Corporations Code

§ 1 This act shall be known as the Corporations Code. (Enacted by Stats. 1947, Ch. 1038.) § 2 The provisions of this code, insofar as they are substantially the same as existing statutory provisions relating to the same subject matter, shall be construed as restatements and continuations, and not as new enactments. (Enacted by Stats. 1947, Ch. 1038.) § 3 All persons who, at the time this code goes into effect, hold office under any of the acts repealed by this code, which offices are continued by this code, continue to hold them according to their former tenure. (Enacted by Stats. 1947, Ch. 1038.) § 4 No action or proceeding commenced before this code takes effect, and no right accrued, is affected by the provisions of this code, but all procedure thereafter taken therein shall conform to the provisions of this code so far as possible. (Enacted by Stats. 1947, Ch. 1038.) § 5 Unless the provision or the context otherwise requires, these general provisions, rules of construction, and definitions govern the construction of this code. (Enacted by Stats. 1947, Ch. 1038.) § 6 Title, division, part, chapter, article, and section headings contained herein do not in any manner affect the scope, meaning, or intent of the provisions of this code. (Enacted by Stats. 1947, Ch. 1038.) § 7 Whenever, by the provisions of this code, a power is granted to, or a duty imposed upon, a public officer, the power may be exercised or the duty performed by a deputy of the officer or by a person authorized, pursuant to law, by the officer, unless this code expressly provides otherwise. (Enacted by Stats. 1947, Ch. 1038.) § 8 Writing includes any form of recorded message capable of comprehension by ordinary visual means; and when used to describe communications between a corporation, partnership, or limited liability company and its shareholders, members, partners, directors, or managers, writing shall include electronic transmissions by and to a corporation (Sections 20 and 21), electronic transmissions by and to a partnership (Section 16101), and electronic transmissions by and to a limited liability company (Section 17701.02). Whenever any notice, report, statement, or record is required or authorized by this code, it shall be made in writing in the English language. Wherever any notice or other communication is required by this code to be mailed by registered mail by or to any person or corporation, the mailing of such notice or other communication by certified mail shall be deemed to be a sufficient compliance with the requirements of law. (Amended by Stats. 2025, Ch. 67, Sec. 38. (AB 1170) Effective January 1, 2026.) § 9 Whenever reference is made to any portion of this code or of any other law of this State, the reference applies to all amendments and additions now or hereafter made. (Enacted by Stats. 1947, Ch. 1038.) § 10 “Section” means a section of this code unless some other statute is specifically mentioned. “Subdivision” means a subdivision of the section in which the term appears unless some other section is expressly mentioned. (Enacted by Stats. 1947, Ch. 1038.) § 11 The present tense includes the past and future tenses, and the future tense includes the present. (Enacted by Stats. 1947, Ch. 1038.) § 12 The masculine gender includes the feminine and neuter. (Enacted by Stats. 1947, Ch. 1038.) § 12.2 “Spouse” includes “registered domestic partner,” as required by Section 297.5 of the Family Code. (Added by Stats. 2016, Ch. 50, Sec. 19. (SB 1005) Effective January 1, 2017.) § 13 The singular number includes the plural, and the plural number includes the singular. (Enacted by Stats. 1947, Ch. 1038.) § 14 “County” includes “city and county.” (Enacted by Stats. 1947, Ch. 1038.) § 15 “Shall” is mandatory and “may” is permissive. (Enacted by Stats. 1947, Ch. 1038.) § 16 “Oath” includes affirmation. (Enacted by Stats. 1947, Ch. 1038.) § 17 “Signature” includes mark when the signer cannot write, such signer’s name being written near the mark by a witness who writes his own name near the signer’s name; but a signature by mark can be acknowledged or can serve as a signature to a sworn statement only when two witnesses so sign their own names thereto. (Enacted by Stats. 1947, Ch. 1038.) § 17.1 (a) In addition to the definition set forth in Section 17, the term “signature” includes a signature in a facsimile document filed pursuant to this code or pursuant to regulations adopted under this code, and presented to the Secretary of State. (b) The terms “signed” and “executed,” when used with respect to the documents filed pursuant to this code or pursuant to regulations adopted under this code, and presented to the Secretary of State, include a document bearing a signature under subdivision (a). (c) The Secretary of State shall accept facsimile signatures on documents that are delivered by mail or by hand. (d) A person on whose behalf a document bearing a facsimile signature is submitted for filing to the Secretary of State shall maintain the originally signed document for at least five years from the date of filing. (e) The Secretary of State may adopt procedures permitting the direct electronic or facsimile presentation of the documents specified in subdivisions (a) and (b). However, the Secretary of State is not required to accept those direct electronic or facsimile filings until procedures are adopted. (Added by Stats. 2003, Ch. 273, Sec. 1. Effective January 1, 2004.) § 18 “Person” includes a corporation as well as a natural person. (Enacted by Stats. 1947, Ch. 1038.) § 19 If any provision of this code, or the application thereof to any person or circumstance, is held invalid, the remainder of the code, or the application of such provision to other persons or circumstances, shall not be affected thereby. (Enacted by Stats. 1947, Ch. 1038.) § 20 “Electronic transmission by the corporation” means a communication (a) delivered by (1) facsimile telecommunication or electronic mail when directed to the facsimile number or electronic mail address, respectively, for that recipient on record with the corporation, (2) posting on an electronic message board or network which the corporation has designated for those communications, together with a separate notice to the recipient of the posting, which transmission shall be validly delivered upon the later of the posting or delivery of the separate notice thereof, or (3) other means of electronic communication, (b) to a recipient who has provided an unrevoked consent to the use of those means of transmission for communications under or pursuant to this code, and (c) that creates a record that is capable of retention, retrieval, and review, and that may thereafter be rendered into clearly legible tangible form. However, an electronic transmission under this code by a corporation to an individual shareholder or member of the corporation who is a natural person, and if an officer or director of the corporation, only if communicated to the recipient in that person’s capacity as a shareholder or member, is not authorized unless, in addition to satisfying the requirements of this section, the consent to the transmission has been preceded by or includes a clear written statement to the recipient as to (a) any right of the recipient to have the record provided or made available on paper or in nonelectronic form, (b) whether the consent applies only to that transmission, to specified categories of communications, or to all communications from the corporation, and (c) the procedures the recipient must use to withdraw consent. (Amended by Stats. 2009, Ch. 96, Sec. 1. (AB 285) Effective January 1, 2010.) § 21 “Electronic transmission to the corporation” means a communication (a) delivered by (1) facsimile telecommunication or electronic mail when directed to the facsimile number or electronic mail address, respectively, which the corporation has provided from time to time to shareholders or members and directors for sending communications to the corporation, (2) posting on an electronic message board or network which the corporation has designated for those communications, and which transmission shall be validly delivered upon the posting, or (3) other means of electronic communication, (b) as to which the corporation has placed in effect reasonable measures to verify that the sender is the shareholder or member (in person or by proxy) or director purporting to send the transmission, and (c) that creates a record that is capable of retention, retrieval, and review, and that may thereafter be rendered into clearly legible tangible form. (Added by Stats. 2004, Ch. 254, Sec. 4. Effective January 1, 2005.) § 100 Division 1, Title 1, Chapter 1 (a) This division shall be known and may be cited as the General Corporation Law. (b) This title of the Corporations Code, or any division, part, chapter, article or section thereof, may at any time be amended or repealed. (Repealed and added by Stats. 1975, Ch. 682.) § 101 Division 1, Title 1, Chapter 1 Unless the provision or the context otherwise requires, the general provisions and definitions set forth in this chapter govern the construction of this division. (Repealed and added by Stats. 1975, Ch. 682.) § 102 Division 1, Title 1, Chapter 1 (a) Subject to Chapter 23 (commencing with Section 2300) (transition provisions), this division applies to corporations organized under this division and to domestic corporations that are not subject to Division 1.5 (commencing with Section 2500), and to domestic corporations that are not subject to Division 2 (commencing with Section 5000) or Part 1 (commencing with Section 12000), 2 (commencing with Section 12200), 3 (commencing with Section 13200), or 5 (commencing with Section 14000) of Division 3 on December 31, 1976, and that are not organized or existing under any statute of this state other than this code; this division applies to any other corporation only to the extent expressly included in a particular provision of this division. (b) The existence of corporations formed or existing on the date of enactment or reenactment of this division shall not be affected by the enactment or reenactment of this division nor by any change in the requirements for the formation of corporations nor by the amendment or repeal of the laws under which they were formed or created. (c) Neither the repeals effected by the enactment or reenactment of this division nor the enactment of this title nor the amendment thereof shall impair or take away any existing liability or cause of action against any corporation, its shareholders, directors, or officers incurred prior to the time of the enactment, reenactment, or amendment. (Amended by Stats. 2011, Ch. 740, Sec. 1. (SB 201) Effective January 1, 2012.) § 103 Division 1, Title 1, Chapter 1 Every corporation organized under the laws of this state, any other state of the United States or the District of Columbia or under an act of the Congress of the United States, all of the capital stock of which is beneficially owned by the United States, an agency or instrumentality of the United States or any corporation the whole of the capital stock of which is owned by the United States or by an agency or instrumentality of the United States, is conclusively presumed to be an agency and instrumentality of the United States and is entitled to all privileges and immunities to which the holders of all of its stock are entitled as agencies of the United States. (Repealed and added by Stats. 1975, Ch. 682.) § 104 Division 1, Title 1, Chapter 1 Unless otherwise expressly provided, whenever reference is made in this division to any other state or federal statute, such reference is to that statute as it may be amended from time to time, whether before or after the enactment of this division. (Repealed and added by Stats. 1975, Ch. 682.) § 105 Division 1, Title 1, Chapter 1 A corporation or association may be sued as provided in the Code of Civil Procedure. (Repealed and added by Stats. 1975, Ch. 682.) § 106 Division 1, Title 1, Chapter 1 Any corporation heretofore or hereafter formed under this division shall, as a condition of its existence as a corporation, be subject to the provisions of the Code of Civil Procedure authorizing the attachment of corporate property. (Repealed and added by Stats. 1975, Ch. 682.) § 107 Division 1, Title 1, Chapter 1 No corporation, social purpose corporation, association, or individual shall issue or put in circulation, as money, anything but the lawful money of the United States. (Amended by Stats. 2014, Ch. 694, Sec. 1. (SB 1301) Effective January 1, 2015.) § 108 Division 1, Title 1, Chapter 1 The fees of the Secretary of State for filing instruments by or on behalf of corporations are prescribed in Article 3 (commencing with Section 12180) of Chapter 3 of Part 2 of Division 3 of Title 2 of the Government Code. (Repealed and added by Stats. 1975, Ch. 682.) § 109 Division 1, Title 1, Chapter 1 (a) Any agreement, certificate or other instrument relating to a domestic or foreign corporation filed pursuant to this division may be corrected with respect to any misstatement of fact contained therein, any defect in the execution thereof or any other error or defect contained therein, by filing a certificate of correction entitled “Certificate of Correction of ____ (insert here the title of the agreement, certificate or other instrument to be corrected and name(s) of corporation or corporations)”; provided, however, that no such certificate of correction shall alter the wording of any resolution or written consent which was in fact adopted by the board or the shareholders or effect a corrected amendment of articles which amendment as so corrected would not in all respects have complied with the requirements of this division at the time of filing of the agreement, certificate, or other instrument being corrected. (b) If the certificate of correction corrects original articles, the certificate of correction shall be either an officers’ certificate or a certificate signed and verified by the incorporators, or a majority of them. If the certificate of correction corrects an agreement of merger or an officers’ certificate accompanying an agreement of merger, the certificate of correction shall be an officers’ certificate of the surviving corporation only. In all other instances, the certificate of correction shall be either an officer’s certificate or a certificate signed and verified as provided in this division with respect to the agreement, certificate or other instrument being corrected. (c) A certificate of correction shall set forth the following: (1) The name or names of the corporation or corporations. (2) The date the agreement, certificate or other instrument being corrected was filed. (3) The provision in the agreement, certificate or other instrument as corrected and, if the execution was defective, wherein it was defective. (4) If applicable, that the certificate does not alter the wording of any resolution or written consent which was in fact adopted by the board or the shareholders. (d) A provision of the articles, amended articles, restated articles, or certificate of determination being corrected by a certificate of correction shall be identified in the certificate of correction in accordance with subdivision (a) of Section 907. (e) The filing of the certificate of correction shall not alter the effective time of the agreement, certificate or instrument being corrected, which shall remain as its original effective time, and such filing shall not affect any right or liability accrued or incurred before such filing, except that any right or liability accrued or incurred by reason of the error or defect being corrected shall be extinguished by such filing if the person having that right has not detrimentally relied on the original instrument. (Amended by Stats. 1988, Ch. 919, Sec. 1.) § 109.5 Division 1, Title 1, Chapter 1 (a) Provisions of the articles described in paragraph (3) of subdivision (g) of Section 202 and subdivisions (a) and (b) of Section 204 may be made dependent upon facts ascertainable outside the articles, if the manner in which those facts shall operate upon those provisions is clearly and expressly set forth in the articles. Similarly, any of the terms of an agreement of merger pursuant to Section 1101 may be made dependent upon facts ascertainable outside that agreement, if the manner in which those facts shall operate upon the terms of the agreement is clearly and expressly set forth in the agreement of merger. (b) Notwithstanding subdivision (a), when any provisions or terms of articles or an agreement of merger are made dependent upon facts ascertainable outside the filed instrument through a reference to an agreement or similar document, the corporation filing that instrument shall (1) maintain at its principal office a copy of any such agreement or document and all amendments and (2) provide to its shareholders, in the case of articles, or to shareholders of any constituent corporation, in the case of an agreement of merger, a copy of them upon written request and without charge. (c) If the reference to an agreement or contract is a reference to an agreement or contract to which the corporation is a party (a “referenced agreement” in this section), any amendment or revision of the referenced agreement requires shareholder approval, in addition to approvals otherwise required, in the following instances and no other: (1) If the amendment or revision of the referenced agreement would result in a material change in the rights, preferences, privileges, or restrictions of a class or series of shares, the amendment or revision of the referenced agreement is required to be approved by the outstanding shares (Section 152) of that class or series. (2) If the amendment or revision of the referenced agreement would result in a material change in the rights or liabilities of any class or series of shares with respect to the subject matter of paragraph (1), (2), (3), (5), or (9) of subdivision (a) of Section 204, the amendment or revision of the referenced agreement is required to be approved by the outstanding shares (Section 152) of that class or series. (3) If the amendment or revision of the referenced agreement would result in a material change in the restrictions on transfer or hypothecation of any class or series of shares, the amendment or revision of the referenced agreement is required to be approved by the outstanding shares (Section 152) of that class or series. (4) If the amendment or revision of the referenced agreement would result in a change of any of the principal terms of an agreement of merger, the amendment or revision of the referenced agreement is required to be approved in the same manner as required by Section 1104 for a change in the principal terms of an agreement of merger. (Amended by Stats. 2022, Ch. 617, Sec. 3. (SB 1202) Effective January 1, 2023.) § 110 Division 1, Title 1, Chapter 1 (a) Upon receipt of any instrument by the Secretary of State for filing pursuant to this division, if it conforms to law, it shall be filed by, and in the office of, the Secretary of State and the date of filing endorsed thereon. Except for instruments filed pursuant to Section 1502, the date of filing shall be the date the instrument is received by the Secretary of State unless the instrument provides that it is to be withheld from filing until a future date, other than instruments filed pursuant to Section 119, or, unless in the judgment of the Secretary of State, the filing is intended to be coordinated with the filing of some other corporate document which cannot be filed. The Secretary of State shall file a document as of any requested future date not more than 90 days after its receipt, including a Saturday, Sunday, or legal holiday, if the document is received in the Secretary of State’s office at least one business day prior to the requested date of filing. An instrument does not fail to conform to law because it is not accompanied by the full filing fee if the unpaid portion of the fee does not exceed the limits established by the policy of the Secretary of State for extending credit in these cases. (b) If the Secretary of State determines that an instrument submitted for filing or otherwise submitted does not conform to law and returns it to the person submitting it, the instrument may be resubmitted accompanied by a written opinion of the member of the State Bar of California submitting the instrument, or representing the person submitting it, to the effect that the specific provision of the instrument objected to by the Secretary of State does conform to law and stating the points and authorities upon which the opinion is based. The Secretary of State shall rely, with respect to any disputed point of law (other than the application of Sections 119, 201, 2101, and 2106), upon that written opinion in determining whether the instrument conforms to law. The date of filing in that case shall be the date the instrument is received on resubmission. (c) Any instrument filed with respect to a corporation, other than original articles or instruments filed pursuant to Section 119, may provide that it is to become effective not more than 90 days subsequent to its filing date. In case such a delayed effective date is specified, the instrument may be prevented from becoming effective by a certificate stating that by appropriate corporate action it has been revoked and is null and void, executed in the same manner as the original instrument and filed before the specified effective date. In the case of a merger agreement, the certificate revoking the earlier filing need only be executed on behalf of one of the constituent corporations. If no revocation certificate is filed, the instrument becomes effective on the date specified. (d) Any instrument submitted to the Secretary of State for filing by a domestic corporation or a foreign corporation that is qualified to transact business in California under Section 2105 shall include the entity name and number as they exist on the Secretary of State’s records. (Amended by Stats. 2022, Ch. 217, Sec. 1. (SB 218) Effective January 1, 2023.) § 110.5 Division 1, Title 1, Chapter 1 The Secretary of State may cancel the filing of articles of a domestic corporation, including articles effecting a conversion, or the filing of a statement and designation by a foreign corporation if a check or other remittance accepted in payment of the filing fee or franchise tax is not paid upon presentation. Within 90 days of receiving written notification that the item presented for payment has not been honored for payment, the Secretary of State shall give written notice of the applicability of this section and the cancellation date, which shall be not less than 20 days from the date of mailing the written notice as certified by the Secretary of State, to the agent for service of process or to the person submitting the instrument. Thereafter, if the amount has not been paid by cashier’s check or equivalent before the date of cancellation as stated in the written notice of cancellation, the cancellation shall thereupon be effective. (Amended by Stats. 2022, Ch. 617, Sec. 4. (SB 1202) Effective January 1, 2023.) § 111 Division 1, Title 1, Chapter 1 All references in this division to the voting of shares include the voting of other securities given voting rights in the articles pursuant to subdivision (a)(7) of Section 204. (Repealed and added by Stats. 1975, Ch. 682.) § 112 Division 1, Title 1, Chapter 1 If the articles provide for more or less than one vote for any share on any matter, the references in Sections 152, 153 and 602 to a majority or other proportion of shares means, as to such matter, a majority or other proportion of the votes entitled to be cast. Whenever in this division shares are disqualified from voting on any matter, they shall not be considered outstanding for the determination of a quorum at any meeting to act upon, or the required vote to approve action upon, that matter under any other provision of this division or the articles or bylaws. (Repealed and added by Stats. 1975, Ch. 682.) § 113 Division 1, Title 1, Chapter 1 Any reference in this division to mailing means first-class mail, postage prepaid, unless registered or some other form of mail is specified or permitted. Registered mail includes certified mail. (Amended by Stats. 1978, Ch. 370.) § 114 Division 1, Title 1, Chapter 1 All references in this division to financial statements, balance sheets, income statements, and statements of cashflows, and all references to assets, liabilities, earnings, retained earnings, and similar accounting items of a corporation mean those financial statements or comparable statements or items prepared or determined in conformity with generally accepted accounting principles then applicable, fairly presenting in conformity with generally accepted accounting principles the matters that they purport to present, subject to any specific accounting treatment required by a particular section of this division. Unless otherwise expressly stated, all references in this division to financial statements mean, in the case of a corporation that has subsidiaries, consolidated statements of the corporation and each of its subsidiaries as are required to be included in the consolidated statements under generally accepted accounting principles then applicable and all references to accounting items mean the items determined on a consolidated basis in accordance with the consolidated financial statements. Financial statements other than annual statements may be condensed or otherwise presented as permitted by authoritative accounting pronouncements. (Amended by Stats. 2006, Ch. 214, Sec. 1. Effective January 1, 2007.) § 115 Division 1, Title 1, Chapter 1 As used in this division, independent accountant means a certified public accountant or public accountant who is independent of the corporation as determined in accordance with generally accepted auditing standards and who is engaged to audit financial statements of the corporation or perform other accounting services. (Amended by Stats. 1976, Ch. 641.) § 116 Division 1, Title 1, Chapter 1 Nothing contained in this division modifies the provisions of subdivision (h) of Section 25102 or the conditions provided therein to the availability of an exemption under that subdivision. (Repealed and added by Stats. 1975, Ch. 682.) § 117 Division 1, Title 1, Chapter 1 Any requirement in this division for a vote of each class of outstanding shares means such a vote regardless of limitations or restrictions upon the voting rights thereof, unless expressly limited to voting shares. (Added by Stats. 1976, Ch. 641.) § 118 Division 1, Title 1, Chapter 1 Any reference in this division to the time a notice is given or sent means, unless otherwise expressly provided, any of the following: (a) The time a written notice by mail is deposited in the United States mails, postage prepaid. (b) The time any other written notice, including facsimile, telegram, or electronic mail message, is personally delivered to the recipient or is delivered to a common carrier for transmission, or actually transmitted by the person giving the notice by electronic means, to the recipient. (c) The time any oral notice is communicated, in person or by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, or wireless, to the recipient, including the recipient’s designated voice mailbox or address on the system, or to a person at the office of the recipient who the person giving the notice has reason to believe will promptly communicate it to the recipient. (Amended by Stats. 2006, Ch. 538, Sec. 78. Effective January 1, 2007.) § 119 Division 1, Title 1, Chapter 1 (a) (1) Otherwise lawful corporate actions not in compliance, or purportedly not in compliance, with this division or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of the corporate action, may be ratified, or validated by the superior court, in accordance with the provisions of this section. (2) Except as otherwise determined by the superior court pursuant to subdivision (e), a ratification or validation of a corporate action in accordance with this section is conclusive in the absence of fraud. (3) This section does not limit the authority of the board, the shareholders, or the corporation to effect any other lawful means of ratification or validation of a corporate action or correction of a record. (4) No corporate action may be ratified under subdivision (b) by a dissolved corporation or a foreign corporation, and no petition may be filed under subdivision (e) in respect of any corporate action or security of such a corporation. (5) This section shall not be used to ratify or validate any corporate action in respect of any of the following: (A) Noncompliance with subdivision (a) of Section 309. (B) Noncompliance with subdivision (a) or (b) of Section 310. (C) Noncompliance with Section 315. (D) Noncompliance with subdivision (a) of Section 500. (E) Noncompliance with Section 501. (b) (1) (A) A ratification of a corporate action pursuant to this section, other than a ratification relating to the election of the initial directors pursuant to paragraph (2) of this subdivision, shall be approved by the board and, as applicable, approved by the shareholders or approved by the outstanding shares in accordance with any provision set forth in this division or the articles, bylaws, or a plan or agreement to which the corporation is a party that is applicable to the type of corporate action proposed to be ratified and in effect at the time of the ratification, unless there are no shares outstanding and entitled to vote on the ratification at the time of the ratification, in which case the ratification shall be approved solely by the board, or a higher approval standard that was or would have been applicable to the original taking or purported taking of the corporate action, in which case the ratification shall be approved in accordance with such higher approval standard. In order to approve a ratification of a corporate action pursuant to this paragraph, the board and, as applicable, the shareholders or the outstanding shares shall adopt resolutions setting forth all of the following: (i) Each corporate action to be ratified. (ii) The date when each such corporate action was purportedly taken, and the date any such corporate action shall be deemed to have become effective pursuant to this section if different than the date the corporate action was purportedly taken. (iii) For a corporate action involving the purported issuance of shares, the number and type of shares purportedly issued and the date or dates upon which such shares were purported to have been issued. (iv) The nature of the noncompliance or purported noncompliance of each such corporate action. (v) A statement that the ratification of each such corporate action is approved. (B) The votes of any shares issued, or purportedly issued, pursuant to any corporate action being ratified shall be disregarded for all purposes of approval of the ratification as required by this subdivision, including, but not limited to, for the purpose of determining a quorum at a meeting of shareholders or required class vote. (2) If the corporate action to be ratified relates to the election of the initial directors pursuant to Section 210, a majority of the persons who, at the time of the ratification, are exercising the powers of directors may approve that ratification by adopting resolutions setting forth all of the following: (A) The name of the person or persons who first took action in the name of the corporation as the initial directors of the corporation. (B) The earlier of the date on which such persons first took such action or were purported to have been elected as the initial directors, and the date on which such person or persons shall be deemed to have become the initial directors of the corporation pursuant to this section if different than the date of such first action or purported election, as applicable. (C) That the ratification of the election of such person or persons as the initial directors is approved. (c) Notice of any ratification of a corporate action pursuant to this section shall be given promptly after ratification pursuant to subdivision (b) to each shareholder and holder of shares purportedly issued at the time of the ratification, regardless of whether approval of the shareholders or of the outstanding shares is required for the ratification. The notice shall be given as provided in subdivision (b) of Section 601 and shall include a copy of any resolutions adopted pursuant to subdivision (b) and a copy of this section. If a corporation that is subject to the reporting requirements of Section 13 or 15(d) of the federal Securities Exchange Act of 1934 includes the disclosures required by this section in a report, proxy statement, or information statement filed with or furnished to the Securities and Exchange Commission, notice shall be deemed given when that report or statement is filed with or furnished to the Securities and Exchange Commission. (d) (1) If a corporate action ratified pursuant to this section would have required the filing of an instrument with the Secretary of State pursuant to the provisions of this division, or if such ratification would cause any instrument previously filed with the Secretary of State to be inaccurate or incomplete in any material respect after giving effect to the ratification, the corporation shall file a certificate of ratification to make, amend, or correct each such instrument. The certificate of ratification shall have the effect as specified therein, and shall be filed with the Secretary of State. A certificate of ratification shall consist of an officers’ certificate setting forth all of the following: (A) The name of the corporation and the Secretary of State’s file number of the corporation. (B) The title of any such instrument whose making, amendment, or correction is being effected by the certificate of ratification. (C) The date any such instrument was filed with the Secretary of State, or a statement that any such instrument was not previously filed with the Secretary of State and, as applicable, a statement that the ratification approved pursuant to the resolutions set forth in the certificate of ratification would cause any such instrument to be inaccurate or incomplete in any material respect after giving effect to the ratification. (D) The date any such instrument shall be deemed to have become effective pursuant to this section, which may be prior to or after the filing date. (E) A statement that the certificate of ratification is making, amending, or correcting any such instrument, as applicable, and a copy of any such instrument containing all of the information required to be included under this division for such instrument to be so made, amended, or corrected. An instrument attached to a certificate of ratification pursuant to this subparagraph need not be separately executed and acknowledged and need not include any statement required by any other section of this division that such instrument has been approved and adopted in accordance with the provisions of such other section. (F) A statement that the ratification has been approved pursuant to subdivision (b), a copy of the resolutions adopted pursuant to subdivision (b) in respect of the ratification including, in the case of the ratification of any corporate action involving the purported issuance of shares, the number and type of shares purportedly issued and the date or dates upon which such shares were purported to have been issued and, if applicable, a statement of the total number of outstanding shares of each class entitled to vote with respect to the ratification. (G) A statement that the number of shares of each class voting in favor of the ratification equaled or exceeded the vote required, specifying the percentage vote required of each class entitled to vote. (2) The office of the Secretary of State may, in its discretion, refuse to file any certificate of ratification if the instrument would render prior filings with the Secretary of State inaccurate, ambiguous, or unintelligible. Upon refusal of the Secretary of State to file a certificate of ratification pursuant to this subdivision, the corporation shall seek validation pursuant to subdivision (e). (e) (1) Upon the filing of a petition by an authorized person, the superior court of the proper county shall have jurisdiction in equity to determine the validity of any corporate action (whether or not such corporate action is a ratification or has been the subject of any ratification) or security of the corporation, validate and declare effective any such corporate action or security of the corporation, and declare the date any such corporate action or security of the corporation shall be deemed to have become effective or valid, as applicable, pursuant to this section. (2) This section does not prescribe or circumscribe the facts and circumstances the superior court may consider or which remedies the superior court may grant in exercising its jurisdiction under this section, except as described in this subdivision. The superior court may make any order concerning the corporate action as justice and equity may require. (3) Any petition relating to a ratification taken or proposed to be taken pursuant to this section shall be filed not later than 180 days after the notice required by subdivision (c) is given, except this paragraph shall not apply to an action asserting that a ratification was not accomplished in accordance with this section or to any person to whom notice of the ratification was required to have been given pursuant to subdivision (c), but to whom such notice was not given. (4) For purposes of this subdivision, the proper county shall be the county where the principal office of the corporation is located or, if the principal office is not located in this state, in the county in which the corporation’s agent for service of process is located. (5) Service of the petition under paragraph (1) upon the registered agent of the corporation shall be deemed to be service upon the corporation, and no other party need be joined in order for the superior court to adjudicate the matter. The superior court may require notice of the action to be provided to other persons specified by the court and permit those other persons to intervene in the action. (6) For purposes of this subdivision, “authorized person” means the corporation, any successor entity to the corporation, any director, any shareholder or holder of shares purportedly issued, any shareholder or holder of shares purportedly issued as of the time of a corporate action ratified pursuant to this section, or any other person, so long as the other person claims to be substantially and adversely affected by the ratification of a corporate action pursuant to this section. (7) Any petition seeking validation of a corporate action shall identify every pending legal proceeding of which the petitioner is aware and in which (A) the validity of the corporate action is being directly challenged or (B) the validation of the corporate action would result in the dismissal of the proceeding in whole or in part. If the petitioner becomes aware of any additional such legal proceeding, the petitioner shall amend, or, to the extent required by applicable rules, move for leave to amend, the petition within 10 court days to identify each such proceeding. Identification of a proceeding shall include the venue or forum in which the proceeding was filed, any case number or other unique identifier assigned to the proceeding in that venue or forum, the names of the parties to the proceeding, and the date on which the proceeding was filed. (f) If a corporate action validated by the superior court pursuant to this section would have required the filing of an instrument with the Secretary of State pursuant to the provisions of this division, or if such validation would cause any instrument previously filed with the Secretary of State to be inaccurate or incomplete in any material respect after giving effect to the validation, the corporation shall file a certificate of validation to make, amend, or correct each such instrument. The certificate of validation shall have the effect as specified therein, and shall be filed with the Secretary of State. A certificate of validation shall consist of an officers’ certificate setting forth all of the following: (1) The name of the corporation and the Secretary of State’s file number of the corporation. (2) The title of any such instrument whose making, amendment, or correction is being effected by the certificate of validation. (3) The date any such instrument was filed with the Secretary of State, or a statement that any such instrument was not previously filed with the Secretary of State and, as applicable, a statement that the validation ordered pursuant to the superior court order set forth in the certificate of validation would cause any such instrument to be inaccurate or incomplete in any material respect after giving effect to the validation. (4) The date any such instrument shall be deemed to have become effective pursuant to this section, which may be prior to or after the filing date. (5) A statement that the certificate of validation is making, amending, or correcting any such instrument, as applicable, and a copy of any such instrument containing all of the information required to be included under this division for such instrument to be so made, amended, or corrected. An instrument attached to a certificate of validation pursuant to this paragraph need not be separately executed and acknowledged and need not include any statement required by any other section of this division that such instrument has been approved and adopted in accordance with the provisions of such other section. (6) A statement that the validation has been ordered pursuant to subdivision (e), and a copy of the superior court order issued pursuant to subdivision (e) in respect of such validation. (g) Unless otherwise stated in resolutions adopted pursuant to subdivision (b) or determined by the superior court pursuant to subdivision (e), a corporate action or security of the corporation ratified or validated in accordance with this section relates back to the date of the original corporate action. (h) As used in this section: (1) “Corporate action” means any of the following: (A) Any action or purported action of the board. (B) Any action or purported action of the shareholders. (C) Any other action or transaction taken, or purportedly taken, by or on behalf of the corporation, including, but not limited to, any issuance, or purported issuance, of securities of the corporation. (2) “Higher approval standard” means any provision set forth in this division or the articles, bylaws, or a plan or agreement to which the corporation was a party in effect at the time of the original taking or purported taking of a corporate action: (A) Requiring action of the board or shareholders, at a meeting or by written consent, to be taken by a proportion greater than would have been required pursuant to this division or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of the ratification of the corporate action pursuant to this section. (B) Requiring a greater proportion of the directors or shareholders to constitute a quorum for the transaction of business at a meeting than would have been required pursuant to this division or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of the ratification of the corporate action pursuant to this section. (C) Requiring, prohibiting, or prescribing conditions on action of the board or shareholders at a meeting or by written consent, which would not have been required, prohibited, or prescribed pursuant to this division or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of the ratification of the corporate action pursuant to this section. (D) Requiring separate action of the holders of any class or series of the corporation’s shares or of directors elected, appointed, or nominated by the holders of any class or series of the corporation’s shares voting as a class or series, which would not have been required pursuant to this division or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of the ratification of the corporate action pursuant to this section, unless no shares of that class or series are outstanding at the time of the ratification of the corporate action pursuant to this section. (E) Requiring separate action of the holders of securities of the corporation other than shares, which would not have been required pursuant to this division or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of the ratification of the corporate action pursuant to this section, unless those securities are not outstanding at the time of the ratification of the corporate action pursuant to this section. (F) Requiring separate action of any specified person or persons, which would not have been required pursuant to this division or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of the ratification of the corporate action pursuant to this section. (3) “Security” means a share, option, or other security of a corporation. (i) The corporation shall retain all records related to the ratification or validation of a corporate action under this section in accordance with Section 1500. (j) If the corporation is a party to a pending legal proceeding in which (1) the validity of a corporate action sought to be ratified or validated pursuant to this section is at issue or (2) the ratification or validation of a corporate action pursuant to this section would result in the dismissal in whole or in part of the proceeding, the corporation shall notify the judge, arbitrator, or other person presiding over the proceeding at least 10 court days prior to adopting resolutions pursuant to subdivision (b) or filing a petition pursuant to subdivision (e) with respect to that corporate action. That person shall have power to stay the ratification or validation as justice and equity may require. (Added by Stats. 2022, Ch. 217, Sec. 2. (SB 218) Effective January 1, 2023.) § 149 Division 1, Title 1, Chapter 1 “Acknowledged” means that an instrument is either: (a) Formally acknowledged as provided in Article 3 (commencing with Section 1180) of Chapter 4 of Title 4 of Part 4 of Division 2 of the Civil Code, or (b) Accompanied by a declaration in writing signed by the persons executing the same that they are such persons and that the instrument is the act and deed of the person or persons executing the same. Any certificate of acknowledgment taken without this state before a notary public or a judge or clerk of a court of record having an official seal need not be further authenticated. (Amended by Stats. 1976, Ch. 641.) § 150 Division 1, Title 1, Chapter 1 A corporation is an “affiliate” of, or a corporation is “affiliated” with, another specified corporation if it directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the other specified corporation. (Added by Stats. 1975, Ch. 682.) § 151 Division 1, Title 1, Chapter 1 “Approved by (or approval of) the board” means approved or ratified by the vote of the board or by the vote of a committee authorized to exercise the powers of the board, except as to matters not within the competence of the committee under Section 311. (Added by Stats. 1975, Ch. 682.) § 152 Division 1, Title 1, Chapter 1 “Approved by (or approval of) the outstanding shares” means approved by the affirmative vote of a majority of the outstanding shares entitled to vote. Such approval shall include the affirmative vote of a majority of the outstanding shares of each class or series entitled, by any provision of the articles or of this division, to vote as a class or series on the subject matter being voted upon and shall also include the affirmative vote of such greater proportion (including all) of the outstanding shares of any class or series if such greater proportion is required by the articles or this division. (Amended by Stats. 1976, Ch. 641.) § 153 Division 1, Title 1, Chapter 1 “Approved by (or approval of) the shareholders” means approved or ratified by the affirmative vote of a majority of the shares represented and voting at a duly held meeting at which a quorum is present (which shares voting affirmatively also constitute at least a majority of the required quorum) or by the written consent of shareholders (Section 603) or by the affirmative vote or written consent of such greater proportion (including all) of the shares of any class or series as may be provided in the articles or in this division for all or any specified shareholder action. (Amended by Stats. 1977, Ch. 235.) § 154 Division 1, Title 1, Chapter 1 “Articles” includes the articles of incorporation, amendments thereto, amended articles, restated articles, certificate of incorporation and certificates of determination. All references in this division to a vote required by the “articles” include, in the case of a close corporation (Section 158), any vote required by a shareholders’ agreement. (Amended by Stats. 1976, Ch. 641.) § 155 Division 1, Title 1, Chapter 1 “Board” means the board of directors of the corporation. (Added by Stats. 1975, Ch. 682.) § 156 Division 1, Title 1, Chapter 1 “Certificate of determination” means a certificate executed and filed pursuant to Section 401. (Added by Stats. 1975, Ch. 682.) § 156.1 Division 1, Title 1, Chapter 1 “Certificated security” means a share (Section 184), as defined in paragraph (4) of subdivision (a) of Section 8102 of, or an obligation of the issuer as described in paragraph (15) of subdivision (a) of, the Commercial Code. (Amended by Stats. 1996, Ch. 497, Sec. 25. Effective January 1, 1997.) § 156.5 Division 1, Title 1, Chapter 1 “Certificate of Redomestication” is the document by which the appropriate official of another state approves the redomestication of a California insurer. (Added by Stats. 1995, Ch. 702, Sec. 1. Effective January 1, 1996.) § 156.6 Division 1, Title 1, Chapter 1 All references in this division to “chairperson of the board” shall be deemed to refer to all permissible titles for the chairperson of the board, as permitted by Section 312. (Added by Stats. 2015, Ch. 98, Sec. 1. (SB 351) Effective January 1, 2016.) § 157 Division 1, Title 1, Chapter 1 “Chapter” refers to a chapter of this Division 1 of Title 1 of the Corporations Code, unless otherwise expressly stated. (Added by Stats. 1975, Ch. 682.) § 158 Division 1, Title 1, Chapter 1 (a) “Close corporation” means a corporation, including a close social purpose corporation, whose articles contain, in addition to the provisions required by Section 202, a provision that all of the corporation’s issued shares of all classes shall be held of record by not more than a specified number of persons, not exceeding 35, and a statement, “This corporation is a close corporation.” (b) The special provisions referred to in subdivision (a) may be included in the articles by amendment, but if such amendment is adopted after the issuance of shares only by the affirmative vote of all of the issued and outstanding shares of all classes. (c) The special provisions referred to in subdivision (a) may be deleted from the articles by amendment, or the number of shareholders specified may be changed by amendment, but if such amendment is adopted after the issuance of shares, only by the affirmative vote of at least two-thirds of each class of the outstanding shares; provided, however, that the articles may provide for a lesser vote, but not less than a majority of the outstanding shares, or may deny a vote to any class, or both. (d) In determining the number of shareholders for the purposes of the provision in the articles authorized by this section, spouses and the personal representative of either shall be counted as one regardless of how shares may be held by either or both of them, a trust or personal representative of a decedent holding shares shall be counted as one regardless of the number of trustees or beneficiaries, and a partnership or corporation or business association holding shares shall be counted as one (except that any such trust or entity the primary purpose of which was the acquisition or voting of the shares shall be counted according to the number of beneficial interests therein). (e) A corporation shall cease to be a close corporation upon the filing of an amendment to its articles pursuant to subdivision (c) or, if it shall have more than the maximum number of holders of record of its shares specified in its articles as a result of an inter vivos transfer of shares which is not void under subdivision (d) of Section 418, the transfer of shares on distribution by will or pursuant to the laws of descent and distribution, the dissolution of a partnership or corporation or business association, or the termination of a trust which holds shares, by court decree upon dissolution of a marriage or otherwise by operation of law. Promptly upon acquiring more than the specified number of holders of record of its shares, a close corporation shall execute and file an amendment to its articles deleting the special provisions referred to in subdivision (a) and deleting any other provisions not permissible for a corporation which is not a close corporation, which amendment shall be promptly approved and filed by the board and need not be approved by the outstanding shares. (f) Nothing contained in this section shall invalidate any agreement among the shareholders to vote for the deletion from the articles of the special provisions referred to in subdivision (a) upon the lapse of a specified period of time or upon the occurrence of a certain event or condition or otherwise. (g) The following sections contain specific references to close corporations: Sections 186, 202, 204, 300, 418, 421, 1111, 1201, 1800, and 1904. (Amended by Stats. 2016, Ch. 50, Sec. 20. (SB 1005) Effective January 1, 2017.) § 159 Division 1, Title 1, Chapter 1 “Common shares” means shares which have no preference over any other shares with respect to distribution of assets on liquidation or with respect to payment of dividends. (Added by Stats. 1975, Ch. 682.) § 160 Division 1, Title 1, Chapter 1 (a) Except as provided in subdivision (b), “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a corporation. (b) “Control” in Sections 181, 1001, and 1200 means the ownership directly or indirectly of shares or equity securities possessing more than 50 percent of the voting power of a domestic corporation, a foreign corporation, or an other business entity. (Amended by Stats. 1999, Ch. 437, Sec. 1. Effective January 1, 2000.) § 161 Division 1, Title 1, Chapter 1 “Constituent corporation” means a corporation which is merged with or into one or more other corporations or one or more other business entities and includes a surviving corporation. (Amended by Stats. 1994, Ch. 1200, Sec. 9. Effective September 30, 1994.) § 161.5 Division 1, Title 1, Chapter 1 “Constituent limited partnership” means a limited partnership which is merged with one or more corporations and includes the surviving limited partnership. (Added by Stats. 1993, Ch. 543, Sec. 2. Effective January 1, 1994.) § 161.7 Division 1, Title 1, Chapter 1 “Constituent other business entity” means an other business entity that is merged with or into one or more corporations and includes the surviving other business entity. (Added by Stats. 1994, Ch. 1200, Sec. 10. Effective September 30, 1994.) § 161.9 Division 1, Title 1, Chapter 1 “Conversion” means a conversion pursuant to Chapter 11.5 (commencing with Section 1150). (Added by Stats. 2002, Ch. 480, Sec. 1. Effective January 1, 2003.) § 162 Division 1, Title 1, Chapter 1 “Corporation”, unless otherwise expressly provided, refers only to a corporation organized under this division or a corporation subject to this division under the provisions of subdivision (a) of Section 102. (Amended by Stats. 1976, Ch. 641.) § 163 Division 1, Title 1, Chapter 1 “Corporation subject to the Banking Law” (Division 1.1 (commencing with Section 1000) of the Financial Code) means: (a) Any corporation which, with the approval of the Commissioner of Financial Protection and Innovation, is incorporated for the purpose of engaging in, or which is authorized by the Commissioner of Financial Protection and Innovation to engage in, the commercial banking business under Division 1.1 (commencing with Section 1000) of the Financial Code. (b) Any corporation which, with the approval of the Commissioner of Financial Protection and Innovation, is incorporated for the purpose of engaging in, or which is authorized by the Commissioner of Financial Protection and Innovation to engage in, the industrial banking business under Division 1.1 (commencing with Section 1000) of the Financial Code. (c) Any corporation (other than a corporation described in subdivision (d)) which, with the approval of the Commissioner of Financial Protection and Innovation, is incorporated for the purpose of engaging in, or which is authorized by the Commissioner of Financial Protection and Innovation to engage in, the trust business under Division 1.1 (commencing with Section 1000) of the Financial Code. (d) Any corporation which is authorized by the Commissioner of Financial Protection and Innovation and the Commissioner of Insurance to maintain a title insurance department to engage in title insurance business and a trust department to engage in trust business; or (e) Any corporation which, with the approval of the Commissioner of Financial Protection and Innovation, is incorporated for the purpose of engaging in, or which is authorized by the Commissioner of Financial Protection and Innovation to engage in, business under Article 1 (commencing with Section 1850), Chapter 21, Division 1.1 of the Financial Code. (Amended by Stats. 2022, Ch. 452, Sec. 43. (SB 1498) Effective January 1, 2023.) § 163.1 Division 1, Title 1, Chapter 1 For purposes of subdivision (b) of Section 500 and subdivision (b) of Section 506, “cumulative dividends in arrears” means only cumulative dividends that have not been paid as required on a scheduled payment date set forth in, or determined pursuant to, the articles of incorporation, regardless of whether those dividends had been declared prior to that scheduled payment date. (Amended by Stats. 2011, Ch. 203, Sec. 1. (AB 571) Effective January 1, 2012.) § 164 Division 1, Title 1, Chapter 1 “Directors” means natural persons designated in the articles as such or elected by the incorporators and natural persons designated, elected or appointed by any other name or title to act as directors, and their successors. (Amended by Stats. 1976, Ch. 641.) § 165 Division 1, Title 1, Chapter 1 “Disappearing corporation” means a constituent corporation which is not the surviving