Bill Text: CA AB2237 | 2017-2018 | Regular Session | Chaptered

California Assembly Bill 2237 (Prior Session Legislation)

Bill Title: Corporations: corporate records.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2018-07-09 - Chaptered by Secretary of State - Chapter 76, Statutes of 2018. [AB2237 Detail]

Download: California-2017-AB2237-Chaptered.html

Assembly Bill No. 2237

CHAPTER 76

An act to amend Section 1601 of the Corporations Code, relating to corporations.

[ Approved by Governor July 09, 2018. Filed with Secretary of State July 09, 2018. ]

LEGISLATIVE COUNSEL'S DIGEST

AB 2237, Maienschein. Corporations: corporate records.

The General Corporation Law provides for the formation of domestic general corporations by the execution and filing of articles of incorporation with the Secretary of State. Under that law, the business and affairs of these corporations are generally managed by, and all corporate powers exercised by or under, the direction of their boards of directors, and each director is elected by shareholder vote, with certain exceptions, as specified. That law also allows foreign corporations to transact intrastate business by obtaining certificates of qualification from the Secretary of State and requires foreign corporations that meet certain criteria to comply with specified provisions applicable to domestic general corporations to the exclusion of the law of the jurisdiction in which the foreign corporation is incorporated.

The General Corporation Law requires the accounting books, records, and minutes of proceedings of the shareholders and the board and committees of the board of any domestic corporation, and of any foreign corporation keeping records in this state or having its principal executive office in this state, upon written demand of any shareholder or holder of a voting trust certificate, to be made available for inspection, as specified.

This bill would revise that provision to permit, if the original has been lost, destroyed, or is not normally physically located within this state, a true and accurate copy of the above-described documents to be open to inspection at the corporation’s principal office in this state or, if there is none, at the physical location for the corporation’s registered agent for service of process. The bill would permit a shareholder or holder of a voting trust certificate, as an alternative to this procedure, to request that the corporation produce these documents by mail or electronically, if the shareholder or holder of a voting trust certificate pays the reasonable costs for copy or converting the requested documents to electronic format. The bill would also make related and conforming changes.

Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 1601 of the Corporations Code is amended to read:

1601.

(a) (1) The accounting books, records, and minutes of proceedings of the shareholders and the board and committees of the board of any domestic corporation, and of any foreign corporation keeping any records in this state or having its principal executive office in this state, or a true and accurate copy thereof if the original has been lost, destroyed, or is not normally physically located within this state shall be open to inspection at the corporation’s principal office in this state, or if none, at the physical location for the corporation’s registered agent for service of process in this state, upon the written demand on the corporation of any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours, for a purpose reasonably related to the holder’s interests as a shareholder or as the holder of a voting trust certificate.

(2) As an alternative to the procedure in subdivision (a), the shareholder or holder of a voting trust certificate may elect to request that the corporation produce the books, records, and minutes by mail or electronically, if the shareholder or holder of a voting trust certificate pays for the reasonable costs for copying or converting the requested documents to electronic format.

(3) The right of inspection created by this subdivision shall extend to the records of each subsidiary of a corporation subject to this subdivision.

(b) The inspection by a shareholder or holder of a voting trust certificate may be made in person or by agent or attorney, and the right of inspection includes the right to copy and make extracts. The right of the shareholders to inspect the corporate records may not be limited by the articles or bylaws.