Yesterday, I wrote about the unfortunate situation of an incorporator dying before the articles of incorporation are filed.  In response, at least two people asked about a different situation.  What do you do when the incorporator dies after the articles and filed and before taking action to appoint directors (assuming that the initial directors are not named in the articles of incorporation)?  Is the corporation doomed to forever inhabit the isthmus of a middle state between incorporation and full organization?

Fortunately, Section 306 of the California Corporations Code provides a solution:

If (a) a corporation has not issued shares and all the directors resign, die, or become incompetent, or (b) a corporation’s initial directors have not been named in the articles, and all the incorporators resign, die, or become incompetent prior to the election of the initial directors, the superior court of any county may appoint directors of the corporation upon application by any party in interest.

This statute previously addressed only the situation described in clause (a).  In 2000, the Business Law Section of the California State Bar sponsored a bill to amend Section 306 to deal with the situation in which no directors have been named in the articles or appointed by a deceased incorporator.  AB 1985 (Ackerman), Stats. 2000, c. 135, § 29.

One issue, of course, may be who constitutes a “party in interest”.  I can provide one clear answer – the Commissioner of Financial Institutions.  Cal. Fin. Code § 1174.

How To Write Like Thucydides (And Not Gilbert)

Writers of law review articles seem to like to refer to (pronounced the hoi polloi).  in Greek simply means the many and by extension, the great unwashed.  in Greek is the article “the”.  In translation, the expression is redundant because it would be “the the many”.  Nonetheless, many find it hard to say simply “hoi polloi”, but it can be done as demonstrated by Judge Flaum of the Seventh Circuit Court of Appeals:

“The practical effect of letting judges play art critic and censor would be to enforce conventional notions of “educated taste,” and thus to allow highly educated people to consume erotica but forbid hoi polloi to do the same.”

Miller v. Civil City of South Bend, 904 F.2d 1081, 1098 (7th Cir. 1990).  Perhaps it was intended to be part of the fun, but Sir William S. Gilbert (the librettist half of Gilbert & Sullivan) chose redundancy over literal correctness in Act I of Iolanthe:

Click here to view the table.