/3 percent of
the voting power.
(b) If the members of a corporation are deadlocked so that they
cannot elect the directors to be elected at the time prescribed
therefor, the superior court of the proper county may,
notwithstanding any provisions of the articles or bylaws, upon
petition of members holding 50 percent of the voting power, appoint a
provisional director or directors pursuant to this section or order
such other equitable relief as the court deems appropriate.
(c) In the case of a corporation holding assets in charitable
trust:
(1) Any person bringing an action under subdivision (a) or (b)
shall give notice to the Attorney General, who may intervene; and
(2) The Attorney General may bring an action under subdivision (a)
or (b).
(d) A provisional director shall be an impartial person, who is
neither a member nor a creditor of the corporation, nor related by
consanguinity or affinity within the third degree according to the
common law to any of the other directors of the corporation or to any
judge of the court by which such provisional director is appointed.
A provisional director shall have all the rights and powers of a
director until the deadlock in the board or among members is broken
or until such provisional director is removed by order of the court
or by approval of a majority of all members (Section 5033). Such
person shall be entitled to such compensation as shall be fixed by
the court unless otherwise agreed with the corporation.



CORPORATIONS CODE
SECTION 7230-7238


7230. (a) Any duties and liabilities set forth in this article
shall apply without regard to whether a director is compensated by
the corporation.
(b) Part 4 (commencing with Section 16000) of Division 9 of the
Probate Code does not apply to the directors of any corporation.



7231. (a) A director shall perform the duties of a director,
including duties as a member of any committee of the board upon which
the director may serve, in good faith, in a manner such director
believes to be in the best interests of the corporation and with such
care, including reasonable inquiry, as an ordinarily prudent person
in a like position would use under similar circumstances.
(b) In performing the duties of a director, a director shall be
entitled to rely on information, opinions, reports or statements,
including financial statements and other financial data, in each case
prepared or presented by: (1) One or more officers or employees
of the corporation whom the director believes to be reliable and
competent in the matters presented; (2) Counsel, independent
accountants or other persons as to matters which the director
believes to be within such person's professional or expert
competence; or (3) A committee of the board upon which the director
does not serve, as to matters within its designated authority, which
committee the director believes to merit confidence, so long as, in
any such case, the director acts in good faith, after reasonable
inquiry when the need therefor is indicated by the circumstances and
without knowledge that would cause such reliance to be unwarranted.
(c) A person who performs the duties of a director in accordance
with subdivisions (a) and (b) shall have no liability based upon any
alleged failure to discharge the person's obligations as a director,
including, without limiting the generality of the foregoing, any
actions or omissions which exceed or defeat a public or charitable
purpose to which assets held by a corporation are dedicated.



7231.5. (a) Except as provided in Section 7233 or 7236, there is no
monetary liability on the part of, and no cause of action for
damages shall arise against, any volunteer director or volunteer
executive officer of a nonprofit corporation subject to this part
based upon any alleged failure to discharge the person's duties as a
director or officer if the duties are performed in a manner that
meets all of the following criteria:
(1) The duties are performed in good faith.
(2) The duties are performed in a manner such director or officer
believes to be in the best interests of the corporation.
(3) The duties are performed with such care, including reasonable
inquiry, as an ordinarily prudent person in a like position would use
under similar circumstances.
(b) "Volunteer" means the rendering of services without
compensation. "Compensation" means remuneration whether by way of
salary, fee, or other consideration for services rendered. However,
the payment of per diem, mileage, or other reimbursement expenses to
a director or executive officer does not affect that person's status
as a volunteer within the meaning of this section.
(c) "Executive officer" means the president, vice president,
secretary, or treasurer of a corporation or other individual serving
in like capacity who assists in establishing the policy of the
corporation.
(d) This section shall apply only to trade, professional, and
labor organizations incorporated pursuant to this part which operate
exclusively for fraternal, educational, and other nonprofit
purposes, and under the provisions of Section 501(c) of the United
States Internal Revenue Code.
(e) This section shall not be construed to limit the provisions of
Section 7231.


7232. (a) Section 7231 governs the duties of directors as to any
acts or omissions in connection with the election, selection, or
nomination of directors.
(b) This section shall not be construed to limit the generality of
Section 7231.



7233. (a) No contract or other transaction between a corporation
and one or more of its directors, or between a corporation and any
domestic or foreign corporation, firm or association in which one or
more of its directors has a material financial interest, is either
void or voidable because such director or directors or such other
corporation, business corporation, firm or association are parties or
because such director or directors are present at the meeting of the
board or a committee thereof which authorizes, approves or ratifies
the contract or transaction, if:
(1) The material facts as to the transaction and as to such
director's interest are fully disclosed or known to the members and
such contract or transaction is approved by the members (Section
5034) in good faith, with any membership owned by any interested
director not being entitled to vote thereon;
(2) The material facts as to the transaction and as to such
director's interest are fully disclosed or known to the board or
committee, and the board or committee authorizes, approves or
ratifies the contract or transaction in good faith by a vote
sufficient without counting the vote of the interested director or
directors and the contract or transaction is just and reasonable as
to the corporation at the time it is authorized, approved or
ratified; or
(3) As to contracts or transactions not approved as provided in
paragraph (1) or (2) of this subdivision, the person asserting the
validity of the contract or transaction sustains the burden of
proving that the contract or transaction was just and reasonable as
to the corporation at the time it was authorized, approved or
ratified.
A mere common directorship does not constitute a material
financial interest within the meaning of this subdivision. A
director is not interested within the meaning of this subdivision in
a resolution fixing the compensation of another director as a
director, officer or employee of the corporation, notwithstanding the
fact that the first director is also receiving compensation from the
corporation.
(b) No contract or other transaction between a corporation and any
corporation, business corporation or association of which one or
more of its directors are directors is either void or voidable
because such director or directors are present at the meeting of the
board or a committee thereof which authorizes, approves or ratifies
the contract or transaction, if:
(1) The material facts as to the transaction and as to such
director's other directorship are fully disclosed or known to the
board or committee, and the board or committee authorizes, approves
or ratifies the contract or transaction in good faith by a vote
sufficient without counting the vote of the common director or
directors or the contract or transaction is approved by the members
(Section 5034) in good faith; or
(2) As to contracts or transactions not approved as provided in
paragraph (1) of this subdivision, the contract or transaction is
just and reasonable as to the corporation at the time it is
authorized, approved or ratified.
This subdivision does not apply to contracts or transactions
covered by subdivision (a).



7234. Interested or common directors may be counted in determining
the presence of a quorum at a meeting of the board or a committee
thereof which authorizes, approves or ratifies a contract or
transaction as provided in Section 7233.


7235. (a) Unless prohibited by the articles or bylaws, a
corporation may loan money or property to, or guarantee the
obligation of, any director or officer of the corporation or of its
parent, affiliate or subsidiary, provided:
(1) The board determines the loan or guaranty may reasonably be
expected to benefit the corporation.
(2) Prior to consummating the transaction or any part thereof, the
loan or guaranty is either:
(A) Approved by the members (Section 5034), without counting the
vote of the director or officer, if a member, or
(B) Approved by the vote of a majority of the directors then in
office, without counting the vote of the director who is to receive
the loan or the benefit of the guaranty.
(b) Notwithstanding subdivision (a), a corporation may advance
money to a director or officer of the corporation or of its parent,
affiliate or subsidiary, for any expenses reasonably anticipated to
be incurred in the performance of the duties of the director or
officer of the corporation or of its parent, affiliate or subsidiary,
provided that in the absence of such an advance the director or
officer would be entitled to be reimbursed for these expenses by the
corporation, its parent, affiliate, or subsidiary.
(c) The provisions of subdivisions (a) and (b) do not apply to
credit unions, or to the payment of premiums in whole or in part by a
corporation on a life insurance policy on the life of a director or
officer so long as repayment to the corporation of the amount paid by
it is secured by the proceeds of the policy and its cash surrender
value, or to loans permitted under any statute regulating any special
class of corporations.



7236. (a) Subject to the provisions of Section 7231, directors of a
corporation who approve any of the following corporate actions shall
be jointly and severally liable to the corporation for the benefit
of all of the creditors entitled to institute an action under
paragraph (1) or (2) of subdivision (c) or to the corporation in an
action by the head organization or members under paragraph (1) or (3)
of subdivision (c):
(1) The making of any distribution contrary to Chapter 4
(commencing with Section 7410).
(2) The distribution of assets after institution of dissolution
proceedings of the corporation, without paying or adequately
providing for all known liabilities of the corporation, excluding any
claims not filed by creditors within the time limit set by the court
in a notice given to creditors under Chapter 15 (commencing with
Section 8510), Chapter 16 (commencing with Section 8610), and Chapter
17 (commencing with Section 8710).
(3) The making of any loan or guaranty contrary to Section 7235.
(b) A director who is present at a meeting of the board, or any
committee thereof, at which an action specified in subdivision (a) is
taken and who abstains from voting shall be considered to have
approved the action.
(c) Suit may be brought in the name of the corporation to enforce
the liability:
(1) Under paragraph (1) of subdivision (a), against any or all
directors liable by the persons entitled to sue under subdivision (c)
of Section 7420.
(2) Under paragraph (2) or (3) of subdivision (a), against any or
all directors liable by any one or more creditors of the corporation
whose debts or claims arose prior to the time of the corporate action
who have not consented to the corporate action, whether or not they
have reduced their claims to judgment.
(3) Under paragraph (3) of subdivision (a), against any or all
directors liable by any one or more members at the time of any
corporate action specified in paragraph (3) of subdivision (a) who
have not consented to the corporate action, without regard to the
provisions of Section 7710.
(d) The damages recoverable from a director under this section
shall be the amount of the illegal distribution, or if the illegal
distribution consists of property, the fair market value of that
property at the time of the illegal distribution, plus interest
thereon from the date of the distribution at the legal rate on
judgments until paid, together with all reasonably incurred costs of
appraisal or other valuation, if any, of that property, or the loss
suffered by the corporation as a result of the illegal loan or
guaranty, but not exceeding, in the case of an action for the benefit
of creditors, the liabilities of the corporation owed to
nonconsenting creditors at the time of the violation.
(e) Any director sued under this section may implead all other
directors liable and may compel contribution, either in that action
or in an independent action against directors not joined in that
action.
(f) Directors liable under this section shall also be entitled to
be subrogated to the rights of the corporation:
(1) With respect to paragraph (1) of subdivision (a), against the
persons who received the distribution.
(2) With respect to paragraph (2) of subdivision (a), against the
persons who received the distribution.
(3) With respect to paragraph (3) of subdivision (a), against the
person who received the loan or guaranty.
Any director sued under this section may file a cross-complaint
against the person or persons who are liable to the director as a
result of the subrogation provided for in this subdivision or may
proceed against them in an independent action.



7237. (a) For the purposes of this section, "agent" means any
person who is or was a director, officer, employee or other agent of
the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
foreign or domestic corporation, partnership, joint venture, trust or
other enterprise, or was a director, officer, employee or agent of a
foreign or domestic corporation which was a predecessor corporation
of the corporation or of another enterprise at the request of such
predecessor corporation; "proceeding" means any threatened, pending
or completed action or proceeding, whether civil, criminal,
administrative or investigative; and "expenses" includes without
limitation attorneys' fees and any expenses of establishing a right
to indemnification under subdivision (d) or paragraph (3) of
subdivision (e).
(b) A corporation shall have power to indemnify any person who was
or is a party or is threatened to be made a party to any proceeding
(other than an action by or in the right of the corporation to
procure a judgment in its favor, an action brought under Section 5233
of Part 2 (commencing with Section 5110) made applicable pursuant to
Section 7238, or an action brought by the Attorney General or a
person granted relator status by the Attorney General for any breach
of duty relating to assets held in charitable trust) by reason of the
fact that such person is or was an agent of the corporation, against
expenses, judgments, fines, settlements and other amounts actually
and reasonably incurred in connection with such proceeding if such
person acted in good faith and in a manner such person reasonably
believed to be in the best interests of the corporation and, in the
case of a criminal proceeding, had no reasonable cause to believe the
conduct of such person was unlawful. The termination of any
proceeding by judgment, order, settlement, conviction or upon a plea
of nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which the person reasonably believed to be in the best interests of
the corporation or that the person had reasonable cause to believe
that the person's conduct was unlawful.
(c) A corporation shall have power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action by or in the right of the corporation,
or brought under Section 5233 of Part 2 (commencing with Section
5110) made applicable pursuant to Section 7238, or brought by the
Attorney General or a person granted relator status by the Attorney
General for breach of duty relating to assets held in charitable
trust, to procure a judgment in its favor by reason of the fact that
such person is or was an agent of the corporation, against expenses
actually and reasonably incurred by such person in connection with
the defense or settlement of such action if such person acted in good
faith, in a manner such person believed to be in the best interests
of the corporation and with such care, including reasonable inquiry,
as an ordinarily prudent person in a like position would use under
similar circumstances. No indemnification shall be made under this
subdivision:
(1) In respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation in
the performance of such person's duty to the corporation, unless and
only to the extent that the court in which such proceeding is or was
pending shall determine upon application that, in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for the expenses which such court shall
determine;
(2) Of amounts paid in settling or otherwise disposing of a
threatened or pending action, with or without court approval; or
(3) Of expenses incurred in defending a threatened or pending
action which is settled or otherwise disposed of without court
approval unless such action concerns assets held in charitable trust
and is settled with the approval of the Attorney General.
(d) To the extent that an agent of a corporation has been
successful on the merits in defense of any proceeding referred to in
subdivision (b) or (c) or in defense of any claim, issue or matter
therein, the agent shall be indemnified against expenses actually and
reasonably incurred by the agent in connection therewith.
(e) Except as provided in subdivision (d), any indemnification
under this section shall be made by the corporation only if
authorized in the specific case, upon a determination that
indemnification of the agent is proper in the circumstances because
the agent has met the applicable standard of conduct set forth in
subdivision (b) or (c), by:
(1) A majority vote of a quorum consisting of directors who are
not parties to such proceeding;
(2) Approval of the members (Section 5034), with the persons to be
indemnified not being entitled to vote thereon; or
(3) The court in which such proceeding is or was pending upon
application made by the corporation or the agent or the attorney or
other person rendering services in connection with the defense,
whether or not such application by the agent, attorney or other
person is opposed by the corporation.
(f) Expenses incurred in defending any proceeding may be advanced
by the corporation prior to the final disposition of such proceeding
upon receipt of an undertaking by or on behalf of the agent to repay
such amount unless it shall be determined ultimately that the agent
is entitled to be indemnified as authorized in this section. The
provisions of subdivision (a) of Section 7235 do not apply to
advances made pursuant to this subdivision.
(g) No provision made by a corporation to indemnify its or its
subsidiary's directors or officers for the defense of any proceeding,
whether contained in the articles, bylaws, a resolution of members
or directors, an agreement or otherwise, shall be valid unless
consistent with this section. Nothing contained in this section
shall affect any right to indemnification to which persons other than
such directors and officers may be entitled by contract or
otherwise.
(h) No indemnification or advance shall be made under this
section, except as provided in subdivision (d) or paragraph (3) of
subdivision (e), in any circumstance where it appears:
(1) That it would be inconsistent with a provision of the
articles, bylaws, a resolution of the members or an agreement in
effect at the time of the accrual of the alleged cause of action
asserted in the proceeding in which the expenses were incurred or
other amounts were paid, which prohibits or otherwise limits
indemnification; or
(2) That it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
(i) A corporation shall have power to purchase and maintain
insurance on behalf of any agent of the corporation against any
liability asserted against or incurred by the agent in such capacity
or arising out of the agent's status as such whether or not the
corporation would have the power to indemnify the agent against such
liability under the provisions of this section.
(j) This section does not apply to any proceeding against any
trustee, investment manager or other fiduciary of an employee benefit
plan in such person's capacity as such, even though such person may
also be an agent as defined in subdivision (a) of the employer
corporation. A corporation shall have power to indemnify such
trustee, investment manager or other fiduciary to the extent
permitted by subdivision (f) of Section 207.



7238. Where a corporation holds assets in charitable trust, the
conduct of its directors or of any person performing functions
similar to those performed by a director, shall, in respect to the
assets held in charitable trust, be governed by the standards of
conduct set forth in Article 3 (commencing with Section 5230) of
Chapter 2 of Part 2 for directors of nonprofit public benefit
corporations. This does not limit any additional requirements which
may be specifically set forth in this part regarding corporations
holding assets in charitable trust.

CORPORATIONS CODE
SECTION 7240


7240. A corporation holding assets in charitable trust is subject
at all times to examination by the Attorney General, on behalf of the
state, to ascertain to what extent, if at all, it has failed or is
failing to comply with trusts it has assumed. In case of any such
failure the Attorney General, in the name of the state, may institute
against any person or persons the proceedings necessary to correct
the failure.


CORPORATIONS CODE
SECTION 7310-7315


7310. (a) A corporation may admit persons to membership, as
provided in its articles or bylaws, or may provide in its articles or
bylaws that it shall have no members. In the absence of any
provision in its articles or bylaws providing for members, a
corporation shall have no members.
(b) In the case of a corporation which has no members:
(1) Any action for which there is no specific provision of this
part applicable to a corporation which has no members and which would
otherwise require approval by a majority of all members (Section
5033) or approval by the members (Section 5034) shall require only
approval of the board, any provision of this part or the articles or
bylaws to the contrary notwithstanding.
(2) All rights which would otherwise vest in the members to share
in a distribution upon dissolution shall vest in the directors.
(c) Reference in this part to a corporation which has no members
includes a corporation in which the directors are the only members.



7311. Subject to the articles or bylaws, memberships may be issued
by a corporation for no consideration or for such consideration as is
determined by the board.



7312. No person may hold more than one membership, and no
fractional memberships may be held, except as follows:
(a) Two or more persons may have an indivisible interest in a
single membership when authorized by, and in a manner or under the
circumstances prescribed by, the articles or bylaws subject to
Section 7612.
(b) If the articles or bylaws provide for classes of membership
and if the articles or bylaws permit a person to be a member of more
than one class, a person may hold a membership in one or more
classes.
(c) Any branch, division, or office of any person, which is not
formed primarily to be a member, may hold a separate membership.
(d) In the case of membership in 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, the articles or
bylaws may permit a person who owns an interest, or who has a right
of exclusive occupancy, in more than one lot, parcel, area,
apartment, or unit to hold a separate membership in the owners'
association for each lot, parcel, area, apartment, or unit.
(e) In the case of membership in a mutual water company, as
defined in Section 14300, the articles or bylaws may permit a person
entitled to membership by reason of the ownership, lease, or right of
occupancy of more than one lot, parcel, or other service unit to
hold a separate membership in the mutual water company for each lot,
parcel, or other service unit.
(f) In the case of membership in a mobilehome park acquisition
corporation, as described in Section 11010.8 of the Business and
Professions Code, a bona fide secured party who has, pursuant to a
security interest in a membership, taken title to the membership by
way of foreclosure, repossession, or voluntary repossession, and who
is actively attempting to resell the membership to a prospective
homeowner or resident of the mobilehome park, may own more than one
membership.


7313. (a) A corporation may, but is not required to, issue
membership certificates. Nothing in this section shall restrict a
corporation from issuing identity cards or similar devices to members
which serve to identify members qualifying to use facilities or
services of the corporation.
(b) Membership certificates issued by corporations shall state the
following on the certificate:
(1) The corporation is a nonprofit mutual benefit corporation
which may not make distributions to its members except upon
dissolution, or, if the articles or bylaws so provide, that it may
not make distributions to its members during its life or upon
dissolution.
(2) If there are restrictions upon the transferability, a
statement that a copy of the restrictions are on file with the
secretary of the corporation and are open for inspection by a member
on the same basis as the records of the corporation.
(c) If the membership certificates are transferable only with
consent of the corporation, or if there are no membership
certificates, then instead of complying with paragraph (2) of
subdivision (b) the corporation may, or if there are no membership
certificates, shall, give notice to the transferee, within a
reasonable time after the corporation is first notified of the
proposed transfer, and before the membership is transferred on the
books and records of the corporation, of the information that would
otherwise be provided by the legends required by paragraph (2) of
subdivision (b).
(d) If the articles or bylaws are amended so that any statement
required by subdivision (b) upon outstanding membership certificates
is no longer accurate, then the board may cancel the outstanding
certificates and issue in their place new certificates conforming to
the articles or bylaw amendments.
(e) Where new membership certificates are issued in accordance
with subdivision (d), the board may order holders of outstanding
certificates to surrender and exchange them for new certificates
within a reasonable time fixed by the board. The board may further
provide that the holder of a certificate so ordered to be surrendered
shall not be entitled to exercise any of the rights of membership
until the certificate is surrendered and exchanged, but rights shall
be suspended only after notice of such order is given to the holder
of the certificate and only until the certificate is exchanged. The
duty of surrender of any outstanding certificates may also be
enforced by civil action.



7314. (a) A corporation may issue a new membership certificate or a
new certificate for any security in the place of any certificate
theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the corporation may require the owner of the lost,
stolen or destroyed certificate or the owner's legal representative
to give the corporation a bond (or other adequate security)
sufficient to indemnify it against any claim that may be made against
it (including any expense or liability) on account of the alleged
loss, theft or destruction of any such certificate or the issuance of
such new certificate.
(b) If a corporation refuses to issue a new membership certificate
or other certificate in place of one theretofore issued by it, or by
any corporation of which it is the lawful successor, alleged to have
been lost, stolen or destroyed, the owner of the lost, stolen or
destroyed certificate or the owner's legal representative may bring
an action in the superior court of the proper county for an order
requiring the corporation to issue a new certificate in place of the
one lost, stolen or destroyed.



7315. (a) Except as provided in subdivision (b), or in its articles
or bylaws, a corporation may admit any person to membership.
(b) A corporation may not admit its subsidiary (Section 5073) to
membership.

CORPORATIONS CODE
SECTION 7320


7320. Subject to Section 7613:
(a) Unless the articles or bylaws otherwise provide:
(1) No member may transfer a membership or any right arising
therefrom; and
(2) Subject to the provisions of subdivision (b), all rights as a
member of the corporation cease upon the member's death or
dissolution.
(b) The articles or bylaws may provide for, or may authorize the
board to provide for, the transfer of memberships, or of memberships
within any class or classes, with or without restriction or
limitation, including transfer upon the death, dissolution, merger,
or reorganization of a member.
(c) Where transfer rights have been provided, no restriction of
them shall be binding with respect to memberships issued prior to the
adoption of the restriction, unless the holders of such memberships
voted in favor of the restriction.


CORPORATIONS CODE
SECTION 7330-7333


7330. A corporation may issue memberships having different rights,
privileges, preferences, restrictions, or conditions, as authorized
by its articles or bylaws.



7331. Except as provided in or authorized by the articles or
bylaws, all memberships shall have the same rights, privileges,
preferences, restrictions and conditions.



7332. (a) A corporation may provide in its articles for one or more
classes of memberships which are redeemable, in whole or in part, at
the option of the corporation, or the member for such consideration
within such time or upon the happening of one or more specified
events and upon such terms and conditions as are stated in the
articles. However, no membership shall actually be redeemed if
prohibited by Chapter 4 (commencing with Section 7410).
(b) Nothing in this section shall prevent a corporation from
creating a sinking fund or similar provision for, or entering into an
agreement for, the redemption or purchase of its memberships to the
extent permitted by Chapter 4 (commencing with Section 7410).



7333. (a) A corporation may refer to persons associated with it as
"members" even though such persons are not members within the meaning
of Section 5056; but references to members in this part mean members
as defined in Section 5056.
(b) A corporation may benefit, serve, or assist persons who are
not members within the meaning of Section 5056 for such
consideration, if any, as the board may determine or as is authorized
or provided for in the articles or bylaws.

CORPORATIONS CODE
SECTION 7340-7341


7340. (a) A member may resign from membership at any time, although
the articles or bylaws may require reasonable notice before the
resignation is effective.
(b) This section shall not relieve the resigning member from any
obligation for charges incurred, services or benefits actually
rendered, dues, assessments or fees, or arising from contract, a
condition to ownership of land, an obligation arising out of the
ownership of land, or otherwise, and this section shall not diminish
any right of the corporation to enforce any such obligation or obtain
damages for its breach.
(c) A membership issued for a period of time shall expire when
such period of time has elapsed unless the membership is renewed.



7341. (a) No member may be expelled or suspended, and no membership
or memberships may be terminated or suspended, except according to
procedures satisfying the requirements of this section. An
expulsion, termination or suspension not in accord with this section
shall be void and without effect.
(b) Any expulsion, suspension, or termination must be done in good
faith and in a fair and reasonable manner. Any procedure which
conforms to the requirements of subdivision (c) is fair and
reasonable, but a court may also find other procedures to be fair and
reasonable when the full circumstances of the suspension,
termination, or expulsion are considered.
(c) A procedure is fair and reasonable when:
(1) The provisions of the procedure have been set forth in the
articles or bylaws, or copies of such provisions are sent annually to
all the members as required by the articles or bylaws;
(2) It provides the giving of 15 days' prior notice of the
expulsion, suspension or termination and the reasons therefor; and
(3) It provides an opportunity for the member to be heard, orally
or in writing, not less than five days before the effective date of
the expulsion, suspension or termination by a person or body
authorized to decide that the proposed expulsion, termination or
suspension not take place.
(d) Any notice required under this section may be given by any
method reasonably calculated to provide actual notice. Any notice
given by mail must be given by first-class or registered mail sent to
the last address of the members shown on the corporation's records.

(e) Any action challenging an expulsion, suspension or termination
of membership, including any claim alleging defective notice, must
be commenced within one year after the date of the expulsion,
suspension or termination. In the event such an action is successful
the court may order any relief, including reinstatement, it finds
equitable under the circumstances, but no vote of the members or of
the board may be set aside solely because a person was at the time of
the vote wrongfully excluded by virtue of the challenged expulsion,
suspension or termination, unless the court finds further that the
wrongful expulsion, suspension or termination was in bad faith and
for the purpose, and with the effect, of wrongfully excluding the
member from the vote or from the meeting at which the vote took
place, so as to affect the outcome of the vote.
(f) This section governs only the procedures for expulsion,
suspension or termination and not the substantive grounds therefor.
An expulsion, suspension or termination based upon substantive
grounds which violate contractual or other rights of the member or
are otherwise unlawful is not made valid by compliance with this
section.
(g) A member who is expelled or suspended or whose membership is
terminated shall be liable for any charges incurred, services or
benefits actually rendered, dues, assessments or fees incurred before
the expulsion, suspension or termination or arising from contract or
otherwise.

CORPORATIONS CODE
SECTION 7350-7354


7350. (a) A member of a corporation is not, as such, personally
liable for the debts, liabilities, or obligations of the corporation.

(b) No person is liable for any obligation arising from membership
unless the person was admitted to membership upon the person's
application or with the person's consent.
(c) The ownership of an interest in real property, when a
condition of its ownership is membership in a corporation, shall be
considered consent to such membership for the purpose of this
section.



7351. A corporation may levy dues, assessments, or fees upon its
members pursuant to its articles or bylaws, but a member upon
learning of them may avoid liability for them by promptly resigning
from membership, except where the member is liable for them by
contract, as a condition to ownership of an interest in real
property, as an obligation arising out of the ownership of an
interest in real property, or otherwise. Article or bylaw provisions
authorizing such dues, assessments or fees do not, of themselves,
create such liability.


7352. A person holding a membership as pledgee or a membership as
executor, administrator, guardian, trustee, receiver or in any
representative or fiduciary capacity is not personally liable for any
unpaid balance of the purchase price of the membership, or for any
amount owing to the corporation by the member, because the membership
is so held, but the estate and funds in the hands of such fiduciary
or representative are liable and the membership subject to sale
therefor.


7353. (a) No action shall be brought by or on behalf of any
creditor to reach and apply the liability, if any, of a member to the
corporation to pay the amount due on such member's membership or
otherwise due to the corporation unless final judgment has been
rendered in favor of the creditor against the corporation and
execution has been returned unsatisfied in whole or in part or unless
such proceedings would be useless.
(b) All creditors of the corporation, with or without reducing
their claims to judgment, may intervene in any such creditor's action
to reach and apply unpaid amounts due the corporation and any or all
members who owe amounts to the corporation may be joined in such
action. Several judgments may be rendered for and against the
parties to the action or in favor of a receiver for the benefit of
the respective parties thereto.
(c) All amounts paid by any member in any such action shall be
credited on the unpaid balance due the corporation by such member.



7354. Nothing in this part shall be construed as in derogation of
any rights or remedies which any creditor or member may have against
any promoter, member, director, officer or the corporation because of
participation in any fraud or illegality practiced upon such
creditor or member by any such person or by the corporation in
connection with the issue or sale of memberships or securities or in
derogation of any rights which the corporation may have by
rescission, cancellation or otherwise because of any fraud or
illegality practiced on it by any such person in connection with the
issue or sale of memberships or securities.

CORPORATIONS CODE
SECTION 7410-7414


7410. This chapter does not apply to any proceeding for winding up
and dissolution of corporations under Chapters 15 (commencing with
Section 8510), 16 (commencing with Section 8610), and 17 (commencing
with Section 8710).


7411. (a) Except as provided in subdivision (b), no corporation
shall make any distribution except upon dissolution.
(b) A corporation may, subject to meeting the requirements of
Sections 7412 and 7413 and any additional restrictions authorized by
Section 7414, purchase or redeem memberships.



7412. Neither a corporation nor any of its subsidiaries shall make
a distribution if the corporation or the subsidiary making the
distribution is, or as a result thereof would be, likely to be unable
to meet its liabilities (except those whose payment is otherwise
adequately provided for) as they mature.



7413. Neither a corporation nor any of its subsidiaries shall
purchase or redeem a membership of the parent or subsidiary if the
articles of the corporation contain a provision authorized by
paragraph (4), clause (ii), of subdivision (a) of Section 7132 and
such corporation or the subsidiary making the purchase or redemption
is, or as a result thereof would be, likely to be unable to meet the
obligations resulting from such article provision.



7414. Nothing in this chapter prohibits additional restrictions
upon the purchase or redemption of a membership by provision in a
corporation's articles or bylaws or agreement entered into by the
corporation.

CORPORATIONS CODE
SECTION 7420


7420. (a) Any person who with knowledge of facts indicating the
impropriety thereof receives any distribution, including a payment in
redemption of a membership, prohibited by this chapter is liable to
the corporation for the amount so received by the person with
interest thereon at the legal rate on judgments until paid.
(b) Any person who with knowledge of facts indicating the
impropriety thereof receives any distribution, including a payment in
redemption of a membership, prohibited by this chapter is liable to
the corporation for the benefit of the head organization, or of all
of the creditors entitled to institute an action under subdivision
(c), for the amount so received by the person with interest thereon
at the legal rate on judgments until paid, but not exceeding the
obligations of the corporation owed to the head organization at the
time of the violation, or the liabilities of the corporation owed to
nonconsenting creditors at the time of the violation, as the case may
be.
(c) Suit may be brought in the name of the corporation to enforce
the liability (1) to creditors arising under subdivision (b) for a
violation of Section 7411 or 7412 against any or all persons liable
by any one or more creditors of the corporation whose debts or claims
arose prior to the time of the distribution and who have not
consented thereto, whether or not they have reduced their claims to
judgment, or (2) to the head organization arising under subdivision
(b) for a violation of Section 7413 against any or all persons liable
by any head organization which pursuant to the corporation's
articles is entitled to a distribution of assets upon dissolution.
(d) Any person sued under subdivision (b) may implead all other
persons liable under subdivision (b) and may in the absence of fraud
by the moving party compel contribution, either in that action or in
an independent action against persons not joined in that action.
(e) Nothing contained in this section affects any liability which
any person may have under Sections 3439 to 3439.12, inclusive, of the
Civil Code.


CORPORATIONS CODE
SECTION 7510-7517


7510. (a) Meetings of members may be held at a place within or
without this state as may be stated in or fixed in accordance with
the bylaws. If no other place is stated or so fixed, meetings of
members shall be held at the principal executive office of the
corporation. Unless prohibited by the bylaws of the corporation, if
authorized by the board of directors in its sole discretion, and
subject to the requirement of consent in clause (b) of Section 20 and
those guidelines and procedures as the board of directors may adopt,
members not physically present in person (or, if proxies are
allowed, by proxy) at a meeting of members may, by electronic
transmission by and to the corporation (Sections 20 and 21) or by
electronic video screen communication, participate in a meeting of
members, be deemed present in person (or, if proxies are allowed, by
proxy), and vote at a meeting of members whether that meeting is to
be held at a designated place or in whole or in part by means of
electronic transmission by and to the corporation or by electronic
video screen communication, in accordance with subdivision (f).
(b) A regular meeting of members shall be held on a date and time,
and with the frequency stated in or fixed in accordance with the
bylaws, but in any event in each year in which directors are to be
elected at that meeting for the purpose of conducting such election,
and to transact any other proper business which may be brought before
the meeting.
(c) If a corporation with members is required by subdivision (b)
to hold a regular meeting and fails to hold the regular meeting for a
period of 60 days after the date designated therefor or, if no date
has been designated, for a period of 15 months after the formation of
the corporation or after its last regular meeting, or if the
corporation fails to hold a written ballot for a period of 60 days
after the date designated therefor, then the superior court of the
proper county may summarily order the meeting to be held or the
ballot to be conducted upon the application of a member or the
Attorney General, after notice to the corporation giving it an
opportunity to be heard.
(d) The votes represented, either in person (or, if proxies are
allowed, by proxy), at a meeting called or by written ballot ordered
pursuant to subdivision (c), and entitled to be cast on the business
to be transacted shall constitute a quorum, notwithstanding any
provision of the articles or bylaws or in this part to the contrary.
The court may issue such orders as may be appropriate including,
without limitation, orders designating the time and place of the
meeting, the record date for determination of members entitled to
vote, and the form of notice of the meeting.
(e) Special meetings of members for any lawful purpose may be
called by the board, the chairman of the board, the president, or
such other persons, if any, as are specified in the bylaws. In
addition, special meetings of members for any lawful purpose may be
called by 5 percent or more of the members.
(f) A meeting of the members may be conducted, in whole or in
part, by electronic transmission by and to the corporation or by
electronic video screen communication (1) if the corporation
implements reasonable measures to provide members in person (or, if
proxies are allowed, by proxy) a reasonable opportunity to
participate in the meeting and to vote on matters submitted to the
members, including an opportunity to read or hear the proceedings of
the meeting substantially concurrently with those proceedings, and
(2) if any member votes or takes other action at the meeting by means
of electronic transmission to the corporation or electronic video
screen communication, a record of that vote or action is maintained
by the corporation. Any request by a corporation to a member
pursuant to clause (b) of Section 20 for consent to conduct a meeting
of members by electronic transmission by and to the corporation,
shall include a notice that absent consent of the member pursuant to
clause (b) of Section 20, the meeting shall be held at a physical
location in accordance with subdivision (a).




7511. (a) Whenever members are required or permitted to take any
action at a meeting, a written notice of the meeting shall be given
not less than 10 nor more than 90 days before the date of the meeting
to each member who, on the record date for notice of the meeting, is
entitled to vote thereat; provided, however, that if notice is given
by mail, and the notice is not mailed by first-class, registered, or
certified mail, that notice shall be given not less than 20 days
before the meeting. Subject to subdivision (f), and subdivision (b)
of Section 7512, the notice shall state the place, date and time of
the meeting, the means of electronic transmission by and to the
corporation (Sections 20 and 21) or electronic video screen
communication, if any, by which members may participate in that
meeting, and (1) in the case of a special meeting, the general nature
of the business to be transacted, and no other business may be
transacted, or (2) in the case of the regular meeting, those matters
which the board, at the time the notice is given, intends to present
for action by the members, but, except as provided in subdivision (b)
of Section 7512, any proper matter may be presented at the meeting
for the action. The notice of any meeting at which directors are to
be elected shall include the names of all those who are nominees at
the time the notice is given to members.
(b) Notice of a members' meeting or any report shall be given
personally, by electronic transmission by a corporation, or by mail
or other means of written communication, addressed to a member at the
address of the member appearing on the books of the corporation or
given by the member to the corporation for purpose of notice; or if
no such address appears or is given, at the place where the principal
office of the corporation is located or by publication at least once
in a newspaper of general circulation in the county in which the
principal office is located. An affidavit of giving of any notice or
report in accordance with the provisions of this part, executed by
the secretary, assistant secretary or any transfer agent, shall be
prima facie evidence of the giving of the notice or report.
If any notice or report addressed to the member at the address of
the member appearing on the books of the corporation is returned to
the corporation by the United States Postal Service marked to
indicate that the United States Postal Service is unable to deliver
the notice or report to the member at the address, all future notices
or reports shall be deemed to have been duly given without further
mailing if the same shall be available for the member upon written
demand of the member at the principal office of the corporation for a
period of one year from the date of the giving of the notice or
report to all other members.
Notice given by electronic transmission by the corporation under
this subdivision shall be valid only if it complies with Section 20.
Notwithstanding the foregoing, notice shall not be given by
electronic transmission by the corporation under this subdivision
after either of the following:
(1) The corporation is unable to deliver two consecutive notices
to the member by that means.
(2) The inability to so deliver the notices to the member becomes
known to the secretary, any assistant secretary, the transfer agent,
or other person responsible for the giving of the notice.
(c) Upon request in writing to the corporation addressed to the
attention of the chairman of the board, president, vice president, or
secretary by any person (other than the board) entitled to call a
special meeting of members, the officer forthwith shall cause notice
to be given to the members entitled to vote that a meeting will be
held at a time fixed by the board not less than 35 nor more than 90
days after the receipt of the request. If the notice is not given
within 20 days after receipt of the request, the persons entitled to
call the meeting may give the notice or the superior court of the
proper county shall summarily order the giving of the notice, after
notice to the corporation giving it an opportunity to be heard. The
court may issue such orders as may be appropriate, including, without
limitation, orders designating the time and place of the meeting,
the record date for determination of members entitled to vote, and
the form of notice.
(d) When a members' meeting is adjourned to another time or place,
unless the bylaws otherwise require and except as provided in this
subdivision, notice need not be given of the adjourned meeting if the
time and place thereof (or the means of electronic transmission by
and to the corporation or electronic video screen communication, if
any, by which members may participate) are announced at the meeting
at which the adjournment is taken. No meeting may be adjourned for
more than 45 days. At the adjourned meeting the corporation may
transact any business which might have been transacted at the
original meeting. If after the adjournment a new record date is
fixed for notice or voting, a notice of the adjourned meeting shall
be given to each member who, on the record date for notice of the
meeting, is entitled to vote at the meeting.
(e) The transactions of any meeting of members however called and
noticed, and wherever held, are as valid as though had at a meeting
duly held after regular call and notice, if a quorum is present
either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person
(or, if proxies are allowed, by proxy), provides a waiver of notice
or consent to the holding of the meeting or an approval of the
minutes thereof in writing. All such waivers, consents and approvals
shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance of a person at a meeting shall
constitute a waiver of notice of and presence at the meeting, except
when the person objects, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully
called or convened and except that attendance at a meeting is not a
waiver of any right to object to the consideration of matters
required by this part to be included in the notice but not so
included, if the objection is expressly made at the meeting. Neither
the business to be transacted at nor the purpose of any regular or
special meeting of members need be specified in any written waiver of
notice, consent to the holding of the meeting or approval of the
minutes thereof, unless otherwise provided in the articles or bylaws,
except as provided in subdivision (f).
(f) Any approval of the members required under Section 7222, 7224,
7233, 7812, 8610, or 8719, other than unanimous approval by those
entitled to vote, shall be valid only if the general nature of the
proposal so approved was stated in the notice of meeting or in any
written waiver of notice.
(g) A court may find that notice not given in conformity with this
section is still valid, if it was given in a fair and reasonable
manner.



7512. (a) One-third of the voting power, represented in person or
by proxy, shall constitute a quorum at a meeting of members, but,
subject to subdivisions (b) and (c), a bylaw may set a different
quorum. Any bylaw amendment to increase the quorum may be adopted
only by approval of the members (Section 5034). If a quorum is
present, the affirmative vote of the majority of the voting power
represented at the meeting, entitled to vote, and voting on any
matter shall be the act of the members unless the vote of a greater
number or voting by classes is required by this part or the articles
or bylaws.
(b) Where a bylaw authorizes a corporation to conduct a meeting
with a quorum of less than one-third of the voting power, then the
only matters that may be voted upon at any regular meeting actually
attended, in person or by proxy, by less than one-third of the voting
power are matters notice of the general nature of which was given,
pursuant to the first sentence of subdivision (a) of Section 7511.
(c) Subject to subdivision (b), the members present at a duly
called or held meeting at which a quorum is present may continue to
transact business until adjournment notwithstanding the withdrawal of
enough members to leave less than a quorum, if any action taken
(other than adjournment) is approved by at least a majority of the
members required to constitute a quorum or, if required by this
division, or by the articles or the bylaws, the vote of the greater
number or voting by classes.
(d) In the absence of a quorum, any meeting of members may be
adjourned from time to time by the vote of a majority of the votes
represented either in person or by proxy, but no other business may
be transacted, except as provided in subdivision (c).




7513. (a) Subject to subdivision (e), and unless prohibited in the
articles or bylaws, any action which may be taken at any regular or
special meeting of members may be taken without a meeting if the
corporation distributes a written ballot to every member entitled to
vote on the matter. Unless otherwise provided by the articles or
bylaws and if approved by the board of directors, that ballot and any
related material may be sent by electronic transmission by the
corporation (Section 20) and responses may be returned to the
corporation by electronic transmission to the corporation (Section
21). That ballot shall set forth the proposed action, provide an
opportunity to specify approval or disapproval of any proposal, and
provide a reasonable time within which to return the ballot to the
corporation.
(b) Approval by written ballot pursuant to this section shall be
valid only when the number of votes cast by ballot within the time
period specified equals or exceeds the quorum required to be present
at a meeting authorizing the action, and the number of approvals
equals or exceeds the number of votes that would be required to
approve at a meeting at which the total number of votes cast was the
same as the number of votes cast by ballot.
(c) Ballots shall be solicited in a manner consistent with the
requirements of subdivision (b) of Section 7511 and Section 7514.
All such solicitations shall indicate the number of responses needed
to meet the quorum requirement and, with respect to ballots other
than for the election of directors, shall state the percentage of
approvals necessary to pass the measure submitted. The solicitation
must specify the time by which the ballot must be received in order
to be counted.
(d) Unless otherwise provided in the articles or bylaws, a written
ballot may not be revoked.
(e) Directors may be elected by written ballot under this section,
where authorized by the articles or bylaws, except that election by
written ballot may not be authorized where the directors are elected
by cumulative voting pursuant to Section 7615.
(f) When directors are to be elected by written ballot and the
articles or bylaws prescribe a nomination procedure, the procedure
may provide for a date for the close of nominations prior to the
printing and distributing of the written ballots.



7514. (a) Any form of proxy or written ballot distributed to 10 or
more members of a corporation with 100 or more members shall afford
an opportunity on the proxy or form of written ballot to specify a
choice between approval and disapproval of each matter or group of
related matters intended, at the time the written ballot or proxy is
distributed, to be acted upon at the meeting for which the proxy is
solicited or by such written ballot, and shall provide, subject to
reasonable specified conditions, that where the person solicited
specifies a choice with respect to any such matter the vote shall be
cast in accordance therewith.
(b) In any election of directors, any form of proxy or written
ballot in which the directors to be voted upon are named therein as
candidates and which is marked by a member "withhold" or otherwise
marked in a manner indicating that the authority to vote for the
election of directors is withheld shall not be voted either for or
against the election of a director.
(c) Failure to comply with this section shall not invalidate any
corporate action taken, but may be the basis for challenging any
proxy at a meeting or written ballot and the superior court may
compel compliance therewith at the suit of any member.



7515. (a) If for any reason it is impractical or unduly difficult
for any corporation to call or conduct a meeting of its members,
delegates or directors, or otherwise obtain their consent, in the
manner prescribed by its articles or bylaws, or this part, then the
superior court of the proper county, upon petition of a director,
officer, delegate or member, may order that such a meeting be called
or that a written ballot or other form of obtaining the vote of
members, delegates or directors be authorized, in such a manner as
the court finds fair and equitable under the circumstances.
(b) The court shall, in an order issued pursuant to this section,
provide for a method of notice reasonably designed to give actual
notice to all parties who would be entitled to notice of a meeting
held pursuant to the articles, bylaws and this part, whether or not
the method results in actual notice to every such person, or conforms
to the notice requirements that would otherwise apply. In a
proceeding under this section the court may determine who the members
or directors are.
(c) The order issued pursuant to this section may dispense with
any requirement relating to the holding of and voting at meetings or
obtaining of votes, including any requirement as to quorums or as to
the number or percentage of votes needed for approval, that would
otherwise be imposed by the articles, bylaws, or this part.
(d) Wherever practical any order issued pursuant to this section
shall limit the subject matter of the meetings or other forms of
consent authorized to items, including amendments to the articles or
bylaws, the resolution of which will or may enable the corporation to
continue managing its affairs without further resort to this
section; provided, however, that an order under this section may also
authorize the obtaining of whatever votes and approvals are
necessary for the dissolution, merger, sale of assets or
reorganization of the corporation.
(e) Any meeting or other method of obtaining the vote of members,
delegates or directors conducted pursuant to an order issued under
this section, and which complies with all the provisions of such
order, is for all purposes a valid meeting or vote, as the case may
be, and shall have the same force and effect as if it complied with
every requirement imposed by the articles, bylaws, and this part.



7516. Any action required or permitted to be taken by the members
may be taken without a meeting, if all members shall individually or
collectively consent in writing to the action. The written consent
or consents shall be filed with the minutes of the proceedings of the
members. The action by written consent shall have the same force
and effect as the unanimous vote of the members.



7517. (a) If the name signed on a ballot, consent, waiver, or proxy
appointment corresponds to the name of a member, the corporation if
acting in good faith is entitled to accept the ballot, consent,
waiver or proxy appointment and give it effect as the act of the
member.
(b) If the name signed on a ballot, consent, waiver, or proxy
appointment does not correspond to the record name of a member, the
corporation if acting in good faith is nevertheless entitled to
accept the ballot, consent, waiver, or proxy appointment and give it
effect as the act of the member if any of the following occur:
(1) The member is an entity and the name signed purports to be
that of an officer or agent of the entity.
(2) The name signed purports to be that of an attorney-in-fact of
the member and if the corporation requests, evidence acceptable to
the corporation of the signatory's authority to sign for the member
has been presented with respect to the ballot, consent, waiver, or
proxy appointment.
(3) Two or more persons hold the membership as cotenants or
fiduciaries and the name signed purports to be the name of at least
one of the coholders and the person signing appears to be acting on
behalf of all the coholders.
(4) The name signed purports to be that of an administrator,
executor, guardian, or conservator representing the member and, if
the corporation requests, evidence of fiduciary status acceptable to
the corporation has been presented with respect to the ballot,
consent, waiver, or proxy appointment.
(5) The name signed purports to be that of a receiver or trustee
in bankruptcy of the member, and, if the corporation requests,
evidence of this status acceptable to the corporation has been
presented with respect to the ballot, consent, waiver, or proxy
appointment.
(c) The corporation is entitled to reject a ballot, consent,
waiver, or proxy appointment if the secretary or other officer or
agent authorized to tabulate votes, acting in good faith, has a
reasonable basis for doubt concerning the validity of the signature
or the signatory's authority to sign for the member.
(d) The corporation and any officer or agent thereof who accepts
or rejects a ballot, consent, waiver, or proxy appointment in good
faith and in accordance with the standards of this section shall not
be liable in damages to the member for the consequences of the
acceptance or rejection.
(e) Corporate action based on the acceptance or rejection of a
ballot, consent, waiver, or proxy appointment under this section is
valid unless a court of competent jurisdiction determines otherwise.


CORPORATIONS CODE
SECTION 7520-7527


7520. (a) As to directors elected by members, there shall be
available to the members reasonable nomination and election
procedures given the nature, size and operations of the corporation.

(b) If a corporation complies with all of the provisions of
Sections 7521, 7522, 7523, and 7524 applicable to a corporation with
the same number of members, the nomination and election procedures of
that corporation, shall be deemed reasonable. However, those
sections do not prescribe the exclusive means of making available to
the members reasonable procedures for nomination and election of
directors. A corporation may make available to the members other
reasonable nomination and election procedures given the nature, size,
and operations of the corporation.
(c) Subject to the provisions of subdivisions (a), (b), and (d) of
Section 7616, the superior court of the proper county shall enforce
the provisions of this section.



7521. A corporation with 500 or more members may provide that,
except for directors who are elected as authorized by Section 7152 or
7153, and except as provided in Section 7522, any person who is
qualified to be elected to the board of directors of the corporation
may be nominated:
(a) By any method authorized by the bylaws, or if no method is set
forth in the bylaws by any method authorized by the board.
(b) By petition delivered to an officer of the corporation, signed
within 11 months preceding the next time directors will be elected,
by members representing the following number of votes:


Number of Votes Eligible
to be Cast for Director
Disregarding any Provision
for Cumulative Voting Number of Votes
Under 5,000 ................. 2 percent of voting power
5,000 or more ................. one-twentieth of 1 percent

of voting power but not
less than 100.

This subdivision does not apply to a corporation described in
subdivision (c).
(c) In corporations with one million or more members engaged
primarily in the business of retail merchandising of consumer goods,
by petition delivered to an officer of the corporation, signed within
11 months preceding the next time directors will be elected, by such
reasonable number of members as is set forth in the bylaws, or if no
number is set forth in the bylaws, by such reasonable number of
members as is determined by the directors.
(d) If there is a meeting to elect directors, by any member
present at the meeting in person or by proxy if proxies are
permitted.



7522. A corporation with 5,000 or more members may provide that, in
any election of a director or directors by members of the
corporation except for an election authorized by Section 7152 or
7153:
(a) The corporation's articles or bylaws shall set a date for the
close of nominations for the board. The date shall not be less than
50 nor more than 120 days before the day directors are to be elected.
No nominations for the board can be made after the date set for the
close of nominations.
(b) If more people are nominated for the board than can be
elected, the election shall take place by means of a procedure which
allows all nominees a reasonable opportunity to solicit votes and all
members a reasonable opportunity to choose among the nominees.
(c) A nominee shall have a reasonable opportunity to communicate
to the members the nominee's qualifications and the reasons for the
nominee's candidacy.
(d) If after the close of nominations the number of people
nominated for the board is not more than the number of directors to
be elected, the corporation may without further action declare that
those nominated and qualified to be elected have been elected.



7523. Where a corporation with 500 or more members publishes any
material soliciting a vote for any nominee for director in any
publication owned or controlled by the corporation, the corporation
may provide that it shall make available to all other nominees, in
the same issue of the publication, an equal amount of space, with
equal prominence, to be used by the nominee for a purpose reasonably
related to the election.



7524. A corporation with 500 or more members may provide that upon
written request by any nominee for election to the board and the
payment of the reasonable costs of mailing (including postage), the
corporation shall within 10 business days after such request
(provided payment has been made) mail to all members, or such portion
of them as the nominee may reasonably specify, any material, which
the nominee may furnish and which is reasonably related to the
election, unless the corporation within five business days after the
request allows the nominee, at the corporation's option, the rights
set forth in either paragraph (1) or (2) of subdivision (a) of
Section 8330.



7525. (a) This section shall apply to corporations publishing or
mailing materials on behalf of any nominee in connection with
procedures for the nomination and election of directors.
(b) Neither the corporation, nor its agents, officers, directors,
or employees, may be held criminally liable, liable for any
negligence (active or passive) or otherwise liable for damages to any
person on account of any material which is supplied by a nominee for
director and which it mails or publishes in procedures intended to
comply with Section 7520 or pursuant to Section 7523 or 7524 but the
nominee on whose behalf such material was published or mailed shall
be liable and shall indemnify and hold the corporation, its agents,
officers, directors, and employees and each of them harmless from all
demands, costs, including reasonable legal fees and expenses,
claims, damages and causes of action arising out of such material or
any such mailing or publication.
(c) Nothing in this section shall prevent a corporation or any of
its agents, officers, directors, or employees from seeking a court
order providing that the corporation need not mail or publish
material tendered by or on behalf of a nominee under this article on
the ground the material will expose the moving party to liability.




7526. Without authorization of the board, no corporation funds may
be expended to support a nominee for director after there are more
people nominated for director than can be elected.



7527. An action challenging the validity of any election,
appointment or removal of a director or directors must be commenced
within nine months after the election, appointment or removal. If no
such action is commenced, in the absence of fraud, any election,
appointment or removal of a director is conclusively presumed valid
nine months thereafter.


CORPORATIONS CODE
SECTION 7610-7616


7610. Except as provided in a corporation's articles or bylaws or
Section 7615, each member shall be entitled to one vote on each
matter submitted to a vote of the members. Single memberships in
which two or more persons have an indivisible interest shall be voted
as provided in Section 7612.



7611. (a) The bylaws may provide or, in the absence of such
provision, the board may fix, in advance, a date as the record date
for the purpose of determining the members entitled to notice of any
meeting of members. Such record date shall not be more than 90 nor
less than 10 days before the date of the meeting. If no record date
is fixed, members at the close of business on the business day
preceding the day on which notice is given or, if notice is waived,
at the close of business on the business day preceding the day on
which the meeting is held are entitled to notice of a meeting of
members. A determination of members entitled to notice of a meeting
of members shall apply to any adjournment of the meeting unless the
board fixes a new record date for the adjourned meeting.
(b) The bylaws may provide or, in the absence of such provision,
the board may fix, in advance, a date as the record date for the
purpose of determining the members entitled to vote at a meeting of
members. Such record date shall not be more than 60 days before the
date of the meeting. Such record date shall also apply in the case
of an adjournment of the meeting unless the board fixes a new record
date for the adjourned meeting. If no record date is fixed, members
on the day of the meeting who are otherwise eligible to vote are
entitled to vote at the meeting of members or, in the case of an
adjourned meeting, members on the day of the adjourned meeting who
are otherwise eligible to vote are entitled to vote at the adjourned
meeting of members.
(c) The bylaws may provide or, in the absence of such provision,
the board may fix, in advance, a date as the record date for the
purpose of determining the members entitled to cast written ballots
(Section 7513). Such record date shall not be more than 60 days
before the day on which the first written ballot is mailed or
solicited. If no record date is fixed, members on the day the first
written ballot is mailed or solicited who are otherwise eligible to
vote are entitled to cast written ballots.
(d) The bylaws may provide or, in the absence of such provision,
the board may fix, in advance, a date as the record date for the
purpose of determining the members entitled to exercise any rights in
respect of any other lawful action. Such record date shall not be
more than 60 days prior to such other action. If no record date is
fixed, members at the close of business on the day on which the board
adopts the resolution relating thereto, or the 60th day prior to the
date of such other action, whichever is later, are entitled to
exercise such rights.


7612. If a membership stands of record in the names of two or more
persons, whether fiduciaries, members of a partnership, joint
tenants, tenants in common, husband and wife as community property,
tenants by the entirety, persons entitled to vote under a voting
agreement or otherwise, or if two or more persons (including
proxyholders) have the same fiduciary relationship respecting the
same membership, unless the secretary of the corporation is given
written notice to the contrary and is furnished with a copy of the
instrument or order appointing them or creating the relationship
wherein it is so provided, their acts with respect to voting shall
have the following effect:
(a) If only one votes, such act binds all; or
(b) If more than one vote, the act of the majority so voting binds
all.



7613. (a) Any member may authorize another person or persons to act
by proxy with respect to such membership except that this right may
be limited or withdrawn by the articles or bylaws, subject to
subdivision (f). Any proxy purported to be executed in accordance
with the provisions of this part shall be presumptively valid.
(b) No proxy shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the proxy, except that
the maximum term of any proxy shall be three years from the date of
execution. Every proxy continues in full force and effect until
revoked by the person executing it prior to the vote pursuant
thereto, except as otherwise provided in this section. Such
revocation may be effected by a writing delivered to the corporation
stating that the proxy is revoked or by a subsequent proxy executed
by the person executing the prior proxy and presented to the meeting,
or as to any meeting by attendance at such meeting and voting in
person by the person executing the proxy. The dates contained on the
forms of proxy presumptively determine the order of execution,
regardless of the postmark dates on the envelopes in which they are
mailed.
(c) A proxy is not revoked by the death or incapacity of the maker
or the termination of a membership as a result thereof unless,
before the vote is counted, written notice of such death or
incapacity is received by the corporation.
(d) Unless otherwise provided in the articles or bylaws, the proxy
of a member which states that it is irrevocable is irrevocable for
the period specified therein (notwithstanding subdivisions (b) and
(c)) when it is held by any of the following or a nominee of any of
the following:
(1) A person who has purchased or who has agreed to purchase the
membership;
(2) A creditor or creditors of the corporation or the member who
extended or continued credit to the corporation or the member in
consideration of the proxy if the proxy states that it was given in
consideration of such extension or continuation of credit and the
name of the person extending or continuing the credit; or
(3) A person who has contracted to perform services as an employee
of the corporation, if the proxy is required by the contract of
employment and if the proxy states that it was given in consideration
of such contract of employment, the name of the employee and the
period of employment contracted for.
Notwithstanding the period of irrevocability specified, the proxy
becomes revocable when the agreement to purchase is terminated; the
debt of the corporation or the member is paid; or the period of
employment provided for in the contract of employment has terminated.
In addition to the foregoing paragraphs (1) through (3), a proxy of
a member may be made irrevocable (notwithstanding subdivision (c))
if it is given to secure the performance of a duty or to protect a
title, either legal or equitable, until the happening of events
which, by its terms, discharge the obligations secured by it.
(e) A proxy may be revoked, notwithstanding a provision making it
irrevocable, by a transferee of a membership without knowledge of the
existence of the provision unless the existence of the proxy and its
irrevocability appears on the certificate representing the
membership.
(f) Subdivision (a) notwithstanding:
(1) No amendment of the articles or bylaws repealing, restricting,
creating or expanding proxy rights may be adopted without approval
by the members (Section 5034); and
(2) No amendment of the articles or bylaws restricting or limiting
the use of proxies may affect the validity of a previously issued
irrevocable proxy during the term of its irrevocability, so long as
it complied with applicable provisions, if any, of the articles or
bylaws at the time of its issuance, and is otherwise valid under this
section.
(g) Anything to the contrary notwithstanding, any revocable proxy
covering matters requiring a vote of the members pursuant to Section
7222; Section 7224; Section 7233; paragraph (1) of subdivision (f) of
this section; Section 7812; paragraph (2) of subdivision (a) of
Section 7911; Section 8012; subdivision (a) of Section 8015; Section
8610; or subdivision (a) of Section 8719 is not valid as to such
matters unless it sets forth the general nature of the matter to be
voted on.


7614. (a) In advance of any meeting of members, the board may
appoint inspectors of election to act at the meeting and any
adjournment thereof. If inspectors of election are not so appointed,
or if any persons so appointed fail to appear or refuse to act, the
chairman of any meeting of members may, and on the request of any
member or a member's proxy shall, appoint inspectors of election (or
persons to replace those who so fail or refuse) at the meeting. The
number of inspectors shall be either one or three. If appointed at a
meeting on the request of one or more members or proxies, the
majority of members represented in person or by proxy shall determine
whether one or three inspectors are to be appointed. In the case of
any action by written ballot (Section 7513), the board may similarly
appoint inspectors of election to act with powers and duties as set
forth in this section.
(b) The inspectors of election shall determine the number of
memberships outstanding and the voting power of each, the number
represented at the meeting, the existence of a quorum, and the
authenticity, validity and effect of proxies, receive votes, ballots
or consents, hear and determine all challenges and questions in any
way arising in connnection with the right to vote, count and tabulate
all votes or consents, determine when the polls shall close,
determine the result and do such acts as may be proper to conduct the
election or vote with fairness to all members.
(c) The inspectors of election shall perform their duties
impartially, in good faith, to the best of their ability and as
expeditiously as is practical. If there are three inspectors of
election, the decision, act or certificate of a majority is effective
in all respects as the decision, act or certificate of all. Any
report or certificate made by the inspectors of election is prima
facie evidence of the facts stated therein.



7615. (a) If the articles or bylaws authorize cumulative voting,
but not otherwise, every member entitled to vote at any election of
directors may cumulate the member's votes and give one candidate a
number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the member is entitled, or
distribute the member's votes on the same principle among as many
candidates as the member thinks fit. An article or bylaw provision
authorizing cumulative voting may be repealed or amended only by
approval of the members (Section 5034), except that the governing
article or bylaw provision may require the vote of a greater
proportion of the members, or of the members of any class, for its
repeal.
(b) No member shall be entitled to cumulate votes for a candidate
or candidates unless the candidate's name or candidates' names have
been placed in nomination prior to the voting and the member has
given notice at the meeting prior to the voting of the member's
intention to cumulate votes. If any one member has given this
notice, all members may cumulate their votes for candidates in
nomination.
(c) In any election of directors by cumulative voting, the
candidates receiving the highest number of votes are elected, subject
to any lawful provision specifying election by classes.
(d) In any election of directors not governed by subdivision (c),
unless otherwise provided in the articles or bylaws, the candidates
receiving the highest number of votes are elected.
(e) Elections for directors need not be by ballot unless a member
demands election by ballot at the meeting and before the voting
begins or unless the bylaws so require.



7616. (a) Upon the filing of an action therefor by any director or
member or by any person who had the right to vote in the election at
issue, the superior court of the proper county shall determine the
validity of any election or appointment of any director of any
corporation.
(b) In the case of a corporation holding assets in charitable
trust, any person bringing an action under this section shall give
notice of the action to the Attorney General, who may intervene.
(c) Upon the filing of the complaint, and before any further
proceedings are had, the court shall enter an order fixing a date for
the hearing, which shall be within five days unless for good cause
shown a later date is fixed, and requiring notice of the date for the
hearing and a copy of the complaint to be served upon the
corporation and upon the person whose purported election or
appointment is questioned and upon any person (other than the
plaintiff) whom the plaintiff alleges to have been elected or
appointed, in the manner in which a summons is required to be served,
or, if the court so directs, by registered mail; and the court may
make such further requirements as to notice as appear to be proper
under the circumstances.
(d) The court, consistent with the provisions of this part and in
conformity with the articles and bylaws to the extent feasible, may
determine the person entitled to the office of director or may order
a new election to be held or appointment to be made, may determine
the validity, effectiveness and construction of voting agreements and
voting trusts, the validity of the issuance of memberships and the
right of persons to vote and may direct such other relief as may be
just and proper.

CORPORATIONS CODE
SECTION 7710


7710. (a) Subdivisions (c) through (f) notwithstanding, no motion
to require a bond shall be granted in an action brought by 100
members or the authorized number (Section 5036), whichever is less.
(b) No action may be instituted or maintained in the right of any
corporation by any member of such corporation unless both of the
following conditions exist:
(1) The plaintiff alleges in the complaint that plaintiff was a
member at the time of the transaction or any part thereof of which
plaintiff complains, or that plaintiff's membership thereafter
devolved upon plaintiff by operation of law from a holder who was a
holder at the time of transaction or any part thereof complained of;
and
(2) The plaintiff alleges in the complaint with particularity
plaintiff's efforts to secure from the board such action as plaintiff
desires, or the reasons for not making such effort, and alleges
further that plaintiff has either informed the corporation or the
board in writing of the ultimate facts of each cause of action
against each defendant or delivered to the corporation or the board a
true copy of the complaint which plaintiff proposes to file.
(c) Subject to subdivision (a), in any action referred to in
subdivision (b), at any time within 30 days after service of summons
upon the corporation or upon any defendant who is an officer or
director of the corporation, or held such office at the time of the
acts complained of, the corporation or such defendant may move the
court for an order, upon notice and hearing, requiring the plaintiff
to furnish a bond as hereinafter provided. The motion shall be based
upon one or both of the following grounds:
(1) That there is no reasonable possibility that the prosecution
of the cause of action alleged in the complaint against the moving
party will benefit the corporation or its members economically or
otherwise.
(2) That the moving party, if other than the corporation, did not
participate in the transaction complained of in any capacity.
The court on application of the corporation or any defendant may,
for good cause shown, extend the 30-day period for an additional
period or periods not exceeding 60 days.
(d) At the hearing upon any motion pursuant to subdivision (c),
the court shall consider such evidence, written or oral, by witnesses
or affidavit, as may be material (1) to the ground or grounds upon
which the motion is based, or (2) to a determination of the probable
reasonable expenses, including attorneys' fees, of the corporation
and the moving party which will be incurred in the defense of the
action. If the court determines, after hearing the evidence adduced
by the parties, that the moving party has established a probability
in support of any of the grounds upon which the motion is based, the
court shall fix the amount of the bond, not to exceed fifty thousand
dollars ($50,000), to be furnished by the plaintiff for reasonable
expenses, including attorneys' fees, which may be incurred by the
moving party and the corporation in connection with the action,
including expenses for which the corporation may become liable
pursuant to Section 7237. A ruling by the court on the motion shall
not be a determination of any issue in the action or of the merits
thereof. If the court, upon any such motion, makes a determination
that a bond shall be furnished by the plaintiff as to any one or more
defendants, the action shall be dismissed as to such defendant or
defendants, unless the bond required by the court has been furnished
within such reasonable time as may be fixed by the court.
(e) If the plaintiff shall, either before or after a motion is
made pursuant to subdivision (c), or any order or determination
pursuant to such motion, furnish a bond or bonds in the aggregate
amount of fifty thousand dollars ($50,000) to secure the reasonable
expenses of the parties entitled to make the motion, the plaintiff
has complied with the requirements of this section and with any order
for a bond theretofore made, and any such motion then pending shall
be dismissed and no further or additional bond shall be required.
(f) If a motion is filed pursuant to subdivision (c), no pleadings
need be filed by the corporation or any other defendant and the
prosecution of the action shall be stayed until 10 days after the
motion has been disposed of.

CORPORATIONS CODE
SECTION 7810-7820


7810. (a) By complying with the provisions of this chapter, a
corporation may amend its articles from time to time, in any and as
many respects as may be desired, so long as its articles as amended
contain only such provisions as it would be lawful to insert in
original articles filed at the time of the filing of the amendment or
as authorized by Section 7813.5 and, if a change in the rights of
members or an exchange, reclassification or cancellation of
memberships is to be made, such provisions as may be necessary to
effect such change, exchange, reclassification or cancellation. It
is the intent of the Legislature in adopting this section to exercise
to the fullest extent the reserve power of the state over
corporations and to authorize any amendment of the articles covered
by the preceding sentence regardless of whether any provision
contained in the amendment was permissible at the time of the
original incorporation of the corporation.
(b) A corporation shall not amend its articles to alter any
statement which may appear in the original articles of the names and
addresses of the first directors, nor the name and address of the
initial agent, except to correct an error in the statement or to
delete either after the corporation has filed a statement under
Section 8210.



7811. Any amendment of the articles may be adopted by a writing
signed by a majority of the incorporators, so long as:
(a) No directors were named in the original articles;
(b) No directors have been elected; and
(c) The corporation has no members.



7812. (a) Except as provided in this section or Section 7813,
amendments may be adopted if approved by the board and approved by
the members (Section 5034) and approved by such other person or
persons, if any, as required by the articles. The approval by the
members or other person or persons may be before or after the
approval by the board.
(b) Notwithstanding subdivision (a), the following amendments may
be adopted by approval of the board alone:
(1) An amendment extending the corporate existence or making the
corporate existence perpetual, if the corporation was organized prior
to August 14, 1929.
(2) An amendment deleting the names and addresses of the first
directors or the name and address of the initial agent.
(3) Any amendment, at a time the corporation has no members;
provided, however, that if the articles require approval by any
person for an amendment, an amendment may not be adopted without such
approval.
(4) An amendment adopted pursuant to Section 9913.
(c) Whenever the articles require for corporate action the
approval of a particular class of members or of a larger proportion
of, or all of, the votes of any class, or of a larger proportion of,
or all of, the directors, than is otherwise required by this part,
the provision in the articles requiring such greater vote shall not
be altered, amended or repealed except by such class or such greater
vote, unless otherwise provided in the articles.



7813. An amendment must also be approved by the members (Section
5034) of a class, whether or not such class is entitled to vote
thereon by the provisions of the articles or bylaws, if the amendment
would:
(a) Materially and adversely affect the rights, privileges,
preferences, restrictions or conditions of that class as to voting,
dissolution, redemption or transfer in a manner different than such
action affects another class;
(b) Materially and adversely affect such class as to voting,
dissolution, redemption or transfer by changing the rights,
privileges, preferences, restrictions or conditions of another class;

(c) Increase or decrease the number of memberships authorized for
such class;
(d) Increase the number of memberships authorized for another
class;
(e) Effect an exchange, reclassification or cancellation of all or
part of the memberships of such class; or
(f) Authorize a new class of memberships.



7813.5. (a) A mutual benefit corporation may amend its articles to
change its status to that of a public benefit corporation, a
religious corporation, a business corporation, or a cooperative
corporation by complying with this section and the other sections of
this chapter.
(b) Except as authorized by Section 7811 or unless the corporation
has no members, an amendment to change its status to a public
benefit corporation or religious corporation shall: (i) be approved
by the members (Section 5034), and the fairness of the amendment to
the members shall be approved by the Commissioner of Corporations
pursuant to Section 25142; (ii) be approved by the members (Section
5034) in an election conducted by written ballot pursuant to Section
7513 in which no negative votes are cast; or (iii) be approved by 100
percent of the voting power.
(c) Amended articles authorized by this section shall include the
provisions which would have been required (other than the name of the
initial agent for service of process if a statement has been filed
pursuant to Section 8210), and may in addition only include those
provisions which would have been permitted, in original articles
filed by the type of corporation (public benefit, religious,
business, or cooperative) into which the mutual benefit corporation
is changing its status.
(d) At the time of filing a certificate of amendment to change
status to a public benefit corporation, a corporation shall furnish
an additional copy of the certificate of amendment to the Secretary
of State who shall forward that copy to the Attorney General.
(e) In the case of a change of status to a business corporation or
a cooperative corporation, if the Franchise Tax Board has issued a
determination exempting the corporation from tax as provided in
Section 23701 of the Revenue and Taxation Code, the corporation shall
be subject to Section 23221 of the Revenue and Taxation Code upon
filing the certificate of amendment.



7814. (a) Except for amendments adopted by the incorporators
pursuant to Section 7811, upon adoption of an amendment, the
corporation shall file a certificate of amendment, which shall
consist of an officers' certificate stating:
(1) The wording of the amendment or amended articles in accordance
with Section 7816;
(2) That the amendment has been approved by the board;
(3) If the amendment is one for which the approval of the members
(Section 5034) or the approval of 100 percent of the voting power is
required, that the amendment was approved by the required vote of
members; and
(4) If the amendment is one which may be adopted with approval by
the board alone, a statement of the facts entitling the board alone
to adopt the amendment.
(5) If the amendment is one for which the approval of a person or
persons other than the incorporators, directors or members is
required, that the approval of such person or persons has been
obtained.
(b) In the event of an amendment of the articles pursuant to a
merger, the filing of the officers' certificate and agreement
pursuant to Section 8014 shall be in lieu of any filing required
under this chapter.


7815. In the case of amendments adopted by the incorporators under
Section 7811, the corporation shall file a certificate of amendment
signed and verified by a majority of the incorporators which shall
state that the signers thereof constitute at least a majority of the
incorporators, that directors were not named in the original articles
and have not been elected, that the corporation has no members and
that they adopt the amendment or amendments therein set forth.



7816. The certificate of amendment shall establish the wording of
the amendment or amended articles by one or more of the following
means:
(a) By stating that the articles shall be amended to read as
therein set forth in full.
(b) By stating that any provision of the articles, which shall be
identified by the numerical or other designation given it in the
articles or by stating the wording thereof, shall be stricken from
the articles or shall be amended to read as set forth in the
certificate.
(c) By stating that the provisions set forth therein shall be
added to the articles.
If the purpose of the amendment is to reclassify, cancel,
exchange, or otherwise change outstanding memberships the amended
articles shall state the effect thereof on outstanding memberships.



7817. Upon the filing of the certificate of amendment, the articles
shall be amended in accordance with the certificate and any change,
reclassification or cancellation of memberships shall be effected,
and a copy of the certificate, certified by the Secretary of State,
is prima facie evidence of the performance of the conditions
necessary to the adoption of the amendment.



7818. A corporation formed for a limited period may at any time
subsequent to the expiration of the term of its corporate existence,
extend the term of its existence by an amendment to its articles
removing any provision limiting the term of its existence and
providing for perpetual existence. If the filing of the certificate
of amendment providing for perpetual existence would be prohibited if
it were original articles by the provisions of Section 7122, the
Secretary of State shall not file such certificate unless, by the
same or a concurrently filed certificate of amendment, the articles
of such corporation are amended to adopt a new available name. For
the purpose of the adoption of any such amendment, persons who have
been functioning as directors of such corporation shall be considered
to have been validly elected even though their election may have
occurred after the expiration of the original term of the corporate
existence.


7819. (a) A corporation may restate in a single certificate the
entire text of its articles as amended by filing an officers'
certificate or, in circumstances where incorporators or the board may
amend a corporation's articles pursuant to Sections 7811 and 7815, a
certificate signed and verified by a majority of the incorporators
or the board, as applicable, entitled "Restated Articles of
Incorporation of (insert name of corporation)" which shall set forth
the articles as amended to the date of filing of the certificate,
except that the signatures and acknowledgments of the articles by the
incorporators and any statements regarding the effect of any prior
amendment upon memberships and any provisions of agreements of merger
(other than amendments to the articles of the surviving corporation)
and the names and addresses of the first directors and of the
initial agent for service of process shall be omitted (except that
the names and addresses of the initial agent for service of process
and, if previously set forth in the articles, the initial directors,
shall not be omitted prior to the time that the corporation has filed
a statement under Section 8210). Such omissions are not alterations
or amendments of the articles. The certificate may also itself
alter or amend the articles in any respect, in which case the
certificate must comply with Section 7814 or 7815, as the case may
be, and Section 7816.
(b) If the certificate does not itself alter or amend the articles
in any respect, it shall be approved by the board or, prior to the
issuance of any memberships and the naming and election of directors,
by a majority of the incorporators, and shall be subject to the
provisions of this chapter relating to an amendment of the articles
not requiring approval of the members (Section 5034). If the
certificate does itself alter or amend the articles, it shall be
subject to the provisions of this chapter relating to the amendment
or amendments so made.
(c) Restated articles of incorporation filed pursuant to this
section shall supersede for all purposes the original articles and
all amendments filed prior thereto.


7820. (a) Amendment of the articles of a corporation holding
property in charitable trust, pursuant to this chapter, does not, of
itself, abrogate any requirement or limitation imposed upon the
corporation, or any property held by it, by virtue of the trust under
which such property is held by the corporation.
(b) The Attorney General may, at the corporation's request, and
pursuant to such regulations as the Attorney General may issue, give
rulings as to whether the Attorney General will or may oppose a
proposed action, or article amendment, as inconsistent with or
proscribed by the requirements of a charitable trust.
 
 
________________________________________________________________________________________ 
 

CORPORATIONS CODE
SECTION 7910-7913

 

7910.  Any mortgage, deed of trust, pledge or other hypothecation of
all or any part of the corporation's property, real or personal, for
the purpose of securing the payment or performance of any contract
or obligation may be approved by the board. Unless the articles or
bylaws otherwise provide, no approval of the members (Section 5034)
shall be necessary for such action.



7911. (a) Subject to the provisions of Section 7142, a corporation
may sell, lease, convey, exchange, transfer or otherwise dispose of
all or substantially all of its assets when the principal terms are:

(1) Approved by the board; and
(2) Unless the transaction is in the usual and regular course of
its activities, approved by the members (Section 5034), either before
or after approval by the board and before or after the transaction.

(b) Notwithstanding approval by the members (Section 5034), the
board may abandon the proposed transaction without further action by
the members, subject to the contractual rights, if any, of third
parties.
(c) Subject to the provisions of Section 7142, such sale, lease,
conveyance, exchange, transfer or other disposition may be made upon
such terms and conditions and for such consideration as the board may
deem in the best interests of the corporation. The consideration
may be money, property, or securities of any domestic corporation,
foreign corporation, or foreign business corporation or any of them.



7912. Any deed or instrument conveying or otherwise transferring
any assets of a corporation may have annexed to it the certificate of
the secretary or an assistant secretary of the corporation, setting
forth that the transaction has been validly approved by the board and
(a) stating that the property described in such deed or instrument
is less than substantially all of the assets of the corporation or
that the transfer is in the usual and regular course of the business
of the corporation, if such be the case, or (b) if such property
constitutes all or substantially all of the assets of the corporation
and the transfer is not in the usual and regular course of the
business of the corporation, stating the fact of approval thereof by
the members (Section 5034) or all the members pursuant to this
chapter. Such certificate is prima facie evidence of the existence
of the facts authorizing such conveyance or other transfer of the
assets and conclusive evidence in favor of any purchaser or
encumbrancer for value who, without notice of any trust restriction
applicable to the property or any failure to comply therewith, in
good faith parted with value.



7913. A corporation holding assets in charitable trust must give
written notice to the Attorney General 20 days before it sells,
leases, conveys, exchanges, transfers or otherwise disposes of any or
all of the assets held in trust unless the Attorney General has
given the corporation a written waiver of this section as to the
proposed transaction.

______________________________________________________________

CORPORATIONS CODE
SECTION 8010-8019.1


8010. A mutual benefit corporation may merge with any domestic
corporation, foreign corporation, foreign business corporation, or
other business entity (Section 5063.5). However, a merger with a
public benefit corporation or a religious corporation must have the
prior written consent of the Attorney General.



8011. The board of each corporation that desires to merge shall
approve an agreement of merger. The constituent corporations shall
be parties to the agreement of merger and other persons may be
parties to the agreement of merger. The agreement shall state all of
the following:
(a) The terms and conditions of the merger.
(b) The amendments, subject to Sections 7810 and 7816, to the
articles of the surviving corporation to be effected by the merger,
if any; if any amendment changes the name of the surviving
corporation, the new name may be the same as or similar to the name
of a disappearing corporation, subject to subdivision (c) of Section
7122.
(c) The amendments to the bylaws of the surviving corporation to
be effected by the merger, if any.
(d) The name and place of incorporation of each constituent
corporation and which of the constituent corporations is the
surviving corporation.
(e) The manner, if any, of converting memberships or securities of
the constituent corporations into memberships or securities of the
surviving corporation and, if any memberships or securities of any of
the constituent corporations are not to be converted solely into
memberships or securities of the surviving corporation, the cash,
property, rights or securities of any corporation that the holders of
those memberships or securities are to receive in exchange for the
memberships or securities, which cash, property, rights or securities
of any corporation may be in addition to or in lieu of memberships
or securities of the surviving corporation, or that the memberships
are to be canceled without consideration.
(f) Other details or provisions as are desired, if any, including,
without limitation, if not prohibited by this chapter, a provision
for the payment of cash in lieu of fractional memberships or for any
other arrangement with respect thereto.



8011.5. Each membership of the same class of any constituent
corporation (other than the cancellation of memberships held by a
surviving corporation or its parent or a wholly owned subsidiary of
either in a constituent corporation) shall be treated equally with
respect to any distribution of cash, property, rights or securities
unless: (i) all members of the class consent or (ii) the
Commissioner of Corporations has approved the terms and conditions of
the transaction and the fairness of such terms pursuant to Section
25142.


8012. The principal terms of the merger shall be approved by the
members (Section 5034) of each class of each constituent corporation
and by each other person or persons whose approval of an amendment of
articles is required by the articles; and the approval by the
members (Section 5034) or such other person or persons required by
this section may be given before or after the approval by the board.




8013. Each constituent corporation shall sign the agreement by the
chairman of its board, president or a vice president and secretary or
an assistant secretary acting on behalf of their respective
corporations.


8014. After approval of a merger by the board and any approval by
the members (Section 5034) required by Section 8012, the surviving
corporation shall file a copy of the agreement of merger with an
officers' certificate of each constituent corporation attached
stating the total number of memberships of each class entitled to
vote on the merger, identifying any other person or persons whose
approval is required, and that the principal terms of the agreement
in the form attached were duly approved by the required vote of the
members and, if applicable, any other person or persons. The merger
and any amendment of the articles of the surviving corporation
contained in the merger agreement shall thereupon be effective
(subject to subdivision (c) of Section 5008 and subject to the
provisions of Section 8018) and the several parties thereto shall be
one corporation. The Secretary of State may certify a copy of the
merger agreement separate from the officers' certificates attached
thereto.



8015. (a) Any amendment to the agreement may be adopted and the
agreement so amended may be approved by the board and, if it changes
any of the principal terms of the agreement, by the members (Section
5034) or other person or persons, as required by Section 8012, of any
constituent corporation in the same manner as the original
agreement.
(b) If the agreement so amended is approved as provided in
subdivision (a), the agreement so amended shall then constitute the
agreement of merger.



8016. The board may, in its discretion, abandon a merger, subject
to the contractual rights, if any, of third parties, including other
constituent corporations, without further approval by the members
(Section 5034) or other persons entitled to approve the merger at any
time before the merger is effective.


8017. A copy of an agreement of merger certified on or after the
effective date by an official having custody thereof has the same
force in evidence as the original and, except as against the state,
is conclusive evidence of the performance of all conditions precedent
to the merger, the existence on the effective date of the surviving
corporation and the performance of the conditions necessary to the
adoption of any amendment to the articles contained in the agreement
of merger.



8018. (a) Subject to the provisions of Section 8010, the merger of
any number of corporations with any number of foreign corporations,
foreign business corporations or domestic corporations may be
effected if the foreign corporations are authorized by the laws under
which they are formed to effect the merger. The surviving
corporation may be any one of the constituent corporations and shall
continue to exist under the laws of the state or place of its
incorporation.
(b) If the surviving corporation is a mutual benefit corporation,
the merger proceedings with respect to that corporation and any
domestic disappearing corporation shall conform to the provisions of
this chapter and other applicable laws of this state, but if the
surviving corporation is a foreign corporation, then, subject to the
requirements of subdivision (d) and Section 8012 the merger
proceedings may be in accordance with the laws of the state or place
of incorporation of the surviving corporation.
(c) If the surviving corporation is a mutual benefit corporation,
the agreement and the officers' certificate of each constituent
corporation shall be filed as provided in Section 8014 and thereupon,
subject to subdivision (c) of Section 5008, the merger shall be
effective as to each corporation; and each foreign disappearing
corporation that is qualified for the transaction of intrastate
business shall, by virtue of the filing, automatically surrender its
right to transact intrastate business.
(d) If the surviving corporation is a foreign corporation, or
foreign business corporation, the merger shall become effective in
accordance with the law of the jurisdiction in which it is organized,
but shall be effective as to any disappearing corporation as of the
time of effectiveness in the foreign jurisdiction upon the filing in
this state as required by this subdivision. There shall be filed as
to the domestic disappearing corporation or corporations the
documents described in any one of the following paragraphs:
(1) A copy of the agreement, certificate, or other document filed
by the surviving foreign corporation in the state or place of its
incorporation for the purpose of effecting the merger, which copy
shall be certified by the public officer having official custody of
the original.
(2) An executed counterpart of the agreement, certificate, or
other document filed by the surviving corporation in the state or
place of its incorporation for the purpose of effecting the merger.
(3) A copy of the agreement of merger with an officers'
certificate of the surviving foreign corporation and of each
constituent domestic corporation attached, which officers'
certificates shall conform to the requirements of Section 8014.
(e) If the date of the filing in this state pursuant to
subdivision (d) is more than six months after the time of the
effectiveness in the foreign jurisdiction, or if the powers of the
domestic corporation are suspended at the time of effectiveness in
the foreign jurisdiction, the merger shall be effective as to the
domestic disappearing corporation or corporations as of the date of
filing in this state. Each foreign disappearing corporation that is
qualified for the transaction of intrastate business shall
automatically by the filing pursuant to subdivision (d) surrender its
right to transact intrastate business as of the date of filing in
this state regardless of the time of effectiveness as to a domestic
disappearing corporation.


8019. If an agreement of merger is entered into between a nonprofit
corporation and a business corporation: (a) Sections 6011, 6012,
6014, and 6015 shall apply to any constituent public benefit
corporation; (b) Sections 8011, 8011.5, 8012, 8014, and 8015 shall
apply to any constituent mutual benefit corporation; (c) Sections
6014 and 6015 and subdivisions (c) and (d) of Section 9640 shall
apply to any constituent religious corporation; and (d) Sections
1101, 1101.1, 1103, and 1104 shall apply to any constituent business
corporation.


8019.1. (a) Subject to the provisions of Section 8010, any one or
more corporations may merge with one or more other business entities
(Section 5063.5). One or more other domestic corporations, foreign
corporations (Sections 5053), and foreign business corporations
(Section 5052) may be parties to the merger. Notwithstanding the
provisions of this section, such a merger may be effected only if:
(1) In a merger in which a domestic corporation or domestic other
business entity is a party, it is authorized by the laws under which
it is organized to effect the merger.
(2) In a merger in which a foreign corporation or foreign business
corporation is a party, it is authorized by the laws under which it
is organized to effect the merger.
(3) In a merger in which a foreign other business entity is a
party, it is authorized by the laws under which it is organized to
effect the merger.
(b) Each corporation and each other party which desires to merge
shall approve an agreement of merger. The board and the members
(Section 5034) of each corporation which desires to merge, and each
other person or persons, if any, whose approval of an amendment of
the articles of that corporation is required by the articles or
bylaws shall approve the agreement of merger. The agreement of merger
shall be approved on behalf of each other constituent party by those
persons authorized or required to approve the merger by the laws
under which it is organized. The parties desiring to merge shall be
parties to the agreement of merger and other persons, including a
parent party (Section 5064.5), may be parties to the agreement of
merger. The agreement of merger shall state all of the following:
(1) The terms and conditions of the merger.
(2) The name and place of incorporation or organization of each
party and the identity of the surviving party.
(3) The amendments, if any, subject to Sections 7810 and 7816, to
the articles of the surviving corporation, if applicable, to be
effected by the merger. The name of the surviving corporation may be,
subject to subdivisions (b) and (c) of Section 7122, the same as or
similar to the name of a disappearing party to the merger.
(4) The manner, if any, of converting the memberships or
securities of each of the constituent corporations into shares,
memberships, interests, or other securities of the surviving party;
and, if any memberships or securities of any of the constituent
corporations are not to be converted solely into shares, memberships,
interests, or other securities of the surviving party, cash, rights,
securities, or other property which the holders of those memberships
or securities are to receive in exchange for the memberships or
securities, which cash, rights, securities, or other property may be
in addition to or in lieu of shares, memberships, interests, or other
securities of the surviving party.
(5) Any other details or provisions required by the laws under
which any party to the merger is organized, including, if a domestic
limited partnership is a party to the merger, subdivision (a) of
Section 15678.2 or 15911.12, or, if a domestic general partnership is
a party to the merger, subdivision (a) of Section 16911, or, if a
domestic limited liability company is a party to the merger,
subdivision (a) of Section 17551.
(6) Any other details or provisions as are desired.
(c) Each membership of the same class of any constituent
corporation (other than the cancellation of memberships held by a
party to the merger or its parent or a wholly owned subsidiary of
either in another constituent corporation) shall be treated equally
with respect to any distribution of cash, property, rights, or
securities unless (i) all members of the class consent or (ii) the
commissioner has approved the terms and conditions of the transaction
and the fairness of those terms pursuant to Section 25142.
(d) Notwithstanding its prior approval, an agreement of merger may
be amended prior to the filing of the agreement of merger if the
amendment is approved by each constituent corporation in the same
manner as the original agreement of merger. If the agreement of
merger as so amended and approved is also approved by each of the
other parties to the agreement of merger, as so amended it shall then
constitute the agreement of merger.
(e) The board of a constituent corporation may, in its discretion,
abandon a merger, subject to the contractual rights, if any, of
third parties, including other parties to the agreement of merger,
without further approval by the members (Section 5034) or other
persons, at any time before the merger is effective.
(f) Each constituent corporation shall sign the agreement of
merger by its chairperson of the board, president, or a vice
president and also by its secretary or an assistant secretary acting
on behalf of their respective corporations.
(g) After required approvals of the merger by each constituent
corporation and each other party to the merger, the surviving party
shall file a copy of the agreement of merger with an officers'
certificate of each constituent domestic corporation, foreign
corporation, and foreign business corporation attached stating the
total number of outstanding shares or membership interests of each
class entitled to vote on the merger (and identifying any other
person or persons whose approval is required), that the agreement of
merger in the form attached or its principal terms, as required, were
approved by that corporation by a vote of a number of shares or
membership interests of each class which equaled or exceeded the vote
required, specifying each class entitled to vote required of each
class, and, if applicable, by such other person or persons whose
approval is required.
If equity securities of a parent party (Section 5064.5) are to be
issued in the merger, the officers' certificate or certificate of
merger of the controlled party shall state either that no vote of the
shareholders of the parent party was required or that the required
vote was obtained. The merger and any amendment of the articles of
the surviving corporation, if applicable, contained in the agreement
of merger shall be effective upon the filing of the agreement of
merger, subject to the provisions of subdivision (i). If a domestic
reciprocal insurer organized after 1974 to provide medical
malpractice insurance is a party to the merger, the agreement of
merger or certificate of merger shall not be filed until there has
been filed the certificate issued by the Insurance Commissioner
approving the merger pursuant to Section 1555 of the Insurance Code.

In lieu of an officers' certificate, a certificate of merger, on a
form prescribed by the Secretary of State, shall be filed for each
constituent other business entity. The certificate of merger shall be
executed and acknowledged by each domestic constituent limited
liability company by all of the managers of the limited liability
company (unless a lesser number is specified in its articles of
organization or operating agreement) and by each domestic constituent
limited partnership by all general partners (unless a lesser number
is provided in its certificate of limited partnership or partnership
agreement) and by each domestic constituent general partnership by
two partners (unless a lesser number is provided in its partnership
agreement) and by each foreign constituent limited liability company
by one or more managers and by each foreign constituent general
partnership or foreign constituent limited partnership by one or more
general partners, and by each constituent reciprocal insurer by the
chairperson of the board, president, or vice president, and by the
secretary or assistant secretary, or, if a constituent reciprocal
insurer has not appointed such officers, by the chairperson of the
board, president, or vice president, and by the secretary or
assistant secretary of the constituent reciprocal insurer's
attorney-in-fact, and by each other party to the merger by those
persons required or authorized to execute the certificate of merger
by the laws under which that party is organized, specifying for such
party the provision of law or other basis for the authority of the
signing persons.
The certificate of merger shall set forth, if a vote of the
shareholders, members, partners, or other holders of interests of a
constituent other business entity was required, a statement setting
forth the total number of outstanding interests of each class
entitled to vote on the merger and that the principal terms of the
agreement of merger were approved by a vote of the number of
interests of each class which equaled or exceeded the vote required,
specifying each class entitled to vote and the percentage vote
required of each class, and any other information required to be set
forth under the laws under which the constituent other business
entity is organized, including, if a domestic limited partnership is
a party to the merger, subdivision (a) of Section 15678.4 or
15911.14, if a domestic general partnership is a party to the merger,
subdivision (b) of Section 16915 and, if a domestic limited
liability company is a party to the merger, subdivision (a) of
Section 17552. The certificate of merger for each constituent foreign
other business entity, if any, shall also set forth the statutory or
other basis under which that foreign other business entity is
authorized by the laws under which it is organized to effect the
merger.
The Secretary of State may certify a copy of the agreement of
merger separate from the officers' certificates and certificates of
merger attached thereto.
(h) A copy of an agreement of merger certified on or after the
effective date by an official having custody thereof has the same
force in evidence as the original and, except as against the state,
is conclusive evidence of the performance of all conditions precedent
to the merger, the existence on the effective date of the surviving
party to the merger, the performance of the conditions necessary to
the adoption of any amendment to the articles, if applicable,
contained in the agreement of merger, and of the merger of the
constituent corporations, either by themselves or together with other
constituent parties, into the surviving party to the merger.
(i) (1) The merger of domestic corporations with foreign
corporations or foreign other business entities in a merger in which
one or more other business entities is a party shall comply with
subdivisions (a) and (g) and this subdivision.
(2) Subject to subdivision (c) of Section 5008 and paragraph (3),
the merger shall be effective as to each domestic constituent
corporation and domestic constituent other business entity upon
filing of the agreement of merger with attachments as provided in
subdivision (g).
(3) If the surviving party is a foreign corporation or foreign
business corporation or foreign other business entity, except as
provided in paragraph (4), the merger shall be effective as to any
domestic disappearing corporation as of the time of effectiveness in
the foreign jurisdiction upon the filing in this state of a copy of
the agreement of merger with an officers' certificate of the
surviving foreign corporation or foreign business corporation and of
each constituent foreign and domestic corporation and a certificate
of merger of each constituent other business entity attached, which
officers' certificates and certificates of merger shall conform to
the requirements of subdivision (g).
If one or more domestic other business entities is a disappearing
party in a merger pursuant to this subdivision in which a foreign
other business entity is the surviving entity, a certificate of
merger required by the laws under which each domestic other business
entity is organized, including subdivision (a) of Section 15678.4 or
15911.14, subdivision (b) of Section 16915, or subdivision (a) of
Section 17522, if applicable, shall also be filed at the same time as
the filing of the agreement of merger.
(4) If the date of the filing in this state pursuant to this
subdivision is more than six months after the time of the
effectiveness in the foreign jurisdiction, or if the powers of a
domestic disappearing corporation are suspended at the time of
effectiveness in the foreign jurisdiction, the merger shall be
effective as to the domestic disappearing corporation as of the date
of filing in this state.
(5) Each foreign disappearing corporation that is qualified for
the transaction of intrastate business shall automatically by the
filing pursuant to subdivision (g) surrender its right to transact
intrastate business as of the date of filing in this state or, if
later, the effective date of the merger. With respect to each foreign
disappearing other business entity previously registered for the
transaction of intrastate business in this state, the filing of the
agreement of merger pursuant to subdivision (g) automatically has the
effect of a cancellation of registration for that foreign other
business entity as of the date of filing in this state or, if later,
the effective date of the merger, without the necessity of the filing
of a certificate of cancellation.
 
__________________________________________________________________________________________
 
CORPORATIONS CODE
SECTION 8020-8022


8020. (a) Upon merger pursuant to this chapter the separate
existences of the disappearing parties to the merger cease and the
surviving party to the merger shall succeed, without other transfer,
to all the rights and property of each of the disappearing parties to
the merger and shall be subject to all the debts and liabilities of
each and trust obligations upon the property of a disappearing party
in the same manner as if incurred by the surviving party to the
merger.
(b) All rights of creditors and all liens and trusts upon or
arising from the property of each of the constituent corporations and
other parties to the merger shall be preserved unimpaired, provided
that the liens and trust obligations upon property of a disappearing
party shall be limited to the property affected thereby immediately
prior to the time the merger is effective.
(c) Any action or proceeding pending by or against any
disappearing corporation or other party to the merger may be
prosecuted to judgment, which shall bind the surviving party to the
merger, or the surviving party to the merger may be proceeded against
or substituted in its place.



8020.5. (a) Upon merger pursuant to this chapter, a surviving
domestic or foreign corporation or other business entity shall be
deemed to have assumed the liability of each disappearing domestic or
foreign corporation or other business entity that is taxed under
Part 10 (commencing with Section 17001) of, or under Part 11
(commencing with Section 23001) of, Division 2 of the Revenue and
Taxation Code for the following:
(1) To prepare and file, or to cause to be prepared and filed, tax
and information returns otherwise required of that disappearing
entity as specified in Chapter 2 (commencing with Section 18501) of
Part 10.2 of Division 2 of the Revenue and Taxation Code.
(2) To pay any tax liability determined to be due.
(b) If the surviving entity is a domestic limited liability
company, domestic corporation, or registered limited liability
partnership or a foreign limited liability company, foreign limited
liability partnership, or foreign corporation that is registered or
qualified to do business in California, the Secretary of State shall
notify the Franchise Tax Board of the merger.




8021. Whenever a domestic or foreign or foreign business
corporation or other business entity (Section 5063.5) having any real
property in this state merges with another domestic or foreign or
foreign business corporation or other business entity pursuant to the
laws of this state or of the state or place in which any constituent
party to the merger was organized, and the laws of the state or
place of organization (including this state) of any disappearing
party to the merger provide substantially that the making and filing
of the agreement of merger vests in the surviving party to the merger
all the real property of any disappearing party to the merger, the
filing for record in the office of the county recorder of any county
in this state in which any of the real property of the disappearing
party to the merger is located of either (a) a certificate prescribed
by the Secretary of State, or (b) a copy of the agreement of merger
or certificate of merger, certified by the Secretary of State or an
authorized public official of the state or place pursuant to the laws
of which the merger is effected, shall evidence record ownership in
the surviving party to the merger of all interest of such
disappearing party to the merger in and to the real property located
in that county.



8022. Any bequest, devise, gift, grant, or promise contained in a
will or other instrument of donation, subscription, or conveyance,
which is made to a constituent corporation and which takes effect or
remains payable after the merger, inures to the surviving party to
the merger.

__________________________________________________________________________________

CORPORATIONS CODE
SECTION 8110



8110. Any proceeding, initiated with respect to a corporation,
under any applicable statute of the United States, as now existing or
hereafter enacted, relating to reorganizations or arrangements of
corporations, shall be governed by the provisions of Chapter 14
(commencing with Section 1400) of Division 1 of Title 1, and for this
purpose the reference in Chapter 14 to "shareholders" shall be
deemed to be a reference to members and the reference to "this
division" shall be deemed to be a reference to this part.

________________________________________________________________________________________________________
 
 
CORPORATIONS CODE
SECTION 8210-8217


8210. (a) Every corporation shall, within 90 days after the filing
of its original articles and biennially thereafter during the
applicable filing period, file, on a form prescribed by the Secretary
of State, a statement containing: (1) the names and complete
business or residence addresses of its chief executive officer,
secretary, and chief financial officer; (2) the street address of its
principal office in this state, if any; (3) the mailing address of
the corporation, if different from the street address of its
principal executive office or if the corporation has no principal
office address in this state.
(b) The statement required by subdivision (a) shall also
designate, as the agent of the corporation for the purpose of service
of process, a natural person residing in this state or any domestic
or foreign or foreign business corporation that has complied with
Section 1505 and whose capacity to act as an agent has not
terminated. If a natural person is designated, the statement shall
set forth the person's complete business or residence street address.
If a corporate agent is designated, no address for it shall be set
forth.
(c) For the purposes of this section, the applicable filing period
for a corporation shall be the calendar month during which its
original articles were filed and the immediately preceding five
calendar months. The Secretary of State shall mail a notice for
compliance with this section to each corporation approximately three
months prior to the close of the applicable filing period. The notice
shall state the due date for compliance and shall be mailed to the
last address of the corporation according to the records of the
Secretary of State. Neither the failure of the Secretary of State to
mail the notice nor the failure of the corporation to receive it is
an excuse for failure to comply with this section.
(d) Whenever any of the information required by subdivision (a) is
changed, the corporation may file a current statement containing all
the information required by subdivisions (a) and (b). In order to
change its agent for service of process or the address of the agent,
the corporation must file a current statement containing all the
information required by subdivisions (a) and (b). Whenever any
statement is filed pursuant to this section, it supersedes any
previously filed statement and the statement in the articles as to
the agent for service of process and the address of the agent.
(e) The Secretary of State may destroy or otherwise dispose of any
statement filed pursuant to this section after it has been
superseded by the filing of a new statement.
(f) This section shall not be construed to place any person
dealing with the corporation on notice of, or under any duty to
inquire about, the existence or content of a statement filed pursuant
to this section.


8211. (a) An agent designated for service of process pursuant to
Section 8210 may file a signed and acknowledged written statement of
resignation as that agent. Thereupon the authority of the agent to
act in that capacity shall cease and the Secretary of State forthwith
shall give written notice of the filing of the statement of
resignation by mail to the corporation addressed to its principal
office.
(b) Under regulations adopted by the Secretary of State, the
resignation of an agent may be effective if the agent disclaims
having been properly appointed as the agent. Similarly, a person
named as an officer or director may indicate that the person was
never properly appointed as the officer or director.




8212. If a natural person who has been designated agent for service
of process pursuant to Section 8210 dies or resigns or no longer
resides in the state or if the corporate agent for such purpose
resigns, dissolves, withdraws from the state, forfeits its right to
transact intrastate business, has its corporate rights, powers and
privileges suspended or ceases to exist, the corporation shall
forthwith file a designation of a new agent conforming to the
requirements of Section 8210.



8214. Upon request of an assessor, a corporation owning, claiming,
possessing or controlling property in this state subject to local
assessment shall make available at the corporation's principal office
in California or at a place mutually acceptable to the assessor and
the corporation a true copy of business records relevant to the
amount, cost and value of all property that it owns, claims,
possesses or controls within the county.



8215. Any officers, directors, employees or agents of a corporation
who do any of the following are liable jointly and severally for all
the damages resulting therefrom to the corporation or any person
injured thereby who relied thereupon or to both:
(a) Make, issue, deliver or publish any prospectus, report,
circular, certificate, financial statement, balance sheet, public
notice or document respecting the corporation or its memberships,
assets, liabilities, capital, dividends, business, earnings or
accounts which is false in any material respect, knowing it to be
false, or participate in the making, issuance, delivery or
publication thereof with knowledge that the same is false in a
material respect.
(b) Make or cause to be made in the books, minutes, records or
accounts of a corporation any entry which is false in any material
particular knowing such entry is false.
(c) Remove, erase, alter or cancel any entry in any books or
records of the corporation, with intent to deceive.



8216. (a) The Attorney General, upon complaint of a member,
director or officer, that a corporation is failing to comply with the
provisions of this chapter, Chapter 5 (commencing with Section
7510), Chapter 6 (commencing with Section 7610) or Chapter 13
(commencing with Section 8310), may, in the name of the people of the
State of California, send to the principal office of such
corporation, (or, if there is no such office, to the office or
residence of the chief executive officer or secretary, of the
corporation, as set forth in the most recent statement filed pursuant
to Section 8210) notice of the complaint. If the answer is not
satisfactory, or if there is no answer within 30 days, the Attorney
General may institute, maintain or intervene in such suits, actions,
or proceedings of any type in any court or tribunal of competent
jurisdiction or before any administrative agency for such relief by
way of injunction, the dissolution of entities, the appointment of
receivers or any other temporary, preliminary, provisional or final
remedies as may be appropriate to protect the rights of members or to
undo the consequences of failure to comply with such requirements.
In any such action, suit or proceeding there may be joined as parties
all persons and entities responsible for or affected by such
activity.
(b) In the case of a corporation where the action concerns assets
held in charitable trust, the Attorney General may bring an action
under subdivision (a) without having received a complaint, and
without first giving notice of a complaint.



8217. (a) No corporation formed under this part for the sole
purpose of operating a single ridesharing vanpool vehicle designed
for transporting at least seven persons, including the driver, under
an arrangement in which ridesharing is incidental to another purpose
of the driver shall be subject to the payment of any fee under
provisions of the Government Code for any filing required by this
part.
(b) For purposes of this section, "ridesharing" shall have the
meaning specified in Section 522 of the Vehicle Code.
 
_________________________________________________________________________________________________
 
CORPORATIONS CODE
SECTION 8310-8313


8310. If any record subject to inspection pursuant to this chapter
is not maintained in written form, a request for inspection is not
complied with unless and until the corporation at its expense makes
such record available in written form. For the purposes of this
chapter "written" or "in writing" also includes cathode ray tube and
similar electronic communications methods.



8311. Any inspection under this chapter may be made in person or by
agent or attorney and the right of inspection includes the right to
copy and make extracts.



8312. Any right of inspection created by this chapter extends to
the records of each subsidiary of a corporation.



8313. The rights of members provided in this chapter may not be
limited by contract or the articles or bylaws.
 
____________________________________________________________________________
 
CORPORATIONS CODE
SECTION 8320-8325


8320. (a) Each corporation shall keep:
(1) Adequate and correct books and records of account:
(2) Minutes of the proceedings of its members, board and
committees of the board; and
(3) A record of its members giving their names and addresses and
the class of membership held by each.
(b) Those minutes and other books and records shall be kept either
in written form or in any other form capable of being converted into
clearly legible tangible form or in any combination of the
foregoing. When minutes and other books and records are kept in a
form capable of being converted into clearly legible paper form, the
clearly legible paper form into which those minutes and other books
and records are converted shall be admissible in evidence, and
accepted for all other purposes, to the same extent as an original
paper record of the same information would have been, provided that
the paper form accurately portrays the record.



8321. (a) A corporation shall notify each member yearly of the
member's right to receive a financial report pursuant to this
subdivision. Except as provided in subdivision (c), upon written
request of a member, the board shall promptly cause the most recent
annual report to be sent to the requesting member. An annual report
shall be prepared not later than 120 days after the close of the
corporation's fiscal year. Unless otherwise provided by the articles
or bylaws and if approved by the board of directors, that report and
any accompanying material may be sent by electronic transmission by
the corporation (Section 20). That report shall contain in
appropriate detail the following:
(1) A balance sheet as of the end of that fiscal year and an
income statement and a statement of cashflows for that fiscal year.
(2) A statement of the place where the names and addresses of the
current members are located.
(3) Any information required by Section 8322.
(b) The report required by subdivision (a) shall be accompanied by
any report thereon of independent accountants, or, if there is no
report, the certificate of an authorized officer of the corporation
that the statements were prepared without audit from the books and
records of the corporation.
(c) Subdivision (a) does not apply to any corporation that
receives less than ten thousand dollars ($10,000) in gross revenues
or receipts during the fiscal year.



8322. (a) Any provision of the articles or bylaws notwithstanding,
every corporation shall furnish annually to its members and directors
a statement of any transaction or indemnification of a kind
described in subdivision (d) or (e), if any such transaction or
indemnification took place. If the corporation issues an annual
report to all members, this subdivision shall be satisfied by
including the required information in the annual report. A
corporation which does not issue an annual report to all members,
pursuant to subdivision (c) of Section 8321, shall satisfy this
section by mailing or delivering to its members the required
statement within 120 days after the close of the corporation's fiscal
year. Unless otherwise provided by the articles or bylaws and if
approved by the board of directors, that statement may be sent by
electronic transmission by the corporation (Section 20).
(b) Except as provided in subdivision (c), a covered transaction
under this section is a transaction in which the corporation, its
parent, or its subsidiary was a party, and in which either of the
following had a direct or indirect material financial interest:
(1) Any director or officer of the corporation, or its parent or
subsidiary.
(2) Any holder of more than 10 percent of the voting power of the
corporation, its parent or its subsidiary.
For the purpose of subdivision (d), an "interested person" is any
person described in paragraph (1) or (2) of this subdivision.
(c) Transactions approved by the members of a corporation (Section
5034), under subdivision (a) of Section 7233, are not covered
transactions. For the purpose of subdivision (b), a mere common
directorship is not a material financial interest.
(d) The statement required by subdivision (a) shall describe
briefly:
(1) Any covered transaction (excluding compensation of officers
and directors) during the previous fiscal year involving more than
fifty thousand dollars ($50,000), or which was one of a number of
covered transactions in which the same interested person had a direct
or indirect material financial interest, and which transactions in
the aggregate involved more than fifty thousand dollars ($50,000).
(2) The names of the interested persons involved in such
transactions, stating such person's relationship to the corporation,
the nature of such person's interest in the transaction and, where
practicable, the amount of such interest; provided, that in the case
of a transaction with a partnership of which such person is a
partner, only the interest of the partnership need be stated.
(e) The statement required by subdivision (a) shall describe
briefly the amount and circumstances of any loans, guaranties,
indemnifications or advances aggregating more than ten thousand
dollars ($10,000) paid or made during the fiscal year to any officer
or director of the corporation pursuant to Section 7237; provided
that no such report need be made in the case of a loan, guaranty, or
indemnification approved by the members (Section 5034) or a loan or
guaranty not subject to the provisions of subdivision (a) of Section
7235.



8323. (a) The superior court of the proper county shall enforce the
duty of making and mailing or delivering the information and
financial statements required by this article and, for good cause
shown, may extend the time therefor.
(b) In any action or proceeding under this section, if the court
finds the failure of the corporation to comply with the requirements
of this article to have been without justification, the court may
award the member reasonable expenses, including attorneys' fees, in
connection with such action or proceeding.



8324. (a) Nothing in this part relieves a corporation from the
requirements of Article 7 (commencing with Section 12580) of Chapter
6 of Part 2 of Division 3 of the Government Code as to any assets
held in charitable trust.
(b) A corporation shall furnish any member who so requests a copy
of any report filed by the corporation pursuant to Article 7
(commencing with Section 12580) of Chapter 6 of Part 2 of Division 3
of the Government Code. The corporation may impose reasonable
charges for copying and mailing a report furnished under this
subdivision.



8325. For a period of 60 days following the conclusion of an
annual, regular, or special meeting of members, a corporation shall,
upon written request from a member, forthwith inform the member of
the result of any particular vote of members taken at the meeting,
including the number of memberships voting for, the number of
memberships voting against, and the number of memberships abstaining
or withheld from voting. If the matter voted on was the election of
directors, the corporation shall report the number of memberships, or
votes if voted cumulatively, cast for each nominee for director. If
more than one class or series of memberships voted, the report shall
state the appropriate numbers by class and series of memberships.
 
____________________________________________________________________________________________
 
CORPORATIONS CODE
SECTION 8330-8338


8330. (a) Subject to Sections 8331 and 8332, and unless the
corporation provides a reasonable alternative pursuant to subdivision
(c), a member may do either or both of the following as permitted by
subdivision (b):
(1) Inspect and copy the record of all the members' names,
addresses and voting rights, at reasonable times, upon five business
days' prior written demand upon the corporation which demand shall
state the purpose for which the inspection rights are requested; or
(2) Obtain from the secretary of the corporation, upon written
demand and tender of a reasonable charge, a list of the names,
addresses and voting rights of those members entitled to vote for the
election of directors, as of the most recent record date for which
it has been compiled or as of a date specified by the member
subsequent to the date of demand. The demand shall state the purpose
for which the list is requested. The membership list shall be made
available on or before the later of ten business days after the
demand is received or after the date specified therein as the date as
of which the list is to be compiled.
(b) The rights set forth in subdivision (a) may be exercised by:
(1) Any member, for a purpose reasonably related to such person's
interest as a member. Where the corporation reasonably believes that
the information will be used for another purpose, or where it
provides a reasonable alternative pursuant to subdivision (c), it may
deny the member access to the list. In any subsequent action
brought by the member under Section 8336, the court shall enforce the
rights set forth in subdivision (a) unless the corporation proves
that the member will allow use of the information for purposes
unrelated to the person's interest as a member or that the
alternative method offered reasonably achieves the proper purpose set
forth in the demand.
(2) The authorized number of members for a purpose reasonably
related to the members' interest as members.
(c) The corporation may, within ten business days after receiving
a demand under subdivision (a), deliver to the person or persons
making the demand a written offer of an alternative method of
achieving the purpose identified in said demand without providing
access to or a copy of the membership list. An alternative method
which reasonably and in a timely manner accomplishes the proper
purpose set forth in a demand made under subdivision (a) shall be
deemed a reasonable alternative, unless within a reasonable time
after acceptance of the offer the corporation fails to do those
things which it offered to do. Any rejection of the offer shall be
in writing and shall indicate the reasons the alternative proposed by
the corporation does not meet the proper purpose of the demand made
pursuant to subdivision (a).



8331. (a) Where the corporation, in good faith, and with a
substantial basis, believes that the membership list, demanded under
Section 8330 by the authorized number (Section 5036), will be used
for a purpose not reasonably related to the interests as members of
the person or persons making the demand (hereinafter called the
requesting parties) as members or provides a reasonable alternative
pursuant to subdivision (c) of Section 8330, it may petition the
superior court of the proper county for an order setting aside the
demand.
(b) Except as provided in subdivision (c), a petition for an order
to show cause why a protective order pursuant to subdivision (d)
should not issue shall be filed within 10 business days after the
demand by the authorized number under Section 8330 or receipt of a
written rejection by the authorized number of an offer made pursuant
to subdivision (c) of Section 8330, whichever is later. The petition
shall be accompanied by an application for a hearing on the
petition. Upon the filing of the petition, the court shall issue a
protective order staying production of the list demanded until the
hearing on the order to show cause. The court shall set the hearing
on the order to show cause not more than 20 days from the date of the
filing of the petition. The order to show cause shall be granted
unless the court finds that there is no reasonable probability that
the corporation will make the showing required under subdivision (f).

(c) A corporation may file a petition under this section more than
10 business days after the demand or rejection under Section 8330,
but only upon a showing the delay was caused by excusable neglect.
In no event, however, may any petition under this section be
considered if filed more than 30 days after the requesting parties'
demand or rejection, whichever is later.
(d) Upon the return day of the order to show cause, the court may
issue a protective order staying production of the list demanded
until final adjudication of the petition filed pursuant to this
section. No protective order shall issue under this subdivision
unless the court finds that the rights of the requesting parties can
reasonably be preserved and that the corporation is likely to make
the showing required by subdivision (f) or the court is likely to
issue a protective order pursuant to subdivision (g).
(e) If the corporation fails to file a petition within the time
allowed by subdivision (b) or (c), whichever is applicable, or fails
to obtain a protective order under subdivision (d), then the
corporation shall comply with the demand, and no further action may
be brought by the corporation under this section.
(f) The court shall issue the final order setting aside the demand
only if the corporation proves:
(1) That there is a reasonable probability that the requesting
parties will permit use of the membership list for a purpose
unrelated to their interests as members; or
(2) That the method offered by the corporation is a reasonable
alternative in that it reasonably achieves the proper purpose set
forth in the requesting parties' demand and that the corporation
intends and is able to effectuate the reasonable alternative.
(g) In the final order, the court may, in its discretion, order an
alternate mechanism for achieving the proper purposes of the
requesting parties, or impose just and proper conditions upon the use
of the membership list which reasonably assures compliance with
Section 8330 and Section 8338.
(h) The court shall award reasonable costs and expenses including
reasonable attorneys' fees, to requesting parties who successfully
oppose any petition or application filed pursuant to this section.
(i) Where the corporation has neither, within the time allowed,
complied with a demand by the authorized number (Section 5036) under
Section 8330, nor obtained a protective order staying production of
the list, or a final order setting aside the demand, which is then in
effect, the requesting parties may petition the superior court of
the proper county for a writ of mandamus pursuant to Section 1085 of
the Code of Civil Procedure compelling the corporation to comply with
the demand. At the hearing, the court shall hear the parties
summarily, by affidavit or otherwise, and shall issue a peremptory
writ of mandamus unless it appears that the demand was not made by an
authorized number (Section 5036), that the demand has been complied
with, that the corporation, pursuant to subdivision (c) of Section
8330, made an offer which was not rejected in writing within a
reasonable time, or that a protective or final order properly issued
under subdivision (d), (f) or (g) is then in effect. No inquiry may
be made in such proceeding into the use for which the authorized
number seek the list. The court shall award reasonable costs and
expenses, including reasonable attorneys' fees, to persons granted an
order under this subdivision.
(j) Nothing in this section shall be construed to limit the right
of the corporation to obtain damages for any misuse of a membership
list obtained under Section 8330, or otherwise, or to obtain
injunctive relief necessary to restrain misuse of a member list. A
corporation shall be entitled to recover reasonable costs and
expenses, including reasonable attorneys' fees, incurred in
successfully bringing any such action.



8332. (a) Upon petition of the corporation or any member, the
superior court of the proper county may limit or restrict the rights
set forth in Section 8330 where, and only where, such limitation or
restriction is necessary to protect the rights of any member under
the Constitution of the United States or the Constitution of the
State of California. An order issued pursuant to this subdivision
shall provide, insofar as possible, for alternative mechanisms by
which the persons seeking to exercise rights under Section 8330 may
communicate with members for purposes reasonably related to their
interests as members.
(b) Upon the filing of a petition under subdivision (a), the court
may, if requested by the person making the petition, issue a
temporary order suspending the running of any time limit specified in
Section 8330 for compliance with that section. Such an order may be
extended, after notice and hearing, until final adjudication of the
petition, wherever it appears that the petitioner may prevail on the
merits, and it is otherwise equitable to do so.



8333. The accounting books and records and minutes of proceedings
of the members and the board and committees of the board shall be
open to inspection upon the written demand on the corporation of any
member at any reasonable time, for a purpose reasonably related to
such person's interests as a member.



8334. Every director shall have the absolute right at any
reasonable time to inspect and copy all books, records and documents
of every kind and to inspect the physical properties of the
corporation of which such person is a director.



8335. Where the proper purpose of the person or persons making a
demand pursuant to Section 8330 is frustrated by (1) any delay by the
corporation in complying with a demand under Section 8330 beyond the
time limits specified therein, or (2) any delay caused by the filing
of a petition under Section 8331 or Section 8332, or (3) any delay
caused by the alternative proposed under subdivision (c) of Section
8330, the person or persons properly making the demand shall have, in
the discretion of the court, a right to obtain from the superior
court an order postponing any members' meeting previously noticed for
a period equal to the period of such delay. The members may obtain
such an order in a proceeding brought pursuant to Section 8331 upon
the filing of a verified complaint in the proper county and after a
hearing, notice of which shall be given to such persons and in such
manner as the court may direct. Such right shall be in addition to
any other legal or equitable remedies to which the member may be
entitled.


8336. (a) Upon refusal of a lawful demand for inspection under this
chapter, or a lawful demand pursuant to Section 8330 or Section
8333, the superior court of the proper county, or the county where
the books or records in question are kept, may enforce the demand or
right of inspection with just and proper conditions or may, for good
cause shown, appoint one or more competent inspectors or independent
accountants to audit the financial statements kept in this state and
investigate the property, funds and affairs of any corporation and of
any subsidiary corporation thereof, domestic or foreign, keeping
records in this state and to report thereon in such manner as the
court may direct.
(b) All officers and agents of the corporation shall produce to
the inspectors or accountants so appointed all books and documents in
their custody or power, under penalty of punishment for contempt of
court.
(c) All expenses of the investigation or audit shall be defrayed
by the applicant unless the court orders them to be paid or shared by
the corporation.



8337. In any action or proceeding under this article, and except as
required by Section 8331, if the court finds the failure of the
corporation to comply with a proper demand thereunder was without
justification, the court may award the member reasonable costs and
expenses, including reasonable attorneys' fees, in connection with
such action or proceeding.



8338. (a) A membership list is a corporate asset. Without consent
of the board a membership list or any part thereof may not be
obtained or used by any person for any purpose not reasonably related
to a member's interest as a member. Without limiting the generality
of the foregoing, without the consent of the board a membership list
or any part thereof may not be:
(1) Used to solicit money or property unless such money or
property will be used solely to solicit the vote of the members in an
election to be held by their corporation.
(2) Used for any purpose which the user does not reasonably and in
good faith believe will benefit the corporation.
(3) Used for any commercial purpose or purpose in competition with
the corporation.
(4) Sold to or purchased by any person.
(b) Any person who violates the provisions of subdivision (a)
shall be liable for any damage such violation causes the corporation
and shall account for and pay to the corporation any profit derived
as a result of said violation. In addition, a court in its
discretion may award exemplary damages for a fraudulent or malicious
violation of subdivision (a).
(c) Nothing in this article shall be construed to limit the right
of a corporation to obtain injunctive relief necessary to restrain
misuse of a membership list or any part thereof.
(d) In any action or proceeding under this section, a court may
award the corporation reasonable costs and expenses, including
reasonable attorneys' fees, in connection with such action or
proceeding.
(e) As used in this section, the term "membership list" means the
record of the members' names and addresses.

______________________________________________________________________________________________________


CORPORATIONS CODE
SECTION 8410


8410. Service of process upon a corporation shall be governed by
Chapter 17 (commencing with Section 1700) of Division 1 of Title 1.
 
______________________________________________________________________________________________________
 
CORPORATIONS CODE
SECTION 8510-8519


8510. (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 331/3 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.
(5) In the case of a corporation holding assets in charitable
trust, the Attorney General.
(6) The head organization under whose authority the corporation
was created, where the corporation's articles include the provision
authorized by subdivision (a), paragraph (4), clause (i), of Section
7132.
(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) In the case of any corporation with 35 or fewer members,
liquidation is reasonably necessary for the protection of the rights
or interests of a complaining member or members.
(7) The period for which the corporation was formed has terminated
without extension of such period.
(8) The corporation is required to dissolve under the terms of any
article provision adopted pursuant to subdivision (a), paragraph
(4), clause (i) of Section 7132.
(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.
(3) The California Credit Union Law (Chapter 1 (commencing with
Section 14000) of Division 5 of the Financial Code).
(e) In the case of a corporation holding assets in charitable
trust at the time of the filing of the complaint pursuant to
subdivision (a), a copy thereof shall be served on the Attorney
General who may intervene.



8511. (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.




8512. 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 8510, the court may
appoint a provisional director. The provisions of subdivision (d) of
Section 7225 apply to any such provisional director so appointed.




8513. 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, 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.




8514. 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.



8515. (a) Involuntary proceedings for winding up a corporation
commence when the order for winding up is entered under Section 8514.

(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.




8516. 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 filling 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.



8517. (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.



8518. (a) Upon the final settlement of the accounts of the
directors or other persons appointed pursuant to Section 8515 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.



8519. 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.
 
__________________________________________________________________________________________________
 
CORPORATIONS CODE
SECTION 8610-8618


8610. (a) Any corporation may elect voluntarily to wind up and
dissolve (1) by approval of a majority of all members (Section 5033),
or (2) by approval of the board and approval of the members
(Section 5034).
(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 adjudicated as bankrupt.
(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.
(4) A corporation which is required to dissolve under provisions
of its articles adopted pursuant to subdivision (a), paragraph (4),
clause (i) of Section 7132.



8611. (a) Whenever a corporation has elected to wind up and
dissolve a certificate evidencing that election shall forthwith be
filed. A copy of that certificate shall be filed with the Attorney
General if the corporation holds assets in charitable trust or has a
charitable dissolution clause.
(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 5033) 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 a
majority of all members (Section 5033).
(3) If the election was made by the board and the members pursuant
to paragraph (2) of subdivision (a) of Section 8610, the certificate
shall state that it was made by the board and the members in
accordance with Section 5034.
(4) If the certificate is executed by a member or members, that
the subscribing person or persons were authorized to execute the
certificate a majority of all members (Section 5033).
(5) If the election was made by the board pursuant to subdivision
(b) of Section 8610, 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 8610 is made by the vote of all the members of a corporation
with members or by all members of the board of a corporation without
members and a statement to that effect is added to the certificate
of dissolution pursuant to Section 8611, the separate filing of the
certificate of election pursuant to this section is not required.




8612. (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 subdivision (a) of Section 8610, by the vote of
members representing a majority of the voting power; or (2) if the
election was by the board pursuant to subdivision (b) of Section
8610, by approval of the board. Thereupon a certificate evidencing
the revocation shall be signed, verified and filed in the manner
prescribed by Section 8611 and a copy thereof filed with the Attorney
General.
(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 board alone, the certificate
shall so state.


8613. (a) Voluntary proceedings for winding up the corporation
commence upon the adoption of the resolution required by Section 8610
by the members, by the board and members, or by the board alone,
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, and in the
case of a corporation holding assets in charitable trust to the
Attorney General.



8614. 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) the authorized number (Section 5036), or (c) in
the case of a corporation holding assets in charitable trust, the
Attorney General, or (d) 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 or in
the case of a corporation holding assets in charitable trust, for
the protection of such assets. 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, creditors and in the case of a corporation
holding assets in charitable trust, for the protection of such
assets, as justice and equity may require. The provisions of Chapter
15 (commencing with Section 8510) (except Sections 8510 and 8511)
shall apply to such court proceedings.



8615. (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.



8616. 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 8615.



8617. (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, including the Attorney General in
the case of a corporation holding assets in charitable trust, 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 8517.
(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 8518 and 8519.



8618. (a) A corporation in the process of voluntary 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 8613 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 may 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.

________________________________________________________________________________________________


CORPORATIONS CODE
SECTION 8710-8724


8710. The powers and duties of the directors (or other persons
appointed by the court pursuant to Section 8515) 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 7911 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.



8711. A vacancy on the board may be filled during a winding up
proceeding in the manner provided in Section 7224.



8712. 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, including the Attorney General in the case of
corporations holding assets in charitable trust, 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.



8713. (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 8715 to
8717, inclusive.
(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,
which are not subject to attachment, execution or sale for the
corporation's debts and liabilities may be distributed pursuant to
Sections 8715 to 8717, inclusive, even though all debts and
liabilities have not been paid or adequately provided for.



8714. 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 8720.
This section does not prescribe the exclusive means of making
adequate provision for debts and liabilities.



8715. After complying with the provisions of Section 8713, 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.



8716. After complying with the provisions of Section 8713:
(a) Except as provided in Section 8715 those assets held by a
corporation in a charitable trust shall be disposed of on dissolution
in conformity with its articles or bylaws subject to complying with
the provisions of any trust under which such assets are held.
(b) Except as provided in subdivision (c), the disposition
required in subdivision (a) shall be made by decree of the superior
court of the proper county in proceedings to which the Attorney
General is a party. The decree shall be made upon petition therefor
by the Attorney General or, upon 30 days' notice to the Attorney
General, by any person concerned in the dissolution.
(c) The disposition required in subdivision (a) may be made
without the decree of the superior court, subject to the rights of
persons concerned in the dissolution, if the Attorney General makes a
written waiver of objections to the disposition.




8717. After complying with the provisions of Section 8713 and
except as otherwise provided in Sections 8715 and 8716, 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.



8718. Subject to the provisions of any trust under which assets to
be distributed are held, 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.



8719. (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
5034) 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.



8720. (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.



8721. (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 8510) and 16
(commencing with Section 8610) and also any other distribution of
assets to persons made in contemplation of termination or abandonment
of the corporate business.



8722. (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.



8723. (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 Fraudulent Transfer Act, which may arise against
persons to whom those assets are distributed.
(4) 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 the corporation may be served
by delivering a copy thereof to an officer, director or person
having charge of its assets or, if none of these persons can be
found, to any agent upon whom process might be served at the time of
dissolution. If none of those 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, with an
additional copy of the summons or other process and order being
delivered to the Attorney General in the case of a corporation that
at the commencement of the dissolution proceedings held assets in
charitable trust. Service in this manner is deemed complete on the
10th day after delivery of the process to the Secretary of State, or
in the case of a corporation that at the commencement of the
dissolution proceedings held assets in charitable trust, upon the
10th day after the later of delivery of process to the Secretary of
State or Attorney General.
(c) The corporation shall survive and continue to exist
indefinitely for the purpose of being sued in any quiet title action.
Any judgment rendered in that action shall bind each of its members
or other persons having any equity or other interest in the
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 that 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.


8724. 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.
 
____________________________________________________________________________________________
 
CORPORATIONS CODE
SECTION 8810-8817


8810. (a) Upon the failure of a corporation to file the statement
required by Section 8210, the Secretary of State shall mail a notice
of such delinquency to the corporation. The notice shall also
contain information concerning the application of this section, and
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 mailed by the
Secretary of State. If, within 60 days after the mailing of the
notice of delinquency, a statement pursuant to Section 8210 has not
been filed by the corporation, the Secretary of State may pursuant to
regulation certify the name of such 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 or has been merged into another
corporation.
(d) The penalty herein provided shall not apply and the Secretary
of State need not mail a notice of 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
8210. The Secretary of State need not mail a form pursuant to
Section 8210, 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 forms for mailing.
(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 mailing of the notice of
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 8210 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.



8811. 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.



8812. 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 in a state prison, or by a fine of not
more than one thousand dollars ($1,000) or imprisonment in county
jail for not more than one year, or by both such fine and
imprisonment.



8813. (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.



8814. (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.



8815. 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 in a state
prison, or by imprisonment in a county jail for not exceeding one
year.


8816. 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.


8817. 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.


_______________________________________________________________________________________

CORPORATIONS CODE
SECTION 8910


8910. 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.
 
_______________________________________________________________________________________