SECTIONS 1000-1002 - California Statutes

CORPORATIONS CODE

SECTION 1000-1002

1000. 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
otherwise provide, no approval of shareholders (Section 153) or of
the outstanding shares (Section 152) shall be necessary for such
action.

1001. (a) A corporation may sell, lease, convey, exchange,
transfer, or otherwise dispose of all or substantially all of its
assets when the principal terms are approved by the board, and,
unless the transaction is in the usual and regular course of its
business, approved by the outstanding shares (Section 152), either
before or after approval by the board and before or after the
transaction. A transaction constituting a reorganization (Section
181) is subject to the provisions of Chapter 12 (commencing with
Section 1200) and not this section (other than subdivision (d)). A
transaction constituting a conversion (Section 161.9) is subject to
the provisions of Chapter 11.5 (commencing with Section 1150) and not
this section.
(b) Notwithstanding approval of the outstanding shares (Section
152), the board may abandon the proposed transaction without further
action by the shareholders, subject to the contractual rights, if
any, of third parties.
(c) The sale, lease, conveyance, exchange, transfer or other
disposition may be made upon those terms and conditions and for that
consideration as the board may deem in the best interests of the
corporation. The consideration may be money, securities, or other
property.
(d) If the acquiring party in a transaction pursuant to
subdivision (a) of this section or subdivision (g) of Section 2001 is
in control of or under common control with the disposing
corporation, the principal terms of the sale must be approved by at
least 90 percent of the voting power of the disposing corporation
unless the disposition is to a domestic or foreign corporation or
other business entity in consideration of the nonredeemable common
shares or nonredeemable equity securities of the acquiring party or
its parent.
(e) Subdivision (d) does not apply to any transaction if the
Commissioner of Corporations, the Commissioner of Financial
Institutions, the Insurance Commissioner or the Public Utilities
Commission has approved the terms and conditions of the transaction
and the fairness of those terms and conditions pursuant to Section
25142, Section 696.5 of the Financial Code, Section 838.5 of the
Insurance Code, or Section 822 of the Public Utilities Code.

1002. 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 said 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 outstanding shares (Section 152) pursuant to this chapter or
Chapter 12, as the case may be, or that such approval is not required
by Chapter 12. 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 innocent
purchaser or encumbrancer for value.