Code Section Group

Business and Professions Code - BPC

DIVISION 3. PROFESSIONS AND VOCATIONS GENERALLY [5000 - 9998.11]

  ( Heading of Division 3 added by Stats. 1939, Ch. 30. )

CHAPTER 4. Attorneys [6000 - 6243]

  ( Chapter 4 added by Stats. 1939, Ch. 34. )

ARTICLE 10. Law Corporations [6160 - 6172]
  ( Article 10 added by Stats. 1968, Ch. 1375. )

6160.
  

A law corporation is a corporation which is registered with the State Bar of California and has a currently effective certificate of registration from the State Bar pursuant to the Professional Corporation Act, as contained in Part 4 (commencing with Section 13400) of Division 3 of Title 1 of the Corporations Code, and this article. Subject to all applicable statutes, rules and regulations, such law corporation is entitled to practice law. With respect to a law corporation the governmental agency referred to in the Professional Corporation Act is the State Bar.

(Added by Stats. 1968, Ch. 1375.)

6161.
  

An applicant for registration as a law corporation shall supply to the State Bar all necessary and pertinent documents and information requested by the State Bar concerning the applicant’s plan of operation, including, but not limited to, a copy of its articles of incorporation, certified by the Secretary of State, a copy of its bylaws, certified by the secretary of the corporation, the name and address of the corporation, the names and addresses of its officers, directors, shareholders, members, if any, and employees who will render professional services, the address of each office, and any fictitious name or names which the corporation intends to use. The State Bar may provide forms of application. If the Board of Trustees or a committee authorized by it finds that the corporation is duly organized and existing or duly qualified for the transaction of intrastate business pursuant to the General Corporation Law, or pursuant to subdivision (b) of Section 13406 of the Corporations Code, that each officer (except as provided in Section 13403 of the Corporations Code), director, shareholder (except as provided in subdivision (b) of Section 13406 of the Corporations Code), and each employee who will render professional services is a licensed person as defined in the Professional Corporation Act, or a person licensed to render the same professional services in the jurisdiction or jurisdictions in which the person practices, and that from the application it appears that the affairs of the corporation will be conducted in compliance with law and the rules and regulations of the State Bar, the State Bar shall upon payment of the registration fee in such amount as it may determine issue a certificate of registration. The applicant shall include with the application, for each shareholder of the corporation licensed in a foreign country but not in this state or in any other state, territory, or possession of the United States, a certificate from the authority in the foreign country currently having final jurisdiction over the practice of law, which shall verify the shareholder’s admission to practice in the foreign country, the date thereof, and the fact that the shareholder is currently in good standing as an attorney or counselor at law or the equivalent. If the certificate is not in English, there shall be included with the certificate a duly authenticated English translation thereof. The application shall be signed and verified by an officer of the corporation.

(Amended by Stats. 2011, Ch. 417, Sec. 50. Effective January 1, 2012.)

6161.1.
  

Each law corporation shall renew its certificate of registration annually at a time to be fixed by the State Bar and shall pay a fee therefor which shall be fixed by the State Bar in accordance with subdivision (a) of Section 6163.

(Added by Stats. 1985, Ch. 465, Sec. 5.)

6161.2.
  

All fees for registration and renewal paid pursuant to Sections 6161 and 6161.1 shall be paid into the treasury of the State Bar and shall be used for its regulatory and disciplinary purposes.

(Added by Stats. 2010, Ch. 2, Sec. 5. Effective January 25, 2010.)

6162.
  

Within such time as the State Bar may by rule provide, the law corporation shall report in writing to the State Bar any change in directors, officers, employees performing professional services and share ownership, and amendments to its articles of incorporation and bylaws.

(Added by Stats. 1968, Ch. 1375.)

6163.
  

(a) Each law corporation shall file with the State Bar annually and at such other times as the State Bar may require a report containing such information pertaining to qualification and compliance with the statutes, rules, and regulations referred to in Section 6127.5 as the State Bar may determine. The fee for filing such a report shall be fixed by the State Bar. All reports shall be signed and verified by an officer of the corporation. The State Bar may fix a penalty for the late filing of an annual report in an amount not to exceed double the amount of the applicable filing fee and may also fix the date upon which the penalty shall attach if the report has not been filed and the fee paid prior to that date. The date upon which the penalty shall attach shall be not less than 31 days following the date fixed for filing the report. The filing of the annual report together with the filing fee and any penalty due for late filing constitutes the annual renewal of the certificate of registration. The fee fixed by the board for the filing of the annual report and any penalty due for late filing constitutes the fee required by Section 6161.1 for renewal of the certificate for the year in which the annual report is due to be filed.

(b) The certificate of registration of any law corporation failing to file the annual report, renew its certificate, and pay the fee therefor and any penalty due thereon for late filing, shall be suspended 60 days following written notice of delinquency. The written notice shall be mailed to the corporation at its current office or other address for State Bar purposes, as shown on the law corporation records of the State Bar. The suspension shall be ordered by the chief executive officer of the State Bar or his or her designee.

(c) A certificate of registration suspended pursuant to subdivision (b) may be reinstated upon the filing by the law corporation of all delinquent annual reports and payment of all accrued fees and penalties required by this section and Section 6161.1 which are due on the date of the suspension, and any such fees and penalties which become due on or before the date of the reinstatement.

(Amended by Stats. 1985, Ch. 465, Sec. 6.)

6165.
  

Except as provided in Sections 13403 and 13406 of the Corporations Code, each director, shareholder, and each officer of a law corporation shall be a licensed person as defined in the Professional Corporation Act, or a person licensed to render the same professional services in the jurisdiction or jurisdictions in which the person practices.

(Amended by Stats. 1993, Ch. 955, Sec. 2.5. Effective January 1, 1994.)

6166.
  

The income of a law corporation attributable to professional services rendered while a shareholder is a disqualified person (as defined in the Professional Corporation Act) shall not in any manner accrue to the benefit of such shareholder or his shares in the law corporation.

(Added by Stats. 1968, Ch. 1375.)

6167.
  

A law corporation shall not do or fail to do any act the doing of which or the failure to do which would constitute a cause for discipline of a member of the State Bar, under any statute, rule or regulation now or hereafter in effect. In the conduct of its business, it shall observe and be bound by such statutes, rules and regulations to the same extent as if specifically designated therein as a member of the State Bar.

(Added by Stats. 1968, Ch. 1375.)

6168.
  

The State Bar may conduct an investigation of the conduct of the business of a law corporation.

Upon such investigation, the Board of Trustees, or a committee authorized by it, shall have power to issue subpoenas, administer oaths, examine witnesses, and compel the production of records, in the same manner as upon an investigation or formal hearing in a disciplinary matter under the State Bar Act. Such investigation shall be private and confidential and shall not be disclosed pursuant to any state law, including, but not limited to, the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), except to the extent that disclosure of facts and information may be required if a cease and desist order is thereafter issued and subsequent proceedings are had.

(Amended by Stats. 2015, Ch. 537, Sec. 16. Effective January 1, 2016.)

6169.
  

(a) When there is reason to believe that a law corporation has violated or is about to violate any of the provisions of this article or the Professional Corporation Act or of any other pertinent statute, rule, or regulation, the State Bar may issue a notice directing the corporation to show cause why it should not be ordered to cease and desist from specified acts or conduct or its certificate of registration should not be suspended or revoked. A copy of the notice shall be served upon the corporation in the manner provided for service of summons upon a California corporation.

(b) A hearing upon the notice to show cause shall be held before a standing or special committee appointed by the board of trustees. Upon the hearing, the State Bar and the corporation shall be entitled to the issue of subpoenas, to be represented by counsel, to present evidence, and examine and cross-examine witnesses.

(c) The hearing committee shall make findings in writing and shall either recommend that the proceeding be dismissed or that a cease and desist order be issued or that the certificate of registration of the corporation be suspended or revoked. The determination may be reviewed by the board of trustees or by a committee authorized by the Board of Trustees to act in its stead, upon written petition for review, filed with the State Bar by the corporation or the State Bar within 20 days after service of the findings and recommendation. Upon review, the board of trustees or the committee may take additional evidence, may adopt new or amended findings, and make such order as may be just, as to the notice to show cause.

(d) Subdivisions (a), (b), and (c) shall not apply to the suspension or revocation of the certificate of registration of a corporation in either of the following cases:

(1) The death of a sole shareholder, as provided in Section 6171.1.

(2) Failure to file the annual report and renew the certificate of registration, as provided in Sections 6161.1 and 6163.

(Amended by Stats. 2011, Ch. 417, Sec. 52. Effective January 1, 2012.)

6170.
  

Any action of the State Bar or the Board of Trustees or a committee of the State Bar, or the chief executive officer of the State Bar or the designee of the chief executive officer, provided for in this article, may be reviewed by the Supreme Court by petition for review pursuant to rules prescribed by the Supreme Court.

(Amended by Stats. 2011, Ch. 417, Sec. 53. Effective January 1, 2012.)

6171.
  

With the approval of the Supreme Court, the State Bar may formulate and enforce rules and regulations to carry out the purposes and objectives of this article, including rules and regulations requiring all of the following:

(a) That the articles of incorporation or bylaws of a law corporation shall include a provision whereby the capital stock of the corporation owned by a disqualified person (as defined in the Professional Corporation Act) or a deceased person shall be sold to the corporation or to the remaining shareholders of the corporation within such time as the rules and regulations may provide.

(b) That a law corporation, as a condition of obtaining a certificate pursuant to the Professional Corporation Act and this article, shall provide and maintain security by insurance or otherwise for claims against it by its clients for errors and omissions arising out of the rendering of professional services.

(c) That the name of the law corporation and any name or names under which it renders legal services shall be in compliance with the rules and regulations.

(d) That the law corporation shall obtain from the State Bar, and maintain current, a fictitious name permit when required by the rules and regulations; that the permit may be obtained, maintained, suspended, and revoked pursuant to procedures set forth in the rules and regulations; and that the law corporation shall pay an application and renewal fee for the permit in such amounts as may be determined by the State Bar.

(e) This section shall become operative January 1, 1996.

(Repealed (in Sec. 3) and added by Stats. 1993, Ch. 955, Sec. 3.5. Effective January 1, 1994. Section operative January 1, 1996, by its own provisions.)

6171.1.
  

Six months and one day following the death of a sole shareholder of a law corporation, the certificate of registration of the law corporation shall be deemed canceled by operation of this section. However, the certificate may be sooner canceled by receipt in the State Bar office of a written request for the cancellation from the personal representative or sole heir of the deceased shareholder or the person to whom the shares passed by will or operation of law following the death of the sole shareholder.

(Added by Stats. 1985, Ch. 465, Sec. 11.)

6172.
  

Nothing in this article shall be construed as affecting or impairing the disciplinary powers and authority of the Supreme Court or of the State Bar in respect of conduct of members of the State Bar nor modifying the statutes and rules governing such conduct, except as expressly provided in this article and except that members of the State Bar may properly render legal services as officers or employees of a law corporation and may participate as shareholders, officers and directors thereof, under the terms and conditions provided by this article and the Professional Corporation Act.

(Added by Stats. 1968, Ch. 1375.)

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