Code Section Group

Corporations Code - CORP

TITLE 1. CORPORATIONS [100 - 14631]

  ( Title 1 enacted by Stats. 1947, Ch. 1038. )

DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503]

  ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. )

CHAPTER 4. Shares and Share Certificates [2800- 2800.]
  ( Chapter 4 added by Stats. 2011, Ch. 740, Sec. 12. )

2800.
  

(a) All certificates representing shares of a social purpose corporation shall contain, in addition to any other statements required by this section, the following conspicuous language on the face of the certificate.

“This entity is a social purpose corporation organized under Division 1.5 of the California Corporations Code. The articles of this corporation state one or more purposes required by law. Refer to the articles on file with the Secretary of State, and the bylaws and any agreements on file with the secretary of the corporation, for further information.”

(b) There shall also appear on the certificate, the initial transaction statement, and written statements, unless stated or summarized under subdivision (a) or (b) of Section 417, the statements required by all of the following, to the extent applicable:

(1) The fact that the shares are subject to restrictions upon transfer.

(2) If the shares are assessable or are not fully paid, a statement that they are assessable or the statements required by subdivision (d) of Section 409 if they are not fully paid.

(3) The fact that the shares are subject to a voting agreement under subdivision (a) of Section 706 or an irrevocable proxy under subdivision (e) of Section 705 or restrictions upon voting rights contractually imposed by the social purpose corporation.

(4) The fact that the shares are redeemable.

(5) The fact that the shares are convertible and the period for conversion.

Statements or references to statements on the face of the certificate, the initial transaction statement, and written statements required by paragraph (1) or (2) shall be conspicuous.

(c) Unless stated on the certificate, the initial transaction statement, and written statements as required by subdivision (a), no restriction upon transfer, no right of redemption and no voting agreement under subdivision (a) of Section 706, no irrevocable proxy under subdivision (e) of Section 705, and no voting restriction imposed by the social purpose corporation shall be enforceable against a transferee of the shares without actual knowledge of the restriction, right, agreement, or proxy. With regard only to liability to assessment or for the unpaid portion of the subscription price, unless stated on the certificate as required by subdivision (a), that liability shall not be enforceable against a transferee of the shares. For the purpose of this subdivision, “transferee” includes a purchaser from the social purpose corporation.

(d) All certificates representing shares of a close social purpose corporation shall contain, in addition to any other statements required by this section, the following conspicuous legend on the face thereof:

“This social purpose corporation is a close social purpose corporation. The number of holders of record of its shares of all classes cannot exceed ____ (a number not in excess of 35). Any attempted voluntary inter vivos transfer which would violate this requirement is void. Refer to the articles, bylaws, and any agreements on file with the secretary of the social purpose corporation for further restrictions.”

(e) Any attempted voluntary inter vivos transfer of the shares of a close social purpose corporation that would result in the number of holders of record of its shares exceeding the maximum number specified in its articles is void if the certificate contains the legend required by subdivision (c).

(f) Notwithstanding any other subdivision, the certificates representing shares of a corporation formed pursuant to this division as a “flexible purpose corporation” before January 1, 2015, shall continue to be valid even if the certificates reference a “flexible purpose corporation.” A corporation formed pursuant to this division before January 1, 2015, may, but is not required to, reissue certificates to replace “flexible purpose corporation” with “social purpose corporation” as applicable. Any reference to a “flexible purpose corporation” or any abbreviation of that term in certificates representing shares of a corporation formed pursuant to this division before January 1, 2015, shall also be a reference to “social purpose corporation.”

(Amended by Stats. 2014, Ch. 694, Sec. 45. Effective January 1, 2015.)

CORPCorporations Code - CORP