Amended in Senate April 6, 2015

Senate Bill No. 351

Introduced by Committee on Banking and Financial Institutions (Senators Block (Chair), Galgiani, Hall, Hueso, Lara, Morrell, and Vidak)

February 24, 2015

An act to amend Sections begin insert 173, 305, 307, 312, 313, 416, 703, 1102, end insert 5039.5, 5213, 7213, 9213, 12228.5, 12320, 12331, begin delete and end delete 12353 begin insert , and 13401.5 end insert of begin insert , and to add Section 156.6 to, end insert the Corporations Code, relating to corporations.

LEGISLATIVE COUNSEL’S DIGEST

SB 351, as amended, Committee on Banking and Financial Institutions. begin delete Corporations: management. end delete begin insert Corporations. end insert

(1)  begin insert The General Corporation Law generally authorizes the formation of general corporations. end insert The Nonprofit Corporation Law authorizes the formation of public benefit corporations, mutual benefit corporations, and religious corporations. The Consumer Cooperative Corporation Law authorizes the formation of consumer cooperatives. Each of these laws require a corporation formed under its provisions to have specific corporate officers, which include, among others, a chair of the board, which is also referred to with gender variations.

This bill would specifically expand the permissible titles relating to a chair of a board. begin insert This bill would make nonsubstantive changes relating to bylaws effective during an emergency, as defined. end insert

(2) The Consumer Cooperative Corporation Law authorizes the formation of consumer cooperatives corporations, and specifies the corporate power of a corporation and its officers formed under its provisions.

This bill would expand the authority of a consumer cooperative corporation to conduct its ordinary business operations in anticipation of, or under the conditions of, an emergency, as defined, to include, among others, the authority to modify the requirements of giving notice to directors of a meeting of the board of directors in any practicable manner. The bill would also authorize a consumer cooperative corporation to enact bylaws effective only during an emergency relating to the management and conduct of its ordinary business affairs, to include, among others, bylaws providing procedures for designating additional or substitute directors.

begin insert

(3) The Moscone-Knox Professional Corporation Act provides for the organization of a corporation under certain existing law for the purposes of qualifying as a professional corporation under that act and rendering professional services. The act authorizes specified healing arts practitioners to be shareholders, officers, directors, or professional employees of a designated professional corporation, subject to certain limitations relating to ownership of shares.

end insert begin insert

This bill would add dental assistants, licensed dentists, registered dental hygienists, and registered dental hygienists in extended functions to the list of healing arts practitioners who may be shareholders, officers, or directors of a registered dental hygienist in alternative practice corporation.

end insert

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 156.6 is added to the end insert begin insert Corporations Code end insert begin insert ,
to read: end insert

begin insert

begin insert 156.6. end insert   

All references in this division to “chairperson of the
board” shall be deemed to refer to all permissible titles for the
chairperson of the board, as permitted by Section 312.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 173 of the end insert begin insert Corporations Code end insert begin insert is amended to
read: end insert

173.  

“Officers’ certificate” means a certificate signed and
verified by the begin delete chairman end delete begin insert chairperson end insert of the board, the president
or any vice president and by the secretary, the chief financial
officer, the treasurer or any assistant secretary or assistant treasurer.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 305 of the end insert begin insert Corporations Code end insert begin insert is amended to
read: end insert

305.  

(a) Unless otherwise provided in the articles or bylaws
and except for a vacancy created by the removal of a director,
vacancies on the board may be filled by approval of the board
(Section 151) or, if the number of directors then in office is less
than a quorum, by (1) the unanimous written consent of the
directors then in office, (2) the affirmative vote of a majority of
the directors then in office at a meeting held pursuant to notice or
waivers of notice complying with Section 307 or (3) a sole
remaining director. Unless the articles or a bylaw adopted by the
shareholders provide that the board may fill vacancies occurring
in the board by reason of the removal of directors, such vacancies
may be filled only by approval of the shareholders (Section 153).

(b) The shareholders may elect a director at any time to fill any
vacancy not filled by the directors. Any such election by written
consent other than to fill a vacancy created by removal, which
requires the unanimous consent of all shares entitled to vote for
the election of directors, requires the consent of a majority of the
outstanding shares entitled to vote.

(c) If, after the filling of any vacancy by the directors, the
directors then in office who have been elected by the shareholders
shall constitute less than a majority of the directors then in office,
then both of the following shall be applicable:

(1) Any holder or holders of an aggregate of 5 percent or more
of the total number of shares at the time outstanding having the
right to vote for those directors may call a special meeting of
shareholders, or

(2) The superior court of the proper county shall, upon
application of such shareholder or shareholders, summarily order
a special meeting of shareholders, to be held to elect the entire
board. The term of office of any director shall terminate upon that
election of a successor.

The hearing on any application filed pursuant to this subdivision
shall be held on not less than 10 business days notice to the
corporation. If the corporation intends to oppose the application,
it shall file with the court a notice of opposition not later than five
business days prior to the date set for the hearing. The application
and any notice of opposition shall be supported by appropriate
affidavits and the court’s determination shall be made on the basis
of the papers in the record; but, for good cause shown, the court
may receive and consider at the hearing additional evidence, oral
or documentary, and additional points and authorities. The hearing
shall take precedence over all other matters not of a similar nature
pending on the date set for the hearing.

(d) Any director may resign effective upon giving written notice
to the begin delete chairman end delete begin insert chairperson end insert of the board, the president, the
secretary or the board of directors of the corporation, unless the
notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a
successor may be elected to take office when the resignation
becomes effective.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 307 of the end insert begin insert Corporations Code end insert begin insert is amended to
read: end insert

307.  

(a) Unless otherwise provided in the articles or, subject
to paragraph (5) of subdivision (a) of Section 204, in the bylaws,
all of the following apply:

(1) Meetings of the board may be called by the begin delete chair end delete begin insert chairperson end insert
of the board or the president or any vice president or the secretary
or any two directors.

(2) Regular meetings of the board may be held without notice
if the time and place of the meetings are fixed by the bylaws or
the board. Special meetings of the board shall be held upon four
days’ notice by mail or 48 hours’ notice delivered personally or
by telephone, including a voice messaging system or by electronic
transmission by the corporation (Section 20). The articles or bylaws
may not dispense with notice of a special meeting. A notice, or
waiver of notice, need not specify the purpose of any regular or
special meeting of the board.

(3) Notice of a meeting need not be given to a director who
provides a waiver of notice or a consent to holding the meeting or
an approval of the minutes thereof in writing, whether before or
after the meeting, or who attends the meeting without protesting,
prior thereto or at its commencement, the lack of notice to that
director. These waivers, consents and approvals shall be filed with
the corporate records or made a part of the minutes of the meeting.

(4) A majority of the directors present, whether or not a quorum
is present, may adjourn any meeting to another time and place. If
the meeting is adjourned for more than 24 hours, notice of an
adjournment to another time or place shall be given prior to the
time of the adjourned meeting to the directors who were not present
at the time of the adjournment.

(5) Meetings of the board may be held at a place within or
without the state that has been designated in the notice of the
meeting or, if not stated in the notice or there is no notice,
designated in the bylaws or by resolution of the board.

(6) Members of the board may participate in a meeting through
use of conference telephone, electronic video screen
communication, or electronic transmission by and to the
corporation (Sections 20 and 21). Participation in a meeting through
use of conference telephone or electronic video screen
communication pursuant to this subdivision constitutes presence
in person at that meeting as long as all members participating in
the meeting are able to hear one another. Participation in a meeting
through electronic transmission by and to the corporation (other
than conference telephone and electronic video screen
communication), pursuant to this subdivision constitutes presence
in person at that meeting if both of the following apply:

(A) Each member participating in the meeting can communicate
with all of the other members concurrently.

(B) Each member is provided the means of participating in all
matters before the board, including, without limitation, the capacity
to propose, or to interpose an objection to, a specific action to be
taken by the corporation.

(7) A majority of the authorized number of directors constitutes
a quorum of the board for the transaction of business. The articles
or bylaws may not provide that a quorum shall be less than
one-third the authorized number of directors or less than two,
whichever is larger, unless the authorized number of directors is
one, in which case one director constitutes a quorum.

(8) An act or decision done or made by a majority of the
directors present at a meeting duly held at which a quorum is
present is the act of the board, subject to the provisions of Section
310 and subdivision (e) of Section 317. The articles or bylaws may
not provide that a lesser vote than a majority of the directors present
at a meeting is the act of the board. A meeting at which a quorum
is initially present may continue to transact business
notwithstanding the withdrawal of directors, if any action taken is
approved by at least a majority of the required quorum for that
meeting.

(b) An action required or permitted to be taken by the board
may be taken without a meeting, if all members of the board shall
individually or collectively consent in writing to that action and
if the number of members of the board serving at the time
constitutes a quorum. The written consent or consents shall be
filed with the minutes of the proceedings of the board. For purposes
of this subdivision only, “all members of the board” shall include
an “interested director” as described in subdivision (a) of Section
310 or a “common director” as described in subdivision (b) of
Section 310 who abstains in writing from providing consent, where
the disclosures required by Section 310 have been made to the
noninterested or noncommon directors, as applicable, prior to their
execution of the written consent or consents, the specified
disclosures are conspicuously included in the written consent or
consents executed by the noninterested or noncommon directors,
and the noninterested or noncommon directors, as applicable,
approve the action by a vote that is sufficient without counting the
votes of the interested or common directors. If written consent is
provided by the directors in accordance with the immediately
preceding sentence and the disclosures made regarding the action
that is the subject of the consent do not comply with the
requirements of Section 310, the action that is the subject of the
consent shall be deemed approved, but in any suit brought to
challenge the action, the party asserting the validity of the action
shall have the burden of proof in establishing that the action was
just and reasonable to the corporation at the time it was approved.

(c) This section applies also to committees of the board and
incorporators and action by those committees and incorporators,
mutatis mutandis.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 312 of the end insert begin insert Corporations Code end insert begin insert is amended to
read: end insert

312.  

(a) A corporation shall have begin insert (1) end insert a begin delete chairman end delete begin insert chairperson end insert
of the board begin insert , who may be given the title of chair, chairperson,
chairman, chairwoman, chair of the board, chairperson of the
board, chairman of the board, or chairwoman of the board, end insert or a
president or both, begin insert (2) end insert a secretary, begin insert (3) end insert a chief financial officer begin insert , end insert and
begin insert (4) end insert such other officers with such titles and duties as shall be stated
in the bylaws or determined by the board and as may be necessary
to enable it to sign instruments and share certificates. The president,
or if there is no president the begin delete chairman end delete begin insert chairperson end insert of the board,
is the general manager and chief executive officer of the
corporation, unless otherwise provided in the articles or bylaws.
Any number of offices may be held by the same person unless the
articles or bylaws provide otherwise.

(b) Except as otherwise provided by the articles or bylaws,
officers shall be chosen by the board and serve at the pleasure of
the board, subject to the rights, if any, of an officer under any
contract of employment. Any officer may resign at any time upon
written notice to the corporation without prejudice to the rights, if
any, of the corporation under any contract to which the officer is
a party.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 313 of the end insert begin insert Corporations Code end insert begin insert is amended to
read: end insert

313.  

Subject to the provisions of subdivision (a) of Section
208, any note, mortgage, evidence of indebtedness, contract, share
certificate, initial transaction statement or written statement,
conveyance, or other instrument in writing, and any assignment
or endorsement thereof, executed or entered into between any
corporation and any other person, when signed by the begin delete chairman end delete
begin insert chairperson end insert of the board, the president or any vice president and
the secretary, any assistant secretary, the chief financial officer or
any assistant treasurer of such corporation, is not invalidated as to
the corporation by any lack of authority of the signing officers in
the absence of actual knowledge on the part of the other person
that the signing officers had no authority to execute the same.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 416 of the end insert begin insert Corporations Code end insert begin insert is amended to
read: end insert

416.  

(a) Every holder of shares in a corporation shall be
entitled to have a certificate signed in the name of the corporation
by the begin delete chairman end delete begin insert chairperson end insert or vice begin delete chairman end delete begin insert chairperson end insert of the
board or the president or a vice president and by the chief financial
officer or an assistant treasurer or the secretary or any assistant
secretary, certifying the number of shares and the class or series
of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has
been placed upon a certificate has ceased to be such officer, transfer
agent or registrar before such certificate is issued, it may be issued
by the corporation with the same effect as if such person were an
officer, transfer agent or registrar at the date of issue.

(b) Notwithstanding subdivision (a), a corporation may adopt
a system of issuance, recordation and transfer of its shares by
electronic or other means not involving any issuance of certificates,
including provisions for notice to purchasers in substitution for
the required statements on certificates under Sections 417, 418,
and 1302, and as may be required by the commissioner in
administering the Corporate Securities Law of 1968, which system
(1) has been approved by the United States Securities and Exchange
Commission, (2) is authorized in any statute of the United States,
or (3) is in accordance with Division 8 (commencing with Section
8101) of the Commercial Code. Any system so adopted shall not
become effective as to issued and outstanding certificated securities
until the certificates therefor have been surrendered to the
corporation.

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 703 of the end insert begin insert Corporations Code end insert begin insert is amended to
read: end insert

703.  

(a) Shares standing in the name of another corporation,
domestic or foreign, may be voted by an officer, agent, or
proxyholder as the bylaws of the other corporation may prescribe
or, in the absence of such provision, as the board of the other
corporation may determine or, in the absence of that determination,
by the begin delete chairman end delete begin insert chairperson end insert of the board, president or any vice
president of the other corporation, or by any other person
authorized to do so by the begin delete chairman end delete begin insert chairperson end insert of the board,
president, or any vice president of the other corporation. Shares
which are purported to be voted or any proxy purported to be
executed in the name of a corporation (whether or not any title of
the person signing is indicated) shall be presumed to be voted or
the proxy executed in accordance with the provisions of this
subdivision, unless the contrary is shown.

(b) Shares of a corporation owned by its subsidiary shall not be
entitled to vote on any matter.

(c) Shares held by the issuing corporation in a fiduciary capacity,
and shares of an issuing corporation held in a fiduciary capacity
by its subsidiary, shall not be entitled to vote on any matter, except
as follows:

(1) To the extent that the settlor or beneficial owner possesses
and exercises a right to vote or to give the corporation binding
instructions as to how to vote such shares.

(2) Where there are one or more cotrustees who are not affected
by the prohibition of this subdivision, in which case the shares
may be voted by the cotrustees as if it or they are the sole trustee.

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 1102 of the end insert begin insert Corporations Code end insert begin insert is amended to
read: end insert

1102.  

Each corporation shall sign the agreement by its begin delete chairman end delete
begin insert chairperson end insert of the board, president or a vice president and secretary
or an assistant secretary acting on behalf of their respective
corporations.

begin delete SECTION 1. end delete
begin insert SEC. 10. end insert   

Section 5039.5 of the Corporations Code is amended
to read:

5039.5.  

All references in this division to “chairman of the
board,” other than in Sections 5213, 7213, and 9213, shall be
deemed to refer to all permissible titles for a chair of the board, as
permitted by Sections 5213, 7213, and 9213.

begin delete SEC. 2. end delete
begin insert SEC. 11. end insert   

Section 5213 of the Corporations Code is amended
to read:

5213.  

(a) A corporation shall have (1) a chair of the board,
who may be given the title chair, chairperson, chairman,
begin delete chairwomen, end delete begin insert chairwoman, end insert chair of the board, chairperson of the
board, chairman of the board, or chairwoman of the board, or a
president or both, (2) a secretary, (3) a treasurer or a chief financial
officer or both, and (4) any other officers with any titles and duties
as shall be stated in the bylaws or determined by the board and as
may be necessary to enable it to sign instruments. The president,
or if there is no president the chair of the board, is the general
manager and chief executive officer of the corporation, unless
otherwise provided in the articles or bylaws. Unless otherwise
specified in the articles or the bylaws, if there is no chief financial
officer, the treasurer is the chief financial officer of the corporation.
Any number of offices may be held by the same person unless the
articles or bylaws provide otherwise, except that no person serving
as the secretary, the treasurer, or the chief financial officer may
serve concurrently as the president or chair of the board. Any
compensation of the president or chief executive officer and the
chief financial officer or treasurer shall be determined in
accordance with subdivision (g) of Section 12586 of the
Government Code, if applicable.

(b) Except as otherwise provided by the articles or bylaws,
officers shall be chosen by the board and serve at the pleasure of
the board, subject to the rights, if any, of an officer under any
contract of employment. Any officer may resign at any time upon
written notice to the corporation without prejudice to the rights, if
any, of the corporation under any contract to which the officer is
a party.

(c) If the articles or bylaws provide for the election of any
officers by the members, the term of office of the elected officer
shall be one year unless the articles or bylaws provide for a
different term which shall not exceed three years.

begin delete SEC. 3. end delete
begin insert SEC. 12. end insert   

Section 7213 of the Corporations Code is amended
to read:

7213.  

(a) A corporation shall have (1) a chair of the board,
who may be given the title chair, chairperson, chairman,
begin delete chairwomen, end delete begin insert chairwoman, end insert chair of the board, chairperson of the
board, chairman of the board, or chairwoman of the board, or a
president or both, (2) a secretary, (3) a treasurer or a chief financial
officer or both, and (4) any other officers with any titles and duties
as shall be stated in the bylaws or determined by the board and as
may be necessary to enable it to sign instruments. The president,
or if there is no president the chair of the board, is the general
manager and chief executive officer of the corporation, unless
otherwise provided in the articles or bylaws. Unless otherwise
specified in the articles or the bylaws, if there is no chief financial
officer, the treasurer is the chief financial officer of the corporation.
Any number of offices may be held by the same person unless the
articles or bylaws provide otherwise. Where a corporation holds
assets in charitable trust, any compensation of the president or
chief executive officer and the chief financial officer or treasurer
shall be determined in accordance with subdivision (g) of Section
12586 of the Government Code, if applicable.

(b) Except as otherwise provided by the articles or bylaws,
officers shall be chosen by the board and serve at the pleasure of
the board, subject to the rights, if any, of an officer under any
contract of employment. Any officer may resign at any time upon
written notice to the corporation without prejudice to the rights, if
any, of the corporation under any contract to which the officer is
a party.

begin delete SEC. 4. end delete
begin insert SEC. 13. end insert   

Section 9213 of the Corporations Code is amended
to read:

9213.  

(a) A corporation shall have (1) a chair of the board,
who may be given the title chair, chairperson, chairman,
begin delete chairwomen, end delete begin insert chairwoman, end insert chair of the board, chairperson of the
board, chairman of the board, or chairwoman of the board, or a
president or both, (2) a secretary, (3) a treasurer or a chief financial
officer or both and (4) any other officers with any titles and duties
as are stated in the bylaws or determined by the board and as may
be necessary to enable it to sign instruments. The president, or if
there is no president, the chair of the board, is the general manager
and chief executive officer of the corporation, unless otherwise
provided in the articles or bylaws. Unless otherwise specified in
the articles or the bylaws, if there is no chief financial officer, the
treasurer is the chief financial officer of the corporation. Any
number of offices may be held by the same person unless the
articles or bylaws provide otherwise, except that no person serving
as the secretary, the treasurer, or the chief financial officer may
serve concurrently as the president or chair of the board. Any
compensation of the president or chief executive officer and the
chief financial officer or treasurer shall be determined in
accordance with subdivision (g) of Section 12586 of the
Government Code, if applicable.

(b) Except as otherwise provided by the articles or bylaws,
officers shall be chosen by the board and serve at the pleasure of
the board, subject to the rights, if any, of an officer under any
contract of employment. Any officer may resign at any time upon
written notice to the corporation without prejudice to the rights, if
any, of the corporation under any contract to which the officer is
a party.

begin delete SEC. 5. end delete
begin insert SEC. 14. end insert   

Section 12228.5 of the Corporations Code is amended
to read:

12228.5.  

For the purposes of this part, all references to
“chairman of the board,” other than in Section 12353, shall be
deemed to refer to all permissible titles for a chair of the board, as
permitted by Section 12353.

begin delete SEC. 6. end delete
begin insert SEC. 15. end insert   

Section 12320 of the Corporations Code is amended
to read:

12320.  

Subject to any limitations contained in the articles or
bylaws and to compliance with other provisions of this part 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 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 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.

(f) Issue certificates evidencing membership in accordance with
the provisions of Section 12401 and issue identity cards to identify
those persons eligible to use the corporation’s facilities.

(g) Levy dues, assessments, and membership 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)  begin delete In anticipation of or during an emergency, take either
or both of the following actions necessary to conduct the
corporation’s ordinary business operations and affairs, unless
bylaws, authorized pursuant to subdivision (h) of Section 12331,
provide otherwise: end delete begin insert In anticipation of or 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 (h)
of Section 12331: end insert

(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.

(2)  begin delete During an emergency, take either or both of the following
actions necessary to conduct the corporation’s ordinary business
operations and affairs, unless bylaws, authorized pursuant to
subdivision (h) of Section 12331, provide otherwise: end delete begin insert 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 (h) of Section 12331: end insert

(A) 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 12351.

(B) 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.

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

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

(5) 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, 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 end delete begin insert a end insert Governor or by
the President of the United States.

begin delete SEC. 7. end delete
begin insert SEC. 16. end insert   

Section 12331 of the Corporations Code is amended
to read:

12331.  

(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 or 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 (Sections 12222 and
12224), in the manner provided in the bylaws, subject to
subdivision (e). The number or minimum number of directors shall
not be less than three. Alternate directors may be permitted, in
which event, the bylaws shall specify the manner and times of
their election and the conditions to their service in place of a
director.

(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.

(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 begin insert , end insert but not
limited to:

(1) Any provision referred to in subdivision (c) of Section
12313.

(2) The time, place and manner of calling, conducting and giving
notice of members’, directors’, 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 or both, by the board or any officer and the authority
of these 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
membership and transfer fees.

(9) The time and manner of patronage distributions consistent
with this part.

(d) The bylaws may provide for eligibility, the manner of
admission, withdrawal, suspension, and expulsion of members,
and the suspension or termination of memberships consistent with
the requirements of Section 12431.

(e) The bylaws may require, for any or all corporate actions,
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. A provision in the bylaws requiring a greater
vote shall not be altered, amended begin insert , end insert or repealed except by the 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 or series, which the corporation
is authorized to admit.

(g) The bylaws may provide for the establishment by the
corporation of a program for the education of its members, officers,
employees begin insert , end insert and the general public in the principles and techniques
of cooperation.

(h) (1)  begin delete 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 during an emergency,
including, but not limited to, procedures for calling a board
meeting, quorum requirements for a board meeting, and designation
of additional or substitute directors. end delete begin insert 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 12320, including, but not
limited to, procedures for calling a board meeting, quorum
requirements for a board meeting, and designation of additional
or substitute directors. end insert

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

(3)  begin delete All provisions of the regular bylaws consistent with the
bylaws effective only in the event of an emergency shall remain
effective during the emergency, and the emergency bylaws shall
not be effective after the emergency ends. end delete begin insert 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. end insert

(4)  begin delete Corporate action taken in good faith in accordance with the
bylaws effective only in the event of an emergency binds the
corporation, and may not be used to impose liability on a corporate
director, officer, employee, or agent. end delete begin insert 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. end insert

begin delete

(5) For purposed of this subdivision, “emergency” has the same
meaning as the term does in Section 12320.

end delete

begin delete SEC. 8. end delete
begin insert SEC. 17. end insert   

Section 12353 of the Corporations Code is amended
to read:

12353.  

(a) A corporation shall have (1) a chair of the board,
who may be given the title chair, chairperson, chairman,
begin delete chairwomen, end delete begin insert chairwoman, end insert chair of the board, chairperson of the
board, chairman of the board, or chairwoman of the board, or a
president or both, (2) a secretary, (3) a treasurer or a chief financial
officer or both, and (4) any other officers with any titles and duties
as shall be stated in the bylaws or determined by the board and as
may be necessary to enable it to sign instruments. The president,
or if there is no president the chair of the board, is the chief
executive officer of the corporation, unless otherwise provided in
the articles or bylaws. Unless otherwise specified in the articles
or the bylaws, if there is no chief financial officer, the treasurer is
the chief financial officer of the corporation. Any number of offices
may be held by the same person unless the articles or bylaws
provide otherwise. Either the chair of the board or the president
shall be elected from among those board members elected by the
membership of the corporation.

(b) Except as otherwise provided by the articles or bylaws,
officers shall be chosen by the board and serve at the pleasure of
the board, subject to the rights, if any, of an officer under any
contract of employment. Any officer may resign at any time upon
written notice to the corporation without prejudice to the rights, if
any, of the corporation under any contract to which the officer is
a party.

begin insert

begin insert SEC. 18. end insert   

end insert

begin insert Section 13401.5 of the end insert begin insert Corporations Code end insert begin insert is amended
to read: end insert

13401.5.  

Notwithstanding subdivision (d) of Section 13401
and any other provision of law, the following licensed persons
may be shareholders, officers, directors, or professional employees
of the professional corporations designated in this section so long
as the sum of all shares owned by those licensed persons does not
exceed 49 percent of the total number of shares of the professional
corporation so designated herein, and so long as the number of
those licensed persons owning shares in the professional
corporation so designated herein does not exceed the number of
persons licensed by the governmental agency regulating the
designated professional corporation. This section does not limit
employment by a professional corporation designated in this section
of only those licensed professionals listed under each subdivision.
Any person duly licensed under Division 2 (commencing with
Section 500) of the Business and Professions Code, the
Chiropractic Act, or the Osteopathic Act may be employed to
render professional services by a professional corporation
designated in this section.

(a) Medical corporation.

(1) Licensed doctors of podiatric medicine.

(2) Licensed psychologists.

(3) Registered nurses.

(4) Licensed optometrists.

(5) Licensed marriage and family therapists.

(6) Licensed clinical social workers.

(7) Licensed physician assistants.

(8) Licensed chiropractors.

(9) Licensed acupuncturists.

(10) Naturopathic doctors.

(11) Licensed professional clinical counselors.

(12) Licensed physical therapists.

(b) Podiatric medical corporation.

(1) Licensed physicians and surgeons.

(2) Licensed psychologists.

(3) Registered nurses.

(4) Licensed optometrists.

(5) Licensed chiropractors.

(6) Licensed acupuncturists.

(7) Naturopathic doctors.

(8) Licensed physical therapists.

(c) Psychological corporation.

(1) Licensed physicians and surgeons.

(2) Licensed doctors of podiatric medicine.

(3) Registered nurses.

(4) Licensed optometrists.

(5) Licensed marriage and family therapists.

(6) Licensed clinical social workers.

(7) Licensed chiropractors.

(8) Licensed acupuncturists.

(9) Naturopathic doctors.

(10) Licensed professional clinical counselors.

(d) Speech-language pathology corporation.

(1) Licensed audiologists.

(e) Audiology corporation.

(1) Licensed speech-language pathologists.

(f) Nursing corporation.

(1) Licensed physicians and surgeons.

(2) Licensed doctors of podiatric medicine.

(3) Licensed psychologists.

(4) Licensed optometrists.

(5) Licensed marriage and family therapists.

(6) Licensed clinical social workers.

(7) Licensed physician assistants.

(8) Licensed chiropractors.

(9) Licensed acupuncturists.

(10) Naturopathic doctors.

(11) Licensed professional clinical counselors.

(g) Marriage and family therapist corporation.

(1) Licensed physicians and surgeons.

(2) Licensed psychologists.

(3) Licensed clinical social workers.

(4) Registered nurses.

(5) Licensed chiropractors.

(6) Licensed acupuncturists.

(7) Naturopathic doctors.

(8) Licensed professional clinical counselors.

(h) Licensed clinical social worker corporation.

(1) Licensed physicians and surgeons.

(2) Licensed psychologists.

(3) Licensed marriage and family therapists.

(4) Registered nurses.

(5) Licensed chiropractors.

(6) Licensed acupuncturists.

(7) Naturopathic doctors.

(8) Licensed professional clinical counselors.

(i) Physician assistants corporation.

(1) Licensed physicians and surgeons.

(2) Registered nurses.

(3) Licensed acupuncturists.

(4) Naturopathic doctors.

(j) Optometric corporation.

(1) Licensed physicians and surgeons.

(2) Licensed doctors of podiatric medicine.

(3) Licensed psychologists.

(4) Registered nurses.

(5) Licensed chiropractors.

(6) Licensed acupuncturists.

(7) Naturopathic doctors.

(k) Chiropractic corporation.

(1) Licensed physicians and surgeons.

(2) Licensed doctors of podiatric medicine.

(3) Licensed psychologists.

(4) Registered nurses.

(5) Licensed optometrists.

(6) Licensed marriage and family therapists.

(7) Licensed clinical social workers.

(8) Licensed acupuncturists.

(9) Naturopathic doctors.

(10) Licensed professional clinical counselors.

(l) Acupuncture corporation.

(1) Licensed physicians and surgeons.

(2) Licensed doctors of podiatric medicine.

(3) Licensed psychologists.

(4) Registered nurses.

(5) Licensed optometrists.

(6) Licensed marriage and family therapists.

(7) Licensed clinical social workers.

(8) Licensed physician assistants.

(9) Licensed chiropractors.

(10) Naturopathic doctors.

(11) Licensed professional clinical counselors.

(m) Naturopathic doctor corporation.

(1) Licensed physicians and surgeons.

(2) Licensed psychologists.

(3) Registered nurses.

(4) Licensed physician assistants.

(5) Licensed chiropractors.

(6) Licensed acupuncturists.

(7) Licensed physical therapists.

(8) Licensed doctors of podiatric medicine.

(9) Licensed marriage and family therapists.

(10) Licensed clinical social workers.

(11) Licensed optometrists.

(12) Licensed professional clinical counselors.

(n) Dental corporation.

(1) Licensed physicians and surgeons.

(2) Dental assistants.

(3) Registered dental assistants.

(4) Registered dental assistants in extended functions.

(5) Registered dental hygienists.

(6) Registered dental hygienists in extended functions.

(7) Registered dental hygienists in alternative practice.

(o) Professional clinical counselor corporation.

(1) Licensed physicians and surgeons.

(2) Licensed psychologists.

(3) Licensed clinical social workers.

(4) Licensed marriage and family therapists.

(5) Registered nurses.

(6) Licensed chiropractors.

(7) Licensed acupuncturists.

(8) Naturopathic doctors.

(p) Physical therapy corporation.

(1) Licensed physicians and surgeons.

(2) Licensed doctors of podiatric medicine.

(3) Licensed acupuncturists.

(4) Naturopathic doctors.

(5) Licensed occupational therapists.

(6) Licensed speech-language therapists.

(7) Licensed audiologists.

(8) Registered nurses.

(9) Licensed psychologists.

(10) Licensed physician assistants.

begin insert

(q) Registered Dental Hygienist in Alternative Practice
Corporation.

end insert begin insert

(1) Dental assistants.

end insert begin insert

(2) Licensed dentists.

end insert begin insert

(3) Registered dental hygienists.

end insert begin insert

(4) Registered dental hygienists in extended functions.

end insert