June 13, 2021

Volume XI, Number 164

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How To Resuscitate A Moribund Corporation

Sometimes a corporation will for one reason or another fall into desuetude, with all of the directors and officers having resigned or died.  If the corporation has not dissolved and wound up, the shareholders remain shareholders as there is no expiration date on their shares.  If, perchance, a shareholder discovers that the corporation has some remaining assets, there may be a desire to reconstitute the board and management.  The problem is that that there are no incumbent directors or officers who can call a meeting of shareholders.  

One answer may be for the holders of shares entitled to cast not less than 10% of the votes at the meeting to call a special meeting pursuant to Section 600(d) of the California Corporations Code.  This may be a good dog, but it may not hunt in all situations.  In some cases, it may not be possible to find shareholders with sufficient shares to call the meeting.  Even when enough shareholders can be rounded up to effect a call, it may not be possible to attain a quorum at the meeting that is called.

Another approach is available under Section 600(c) which allows any shareholder to ask the Superior Court to order the meeting.  This procedure is available when there is a failure to hold an annual meeting for a period of 60 days after the date designated therefor or, if no date has been designated, for a period of 15 months after the organization of the corporation or its last annual meeting.  If the court orders the meeting, then the shares represented at the meeting (either in person or by proxy) will constitute a quorum regardless of what the articles, bylaws or even the General Corporation Law say.

© 2010-2021 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume XI, Number 130
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
Partner

Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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