While many disagree with the policy choices made by the drafters of the California General Corporation Law, I think many would agree that the GCL is well drafted from a technical perspective. I find it far better organized and accessible than Delaware’s code. Nonetheless, there are a few mysteries that I find intriguing and at times frustrating. These include:
Section 183 defines “series” to mean “those shares within a class which have the same rights, preferences, privileges and restrictions but which differ in one or more rights, preferences, privileges or restrictions from other shares within the same class.” To understand this definition, one needs to know what a “class” is, but the GCL never defines “class”.
Section 200 permits one or more natural persons, partnerships, associations, or corporations (domestic or foreign) to form a corporation under the GCL but makes no mention of limited liability companies.
The GCL allows a name change to be effected, without a shareholder vote, by means of a short-form merger, but doesn’t allow a board of directors to amend the articles without a shareholder vote to do the same thing. Compare Section 1110(d) with Section 902.
My Scheherazade Moment
I once sailed up the Nile on a boat named the Scheherazade. The ship took its name from the legendary storyteller of the Thousand and One Nights. Today’s post is number 1001 and I coincidentally finished it on Norooz, the Persian new year. Norooz Mobarak!
World Down Syndrome Day
Today is World Down Syndrome Day. Please take a look at the this very inspiring video. As my favorite playright once wrote:
All the greatest people ever lived have been telling us that for five thousand years and yet you’d be surprised how people are always losing hold of it. There’s something way down deep that’s eternal about every human being.
Thornton Wilder, Our Town.