SECTIONS 6160-6172 - California Statutes

BUSINESS AND PROFESSIONS CODE

SECTION 6160-6172

6160. A law corporation is a corporation which is registered with
the State Bar of California and has a currently effective certificate
of registration from the State Bar pursuant to the Professional
Corporation Act, as contained in Part 4 (commencing with Section
13400) of Division 3 of Title 1 of the Corporations Code, and this
article. Subject to all applicable statutes, rules and regulations,
such law corporation is entitled to practice law. With respect to a
law corporation the governmental agency referred to in the
Professional Corporation Act is the State Bar.

6161. An applicant for registration as a law corporation shall
supply to the State Bar all necessary and pertinent documents and
information requested by the State Bar concerning the applicant's
plan of operation, including, but not limited to, a copy of its
articles of incorporation, certified by the Secretary of State, a
copy of its bylaws, certified by the secretary of the corporation,
the name and address of the corporation, the names and addresses of
its officers, directors, shareholders, members, if any, and employees
who will render professional services, the address of each office,
and any fictitious name or names which the corporation intends to
use. The State Bar may provide forms of application. If the Board of
Governors or a committee authorized by it finds that the corporation
is duly organized and existing or duly qualified for the transaction
of intrastate business pursuant to the General Corporation Law, or
pursuant to subdivision (b) of Section 13406 of the Corporations
Code, that each officer (except as provided in Section 13403 of the
Corporations Code), director, shareholder (except as provided in
subdivision (b) of Section 13406 of the Corporations Code), and each
employee who will render professional services is a licensed person
as defined in the Professional Corporation Act, or a person licensed
to render the same professional services in the jurisdiction or
jurisdictions in which the person practices, and that from the
application it appears that the affairs of the corporation will be
conducted in compliance with law and the rules and regulations of the
State Bar, the State Bar shall upon payment of the registration fee
in such amount as it may determine issue a certificate of
registration. The applicant shall include with the application, for
each shareholder of the corporation licensed in a foreign country but
not in this state or in any other state, territory, or possession of
the United States, a certificate from the authority in the foreign
country currently having final jurisdiction over the practice of law,
which shall verify the shareholder's admission to practice in the
foreign country, the date thereof, and the fact that the shareholder
is currently in good standing as an attorney or counselor at law or
the equivalent. If the certificate is not in English, there shall be
included with the certificate a duly authenticated English
translation thereof. The application shall be signed and verified by
an officer of the corporation.

6161.1. Each law corporation shall renew its certificate of
registration annually at a time to be fixed by the State Bar and
shall pay a fee therefor which shall be fixed by the State Bar in
accordance with subdivision (a) of Section 6163.

6161.2. All fees for registration and renewal paid pursuant to
Sections 6161 and 6161.1 shall be paid into the treasury of the State
Bar and shall be used for its regulatory and disciplinary purposes.

6162. Within such time as the State Bar may by rule provide, the
law corporation shall report in writing to the State Bar any change
in directors, officers, employees performing professional services
and share ownership, and amendments to its articles of incorporation
and bylaws.

6163. (a) Each law corporation shall file with the State Bar
annually and at such other times as the State Bar may require a
report containing such information pertaining to qualification and
compliance with the statutes, rules, and regulations referred to in
Section 6127.5 as the State Bar may determine. The fee for filing
such a report shall be fixed by the State Bar. All reports shall be
signed and verified by an officer of the corporation. The State Bar
may fix a penalty for the late filing of an annual report in an
amount not to exceed double the amount of the applicable filing fee
and may also fix the date upon which the penalty shall attach if the
report has not been filed and the fee paid prior to that date. The
date upon which the penalty shall attach shall be not less than 31
days following the date fixed for filing the report. The filing of
the annual report together with the filing fee and any penalty due
for late filing constitutes the annual renewal of the certificate of
registration. The fee fixed by the board for the filing of the annual
report and any penalty due for late filing constitutes the fee
required by Section 6161.1 for renewal of the certificate for the
year in which the annual report is due to be filed.
(b) The certificate of registration of any law corporation failing
to file the annual report, renew its certificate, and pay the fee
therefor and any penalty due thereon for late filing, shall be
suspended 60 days following written notice of delinquency. The
written notice shall be mailed to the corporation at its current
office or other address for State Bar purposes, as shown on the law
corporation records of the State Bar. The suspension shall be ordered
by the chief executive officer of the State Bar or his or her
designee.
(c) A certificate of registration suspended pursuant to
subdivision (b) may be reinstated upon the filing by the law
corporation of all delinquent annual reports and payment of all
accrued fees and penalties required by this section and Section
6161.1 which are due on the date of the suspension, and any such fees
and penalties which become due on or before the date of the
reinstatement.

6165. Except as provided in Sections 13403 and 13406 of the
Corporations Code, each director, shareholder, and each officer of a
law corporation shall be a licensed person as defined in the
Professional Corporation Act, or a person licensed to render the same
professional services in the jurisdiction or jurisdictions in which
the person practices.

6166. The income of a law corporation attributable to professional
services rendered while a shareholder is a disqualified person (as
defined in the Professional Corporation Act) shall not in any manner
accrue to the benefit of such shareholder or his shares in the law
corporation.

6167. A law corporation shall not do or fail to do any act the
doing of which or the failure to do which would constitute a cause
for discipline of a member of the State Bar, under any statute, rule
or regulation now or hereafter in effect. In the conduct of its
business, it shall observe and be bound by such statutes, rules and
regulations to the same extent as if specifically designated therein
as a member of the State Bar.

6168. The State Bar may conduct an investigation of the conduct of
the business of a law corporation.
Upon such investigation, the Board of Governors, or a committee
authorized by it, shall have power to issue subpoenas, administer
oaths, examine witnesses and compel the production of records, in the
same manner as upon an investigation or formal hearing in a
disciplinary matter under the State Bar Act. Such investigation shall
be private and confidential, except to the extent that disclosure of
facts and information may be required if a cease and desist order is
thereafter issued and subsequent proceedings are had.

6169. (a) When there is reason to believe that a law corporation
has violated or is about to violate any of the provisions of this
article or the Professional Corporation Act or of any other pertinent
statute, rule, or regulation, the State Bar may issue a notice
directing the corporation to show cause why it should not be ordered
to cease and desist from specified acts or conduct or its certificate
of registration should not be suspended or revoked. A copy of the
notice shall be served upon the corporation in the manner provided
for service of summons upon a California corporation.
(b) A hearing upon the notice to show cause shall be held before a
standing or special committee appointed by the board of governors.
Upon the hearing, the State Bar and the corporation shall be entitled
to the issue of subpoenas, to be represented by counsel, to present
evidence, and examine and cross-examine witnesses.
(c) The hearing committee shall make findings in writing and shall
either recommend that the proceeding be dismissed or that a cease
and desist order be issued or that the certificate of registration of
the corporation be suspended or revoked. The determination may be
reviewed by the board of governors or by a committee authorized by
the Board of Governors to act in its stead, upon written petition for
review, filed with the State Bar by the corporation or the State Bar
within 20 days after service of the findings and recommendation.
Upon review, the board of governors or the committee may take
additional evidence, may adopt new or amended findings, and make such
order as may be just, as to the notice to show cause.
(d) Subdivisions (a), (b), and (c) shall not apply to the
suspension or revocation of the certificate of registration of a
corporation in either of the following cases:
(1) The death of a sole shareholder, as provided in Section
6171.1.
(2) Failure to file the annual report and renew the certificate of
registration, as provided in Sections 6161.1 and 6163.

6170. Any action of the State Bar or the Board of Governors or a
committee of the State Bar, or the chief executive officer of the
State Bar or the designee of the the chief executive officer,
provided for in this article, may be reviewed by the Supreme Court by
petition for review pursuant to rules prescribed by the Supreme
Court.

6171. With the approval of the Supreme Court, the State Bar may
formulate and enforce rules and regulations to carry out the purposes
and objectives of this article, including rules and regulations
requiring all of the following:
(a) That the articles of incorporation or bylaws of a law
corporation shall include a provision whereby the capital stock of
the corporation owned by a disqualified person (as defined in the
Professional Corporation Act) or a deceased person shall be sold to
the corporation or to the remaining shareholders of the corporation
within such time as the rules and regulations may provide.
(b) That a law corporation, as a condition of obtaining a
certificate pursuant to the Professional Corporation Act and this
article, shall provide and maintain security by insurance or
otherwise for claims against it by its clients for errors and
omissions arising out of the rendering of professional services.
(c) That the name of the law corporation and any name or names
under which it renders legal services shall be in compliance with the
rules and regulations.
(d) That the law corporation shall obtain from the State Bar, and
maintain current, a fictitious name permit when required by the rules
and regulations; that the permit may be obtained, maintained,
suspended, and revoked pursuant to procedures set forth in the rules
and regulations; and that the law corporation shall pay an
application and renewal fee for the permit in such amounts as may be
determined by the State Bar.
(e) This section shall become operative January 1, 1996.

6171.1. Six months and one day following the death of a sole
shareholder of a law corporation, the certificate of registration of
the law corporation shall be deemed canceled by operation of this
section. However, the certificate may be sooner canceled by receipt
in the State Bar office of a written request for the cancellation
from the personal representative or sole heir of the deceased
shareholder or the person to whom the shares passed by will or
operation of law following the death of the sole shareholder.

6172. Nothing in this article shall be construed as affecting or
impairing the disciplinary powers and authority of the Supreme Court
or of the State Bar in respect of conduct of members of the State Bar
nor modifying the statutes and rules governing such conduct, except
as expressly provided in this article and except that members of the
State Bar may properly render legal services as officers or employees
of a law corporation and may participate as shareholders, officers
and directors thereof, under the terms and conditions provided by
this article and the Professional Corporation Act.