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While not required to name initial directors in Articles of Incorporation, if initial directors are named, all initial directors must sign and acknowledge the articles. (Corporations Code sections 200(b).)
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When an acknowledgment is required, the articles may be formally acknowledged or acknowledged by written declaration as prescribed by Corporations Code section 149. A sample of an acceptable acknowledgment by written declaration is: "I declare that I am the person who executed the document, which execution is my act and deed."
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If initial directors are not named in the Articles of Incorporation, the articles shall be signed by one or more persons who thereupon are the incorporators of the corporation. (Corporations Code section 200(b).)
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The purpose clause must state the exact language as prescribed by Corporations Code section 202(b). Any deviation from the required purpose statement can be cause for rejection.
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The articles cannot include any additional statement of purpose except by way of limitation or except as expressly required by any law of this state or any federal or other statute or regulation. (Corporations Code section 202(b).)
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Corporations Code section 202(c) requires the articles to set forth the name of the initial agent for service of process in compliance with Corporations Code section 1502(b). If the initial agent for service of process is an individual, the articles must set forth the address for purposes of service of process. If the initial agent for service of process is a corporation (which corporation must comply with Corporations Code section 1505 prior to designation), no address is to be stated. Please note, a corporation cannot act as its own agent.
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If a corporation is authorized to issue only one class of shares, Corporations Code section 202(d) requires the articles to set forth a statement as to the total number of shares the corporation is authorized to issue.
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If a corporation is authorized to issue more than one class of shares, or if any class of shares has two or more series, Corporations Code section 202(e) requires the articles to designate: (a) the total number of shares of each class; (b) the total number of shares for each series; (c) the designation of each class or series; and (d) the rights, preferences, privileges, and restrictions of the respective classes or series. The articles may also delegate to the board of directors the power to designate: (a) the number of shares in a series; (b) the designation of a series; and (c) the rights, preferences, privileges, and restrictions of a class or series of shares.
Note: All shares of a series of stock must have exactly the same rights, preferences, privileges and restrictions. (Corporations Code section 400(b).) Particular holders of a series of stock cannot be granted special or separate corporate rights not granted to holders of other shares of the same series.
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There is no legal authority for the Articles of Incorporation to grant greater authority or special powers over Board decisions to one or more specific directors. As an alternative to a majority vote or special powers delegated to certain directors, approval of a supermajority (up to 100%) of directors may be inserted as a provision in the articles for most corporate actions under Corporations Code section 204(a)(5). Also, to ensure that a particular class or series of shareholders are represented, a requirement can be added for approval of the particular class or series of shareholders as provided in Section 204(a)(9) of the Code.
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A corporation may provide in their Articles of Incorporation for one or more classes or series of shares to be redeemable in whole or in part upon the vote of at least a majority of the outstanding shares of the class or series to be redeemed. (Corporations Code section 402(a).)
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If a corporation does not redeem all the shares of a class or series at the same time, the articles must state for the partial redemption "the method of selecting the shares to be redeemed, which may be pro rata, by lot, at the discretion of, or in a manner approved by, the board or upon such terms as are specified in the articles." (Corporations Code section 402(b).)
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Corporations Code section 407 provides three options for dealing with fractional shares when a corporation chooses not to issue them: (a) pay the fair value in cash; (b) issue scrip or warrants; or (c) arrange for the disposition of the fractional shares through a broker or agent to allow holders of fractional shares to buy or sell their fractional shares to bring their holdings to a whole number. If the corporation chooses to pay in cash for the fractions of a share, the reference in the articles should be to "fair value," rather than "conversion price" or some other stated price since the stated price of the preferred share may not be "fair value" for the fractional share of common stock to which the shareholder is entitled at the time of conversion. (Corporations Code section 407.)
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The Board of Directors cannot be given unlimited authority to make, alter, amend or repeal bylaws of the corporation. Corporations Code section 212(a) requires shareholder approval for bylaw changes in the number or maximum and minimum number of directors.
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The Articles of Incorporation may set forth the number of directors of the corporation in compliance with Corporations Code section 212(a). If the number of directors is set forth, the number must be either a specified number or a range identifying an acceptable minimum and maximum number of directors -- but not both. The minimum number in a range cannot be less than three and the maximum number cannot exceed the minimum by more than two times the minimum minus one (e.g., not less than three nor more than five).
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Corporations Code section 303 places restrictions on the removal of directors that have been elected by cumulative voting. A director elected by cumulative voting only can be removed without cause by the same cumulative voting standards, so that a majority vote is inapplicable.
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Indemnification and elimination of director liability provisions must match the requirements of Corporations Code sections 204(a)(10), 204(a)(11) and 317. Therefore, rather than attempting to paraphrase the applicable statutes, a statement authorizing indemnification "to the fullest extent permissible under California law," and the statement that "The liability of the directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under California law," are all that are necessary to provide the maximum indemnification for corporate agents and elimination of director liability to the fullest extent allowed. (Corporations Code sections 204.5 and 317(g).)
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While not required to name initial directors in Articles of Incorporation, if initial directors are named, all initial directors must sign and acknowledge the articles. (Corporations Code sections 200(b)and 13403.)
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When an acknowledgment is required, the articles may be formally acknowledged or acknowledged by written declaration as prescribed by Corporations Code section 149. A sample of an acceptable acknowledgment by written declaration is: "I declare that I am the person who executed the document, which execution is my act and deed."
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If initial directors are not named in the Articles of Incorporation, the articles shall be signed by one or more persons who thereupon are the incorporators of the corporation. (Corporations Code section 200(b).)
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The proposed name must comply with the law governing the profession for which the professional corporation is engaged. (Corporation Code section 13409(a).)
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The purpose clause must state the exact language as prescribed by Corporations Code section 202(b)(1)(ii). Any deviation from the required purpose statement can be cause for rejection. In addition, the articles must include a separate statement similar to the following: "This corporation is a professional corporation within the meaning of Part 4, Division 3, Title 1 of the California Corporations Code."; or "This corporation is a professional corporation within the meaning of the Moscone-Knox Professional Corporation Act." (Corporations Code sections 202(b)(1)(ii) and 13404.)
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Corporations Code section 202(c) requires the articles to set forth the name of the initial agent for service of process in compliance with Corporations Code section 1502(b). If the initial agent for service of process is an individual, the articles must set forth the address for purposes of service of process. If the initial agent for service of process is a corporation (which corporation must comply with Corporations Code section 1505 prior to designation), no address is to be stated. Please note, a corporation cannot act as its own agent.
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If a corporation is authorized to issue only one class of shares, Corporations Code section 202(d) requires the articles to include a statement as to the total number of shares the corporation is authorized to issue.
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If a corporation is authorized to issue more than one class of shares, or if any class of shares has two or more series, Corporations Code section 202(e) requires the articles to include: (a) the total number of shares of each class; (b) the total number of shares for each series; (c) the designation of each class or series; and (d) the rights, preferences, privileges, and restrictions of the respective classes or series. The articles may also delegate to the board of directors the power to designate: (a) the number of shares in a series; (b) the designation of a series; and (c) the rights, preferences, privileges, and restrictions of a class or series of shares.
Note: All shares of a series or class of stock must have exactly the same rights, preferences, privileges and restrictions. (Corporations Code sections 13403 and 400(b).) Particular holders of a class or series of stock cannot be granted special or separate corporate rights not granted to holders of other shares of the same series or class.
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The articles may set forth the number of directors of the corporation in compliance with Corporations Code sections 212(a) and 13403. If the number of directors is set forth, the number must be either a specified number, or a range identifying an acceptable minimum and maximum number of directors -- but not both. The minimum number in a range cannot be less than three and the maximum number cannot exceed the minimum by more than two times the minimum minus one (e.g., not less than three nor more than five).
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A professional medical corporation may establish in its articles or bylaws the manner in which its directors are selected and removed, their powers, duties, and compensation. (Corporations Code section 13403.)
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Indemnification and elimination of director liability provisions must match the requirements of Corporations Code sections 204(a)(10), 204(a)(11) and 317. Therefore, rather than attempting to paraphrase the applicable statutes, a statement authorizing indemnification "to the fullest extent permissible under California law," and the statement that "The liability of the directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under California law," are all that are necessary to provide the maximum indemnification for corporate agents and elimination of director liability to the fullest extent allowed. (Corporations Code sections 13403, 204.5 and 317(g).)
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While not required to name initial directors in Articles of Incorporation, if initial directors are named, all initial directors must sign and acknowledge the articles. (Corporations Code sections 5120(b) [public benefit], 7120(b) [mutual benefit] or 9120(b) [religious].)
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When an acknowledgment is required, the articles may be formally acknowledged or acknowledged by written declaration as prescribed by Corporations Code section 5030. A sample of an acceptable acknowledgment by written declaration is: "I declare that I am the person who executed the document, which execution is my act and deed."
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If initial directors are not named in the Articles of Incorporation, the articles shall be signed by one or more persons who thereupon are the incorporators of the corporation. Corporations Code sections 5120(b) [public benefit], 7120(b) [mutual benefit] or 9120(b) [religious].)
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A mutual benefit corporation cannot do any of the following: (a) use the word "foundation" in the corporate name; (b) create the impression that the corporate purpose is public, charitable, or religious; or (c) create the impression that it is a charitable foundation. (Corporations Code section 7122(b).)
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Generally, the purpose clause must state the exact language as prescribed by Corporations Code sections 5130(b) [public benefit], 7130(b)(1) [mutual benefit] or 9130(b) [religious], as applicable. Unless otherwise required by law, any deviation from the required purpose statement can be cause for rejection.
Please note, with the passage of Assembly Bill 2157, effective September 20, 2002, Corporations Code section 7130(b) was amended to require the articles of incorporation of a nonprofit mutual benefit corporation to contain the following purpose clause: "This corporation is a nonprofit mutual benefit corporation organized under the Nonprofit Mutual Benefit Corporation Law. The purpose of this corporation is to engage in any lawful act or activity, other than credit union business, for which a corporation may be organized under such law."
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If the corporation is a public benefit corporation and the purpose includes "public" purposes, the articles must include an additional description of the corporation's purposes. (Corporations Code section 5130(b).)
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Corporations Code sections 5130(c) [public benefit], 7130(c) [mutual benefit] or 9130(c) [religious], require the articles to set forth the name of the initial agent for service of process in compliance with Corporations Code sections 6210(b) [public benefit and religious] or 8210(b) [mutual benefit]. If the initial agent for service of process is an individual, the articles must set forth the address for purposes of service of process. If the initial agent for service of process is a corporation (which corporation must comply with Corporations Code section 1505 prior to designation), no address is to be stated. Please note, a corporation cannot act as its own agent.
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The Board of Directors cannot be given unlimited authority to make, alter, amend or repeal bylaws of the corporation. Once members have been admitted, Corporations Code sections 5151(b) [public benefit], 7151(b) [mutual benefit] and 9151(b) [religious], require member approval for bylaw changes in the number or maximum and minimum number of directors.
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The articles may set forth the number of directors of the corporation in compliance with Corporations Code sections 5151(a) [public benefit], 7151(a) [mutual benefit] and 9151(a) [religious]. If the number of directors is set forth, the number must be either a specified number, or a range identifying an acceptable minimum and maximum number of directors -- but not both.
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Indemnification provisions must match exactly the requirements of Corporations Code sections 5238 [public benefit], 7237 [mutual benefit] or 9246 [religious]. The Code does not provide for a shorthand phrase to encompass the indemnification provision or excess indemnification provision as with stock corporations.
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All memberships have exactly the same rights, preferences, privileges and restrictions unless the articles or bylaws provide specification as to memberships with different rights, preferences, privileges, restrictions or conditions (e.g. classes of memberships). (Corporations Code sections 5330, 5331 [public benefit]; 7330, 7331 [mutual benefit]; 9330, 9331 [religious].)
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The name of the corporation, as stated on the Certificate of Amendment or Restated Articles of Incorporation, must match exactly the name of the corporation as it appears on our records, including punctuation.
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The amendment or restatement must be set forth in an Officers' Certificate.
If a corporation chooses a form of Officers' Certificate whereby the provisions of an amendment or amended and restated articles are contained in an attachment or exhibit, the Officers' Certificate must include language that the attachment or exhibit is "incorporated by reference as if fully set forth" in the officers' certificate. (Corporations Code sections 905 and 910.)
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The certificate must be signed and verified by two appropriate corporate officers. (Corporations Code sections 173, 193, 905, 907 and 910.) A sample of an acceptable verification is: "We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct and of our own knowledge." The verification must be dated the actual date it is signed. The verification cannot be postdated. (Corporations Code section 193.)
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The certificate must be signed and verified by the appropriate individual(s), not by the corporation. (Corporations Code sections 193.) Any indication of the corporation on, above or near the signature line, other than the title(s) of the designated individual(s) signing the certificate, must be omitted.
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The Officers' Certificate must set forth the number of outstanding shares of each class and series entitled to vote and specify for each the percentage vote required by Corporations Code sections 902 and 903 for passage of the amendment, as well as any additional vote required by protective provisions in the prior articles.(Corporations Code section 905(c).)
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The corporation has only one initial agent for service of process whose information is contained in the initial Articles of Incorporation. The name and/or address of the initial agent for service of process cannot be changed by way of amendment, except to correct an error in the statement. (Corporations Code section 900(b).) To change the agent for service of process, the corporation must file the statement required by Corporations Code section 1502. After filing the statement required by section 1502, the agent for service of process provision must be omitted from restatements of the corporation's articles. (Corporations Code sections 1502 and 910(a).)
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If a corporation is authorized to issue more than one class of shares, or if any class of shares has two or more series, Corporations Code section 202(e) requires the articles to designate: (a) the total number of shares of each class; (b) the total number of shares for each series; (c) the designation of each class or series; and (d) the rights, preferences, privileges, and restrictions of the respective classes or series. The articles may also delegate to the board of directors the power to designate: (a) the number of shares in a series; (b) the designation of a series; and (c) the rights, preferences, privileges, and restrictions of a class or series of shares.
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There is no legal authority for the Articles of Incorporation to grant greater authority or special powers over Board decisions to one or more specific directors. As an alternative to a majority vote or special powers delegated to certain directors, approval of a supermajority (up to 100%) of directors may be inserted as a provision in the articles for most corporate actions under Corporations Code section 204(a)(5). Also, to ensure that a particular class or series of shareholders are represented, a requirement can be added for approval of the particular class or series of shareholders as provided in Section 204(a)(9) of the Code.
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A corporation may provide in its Articles of Incorporation for one or more classes or series of shares to be redeemable in whole or in part upon the vote of at least a majority of the outstanding shares of the class or series to be redeemed. (Corporations Code section 402(a).)
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If a corporation does not redeem all the shares of a class or series at the same time, the articles must state for the partial redemption "the method of selecting the shares to be redeemed, which may be pro rata, by lot, at the discretion of, or in a manner approved by, the board or upon such terms as are specified in the articles." (Corporations Code section 402(b).)
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Corporations Code section 407 provides three options for dealing with fractional shares when a corporation chooses not to issue them: (a) pay the fair value in cash; (b) issue scrip or warrants; or (c) arrange for the disposition of the fractional shares through a broker or agent to allow holders of fractional shares to buy or sell their fractional shares to bring their holdings to a whole number. If the corporation chooses to pay in cash for the fractions of a share, the reference in the articles should be to "fair value," rather than "conversion price" or some other stated price since the stated price of the preferred share may not be "fair value" for the fractional share of common stock to which the shareholder is entitled at the time of conversion. (Corporations Code section 407.)
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The name of the corporation, as stated on the Certificate of Determination, must match exactly the name of the corporation as it appears on our records, including punctuation.
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The rights, preferences, privileges, and restrictions of shares with terms fixed by the board of directors must be set forth in an Officers' Certificate prior to the issuance of those shares. (Corporations Code sections 173, 193 and 401.)
If a corporation chooses a form of Officers' Certificate whereby the provisions of an amendment or amended and restated articles are contained in an attachment or exhibit, the Officers' Certificate must include language that the attachment or exhibit is "incorporated by reference as if fully set forth" in the officers' certificate. (Corporations Code sections 905 and 910.)
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The contents of the certificate must be verified under penalty of perjury, dated and be of the personal knowledge of the officers signing the certificate. (Corporations Code sections 173 and 193.) A sample of an acceptable verification is: "We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct and of our own knowledge." The verification must be dated the actual date it is signed and must be submitted to the Secretary of State for filing close in time to the date it is signed. The verification cannot be postdated. (Corporations Code section 193.)
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The certificate must be signed and verified by the appropriate officers, not by the corporation. (Corporations Code sections 173 and 193.) Any indication of the corporation on, above or near the signature line, other than the titles of the officer(s) signing the certificate, must be omitted.
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Although Corporations Code section 401 allows the board of directors by way of resolution to designate and set forth the rights, preferences, privileges, and restrictions, this action by the board must be first authorized in its articles. (Corporations Code sections 202(e) and 401(a).) If the corporation has not provided such authorization in its articles, the designation, number, rights, preferences, privileges and restrictions must be set forth in an amendment to the articles, rather than a Certificate of Determination setting forth a board resolution. (See Corporations Code sections 202(e) and 401(a).)
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Corporations Code section 401(a) requires the Officers' Certificate to set forth separately: (1) a copy of the resolution; (2) the number of shares of the class or series; and (3) that none of the shares of the class or series have been issued.
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Any increase or decrease in the number of shares in a series by way of resolution after any Certificate of Determination has been filed, and if authorized in the articles, must meet the requirements of Corporations Code section 401(c), and set forth separately: 1) a copy of the resolution; 2) the number of shares of the series then outstanding; and 3) the increase or decrease in the number of shares constituting the series.
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The name of the corporation, as stated on the dissolution document(s), must match exactly the name of the corporation as it appears on our records, including punctuation.
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If the election to wind up and dissolve was made by a vote of all of the issued and outstanding shares, dissolution of a domestic stock corporation may be accomplished by filing a single document. The document, entitled Certificate of Dissolution, must include the statement: The election to wind up and dissolve was made by a vote of all of the shares. (Corporations Code sections 1901(c) and 1905(a)(5).)
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If the election to dissolve was made by less than 100% shareholder approval, or if no shares are outstanding, both a Certificate of Election to Wind Up and Dissolve and a Certificate of Dissolution must be filed. (Corporations Code sections 1901 and 1905.)
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The Certificate of Election to Wind Up and Dissolve and/or the Certificate of Dissolution must be properly verified under penalty of perjury and include the actual date of signing. (Corporations Code sections 173, 193, 1901 and 1905.) A sample of an acceptable verification is: "We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct and of our own knowledge." The verification cannot be postdated. (Corporations Code section 193.)
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The certificate(s) must be signed and verified by the appropriate individual(s), not by the corporation. (Corporations Code section 193.) Any indication of the corporation on, above or near the signature line, other than the title(s) of the designated individual(s) signing the certificate(s), must be omitted.
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The Certificate of Dissolution must be signed and verified by a majority of directors (or the sole director, if there is only one). (Corporations Code sections (Corporations Code sections 193 and 1905(a).)
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The Certificate of Dissolution must include a statement concerning the disposition of the corporation's known debts and liabilities. The certificate must state that the known debts and liabilities have been paid, or that the corporation never incurred any known debts or liabilities, or that the known debts and liabilities have been adequately provided for. If there are known debts and liabilities for which adequate provision has been made, the certificate must set forth what provision has been made, including the name and address of the corporation, person or governmental agency that has assumed or guaranteed the payment, or the name and address of the depositary with which deposit has been made, or any other information necessary to enable the creditor to claim payment of the debt or liability. (Corporations Code section 1905(a)(2).)
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The Certificate of Dissolution must include the statement: "The corporation is dissolved." (Corporations Code section 1905(a)(4).)
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The name of the corporation, as stated on the dissolution document(s), must match exactly the name of the corporation as it appears on our records, including punctuation.
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If the election to wind up and dissolve was made by a vote of all of the members of a corporation with members or by all members of the board of directors of a corporation without members, dissolution of a domestic nonprofit corporation may be accomplished by filing a single document. The document, entitled Certificate of Dissolution, must include the statement: "The election to dissolve was made by a vote of all the members of the corporation." or the statement: "The corporation has no members, the election was made by all the directors of the corporation." (Corporations Code sections 6611(c) and 8611(c).)
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If the election to dissolve was made by less than 100% approval of the members or less than 100% approval of the board of directors for a corporation with no members, both a Certificate of Election to Wind Up and Dissolve and a Certificate of Dissolution must be filed. (Corporations Code sections 6611, 6615, 8611 and 8615.)
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The Certificate of Election to Wind Up and Dissolve and/or the Certificate of Dissolution must be properly verified under penalty of perjury and include the actual date of signing. (Corporations Code sections 5062, 5076, 6611, 6615, 8611 and 8615.) A sample of an acceptable verification is: "We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct and of our own knowledge." The verification cannot be postdated. (Corporations Code section 5076.)
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The certificate(s) must be signed and verified by the appropriate individuals, not by the corporation. (Corporations Code section 5076.) Any indication of the corporation on, above or near the signature line, other than the title(s) of the designated individual(s) signing the certificate(s), must be omitted.
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The Certificate of Dissolution must be signed and verified by a majority of directors (or the sole director, if there is only one). (Corporations Code sections 5076, 6615(a) and 8615(a).)
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The Certificate of Dissolution must include a statement concerning the disposition of the corporation's known debts and liabilities. The certificate must state that the known debts and liabilities have been paid, or that the corporation never incurred any known debts or liabilities, or that the known debts and liabilities have been adequately provided for. If there are known debts and liabilities for which adequate provision has been made, the certificate must set forth what provision has been made, including the name and address of the corporation, person or governmental agency that has assumed or guaranteed the payment, or the name and address of the depositary with which deposit has been made, or any other information necessary to enable the creditor to claim payment of the debt or liability. (Corporations Code sections 6615(a)(2) and 8615(a)(2).)
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The Certificate of Dissolution must include the statement: "The corporation is dissolved." (Corporations Code sections 6615(a)(3) and 8615(a)(4).)
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A nonprofit public benefit or religious corporation must attach to the Certificate of Dissolution a document issued by the Attorney General that either waives objections to the distribution of the corporation's assets pursuant to Corporations Code section 6716(c) or confirms that the corporation has no assets. (Corporations Code sections 6615(b) and 9680(a).) Information regarding the required document from the Attorney General can be obtained by calling the Attorney General - Registrar of Charitable Trusts at (916) 445-2021. A written request for the required document can be mailed to the Office of the Attorney General - Registrar of Charitable Trusts at P.O. Box 903447, Sacramento, CA 94203-4470.
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A current original Certificate of Good Standing issued within the last six months by the appropriate public official of the state of incorporation must be submitted with the Statement and Designation. (Corporations Code section 2105.)
Note: To register as a nonprofit corporation, the Certificate of Good Standing must indicate the qualifying corporation is a nonprofit, nonstock corporation.
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The name of the corporation stated in the Certificate of Good Standing must match exactly the name of the corporation on the Statement and Designation, including punctuation. (Corporations Code section 2105.)
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If an individual is designated as agent for service of process, the Statement and Designation must contain the complete business or residence address of the agent. (Corporations Code sections 2105 and 2117.)
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If a corporation is designated as agent for service of process, the Statement and Designation must reflect the corporate name, but cannot reflect the address. (Corporations Code sections 2105 and 2117.)
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If the designated corporate agent for service of process is not a California corporation, the Statement and Designation must reflect the correct state of incorporation for the corporate agent for service of process. (Corporations Code sections 2105 and 2117.)
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A designated corporate agent for service of process must comply with Corporations Code section 1505 prior to filing the Statement and Designation. (Corporations Code section 2105(c).)
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A designated corporate agent for service of process must be currently authorized to engage in business in this state and must be in good standing on the records of the Secretary of State before it may be designated as the agent for the purpose of service of process. (Corporations Code section 1505.)
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The name of the foreign corporation must match exactly the name as shown on the records of the California Secretary of State and set forth the state or place of incorporation for the foreign corporation. (Corporations Code section 2112(a)(1).)
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There is no statutory authority for a director or "authorized representative" to sign a Certificate of Surrender. The certificate must be signed by a corporate officer. (Corporations Code section 2112(a).)
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The certificate must provide a post office address to which the Secretary of State may mail a copy of any process against the corporation that is served upon the Secretary of State. (Corporations Code section 2112(a)(5).)
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Entity names must match exactly the name of the entity as it appears on our records, including punctuation. (Corporations Code sections 201 and 1101.)
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Two designated officers must sign the Agreement of Merger on behalf of each corporation (Corporations Code sections 1102 or 1113(f)). Attesting signatures are not acceptable.
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Generally, all entities must have the following signatures on the Agreement of Merger: (a) a corporation requires two designated officers; (b) a limited liability company requires all managers or members; and (c) a limited partnership requires all general partners. (Corporations Code sections 1102 and 1113.)
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If all of the outstanding shares of a disappearing California corporation are to be cancelled without consideration, the Agreement of Merger must state that "the shares are being cancelled without consideration" and the Officers' Certificate for that corporation must state that 100% shareholder approval was obtained. (Corporations Code sections 1101(d) and 1202(a).)
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An Officers' Certificate must have original signatures, be verified by two appropriate corporate officers and include the date of signing. (Corporations Code sections 173, 193 and 1103.) A sample of an acceptable verification is: "We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct and of our own knowledge." The verification must be dated the actual date it is signed. It cannot be postdated. (Corporations Code section 193.)
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The Officers' Certificate or Certificate of Ownership must be signed and verified by the individual officers of the corporation, not by the corporation. (Corporations Code sections 173 and 193.) Any indication of the corporation on, above or near the signature line other than the titles of the officer(s) signing the certificate, must be omitted.
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Correctly and consistently reference the complete title of the documents setting forth the Agreement of Merger throughout the submitted documents.
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Amendments/Restatements to the Articles of Incorporation of the surviving corporation must be set forth in full in the Agreement of Merger, or referenced and attached thereto. Therefore, the Articles of Incorporation of the disappearing corporation cannot be converted automatically into the Articles of Incorporation of the surviving corporation. The Articles of Incorporation of the surviving corporation must be restated. (Corporations Code sections 1103 and 1113.)
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The manner of converting shares must be specifically stated in the Agreement of Merger and each share of the same class or series must be treated equally unless 100% of the vote of that class is obtained approving the inequality. (Corporations Code section 1101.)
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References to documents which are not contained within the Agreement of Merger should clearly and expressly include the name of the document, the date of the document, the parties signing the document, and the appropriate section(s) of the document. (Corporations Code section 109.5.)
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Generally, approval of a majority (or more than 50%) is required of each class of shareholders. (Corporations Code section 152.) There may be other voting requirements contained within the respective Articles of Incorporation or operating agreement. A vote of 50% is not acceptable.
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For Interspecies Mergers, the Certificate of Merger form must state the NUMBER of outstanding interests or shares of each class entitled to vote for both the surviving entity and the disappearing entity. (Corporations Code sections 1103 and 1113.)
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A Certificate of Ownership must be in the form of an Officers' Certificate and comply with Corporations Code sections 173, 193 and 1110.
If a corporation chooses a form of Officers' Certificate whereby required provisions are contained in an attachment or exhibit, the Officers' Certificate must include language that the attachment or exhibit is "incorporated by reference as if fully set forth" in the Officers' Certificate. (Corporations Code section 1110.)
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A domestic (California) stock corporation (Corp) can convert into a California other business entity; a California
limited liability company (LLC), limited partnership (LP) or general partnership (GP) can convert into a California or
foreign other business entity; and a foreign business entity can convert into a California Corp, LLC, LP or registered
GP if the conversion is permitted under the laws of the jurisdiction of the foreign business entity. (California Corporations Code commencing with Sections 1150, 15677.1, 15911.01, 16901 and 17540.1.) |
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The following table identifies the correct document or form to be used and the fee required based on the specific type of conversion: |
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| Document/Form |
Converting Entity |
Converted Entity |
Filing Fee |
Articles of Incorporation containing a statement of conversion. Article samples are available for the following conversions:
 Converting from a Domestic LLC
Converting from a Domestic LP
Converting from a GP
Converting from a Foreign Entity |
Domestic LLC, LP or GP; or
Foreign Corp, LLC, LP, GP or Other Business Entity
|
Domestic Corp |
$150 |
Limited Liability Company Articles of Organization – Conversion
(Form LLC-1A) |
Domestic Corp, LP, GP; or
Foreign Corp, LLC, LP, GP or Other Business Entity |
Domestic LLC |
$150 if Domestic Corp involved;
$70 for all others |
Certificate of Limited Partnership – Conversion
(Form LP-1A) |
Domestic Corp, LLC, GP; or
Foreign Corp, LLC, LP, GP or Other Business Entity |
Domestic LP |
$150 if Domestic Corp involved;
$70 for all others |
General Partnership Statement of Partnership Authority – Conversion
(Form GP-1A) |
Domestic Corp, LLC, LP; or
Foreign Corp, LLC, LP or Other Business Entity |
Registered GP |
$150 if Domestic Corp involved;
$70 for all others |
Certificate of Conversion
(Form CONV-1A)
(formerly Form ALL ENTITY-1A) |
Domestic Corp, LLC, LP; or Qualified
Foreign Corp, LLC, LP or Other Business Entity
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Non-registered GP |
$150 if Domestic Corp involved;
$30 for all others |
Domestic LLC, LP, or
Registered Domestic GP |
Foreign Entity |
$30 |
The following table clarifies the signature requirements for specific types of conversion filings. |
| Signature Requirements |
| Converting Entity |
Signatories |
| Corp |
Executed and acknowledged by the chairman of the board, the president or any vice president AND the secretary, the chief financial officer, the treasurer or any assistant secretary or assistant treasurer. (California Corporations Code §1155(b).) |
| LLC |
Executed and acknowledged by all the managers, unless a lesser number is provided in the articles of organization or the operating agreement. (California Corporations Code §17540.6(b).) |
| LP |
Executed and acknowledged by all general partners, unless a lesser number is provided in
the certificate of limited partnership. (California Corporations Code section 15677.6(b) or
15911.06(b).) Note: Signing a document on behalf of a converting LP that is subject to the
Uniform Limited Partnership Act of 2008 constitutes an affirmation under penalty of perjury
that the facts stated in the document are true. (California Corporations Code section
15902.08(b).) |
| GP |
Executed by at least two partners. (California Corporations Code §16105(c).) |
| Foreign Entities |
According to the laws of the foreign jurisdiction. |
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