Free Confidential Consultation - (310) 475-0321

CALIFORNIA USURY LAW

April 5, 2019

California’s usury law regulates the maximum amount of interest which may be charged on any loan or forbearance of money. This Newsletter shall discuss the permitted rate of interest on various types of loans, which lenders and transactions are exempt from the usury law, and the penalties for making a usurious loan.

Read more

PIERCING THE CORPORATE VEIL

April 5, 2019

One of the principal reasons for conducting a business as a corporation is to ensure that the owners of the business are not personally liable for the debts of the business. However, the courts will “pierce the corporate veil” and hold the shareholders personally liable for corporate obligations when the corporation is merely the alter ego of the shareholders. There are two basic requirements which must be established before the corporate entity will be disregarded by the courts. First, there must be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist. Second, an inequitable result must follow if the acts are treated as those of the corporation alone. Whether the two requirements are satisfied is a matter of fact, and will depend on the circumstances in each case. The mere fact that all of the common stock of the corporation is owned or controlled by one person is not enough to destroy the corporate existence; however, it is not necessary to prove fraud to pierce the corporate veil.

Read more

MINORITY SHAREHOLDER RIGHTS

April 5, 2019

Since a minority shareholder is not in control of a corporation, the officers and directors of the corporation can take most corporate actions without the approval of the minority shareholder. This Newsletter shall discuss the various rights of minority shareholders in a California corporation, and some of the ways a minority shareholder can protect his or her interests.

Read more

STATUTORY CLOSE CORPORATIONS

April 5, 2019

Any corporation may elect to be treated as a “close corporation” under California law. This Newsletter shall discuss the formation of a close corporation, and the advantages and disadvantages of being a close corporation. Formation of a Close Corporation. In order to be a close corporation, the name of the corporation must contain the word “corporation,” “incorporated,” “limited,” or some abbreviation of these words. The articles of incorporation must contain an express provision that the corporation’s stock may not be held by more than 35 shareholders, and the statement “This corporation is a close corporation.” If an existing corporation desires to become a close corporation after the issuance of stock, the amendment to the articles of incorporation must be approved by all of the shareholders.

Read more

NEW LAW ON CROWD-FUNDING

April 5, 2012

On April 5, 2012, President Obama signed the Jump-start Our Business Start-ups (JOBS) Act, which authorizes so-called “crowd-funding” which permits a company to raise small amounts of funds from a large number of investors over the internet. The new crowd-funding law is called the “Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012” or the “CROWDFUND Act.”

Read more