Amended in Senate June 6, 2013

Amended in Assembly May 9, 2013

Amended in Assembly April 10, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 491

Introduced by Assembly Member Torres

February 19, 2013

An act to amend Sections 207, 212, 5140, 5151, 7140, 7151, 9140, and 9151 of the Corporations Code, relating to corporations.

LEGISLATIVE COUNSEL’S DIGEST

AB 491, as amended, Torres. Corporations: bylaws: emergency powers.

Existing law authorizes and regulates the formation and operation of a corporation, nonprofit public benefit corporation, nonprofit mutual benefit corporation, or nonprofit religious corporation, including, but not limited to, the adoption and contents of corporate bylaws.

This bill would authorize a corporation, nonprofit public benefit corporation, nonprofit mutual benefit corporation, or nonprofit religious corporation to take actions begin insert in anticipation of or end insert during an emergency, as defined, to conduct these corporations’ ordinary business operations and affairs, as specified, and provide that any action taken in good faith begin insert in anticipation of or end insert during an emergency under this authorization would bind these corporations and not be a basis to impose liability on a corporate director, officer, employee, or agent. This bill would also authorize a corporation, nonprofit public benefit corporation, nonprofit mutual benefit corporation, or nonprofit religious corporation to adopt bylaws to begin delete further direct the operations of these corporations during end delete begin insert manage and conduct ordinary business affairs of the corporation effective only in end insert an emergency, as specified.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 207 of the Corporations Code is amended
to read:

207.  

Subject to any limitations contained in the articles and to
compliance with other provisions of this division and any other
applicable laws, a corporation shall have all of the powers of a
natural person in carrying out its business activities, including,
without limitation, the power to:

(a) Adopt, use begin insert , end insert and at will alter a corporate seal, but failure to
affix a seal does not affect the validity of any instrument.

(b) Adopt, amend begin insert , end insert and repeal bylaws.

(c) Qualify to do business in any other state, territory,
dependency begin insert , end insert or foreign country.

(d) Subject to the provisions of Section 510, issue, purchase,
redeem, receive, take or otherwise acquire, own, hold, sell, lend,
exchange, transfer or otherwise dispose of, pledge, use begin insert , end insert and
otherwise deal in and with its own shares, bonds, debentures begin insert , end insert and
other securities.

(e) Make donations, regardless of specific corporate benefit, for
the public welfare or for community fund, hospital, charitable,
educational, scientific, civic begin insert , end insert or similar purposes.

(f) Pay pensions, and establish and carry out pension,
profit-sharing, share bonus, share purchase, share option, savings,
thrift and other retirement, incentive begin insert , end insert and benefit plans, trusts begin insert , end insert and
provisions for any or all of the directors, officers begin insert , end insert and employees
of the corporation or any of its subsidiary or affiliated corporations,
and to indemnify and purchase and maintain insurance on behalf
of any fiduciary of such plans, trusts begin insert , end insert or provisions.

(g) Subject to the provisions of Section 315, assume obligations,
enter into contracts, including contracts of guaranty or suretyship,
incur liabilities, borrow and lend money begin insert , end insert and otherwise use its
credit, and secure any of its obligations, contracts begin insert , end insert or liabilities by
mortgage, pledge begin insert , end insert or other encumbrance of all or any part of its
property, franchises begin insert , end insert and income.

(h) Participate with others in any partnership, joint venture or
other association, transaction begin insert , end insert or arrangement of any kind, whether
or not such participation involves sharing or delegation of control
with or to others.

(i) (1) In begin delete advance end delete begin insert anticipation end insert of or during an emergency, take
begin delete any or all end delete begin insert either or both end insert of the following actions necessary to
conduct the corporation’s ordinary business operations and affairs
begin delete during an emergency end delete , unless emergency bylaws provide otherwise
pursuant to subdivision (c) of Section 212:

(A) Modify lines of succession to accommodate the incapacity
of any director, officer, employee, or agent resulting from the
emergency.

(B) Relocate the principal office, designate alternative principal
offices or regional offices, or authorize the officers to do so.

begin insert

(2) During an emergency, take either or both of the following
actions necessary to conduct the corporation’s ordinary business
operations and affairs, unless emergency bylaws provide otherwise
pursuant to subdivision (c) of Section 212:

end insert begin delete

(C)

end delete

begin insert (A) end insert  Give notice to a director or directors in any practicable
manner under the circumstances, including, but not limited to, by
publication and radio, when notice of a meeting of the board cannot
be given to that director or directors in the manner prescribed by
the bylaws or Section 307.

begin delete

(D)

end delete

begin insert ( end insert begin insert B) end insert  Deem that one or more officers of the corporation present
at a board meeting is a director, in order of rank and within the
same rank in order of seniority, as necessary to achieve a quorum
for that meeting.

begin delete

(2) During

end delete

begin insert (3) end insert begin insert   end insert begin insert In anticipation of or during end insert an emergency, the board may
not take any action that requires the vote of the shareholders or is
not in the corporation’s ordinary course of business, unless the
required vote of the shareholders was obtained prior to the
emergency.

begin delete

(3)

end delete

begin insert (4) end insert  Any actions taken in good faith begin insert in anticipation of or end insert during
an emergency under this subdivision begin delete binds end delete begin insert bind end insert the corporation
and may not be used to impose liability on a corporate director,
officer, employee, or agent.

begin delete

(4)

end delete

begin insert (5) end insert  For purposes of this subdivision, “emergency” means any
of the following events or circumstances as a result of which, and
only so long as, a quorum of the corporation’s board of directors
cannot be readily convened for action:

(A) A natural catastrophe, including, but not limited to, a
hurricane, tornado, storm, high water, wind-driven water, tidal
wave, tsunami, earthquake, volcanic eruption, landslide, mudslide,
snowstorm, or drought, or, regardless of cause, any fire, flood, or
explosion.

(B) An attack on this state or nation by an enemy of the United
States of America, or upon receipt by this state of a warning from
the federal government indicating that an enemy attack is probable
or imminent.

(C) An act of terrorism or other manmade disaster that results
in extraordinary levels of casualties or damage or disruption
severely affecting the infrastructure, environment, economy,
government functions, or population, including, but not limited
to, mass evacuations.

(D) A state of emergency proclaimed by begin delete the Governor end delete begin insert a
governor or by the President end insert .

SEC. 2.  

Section 212 of the Corporations Code is amended to
read:

212.  

(a) The bylaws shall set forth (unless such provision is
contained in the articles, in which case it may only be changed by
an amendment of the articles) the number of directors of the
corporation; or that the number of directors shall be not less than
a stated minimum nor more than a stated maximum (which in no
case shall be greater than two times the stated minimum minus
one), with the exact number of directors to be fixed, within the
limits specified, by approval of the board or the shareholders
(Section 153) in the manner provided in the bylaws, subject to
paragraph (5) of subdivision (a) of Section 204. The number or
minimum number of directors shall not be less than three; provided,
however, that (1) before shares are issued, the number may be one,
(2) before shares are issued, the number may be two, (3) so long
as the corporation has only one shareholder, the number may be
one, (4) so long as the corporation has only one shareholder, the
number may be two, and (5) so long as the corporation has only
two shareholders, the number may be two. After the issuance of
shares, a bylaw specifying or changing a fixed number of directors
or the maximum or minimum number or changing from a fixed to
a variable board or vice versa may only be adopted by approval
of the outstanding shares (Section 152); provided, however, that
a bylaw or amendment of the articles reducing the fixed number
or the minimum number of directors to a number less than five
cannot be adopted if the votes cast against its adoption at a meeting
or the shares not consenting in the case of action by written consent
are equal to more than 162⁄3 percent of the outstanding shares
entitled to vote.

(b) The bylaws may contain any provision, not in conflict with
law or the articles for the management of the business and for the
conduct of the affairs of the corporation, including but not limited
to:

(1) Any provision referred to in subdivision (b), (c) or (d) of
Section 204.

(2) The time, place begin insert , end insert and manner of calling, conducting begin insert , end insert and
giving notice of shareholders’, directors’ begin insert , end insert and committee meetings.

(3) The manner of execution, revocation begin insert , end insert and use of proxies.

(4) The qualifications, duties begin insert , end insert and compensation of directors;
the time of their annual election; and the requirements of a quorum
for directors’ and committee meetings.

(5) The appointment and authority of committees of the board.

(6) The appointment, duties, compensation begin insert , end insert and tenure of
officers.

(7) The mode of determination of holders of record of its shares.

(8) The making of annual reports and financial statements to
the shareholders.

(c) (1) The bylaws may contain any provision, not in conflict
with the articles, to manage and conduct the ordinary business
affairs of the corporation effective only in an emergency as defined
in Section 207, including, but not limited to, procedures for calling
a board meeting, quorum requirements for a board meeting, and
designation of additional or substitute directors.

(2) During an emergency, the board may not take any action
that requires the vote of the shareholders or otherwise is not in the
corporation’s ordinary course of business, unless the required vote
of the shareholders was obtained prior to the emergency.

(3) All provisions of the regular bylaws consistent with the
emergency bylaws shall remain effective during the emergency,
and the emergency bylaws shall not be effective after the
emergency ends.

(4) Corporate action taken in good faith in accordance with the
emergency bylaws binds the corporation, and may not be used to
impose liability on a corporate director, officer, employee, or agent.

SEC. 3.  

Section 5140 of the Corporations Code is amended to
read:

5140.  

Subject to any limitations contained in the articles or
bylaws and to compliance with other provisions of this division
and any other applicable laws, a corporation, in carrying out its
activities, shall have all of the powers of a natural person,
including, without limitation, the power to:

(a) Adopt, use, and at will alter a corporate seal, but failure to
affix a seal does not affect the validity of any instrument.

(b) Adopt, amend, and repeal bylaws.

(c) Qualify to conduct its activities in any other state, territory,
dependency begin insert , end insert or foreign country.

(d) Issue, purchase, redeem, receive, take or otherwise acquire,
own, sell, lend, exchange, transfer or otherwise dispose of, pledge,
use begin insert , end insert and otherwise deal in and with its own bonds, debentures,
notes begin insert , end insert and debt securities.

(e) Issue memberships.

(f) Pay pensions, and establish and carry out pension, deferred
compensation, saving, thrift and other retirement, incentive and
benefit plans, trusts begin insert , end insert and provisions for any or all of its directors,
officers, employees, and persons providing services to it or any of
its subsidiary or related or associated corporations, and to
indemnify and purchase and maintain insurance on behalf of any
fiduciary of such plans, trusts, or provisions.

(g) Levy dues, assessments, and admission fees.

(h) Make donations for the public welfare or for community
funds, hospital, charitable, educational, scientific, civic, religious begin insert , end insert
or similar purposes.

(i) Assume obligations, enter into contracts, including contracts
of guarantee or suretyship, incur liabilities, borrow or lend money
or otherwise use its credit, and secure any of its obligations,
contracts or liabilities by mortgage, pledge or other encumbrance
of all or any part of its property and income.

(j) Participate with others in any partnership, joint venture or
other association, transaction or arrangement of any kind whether
or not such participation involves sharing or delegation of control
with or to others.

(k) Act as trustee under any trust incidental to the principal
objects of the corporation, and receive, hold, administer, exchange,
and expend funds and property subject to such trust.

(l) Carry on a business at a profit and apply any profit that results
from the business activity to any activity in which it may lawfully
engage.

(m) Pay the reasonable value of services rendered in this state
to the corporation before January 1, 1975, and not previously paid,
by any person who performed such services on a full-time basis
under the direction of a religious organization in connection with
the religious tenets of the organization. Such person shall have
relied solely on the religious organization for his or her financial
support for a minimum of five years. A payment shall not be made
if such person or religious organization waives the payment or
receipt of compensation for such services in writing. Payment may
be made to such religious organization to reimburse it for
maintenance of any person who rendered such services and to
assist it in providing future support and maintenance; however,
payment shall not be made from any funds or assets acquired with
funds donated by or traceable to gifts made to the corporation by
any person, organization begin insert , end insert or governmental agency other than the
members, immediate families of members begin insert , end insert and affiliated religious
organizations of the religious organization under whose direction
the services were performed.

(n) (1) In begin delete advance end delete begin insert anticipation end insert of or during an emergency, take
begin delete any or all end delete begin insert either or both end insert of the following actions necessary to
conduct the corporation’s ordinary business operations and affairs
begin delete during an emergency end delete , unless emergency bylaws provide otherwise
pursuant to subdivision (g) of Section 5151:

(A) Modify lines of succession to accommodate the incapacity
of any director, officer, employee, or agent resulting from the
emergency.

(B) Relocate the principal office, designate alternative principal
offices or regional offices, or authorize the officers to do so.

begin insert

(2) During an emergency, take either or both of the following
actions necessary to conduct the corporation’s ordinary business
operations and affairs, unless emergency bylaws provide otherwise
pursuant to subdivision (g) of Section 5151:

end insert begin delete

(C)

end delete

begin insert (A) end insert  Give notice to a director or directors in any practicable
manner under the circumstances, including, but not limited to, by
publication and radio, when notice of a meeting of the board cannot
be given to that director or directors in the manner prescribed by
the bylaws or Section 5211.

begin delete

(D)

end delete

begin insert (B) end insert  Deem that one or more officers of the corporation present
at a board meeting is a director, in order of rank and within the
same rank in order of seniority, as necessary to achieve a quorum
for that meeting.

begin delete

(2) During

end delete

begin insert (3) end insert begin insert   end insert begin insert In anticipation of or during end insert an emergency, the board may
not take any action that requires the vote of the shareholders or is
not in the corporation’s ordinary course of business, unless the
required vote of the begin delete shareholders end delete begin insert members end insert was obtained prior to
the emergency.

begin delete

(3)

end delete

begin insert (4) end insert  Any actions taken in good faith begin insert in anticipation of or end insert during
an emergency under this subdivision begin delete binds end delete begin insert bind end insert the corporation
and may not be used to impose liability on a corporate director,
officer, employee, or agent.

begin delete

(4)

end delete

begin insert (5) end insert  For purposes of this subdivision, “emergency” means any
of the following events or circumstances as a result of which, and
only so long as, a quorum of the corporation’s board of directors
cannot be readily convened for action:

(A) A natural catastrophe, including, but not limited to, a
hurricane, tornado, storm, high water, wind-driven water, tidal
wave, tsunami, earthquake, volcanic eruption, landslide, mudslide,
snowstorm, or drought, or, regardless of cause, any fire, flood, or
explosion.

(B) An attack on this state or nation by an enemy of the United
States of America, or upon receipt by this state of a warning from
the federal government indicating that an enemy attack is probable
or imminent.

(C) An act of terrorism or other manmade disaster that results
in extraordinary levels of casualties or damage or disruption
severely affecting the infrastructure, environment, economy,
government functions, or population, including, but not limited
to, mass evacuations.

(D) A state of emergency proclaimed by begin delete the Governor end delete begin insert a
governor or by the President end insert .

SEC. 4.  

Section 5151 of the Corporations Code is amended to
read:

5151.  

(a) The bylaws shall set forth (unless that provision is
contained in the articles, in which case it may only be changed by
an amendment of the articles) the number of directors of the
corporation, or the method of determining the number of directors
of the corporation, or that the number of directors shall be not less
than a stated minimum nor more than a stated maximum with the
exact number of directors to be fixed, within the limits specified,
by approval of the board or the members (Section 5034), in the
manner provided in the bylaws, subject to subdivision (e). The
number or minimum number of directors may be one or more.

(b) Once members have been admitted, a bylaw specifying or
changing a fixed number of directors or the maximum or minimum
number or changing from a fixed to a variable board or vice versa
may only be adopted by approval of the members (Section 5034).

(c) The bylaws may contain any provision, not in conflict with
law or the articles, for the management of the activities and for
the conduct of the affairs of the corporation, including but not
limited to:

(1) Any provision referred to in subdivision (c) of Section 5132.

(2) The time, place begin insert , end insert and manner of calling, conducting begin insert , end insert and
giving notice of members’, directors’ begin insert , end insert and committee meetings,
or of conducting mail ballots.

(3) The qualifications, duties begin insert , end insert and compensation of directors;
the time of their election; and the requirements of a quorum for
directors’ and committee meetings.

(4) The appointment and authority of committees.

(5) The appointment, duties, compensation begin insert , end insert and tenure of
officers.

(6) The mode of determination of members of record.

(7) The making of reports and financial statements to members.

(8) Setting, imposing and collecting dues, assessments begin insert , end insert and
admission fees.

(d) The bylaws may provide for the manner of admission,
withdrawal, suspension, and expulsion of members, consistent
with the requirements of Section 5341.

(e) The bylaws may require, for any or all corporate actions
(except as provided in paragraphs (1) and (2) of subdivision (a) of
Section 5222, subdivision (c) of Section 5616, and Section 6610),
the vote of a larger proportion of, or all of, the members or the
members of any class, unit, or grouping of members, or the vote
of a larger proportion of, or all of, the directors, than is otherwise
required by this part. Such a provision in the bylaws requiring such
greater vote shall not be altered, amended begin insert , end insert or repealed except by
such greater vote, unless otherwise provided in the bylaws.

(f) The bylaws may contain a provision limiting the number of
members, in total or of any class, which the corporation is
authorized to admit.

(g) (1) The bylaws may contain any provision, not in conflict
with the articles, to manage and conduct the ordinary business
affairs of the corporation effective only in an emergency as defined
in Section 5140, including, but not limited to, procedures for calling
a board meeting, quorum requirements for a board meeting, and
designation of additional or substitute directors.

(2) During an emergency, the board may not take any action
that requires the vote of the begin delete shareholders end delete begin insert members end insert or otherwise is
not in the corporation’s ordinary course of business, unless the
required vote of the begin delete shareholders end delete begin insert members end insert was obtained prior to
the emergency.

(3) All provisions of the regular bylaws consistent with the
emergency bylaws shall remain effective during the emergency,
and the emergency bylaws shall not be effective after the
emergency ends.

(4) Corporate action taken in good faith in accordance with the
emergency bylaws binds the corporation, and may not be used to
impose liability on a corporate director, officer, employee, or agent.

SEC. 5.  

Section 7140 of the Corporations Code is amended to
read:

7140.  

Subject to any limitations contained in the articles or
bylaws and to compliance with other provisions of this division
and any other applicable laws, a corporation, in carrying out its
activities, shall have all of the powers of a natural person,
including, without limitation, the power to:

(a) Adopt, use, and at will alter a corporate seal, but failure to
affix a seal does not affect the validity of any instrument.

(b) Adopt, amend, and repeal bylaws.

(c) Qualify to conduct its activities in any other state, territory,
dependency begin insert , end insert or foreign country.

(d) Issue, purchase, redeem, receive, take or otherwise acquire,
own, sell, lend, exchange, transfer or otherwise dispose of, pledge,
use begin insert , end insert and otherwise deal in and with its own memberships, bonds,
debentures, notes begin insert , end insert and debt securities.

(e) Pay pensions, and establish and carry out pension, deferred
compensation, saving, thrift and other retirement, incentive begin insert , end insert and
benefit plans, trusts begin insert , end insert and provisions for any or all of its directors,
officers, employees, and persons providing services to it or any of
its subsidiary or related or associated corporations, and to
indemnify and purchase and maintain insurance on behalf of any
fiduciary of such plans, trusts, or provisions.

(f) Issue certificates evidencing membership in accordance with
the provisions of Section 7313 and issue identity cards.

(g) Levy dues, assessments, and admission and transfer fees.

(h) Make donations for the public welfare or for community
funds, hospital, charitable, educational, scientific, civic, religious begin insert , end insert
or similar purposes.

(i) Assume obligations, enter into contracts, including contracts
of guarantee or suretyship, incur liabilities, borrow or lend money
or otherwise use its credit, and secure any of its obligations,
contracts or liabilities by mortgage, pledge or other encumbrance
of all or any part of its property and income.

(j) Participate with others in any partnership, joint venture or
other association, transaction or arrangement of any kind whether
or not such participation involves sharing or delegation of control
with or to others.

(k) Act as trustee under any trust incidental to the principal
objects of the corporation, and receive, hold, administer, exchange,
and expend funds and property subject to such trust.

(l) Carry on a business at a profit and apply any profit that results
from the business activity to any activity in which it may lawfully
engage.

(m) (1) In begin delete advance end delete begin insert anticipation end insert of, or during an emergency,
take begin delete any or all end delete begin insert either or both end insert of the following actions necessary
to conduct the corporation’s ordinary business operations and
affairs begin delete during an emergency end delete , unless emergency bylaws provide
otherwise pursuant to subdivision (g) of Section 7151:

(A) Modify lines of succession to accommodate the incapacity
of any director, officer, employee, or agent resulting from the
emergency.

(B) Relocate the principal office, designate alternative principal
offices or regional offices, or authorize the officers to do so.

begin insert

(2) During an emergency, take either or both of the following
actions necessary to conduct the corporation’s ordinary business
operations and affairs, unless emergency bylaws provide otherwise
pursuant to subdivision (g) of Section 7151:

end insert begin delete

(C)

end delete

begin insert (A) end insert  Give notice to a director or directors in any practicable
manner under the circumstances, including, but not limited to, by
publication and radio, when notice of a meeting of the board cannot
be given to that director or directors in the manner prescribed by
the bylaws or Section 7211.

begin delete

(D)

end delete

begin insert (B) end insert  Deem that one or more officers of the corporation present
at a board meeting is a director, in order of rank and within the
same rank in order of seniority, as necessary to achieve a quorum
for that meeting.

begin delete

(2) During

end delete

begin insert (3) end insert begin insert   end insert begin insert In anticipation of or during end insert an emergency, the board may
not take any action that requires the vote of the begin delete shareholders end delete
begin insert members end insert or is not in the corporation’s ordinary course of business,
unless the required vote of the begin delete shareholders end delete begin insert members end insert was obtained
prior to the emergency.

begin delete

(3)

end delete

begin insert (4) end insert  Any actions taken in good faith begin insert in anticipation of or end insert during
an emergency under this subdivision begin delete binds end delete begin insert bind end insert the corporation
and may not be used to impose liability on a corporate director,
officer, employee, or agent.

begin delete

(4)

end delete

begin insert (5) end insert  For purposes of this subdivision, “emergency” means any
of the following events or circumstances as a result of which, and
only so long as, a quorum of the corporation’s board of directors
cannot be readily convened for action:

(A) A natural catastrophe, including, but not limited to, a
hurricane, tornado, storm, high water, wind-driven water, tidal
wave, tsunami, earthquake, volcanic eruption, landslide, mudslide,
snowstorm, or drought, or, regardless of cause, any fire, flood, or
explosion.

(B) An attack on this state or nation by an enemy of the United
States of America, or upon receipt by this state of a warning from
the federal government indicating that an enemy attack is probable
or imminent.

(C) An act of terrorism or other manmade disaster that results
in extraordinary levels of casualties or damage or disruption
severely affecting the infrastructure, environment, economy,
government functions, or population, including, but not limited
to, mass evacuations.

(D) A state of emergency proclaimed by begin delete the Governor end delete begin insert a
governor or by the President end insert .

SEC. 6.  

Section 7151 of the Corporations Code is amended to
read:

7151.  

(a) The bylaws shall set forth (unless such provision is
contained in the articles, in which case it may only be changed by
an amendment of the articles) the number of directors of the
corporation, or the method of determining the number of directors
of the corporation, or that the number of directors shall be not less
than a stated minimum nor more than a stated maximum with the
exact number of directors to be fixed, within the limits specified,
by approval of the board or the members (Section 5034), in the
manner provided in the bylaws, subject to subdivision (e). The
number or minimum number of directors may be one or more.

(b) Once members have been admitted, a bylaw specifying or
changing a fixed number of directors or the maximum or minimum
number or changing from a fixed to a variable board or vice versa
may only be adopted by approval of the members (Section 5034).

(c) The bylaws may contain any provision, not in conflict with
law or the articles, for the management of the activities and for
the conduct of the affairs of the corporation, including but not
limited to:

(1) Any provision referred to in subdivision (c) of Section 7132.

(2) The time, place begin insert , end insert and manner of calling, conducting begin insert , end insert and
giving notice of members’, directors’ begin insert , end insert and committee meetings,
or of conducting mail ballots.

(3) The qualifications, duties begin insert , end insert and compensation of directors;
the time of their election; and the requirements of a quorum for
directors’ and committee meetings.

(4) The appointment of committees, composed of directors or
nondirectors begin insert , end insert or both, by the board or any officer and the authority
of any such committees.

(5) The appointment, duties, compensation begin insert , end insert and tenure of
officers.

(6) The mode of determination of members of record.

(7) The making of reports and financial statements to members.

(8) Setting, imposing begin insert , end insert and collecting dues, assessments, and
admission and transfer fees.

(d) The bylaws may provide for the manner of admission,
withdrawal, suspension, and expulsion of members, consistent
with the requirements of Section 7341.

(e) The bylaws may require, for any or all corporate actions
(except as provided in paragraphs (1) and (2) of subdivision (a) of
Section 7222, subdivision (c) of Section 7615, and Section 8610)
the vote of a larger proportion of, or all of, the members or the
members of any class, unit, or grouping of members or the vote
of a larger proportion of, or all of, the directors, than is otherwise
required by this part. Such a provision in the bylaws requiring such
greater vote shall not be altered, amended begin insert , end insert or repealed except by
such greater vote, unless otherwise provided in the bylaws.

(f) The bylaws may contain a provision limiting the number of
members, in total or of any class, which the corporation is
authorized to admit.

(g) (1) The bylaws may contain any provision, not in conflict
with the articles, to manage and conduct the ordinary business
affairs of the corporation effective only in an emergency as defined
in Section 7140, including, but not limited to, procedures for calling
a board meeting, quorum requirements for a board meeting, and
designation of additional or substitute directors.

(2) During an emergency, the board may not take any action
that requires the vote of the begin delete shareholders end delete begin insert members end insert or otherwise is
not in the corporation’s ordinary course of business, unless the
required vote of the begin delete shareholders end delete begin insert members end insert was obtained prior to
the emergency.

(3) All provisions of the regular bylaws consistent with the
emergency bylaws shall remain effective during the emergency,
and the emergency bylaws shall not be effective after the
emergency ends.

(4) Corporate action taken in good faith in accordance with the
emergency bylaws binds the corporation, and may not be used to
impose liability on a corporate director, officer, employee, or agent.

SEC. 7.  

Section 9140 of the Corporations Code is amended to
read:

9140.  

Subject to any limitations contained in the articles or
bylaws and to compliance with other provisions of this division
and any other applicable laws, a corporation, in carrying out its
activities, shall have all of the powers of a natural person,
including, without limitation, the power to:

(a) Adopt, use, and at will alter a corporate seal, but failure to
affix a seal does not affect the validity of any instrument.

(b) Adopt, amend, and repeal bylaws.

(c) Qualify to conduct its activities in any other state, territory,
dependency begin insert , end insert or foreign country.

(d) Issue, purchase, redeem, receive, take or otherwise acquire,
own, sell, lend, exchange, transfer or otherwise dispose of, pledge,
use begin insert , end insert and otherwise deal in and with its own bonds, debentures,
notes and debt securities.

(e) Issue memberships.

(f) Pay pensions, and establish and carry out pension, deferred
compensation, saving, thrift begin insert , end insert and other retirement, incentive begin insert , end insert and
benefit plans, trusts, and provisions for any or all of its directors,
officers, employees, and persons providing services to it or any of
its subsidiary or related or associated corporations, and to
indemnify and purchase and maintain insurance on behalf of any
fiduciary of such plans, trusts, or provisions.

(g) Levy dues, assessments, and fees.

(h) Make donations for the public welfare or for community
funds, hospital, charitable, educational, scientific, civic, religious begin insert , end insert
or similar purposes.

(i) Assume obligations, enter into contracts, including contracts
of guarantee or suretyship, incur liabilities, borrow or lend money
or otherwise use its credit, and secure any of its obligations,
contracts or liabilities by mortgage, pledge or other encumbrance
of all or any part of its property and income.

(j) Participate with others in any partnership, joint venture or
other association, transaction or arrangement of any kind whether
or not such participation involves sharing or delegation of control
with or to others.

(k) Act as trustee under any trust incidental to the principal
objects of the corporation, and receive, hold, administer, exchange,
and expend funds and property subject to such trust.

(l) Carry on a business at a profit and apply any profit that results
from the business activity to any activity in which it may lawfully
engage.

(m) Pay the reasonable value of services rendered in this state
to the corporation before January 1, 1975, and not previously paid,
by any person who performed such services on a full-time basis
under the direction of a religious organization in connection with
the religious tenets of the organization. Such person shall have
relied solely on the religious organization for his or her financial
support for a minimum of five years. A payment shall not be made
if such person or religious organization waives the payment or
receipt of compensation for such services in writing. Payment may
be made to such religious organization to reimburse it for
maintenance of any person who rendered such services and to
assist it in providing future support and maintenance; however,
payment shall not be made from any funds or assets acquired with
funds donated by or traceable to gifts made to the corporation by
any person, organization begin insert , end insert or governmental agency other than the
members, immediate families of members begin insert , end insert and affiliated religious
organizations of the religious organization under whose direction
the services were performed.

(n) (1) In begin delete advance end delete begin insert anticipation end insert of or during an emergency, take
begin delete any or all end delete begin insert either or both end insert of the following actions necessary to
conduct the corporation’s ordinary business operations and affairs
begin delete during an emergency end delete , unless emergency bylaws provide otherwise
pursuant to subdivision (g) of Section 9151:

(A) Modify lines of succession to accommodate the incapacity
of any director, officer, employee, or agent resulting from the
emergency.

(B) Relocate the principal office, designate alternative principal
offices or regional offices, or authorize the officers to do so.

begin insert

(2) During an emergency, take either or both of the following
actions necessary to conduct the corporation’s ordinary business
operations and affairs, unless emergency bylaws provide otherwise
pursuant to subdivision (g) of Section 9151:

end insert begin delete

(C)

end delete

begin insert (A) end insert  Give notice to a director or directors in any practicable
manner under the circumstances, including, but not limited to, by
publication and radio, when notice of a meeting of the board cannot
be given to that director or directors in the manner prescribed by
the bylaws or Section 9211.

begin delete

(D)

end delete

begin insert (B) end insert  Deem that one or more officers of the corporation present
at a board meeting is a director, in order of rank and within the
same rank in order of seniority, as necessary to achieve a quorum
for that meeting.

begin delete

(2) During

end delete

begin insert (3) end insert begin insert   end insert begin insert In anticipation of or during end insert an emergency, the board may
not take any action that requires the vote of the begin delete shareholders end delete
begin insert members end insert or is not in the corporation’s ordinary course of business,
unless the required vote of the begin delete shareholders end delete begin insert members end insert was obtained
prior to the emergency.

begin delete

(3)

end delete

begin insert (4) end insert  Any actions taken in good faith begin insert in anticipation of or end insert during
an emergency under this subdivision begin delete binds end delete begin insert bind end insert the corporation
and may not be used to impose liability on a corporate director,
officer, employee, or agent.

begin delete

(4)

end delete

begin insert (5) end insert  For purposes of this subdivision, “emergency” means any
of the following events or circumstances as a result of which, and
only so long as, a quorum of the corporation’s board of directors
cannot be readily convened for action:

(A) A natural catastrophe, including, but not limited to, a
hurricane, tornado, storm, high water, wind-driven water, tidal
wave, tsunami, earthquake, volcanic eruption, landslide, mudslide,
snowstorm, or drought, or, regardless of cause, any fire, flood, or
explosion.

(B) An attack on this state or nation by an enemy of the United
States of America, or upon receipt by this state of a warning from
the federal government indicating that an enemy attack is probable
or imminent.

(C) An act of terrorism or other manmade disaster that results
in extraordinary levels of casualties or damage or disruption
severely affecting the infrastructure, environment, economy,
government functions, or population, including, but not limited
to, mass evacuations.

(D) A state of emergency proclaimed by begin delete the Governor end delete begin insert a
governor or by the President end insert .

SEC. 8.  

Section 9151 of the Corporations Code is amended to
read:

9151.  

(a) The bylaws shall set forth (unless such provision is
contained in the articles, in which case it may only be changed by
an amendment of the articles) the number of directors of the
corporation, or the method of determining the number of directors
of the corporation, or that the number of directors shall be not less
than a stated minimum nor more than a stated maximum with the
exact number of directors to be fixed, within the limits specified,
by approval of the board or the members (Section 5034), in the
manner provided in the bylaws, subject to subdivision (e) of
Section 9151. The number or minimum number of directors may
be one or more.

(b) Except as otherwise provided in the articles or bylaws, once
members have been admitted, a bylaw specifying or changing a
fixed number of directors or the maximum or minimum number
or changing from a fixed to a variable board or vice versa may
only be adopted by approval of the members (Section 5034).

(c) The bylaws may contain any provision, not in conflict with
law or the articles, for the management of the activities and for
the conduct of the affairs of the corporation, including but not
limited to:

(1) Any provision referred to in subdivision (c) of Section 9132.

(2) The time, place begin insert , end insert and manner of calling, conducting begin insert , end insert and
giving notice of members’, directors’ begin insert , end insert and committee meetings,
or of conducting mail ballots.

(3) The qualifications, duties begin insert , end insert and compensation of directors;
the time of their election; and the requirements of a quorum for
directors’ and committee meetings.

(4) The appointment of committees, composed of directors or
nondirectors begin insert , end insert or both, by the board or any officer and the authority
of any such committees.

(5) The appointment, duties, compensation begin insert , end insert and tenure of
officers.

(6) The mode of determination of members of record.

(7) The making of reports and financial statements to members.

(8) Setting, imposing begin insert , end insert and collecting dues, assessments, and
admissions and transfer fees.

(d) The bylaws may provide for the manner of admission,
withdrawal, suspension, and expulsion of members.

(e) The bylaws may require, for any or all corporate actions
(except as provided in Section 9222 and subdivision (b) of Section
9680), the vote of a larger proportion of, or all of, the members or
the members of any class, unit, or grouping of members, or the
vote of a larger proportion of, or all of, the directors than is
otherwise required by this part. Such a provision in the bylaws
requiring such greater vote shall not be altered, amended begin insert , end insert or
repealed except by such greater vote, unless otherwise provided
in the bylaws.

(f) The bylaws may contain a provision limiting the number of
members, in total or of any class, which the corporation is
authorized to admit.

(g) (1) The bylaws may contain any provision, not in conflict
with the articles, to manage and conduct the ordinary business
affairs of the corporation effective only in an emergency as defined
in Section 9140, including, but not limited to, procedures for calling
a board meeting, quorum requirements for a board meeting, and
designation of additional or substitute directors.

(2) During an emergency, the board may not take any action
that requires the vote of the begin delete shareholders end delete begin insert members end insert or otherwise is
not in the corporation’s ordinary course of business, unless the
required vote of the begin delete shareholders end delete begin insert members end insert was obtained prior to
the emergency.

(3) All provisions of the regular bylaws consistent with the
emergency bylaws shall remain effective during the emergency,
and the emergency bylaws shall not be effective after the
emergency ends.

(4) Corporate action taken in good faith in accordance with the
emergency bylaws binds the corporation, and may not be used to
impose liability on a corporate director, officer, employee, or agent.