Amendments to California Entity Law Bring Substantive Changes to the State’s Corporations Code

Amendments to California Entity Law Bring Substantive Changes to the State’s Corporations Code

December 2, 2014

The 2015 Edition of CSC® Publishing’s California Laws Governing Business Entities captures these and other important legislative changes

The California legislature recently passed amendments to the state’s Corporate Flexibility Act of 2011 that affect the laws governing companies organized as “flexible purpose corporations” (FPCs). The amendments change dozens of references to this entity type throughout the act.

One of the key changes coming out of the new legislation is that, starting January 1, 2015, flexible purpose corporations will change their name to “social purpose corporations.” Any FPC formed before January 1, 2015, will be considered a social purpose corporation, although the new legislation does not require older companies to change their names or amend their articles of incorporation.

Another important change is that directors of an FPC will be required to make decisions that further the mission and purpose of the corporation. Until now, directors were permitted to take the corporation’s mission into account, but it was not mandatory. In addition, smaller FPCs are no longer exempt from the requirement to report to shareholders.

In addition to the changes made to the Corporations Code, the legislature approved changes affecting business entities inthe Business & Professions Code, Revenue & Taxation Code, and the UCC.  A notable change in UCC secured transactions includes a new practice of asking for a copy of a driver’s license as an initial step in preparing a financing statement.

“Between the changes to the FPCs and changes affecting other issues, from voting shares to derivative lawsuits, it has been a busy year for business law in California,” notes Allan Duboff, a partner at Loeb & Loeb LLP and the legal advisor for CSC®Publishing’s California Laws Governing Business Entities.

These changes and many more are captured in the 2015 Edition of California Laws Governing Business Entities. Amendments are listed in the book’s Table of Sections Affected, and changes are clearly indicated in the body of the book with blackline amendment notes. All repealed language is featured with a line through it, while new language is in bold.

“It’s important for practitioners to be able to see exactly how the law has changed in order to properly advise clients and transact business,” explains Jason Schuck, legal editor for CSC®Publishing partner LexisNexis. “The blackline amendment notes are a unique feature that gives readers a complete view of how the law has evolved.”

Stay on Top of Changes to California Business Entity Laws

Blackline amendment notes are just one of the many features that make California Laws Governing Business Entities the ideal resource for corporate attorneys and other corporate and governance professionals.

The book is one of the most comprehensive statutory collections available, with General Corporation Law, Nonprofit Corporation Law, Consumer Cooperative Corporations, Professional Corporations, the Revised Uniform Limited Partnership Act, the Uniform Limited Partnership Act of 2008, the LLC Acts, Real Estate Investment Trusts, Corporate Securities Law, relevant chapters from the Uniform Commercial Code, Administrative Rulings, and selected Title 10 regulations, which are now back in the body of the book. There are also sections on service of process of corporations, arbitration, restraint of trade, fictitious names, and taxation. The book comes out every December to ensure that legal professionals start the new year with the most current law available.

The statutory collection is annotated, something else that sets it apart from other California desk books. “Other books provide cross-references, but our book is a fully annotated,” notes Legal Editor Jason Schuck. “The cases interpret the laws; without them, you are only getting half the picture.”

The 2015 edition includes more than 80 new case annotations from Courts of Appeal and Supreme Court decisions, as well as from federal court decisions construing California law. Newly added cases are listed in the Table of New Annotations, and are indicated by gray bars in the body of the book. In addition, the full text of five cases can be found on the companion CD-ROM concerning creation of a partnership, fiduciary duties of LLC members and managers, minority shareholders, self-dealing, and arbitration agreements.

Other features include thoughtful analysis by legal experts in the state, as well as more than 120 California state and county business forms on the CD-ROM, many of which were updated for 2015.

The book is competitively priced and is available as a soft-bound volume that fits easily in a briefcase, or as an e-book for added accessibility and ease of use.

“It’s the most complete annotated statutory collection available for the state of California,” says CSC®Publishing Director Eric Geringswald. “If you haven’t used this book yet, it’s time to take a look. We’re confident that you’ll agree that it’s the only California statutes collection you need.”