SECTIONS 200-213 - California Statutes

CORPORATIONS CODE

SECTION 200-213

200. (a) One or more natural persons, partnerships, associations or
corporations, domestic or foreign, may form a corporation under this
division 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 described in subdivision (a) 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.

200.5. (a) An existing business association organized as a trust
under the laws of this state or of a foreign jurisdiction may
incorporate under this division upon approval by its board of
trustees or similar governing body and approval by the affirmative
vote of a majority of the outstanding voting shares of beneficial
interest (or such greater proportion of the outstanding shares of
beneficial interest or the vote of such other classes of shares of
beneficial interest as may be specifically required by its
declaration of trust or bylaws) and the filing of articles of
incorporation with certificate attached pursuant to this chapter.
(b) In addition to the matters required to be set forth in the
articles pursuant to Section 202, 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 signed by
the president, or any vice president, and the secretary, or any
assistant secretary, of the existing association and shall be
accompanied by a certificate signed and verified by such officers
signing the articles and stating that the incorporation of the
association has been approved by the trustees and by the required
vote of holders of shares of beneficial interest in accordance with
subdivision (a).
(d) Upon the filing of articles of incorporation pursuant to this
section, the corporation shall succeed automatically to all of the
rights and property of the association being incorporated and shall
be subject to all of its debts and liabilities in the same manner as
if the corporation had itself incurred them. The incumbent trustees
of the association shall constitute the initial directors of the
corporation and shall continue in office until the next annual
meeting of the shareholders, unless they die, resign or are removed
prior thereto. 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 association may be
prosecuted to judgment, which shall bind the corporation, or the
corporation may be proceeded against or substituted in its place.
(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.

201. (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. This subdivision does not
apply to the articles of any corporation subject to the Banking Law
on which is endorsed the approval of the Commissioner of Financial
Institutions.
(b) 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
for another corporation pursuant to this section, Section 5122,
Section 7122, or Section 9122, except that a corporation may adopt a
name that is substantially the same as an existing domestic
corporation 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 domestic or foreign 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.
(c) 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
(b), 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, partnership, firm or
corporation; nor shall consecutive reservations be made by or for the
use or benefit of the same person, partnership, firm or corporation
of names so similar as to fall within the prohibitions of subdivision
(b).

201.5. The Secretary of State shall not file articles in which the
business is to be an insurer unless the certificate of the Insurance
Commissioner approving the corporate name is attached thereto.

201.6. The Secretary of State shall file the certificate of
redomestication of an insurer for which articles of incorporation
have previously been filed if the Insurance Commissioner has approved
the redomestication under Section 709.5 of the Insurance Code.

201.7. Upon receipt of a certified copy of the commissioner's
authorization issued pursuant to subdivision (a) of Section 11542 or
subdivision (a) of Section 4097.11 of the Insurance Code and subject
to subdivision (a) of Section 110 of the Corporations Code, the
Secretary of State shall accept for filing the certificate of
amendment of the articles of incorporation of the domestic mutual
insurer certified by the secretary thereof.
Upon receipt of a certified copy of the commissioner's
authorization to file articles of incorporation of a mutual holding
company and a stock holding company authorized pursuant to conversion
proceedings pursuant to subdivision (a) of Section 11542 or
subdivision (a) of Section 4097.11 of the Insurance Code and subject
to subdivision (a) of Section 110 of the Corporations Code, the
Secretary of State shall accept for filing the articles of
incorporation of the mutual holding company and stock holding
company.

202. The articles of incorporation shall set forth:
(a) The name of the corporation; provided, however, that in order
for the corporation to be subject to the provisions of this division
applicable to a close corporation (Section 158), the name of the
corporation must contain the word "corporation", "incorporated" or
"limited" or an abbreviation of one of such words.
(b) (1) The applicable one of the following statements:
(i) The purpose of the corporation is to engage in any lawful act
or activity for which a corporation may be organized under the
General Corporation Law of California other than the banking
business, the trust company business or the practice of a profession
permitted to be incorporated by the California Corporations Code; or
(ii) The purpose of the corporation is to engage in the profession
of ____ (with the insertion of a profession permitted to be
incorporated by the California Corporations Code) and any other
lawful activities (other than the banking or trust company business)
not prohibited to a corporation engaging in such profession by
applicable laws and regulations.
(2) In case the corporation is a corporation subject to the
Banking Law, the articles shall set forth a statement of purpose
which is prescribed in the applicable provision of the Banking Law.
(3) In case the corporation is a corporation subject to the
Insurance Code as an insurer, the articles shall additionally state
that the business of the corporation is to be an insurer.
(4) If the corporation is intended to be a "professional
corporation" within the meaning of the Moscone-Knox Professional
Corporation Act (Part 4 (commencing with Section 13400) of Division
3), the articles shall additionally contain the statement required by
Section 13404.
The articles shall not set forth any further or additional
statement with respect to the purposes or powers of the corporation,
except by way of limitation or except as expressly required by any
law of this state other than this division or any federal or other
statute or regulation (including the Internal Revenue Code and
regulations thereunder as a condition of acquiring or maintaining a
particular status for tax 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 1502.
(d) If the corporation is authorized to issue only one class of
shares, the total number of shares which the corporation is
authorized to issue.
(e) If the corporation is authorized to issue more than one class
of shares, or if any class of shares is to have two or more series:
(1) The total number of shares of each class the corporation is
authorized to issue, and the total number of shares of each series
which the corporation is authorized to issue or that the board is
authorized to fix the number of shares of any such series;
(2) The designation of each class, and the designation of each
series or that the board may determine the designation of any such
series; and
(3) The rights, preferences, privileges and restrictions granted
to or imposed upon the respective classes or series of shares or the
holders thereof, or that the board, within any limits and
restrictions stated, may determine or alter the rights, preferences,
privileges and restrictions granted to or imposed upon any wholly
unissued class of shares or any wholly unissued series of any class
of shares. As to any series the number of shares of which is
authorized to be fixed by the board, the articles may also authorize
the board, within the limits and restrictions stated therein or
stated in any resolution or resolutions of the board originally
fixing the number of shares constituting any series, to increase or
decrease (but not below the number of shares of such series then
outstanding) the number of shares of any such series subsequent to
the issue of shares of that series. In case the number of shares of
any series shall be so decreased, the shares constituting such
decrease shall resume the status which they had prior to the adoption
of the resolution originally fixing the number of shares of such
series.

203. Except as specified in the articles or in any shareholders'
agreement, no distinction shall exist between classes or series of
shares or the holders thereof.

203.5. (a) If the articles include the designation and number of
shares of one or more series within a class, the stated number of
shares for all series within the class shall not exceed, and may be
less than, the stated number of shares for the class.
(b) If so authorized in the articles and if the articles state the
number of shares of the class, the articles may be amended by
approval of the board alone to increase or decrease (but not below
the number of shares of the series then outstanding) the number of
shares of a series.
(c) If the articles authorize a class of shares which is stated to
be issuable in series, the articles shall include either the
designation and number of shares for at least one series within that
class or an authorization of common shares.

204. The articles of incorporation may set forth:
(a) Any or all of the following provisions, which shall not be
effective unless expressly provided in the articles:
(1) Granting, with or without limitations, the power to levy
assessments upon the shares or any class of shares.
(2) Granting to shareholders preemptive rights to subscribe to any
or all issues of shares or securities.
(3) Special qualifications of persons who may be shareholders.
(4) A provision limiting the duration of the corporation's
existence to a specified date.
(5) A provision requiring, for any or all corporate actions
(except as provided in Section 303, subdivision (b) of Section 402.5,
subdivision (c) of Section 708 and Section 1900) the vote of a
larger proportion or of all of the shares of any class or series, or
the vote or quorum for taking action of a larger proportion or of all
of the directors, than is otherwise required by this division.
(6) A provision limiting or restricting the business in which the
corporation may engage or the powers which the corporation may
exercise or both.
(7) A provision conferring upon the holders of any evidences of
indebtedness, issued or to be issued by the corporation, the right to
vote in the election of directors and on any other matters on which
shareholders may vote.
(8) A provision conferring upon shareholders the right to
determine the consideration for which shares shall be issued.
(9) A provision requiring the approval of the shareholders
(Section 153) or the approval of the outstanding shares (Section 152)
for any corporate action, even though not otherwise required by this
division.
(10) Provisions eliminating or limiting the personal liability of
a director for monetary damages in an action brought by or in the
right of the corporation for breach of a director's duties to the
corporation and its shareholders, as set forth in Section 309,
provided, however, that (A) such a provision may not eliminate or
limit the liability of directors (i) for acts or omissions that
involve intentional misconduct or a knowing and culpable violation of
law, (ii) for acts or omissions that a director believes to be
contrary to the best interests of the corporation or its shareholders
or that involve the absence of good faith on the part of the
director, (iii) for any transaction from which a director derived an
improper personal benefit, (iv) for acts or omissions that show a
reckless disregard for the director's duty to the corporation or its
shareholders in circumstances in which the director was aware, or
should have been aware, in the ordinary course of performing a
director's duties, of a risk of serious injury to the corporation or
its shareholders, (v) for acts or omissions that constitute an
unexcused pattern of inattention that amounts to an abdication of the
director's duty to the corporation or its shareholders, (vi) under
Section 310, or (vii) under Section 316, (B) no such provision shall
eliminate or limit the liability of a director for any act or
omission occurring prior to the date when the provision becomes
effective, and (C) no such provision shall eliminate or limit the
liability of an officer for any act or omission as an officer,
notwithstanding that the officer is also a director or that his or
her actions, if negligent or improper, have been ratified by the
directors.
(11) A provision authorizing, whether by bylaw, agreement, or
otherwise, the indemnification of agents (as defined in Section 317)
in excess of that expressly permitted by Section 317 for those agents
of the corporation for breach of duty to the corporation and its
stockholders, provided, however, that the provision may not provide
for indemnification of any agent for any acts or omissions or
transactions from which a director may not be relieved of liability
as set forth in the exception to paragraph (10) or as to
circumstances in which indemnity is expressly prohibited by Section
317.
Notwithstanding this subdivision, in the case of a close
corporation any of the provisions referred to above may be validly
included in a shareholders' agreement. Notwithstanding this
subdivision, bylaws may require for all or any actions by the board
the affirmative vote of a majority of the authorized number of
directors. Nothing contained in this subdivision shall affect the
enforceability, as between the parties thereto, of any lawful
agreement not otherwise contrary to public policy.
(b) Reasonable restrictions upon the right to transfer or
hypothecate shares of any class or classes or series, but no
restriction shall be binding with respect to shares issued prior to
the adoption of the restriction unless the holders of such shares
voted in favor of the restriction.
(c) The names and addresses of the persons appointed to act as
initial directors.
(d) Any other provision, not in conflict with law, for the
management of the business and for the conduct of the affairs of the
corporation, including any provision which is required or permitted
by this division to be stated in the bylaws.

204.5. (a) If the articles of a corporation include a provision
reading substantially as follows: "The liability of the directors of
the corporation for monetary damages shall be eliminated to the
fullest extent permissible under California law"; the corporation
shall be considered to have adopted a provision as authorized by
paragraph (10) of subdivision (a) of Section 204 and more specific
wording shall not be required.
(b) This section shall not be construed as setting forth the
exclusive method of adopting an article provision as authorized by
paragraph (10) of subdivision (a) of Section 204.
(c) This section shall not change the otherwise applicable
standards or duties to make full and fair disclosure to shareholders
when approval of such a provision is sought.

205. Solely for the purpose of any statute or regulation imposing
any tax or fee based upon the capitalization of a corporation, all
authorized shares of a corporation organized under this division
shall be deemed to have a nominal or par value of one dollar ($1) per
share. If any federal or other statute or regulation applicable to a
particular corporation requires that the shares of such corporation
have a par value, such shares shall have the par value determined by
the board in order to satisfy the requirements of such statute or
regulation.

206. Subject to any limitation contained in the articles and to
compliance with any other applicable laws, any corporation other than
a corporation subject to the Banking Law or a professional
corporation may engage in any business activity; and a corporation
subject to the Banking Law or a professional corporation may engage
in any business activity not prohibited by the respective statutes
and regulations to which it is subject.

207. Subject to any limitations contained in the articles and to
compliance with other provisions of this division and any other
applicable laws, a corporation shall have all of the powers of a
natural person in carrying out its business activities, 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 do business in any other state, territory,
dependency or foreign country.
(d) Subject to the provisions of Section 510, issue, purchase,
redeem, receive, take or otherwise acquire, own, hold, sell, lend,
exchange, transfer or otherwise dispose of, pledge, use and otherwise
deal in and with its own shares, bonds, debentures and other
securities.
(e) Make donations, regardless of specific corporate benefit, for
the public welfare or for community fund, hospital, charitable,
educational, scientific, civic or similar purposes.
(f) Pay pensions, and establish and carry out pension,
profit-sharing, share bonus, share purchase, share option, savings,
thrift and other retirement, incentive and benefit plans, trusts and
provisions for any or all of the directors, officers and employees of
the corporation or any of its subsidiary or affiliated corporations,
and to indemnify and purchase and maintain insurance on behalf of
any fiduciary of such plans, trusts or provisions.
(g) Subject to the provisions of Section 315, assume obligations,
enter into contracts, including contracts of guaranty or suretyship,
incur liabilities, borrow and lend money and 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, franchises and income.
(h) 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.

208. (a) No limitation upon the business, purposes or powers of the
corporation or upon the powers of the shareholders, officers or
directors, or the manner of exercise of such powers, contained in or
implied by the articles or by Chapters 18, 19 and 20 or by any
shareholders' agreement shall be asserted as between the corporation
or any shareholder and any third person, except in a proceeding (1)
by a shareholder or the state to enjoin the doing or continuation of
unauthorized business by the corporation or its officers, or both, in
cases where third parties have not acquired rights thereby, or (2)
to dissolve the corporation or (3) by the corporation or by a
shareholder 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 the 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 division, binds
the corporation, and the corporation acquires rights thereunder,
whether the contract is executed or wholly or in part executory.
(c) This section applies to contracts and conveyances made by
foreign corporations in this state and to all conveyances by foreign
corporations of real property situated in this state.

209. 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.

210. 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.

211. Bylaws may be adopted, amended or repealed either by approval
of the outstanding shares (Section 152) or by the approval of the
board, except as provided in Section 212. Subject to subdivision (a)
(5) of Section 204, the articles or bylaws may restrict or eliminate
the power of the board to adopt, amend or repeal any or all bylaws.

212. (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 (which in no case
shall be greater than two times the stated minimum minus one), with
the exact number of directors to be fixed, within the limits
specified, by approval of the board or the shareholders (Section 153)
in the manner provided in the bylaws, subject to paragraph (5) of
subdivision (a) of Section 204. The number or minimum number of
directors shall not be less than three; provided, however, that (1)
before shares are issued, the number may be one, (2) before shares
are issued, the number may be two, (3) so long as the corporation has
only one shareholder, the number may be one, (4) so long as the
corporation has only one shareholder, the number may be two, and (5)
so long as the corporation has only two shareholders, the number may
be two. After the issuance of shares, 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 outstanding shares (Section 152);
provided, however, that a bylaw or amendment of the articles reducing
the fixed number or the minimum number of directors to a number less
than five cannot be adopted if the votes cast against its adoption
at a meeting or the shares not consenting in the case of action by
written consent are equal to more than 16 2/3 percent of the
outstanding shares entitled to vote.
(b) The bylaws may contain any provision, not in conflict with law
or the articles for the management of the business and for the
conduct of the affairs of the corporation, including but not limited
to:
(1) Any provision referred to in subdivision (b), (c) or (d) of
Section 204.
(2) The time, place and manner of calling, conducting and giving
notice of shareholders', directors' and committee meetings.
(3) The manner of execution, revocation and use of proxies.
(4) The qualifications, duties and compensation of directors; the
time of their annual election; and the requirements of a quorum for
directors' and committee meetings.
(5) The appointment and authority of committees of the board.
(6) The appointment, duties, compensation and tenure of officers.
(7) The mode of determination of holders of record of its shares.
(8) The making of annual reports and financial statements to the
shareholders.

213. Every corporation shall keep at its principal executive office
in this state, or if its principal executive office is not in this
state at its principal business office in this state, the original or
a copy of its bylaws as amended to date, which shall be open to
inspection by the shareholders at all reasonable times during office
hours. If the principal executive office of the corporation is
outside this state and the corporation has no principal business
office in this state, it shall upon the written request of any
shareholder furnish to such shareholder a copy of the bylaws as
amended to date.