Amended in Assembly June 9, 2015

Amended in Senate May 4, 2015

Amended in Senate April 6, 2015

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

LEGISLATIVE COUNSEL’S DIGEST

SB 351, as amended, Committee on Banking and Financial Institutions. Corporations.

(1) The General Corporation Law generally authorizes the formation of general corporations. 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. This bill would make nonsubstantive changes relating to bylaws effective during an emergency, as defined.

(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 delete

(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 delete
begin delete

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 delete

Vote: majority. Appropriation: no. Fiscal committee: begin deleteyes end deletebegin insertnoend insert. State-mandated local program: no.

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

P2    1

SECTION 1.  

Section 156.6 is added to the Corporations Code,
2to read:

3

156.6.  

All references in this division to “chairperson of the
4board” shall be deemed to refer to all permissible titles for the
5chairperson of the board, as permitted by Section 312.

6

SEC. 2.  

Section 173 of the Corporations Code is amended to
7read:

8

173.  

“Officers’ certificate” means a certificate signed and
9verified by the chairperson of the board, the president or any vice
P3    1president and by the secretary, the chief financial officer, the
2treasurer or any assistant secretary or assistant treasurer.

3

SEC. 3.  

Section 305 of the Corporations Code is amended to
4read:

5

305.  

(a) Unless otherwise provided in the articles or bylaws
6and except for a vacancy created by the removal of a director,
7vacancies on the board may be filled by approval of the board
8(Section 151) or, if the number of directors then in office is less
9than a quorum, by (1) the unanimous written consent of the
10directors then in office, (2) the affirmative vote of a majority of
11the directors then in office at a meeting held pursuant to notice or
12waivers of notice complying with Section 307 or (3) a sole
13remaining director. Unless the articles or a bylaw adopted by the
14shareholders provide that the board may fill vacancies occurring
15in the board by reason of the removal of directors, such vacancies
16may be filled only by approval of the shareholders (Section 153).

17(b) The shareholders may elect a director at any time to fill any
18vacancy not filled by the directors. Any such election by written
19consent other than to fill a vacancy created by removal, which
20requires the unanimous consent of all shares entitled to vote for
21the election of directors, requires the consent of a majority of the
22outstanding shares entitled to vote.

23(c) If, after the filling of any vacancy by the directors, the
24directors then in office who have been elected by the shareholders
25shall constitute less than a majority of the directors then in office,
26then both of the following shall be applicable:

27(1) Any holder or holders of an aggregate of 5 percent or more
28of the total number of shares at the time outstanding having the
29right to vote for those directors may call a special meeting of
30shareholders, or

31(2) The superior court of the proper county shall, upon
32application of such shareholder or shareholders, summarily order
33a special meeting of shareholders, to be held to elect the entire
34board. The term of office of any director shall terminate upon that
35election of a successor.

36The hearing on any application filed pursuant to this subdivision
37shall be held on not less than 10 business days notice to the
38corporation. If the corporation intends to oppose the application,
39it shall file with the court a notice of opposition not later than five
40business days prior to the date set for the hearing. The application
P4    1and any notice of opposition shall be supported by appropriate
2affidavits and the court’s determination shall be made on the basis
3of the papers in the record; but, for good cause shown, the court
4may receive and consider at the hearing additional evidence, oral
5or documentary, and additional points and authorities. The hearing
6shall take precedence over all other matters not of a similar nature
7pending on the date set for the hearing.

8(d) Any director may resign effective upon giving written notice
9to the chairperson of the board, the president, the secretary or the
10board of directors of the corporation, unless the notice specifies a
11later time for the effectiveness of such resignation. If the
12resignation is effective at a future time, a successor may be elected
13to take office when the resignation becomes effective.

14

SEC. 4.  

Section 307 of the Corporations Code is amended to
15read:

16

307.  

(a) Unless otherwise provided in the articles or, subject
17to paragraph (5) of subdivision (a) of Section 204, in the bylaws,
18all of the following apply:

19(1) Meetings of the board may be called by the chairperson of
20the board or the president or any vice president or the secretary or
21any two directors.

22(2) Regular meetings of the board may be held without notice
23if the time and place of the meetings are fixed by the bylaws or
24the board. Special meetings of the board shall be held upon four
25days’ notice by mail or 48 hours’ notice delivered personally or
26by telephone, including a voice messaging system or by electronic
27transmission by the corporation (Section 20). The articles or bylaws
28may not dispense with notice of a special meeting. A notice, or
29waiver of notice, need not specify the purpose of any regular or
30special meeting of the board.

31(3) Notice of a meeting need not be given to a director who
32provides a waiver of notice or a consent to holding the meeting or
33an approval of the minutes thereof in writing, whether before or
34after the meeting, or who attends the meeting without protesting,
35prior thereto or at its commencement, the lack of notice to that
36director. These waivers, consents and approvals shall be filed with
37the corporate records or made a part of the minutes of the meeting.

38(4) A majority of the directors present, whether or not a quorum
39is present, may adjourn any meeting to another time and place. If
40the meeting is adjourned for more than 24 hours, notice of an
P5    1adjournment to another time or place shall be given prior to the
2time of the adjourned meeting to the directors who were not present
3at the time of the adjournment.

4(5) Meetings of the board may be held at a place within or
5without the state that has been designated in the notice of the
6meeting or, if not stated in the notice or there is no notice,
7designated in the bylaws or by resolution of the board.

8(6) Members of the board may participate in a meeting through
9use of conference telephone, electronic video screen
10communication, or electronic transmission by and to the
11corporation (Sections 20 and 21). Participation in a meeting through
12use of conference telephone or electronic video screen
13communication pursuant to this subdivision constitutes presence
14in person at that meeting as long as all members participating in
15the meeting are able to hear one another. Participation in a meeting
16through electronic transmission by and to the corporation (other
17than conference telephone and electronic video screen
18communication), pursuant to this subdivision constitutes presence
19in person at that meeting if both of the following apply:

20(A) Each member participating in the meeting can communicate
21with all of the other members concurrently.

22(B) Each member is provided the means of participating in all
23matters before the board, including, without limitation, the capacity
24to propose, or to interpose an objection to, a specific action to be
25taken by the corporation.

26(7) A majority of the authorized number of directors constitutes
27a quorum of the board for the transaction of business. The articles
28or bylaws may not provide that a quorum shall be less than
29one-third the authorized number of directors or less than two,
30whichever is larger, unless the authorized number of directors is
31one, in which case one director constitutes a quorum.

32(8) An act or decision done or made by a majority of the
33directors present at a meeting duly held at which a quorum is
34present is the act of the board, subject to the provisions of Section
35310 and subdivision (e) of Section 317. The articles or bylaws may
36not provide that a lesser vote than a majority of the directors present
37at a meeting is the act of the board. A meeting at which a quorum
38is initially present may continue to transact business
39notwithstanding the withdrawal of directors, if any action taken is
P6    1approved by at least a majority of the required quorum for that
2meeting.

3(b) An action required or permitted to be taken by the board
4may be taken without a meeting, if all members of the board shall
5individually or collectively consent in writing to that action and
6if the number of members of the board serving at the time
7constitutes a quorum. The written consent or consents shall be
8filed with the minutes of the proceedings of the board. For purposes
9of this subdivision only, “all members of the board” shall include
10an “interested director” as described in subdivision (a) of Section
11310 or a “common director” as described in subdivision (b) of
12Section 310 who abstains in writing from providing consent, where
13the disclosures required by Section 310 have been made to the
14noninterested or noncommon directors, as applicable, prior to their
15execution of the written consent or consents, the specified
16disclosures are conspicuously included in the written consent or
17consents executed by the noninterested or noncommon directors,
18and the noninterested or noncommon directors, as applicable,
19approve the action by a vote that is sufficient without counting the
20votes of the interested or common directors. If written consent is
21provided by the directors in accordance with the immediately
22preceding sentence and the disclosures made regarding the action
23that is the subject of the consent do not comply with the
24requirements of Section 310, the action that is the subject of the
25consent shall be deemed approved, but in any suit brought to
26challenge the action, the party asserting the validity of the action
27shall have the burden of proof in establishing that the action was
28just and reasonable to the corporation at the time it was approved.

29(c) This section applies also to committees of the board and
30incorporators and action by those committees and incorporators,
31mutatis mutandis.

32

SEC. 5.  

Section 312 of the Corporations Code is amended to
33read:

34

312.  

(a) A corporation shall have (1) a chairperson of the
35board, who may be given the title of chair of the board, chairperson
36of the board, chairman of the board, or chairwoman of the board,
37or a president or both, (2) a secretary, (3) a chief financial officer,
38and (4) such other officers with such titles and duties as shall be
39stated in the bylaws or determined by the board and as may be
40necessary to enable it to sign instruments and share certificates.
P7    1The president, or if there is no president the chairperson of the
2board, is the general manager and chief executive officer of the
3corporation, unless otherwise provided in the articles or bylaws.
4Any number of offices may be held by the same person unless the
5articles or bylaws provide otherwise.

6(b) Except as otherwise provided by the articles or bylaws,
7officers shall be chosen by the board and serve at the pleasure of
8the board, subject to the rights, if any, of an officer under any
9contract of employment. Any officer may resign at any time upon
10written notice to the corporation without prejudice to the rights, if
11any, of the corporation under any contract to which the officer is
12a party.

13

SEC. 6.  

Section 313 of the Corporations Code is amended to
14read:

15

313.  

Subject to the provisions of subdivision (a) of Section
16208, any note, mortgage, evidence of indebtedness, contract, share
17certificate, initial transaction statement or written statement,
18conveyance, or other instrument in writing, and any assignment
19or endorsement thereof, executed or entered into between any
20corporation and any other person, when signed by the chairperson
21of the board, the president or any vice president and the secretary,
22any assistant secretary, the chief financial officer or any assistant
23treasurer of such corporation, is not invalidated as to the
24corporation by any lack of authority of the signing officers in the
25absence of actual knowledge on the part of the other person that
26the signing officers had no authority to execute the same.

27

SEC. 7.  

Section 416 of the Corporations Code is amended to
28read:

29

416.  

(a) Every holder of shares in a corporation shall be
30entitled to have a certificate signed in the name of the corporation
31by the chairperson or vice chairperson of the board or the president
32or a vice president and by the chief financial officer or an assistant
33treasurer or the secretary or any assistant secretary, certifying the
34number of shares and the class or series of shares owned by the
35shareholder. Any or all of the signatures on the certificate may be
36facsimile. In case any officer, transfer agent or registrar who has
37signed or whose facsimile signature has been placed upon a
38certificate has ceased to be such officer, transfer agent or registrar
39before such certificate is issued, it may be issued by the corporation
P8    1with the same effect as if such person were an officer, transfer
2agent or registrar at the date of issue.

3(b) Notwithstanding subdivision (a), a corporation may adopt
4a system of issuance, recordation and transfer of its shares by
5electronic or other means not involving any issuance of certificates,
6including provisions for notice to purchasers in substitution for
7the required statements on certificates under Sections 417, 418,
8and 1302, and as may be required by the commissioner in
9administering the Corporate Securities Law of 1968, which system
10(1) has been approved by the United States Securities and Exchange
11 Commission, (2) is authorized in any statute of the United States,
12or (3) is in accordance with Division 8 (commencing with Section
138101) of the Commercial Code. Any system so adopted shall not
14become effective as to issued and outstanding certificated securities
15until the certificates therefor have been surrendered to the
16corporation.

17

SEC. 8.  

Section 703 of the Corporations Code is amended to
18read:

19

703.  

(a) Shares standing in the name of another corporation,
20domestic or foreign, may be voted by an officer, agent, or
21proxyholder as the bylaws of the other corporation may prescribe
22or, in the absence of such provision, as the board of the other
23corporation may determine or, in the absence of that determination,
24by the chairperson of the board, president or any vice president of
25the other corporation, or by any other person authorized to do so
26by the chairperson of the board, president, or any vice president
27of the other corporation. Shares which are purported to be voted
28or any proxy purported to be executed in the name of a corporation
29(whether or not any title of the person signing is indicated) shall
30be presumed to be voted or the proxy executed in accordance with
31the provisions of this subdivision, unless the contrary is shown.

32(b) Shares of a corporation owned by its subsidiary shall not be
33entitled to vote on any matter.

34(c) Shares held by the issuing corporation in a fiduciary capacity,
35and shares of an issuing corporation held in a fiduciary capacity
36by its subsidiary, shall not be entitled to vote on any matter, except
37as follows:

38(1) To the extent that the settlor or beneficial owner possesses
39and exercises a right to vote or to give the corporation binding
40instructions as to how to vote such shares.

P9    1(2) Where there are one or more cotrustees who are not affected
2by the prohibition of this subdivision, in which case the shares
3may be voted by the cotrustees as if it or they are the sole trustee.

4

SEC. 9.  

Section 1102 of the Corporations Code is amended to
5read:

6

1102.  

Each corporation shall sign the agreement by its
7chairperson of the board, president or a vice president and secretary
8or an assistant secretary acting on behalf of their respective
9corporations.

10

SEC. 10.  

Section 5039.5 of the Corporations Code is amended
11to read:

12

5039.5.  

All references in this division to “chairman of the
13board,” other than in Sections 5213, 7213, and 9213, shall be
14deemed to refer to all permissible titles for a chair of the board, as
15permitted by Sections 5213, 7213, and 9213.

16

SEC. 11.  

Section 5213 of the Corporations Code is amended
17to read:

18

5213.  

(a) A corporation shall have (1) a chair of the board,
19who may be given the title chair, chairperson, chairman,
20chairwoman, chair of the board, chairperson of the board, chairman
21of the board, or chairwoman of the board, or a president or both,
22(2) a secretary, (3) a treasurer or a chief financial officer or both,
23and (4) any other officers with any titles and duties as shall be
24stated in the bylaws or determined by the board and as may be
25necessary to enable it to sign instruments. The president, or if there
26is no president the chair of the board, is the general manager and
27chief executive officer of the corporation, unless otherwise
28provided in the articles or bylaws. Unless otherwise specified in
29the articles or the bylaws, if there is no chief financial officer, the
30treasurer is the chief financial officer of the corporation. Any
31number of offices may be held by the same person unless the
32articles or bylaws provide otherwise, except that no person serving
33as the secretary, the treasurer, or the chief financial officer may
34serve concurrently as the president or chair of the board. Any
35compensation of the president or chief executive officer and the
36chief financial officer or treasurer shall be determined in
37accordance with subdivision (g) of Section 12586 of the
38Government Code, if applicable.

39(b) Except as otherwise provided by the articles or bylaws,
40officers shall be chosen by the board and serve at the pleasure of
P10   1the board, subject to the rights, if any, of an officer under any
2contract of employment. Any officer may resign at any time upon
3written notice to the corporation without prejudice to the rights, if
4any, of the corporation under any contract to which the officer is
5a party.

6(c) If the articles or bylaws provide for the election of any
7officers by the members, the term of office of the elected officer
8shall be one year unless the articles or bylaws provide for a
9different term which shall not exceed three years.

10

SEC. 12.  

Section 7213 of the Corporations Code is amended
11to read:

12

7213.  

(a) A corporation shall have (1) a chair of the board,
13who may be given the title chair, chairperson, chairman,
14chairwoman, chair of the board, chairperson of the board, chairman
15of the board, or chairwoman of the board, or a president or both,
16(2) a secretary, (3) a treasurer or a chief financial officer or both,
17and (4) any other officers with any titles and duties as shall be
18stated in the bylaws or determined by the board and as may be
19necessary to enable it to sign instruments. The president, or if there
20is no president the chair of the board, is the general manager and
21chief executive officer of the corporation, unless otherwise
22provided in the articles or bylaws. Unless otherwise specified in
23the articles or the bylaws, if there is no chief financial officer, the
24treasurer is the chief financial officer of the corporation. Any
25number of offices may be held by the same person unless the
26articles or bylaws provide otherwise. Where a corporation holds
27assets in charitable trust, any compensation of the president or
28chief executive officer and the chief financial officer or treasurer
29shall be determined in accordance with subdivision (g) of Section
3012586 of the Government Code, if applicable.

31(b) Except as otherwise provided by the articles or bylaws,
32officers shall be chosen by the board and serve at the pleasure of
33the board, subject to the rights, if any, of an officer under any
34contract of employment. Any officer may resign at any time upon
35written notice to the corporation without prejudice to the rights, if
36any, of the corporation under any contract to which the officer is
37a party.

38

SEC. 13.  

Section 9213 of the Corporations Code is amended
39to read:

P11   1

9213.  

(a) A corporation shall have (1) a chair of the board,
2who may be given the title chair, chairperson, chairman,
3chairwoman, chair of the board, chairperson of the board, chairman
4of the board, or chairwoman of the board, or a president or both,
5(2) a secretary, (3) a treasurer or a chief financial officer or both
6and (4) any other officers with any titles and duties as are stated
7in the bylaws or determined by the board and as may be necessary
8to enable it to sign instruments. The president, or if there is no
9president, the chair of the board, is the general manager and chief
10executive officer of the corporation, unless otherwise provided in
11the articles or bylaws. Unless otherwise specified in the articles
12or the bylaws, if there is no chief financial officer, the treasurer is
13the chief financial officer of the corporation. Any number of offices
14may be held by the same person unless the articles or bylaws
15provide otherwise, except that no person serving as the secretary,
16the treasurer, or the chief financial officer may serve concurrently
17as the president or chair of the board. Any compensation of the
18president or chief executive officer and the chief financial officer
19or treasurer shall be determined in accordance with subdivision
20(g) of Section 12586 of the Government Code, if applicable.

21(b) Except as otherwise provided by the articles or bylaws,
22officers shall be chosen by the board and serve at the pleasure of
23the board, subject to the rights, if any, of an officer under any
24contract of employment. Any officer may resign at any time upon
25written notice to the corporation without prejudice to the rights, if
26any, of the corporation under any contract to which the officer is
27a party.

28

SEC. 14.  

Section 12228.5 of the Corporations Code is amended
29to read:

30

12228.5.  

For the purposes of this part, all references to
31“chairman of the board,” other than in Section 12353, shall be
32deemed to refer to all permissible titles for a chair of the board, as
33permitted by Section 12353.

34

SEC. 15.  

Section 12320 of the Corporations Code is amended
35to read:

36

12320.  

Subject to any limitations contained in the articles or
37bylaws and to compliance with other provisions of this part and
38any other applicable laws, a corporation, in carrying out its
39activities, shall have all of the powers of a natural person,
40including, without limitation, the power to:

P12   1(a) Adopt, use, and at will alter a corporate seal, but failure to
2affix a seal does not affect the validity of any instrument.

3(b) Adopt, amend, and repeal bylaws.

4(c) Qualify to conduct its activities in any other state, territory,
5dependency, or foreign country.

6(d) Issue, purchase, redeem, receive, take or otherwise acquire,
7own, sell, lend, exchange, transfer or otherwise dispose of, pledge,
8use and otherwise deal in and with its own memberships, bonds,
9debentures, notes, and debt securities.

10(e) Pay pensions, and establish and carry out pension, deferred
11compensation, saving, thrift and other retirement, incentive and
12benefit plans, trusts and provisions for any or all of its directors,
13officers, employees, and persons providing services to it or any of
14its subsidiary or related or associated corporations, and to
15indemnify and purchase and maintain insurance on behalf of any
16fiduciary of such plans, trusts, or provisions.

17(f) Issue certificates evidencing membership in accordance with
18the provisions of Section 12401 and issue identity cards to identify
19those persons eligible to use the corporation’s facilities.

20(g) Levy dues, assessments, and membership and transfer fees.

21(h) Make donations for the public welfare or for community
22funds, hospital, charitable, educational, scientific, civic, religious,
23or similar purposes.

24(i) Assume obligations, enter into contracts, including contracts
25of guarantee or suretyship, incur liabilities, borrow or lend money
26or otherwise use its credit, and secure any of its obligations,
27contracts or liabilities by mortgage, pledge or other encumbrance
28of all or any part of its property and income.

29(j) Participate with others in any partnership, joint venture or
30other association, transaction or arrangement of any kind whether
31or not such participation involves sharing or delegation of control
32with or to others.

33(k) Act as trustee under any trust incidental to the principal
34objects of the corporation, and receive, hold, administer, exchange,
35and expend funds and property subject to such trust.

36(l) Carry on a business at a profit and apply any profit that results
37from the business activity to any activity in which it may lawfully
38engage.

39(m) (1) In anticipation of or during an emergency, take either
40or both of the following actions necessary to conduct the
P13   1corporation’s ordinary business operations and affairs, unless
2emergency bylaws provide otherwise pursuant to subdivision (h)
3of Section 12331:

4(A) Modify lines of succession to accommodate the incapacity
5of any director, officer, employee, or agent resulting from the
6emergency.

7(B) Relocate the principal office, designate alternative principal
8offices or regional offices, or authorize the officers to do so.

9(2) During an emergency, take either or both of the following
10actions necessary to conduct the corporation’s ordinary business
11operations and affairs, unless emergency bylaws provide otherwise
12pursuant to subdivision (h) of Section 12331:

13(A) Give notice to a director or directors in any practicable
14manner under the circumstances, including, but not limited to, by
15publication and radio, when notice of a meeting of the board cannot
16be given to that director or directors in the manner prescribed by
17the bylaws or Section 12351.

18(B) Deem that one or more officers of the corporation present
19at a board meeting is a director, in order of rank and within the
20same rank in order of seniority, as necessary to achieve a quorum
21for that meeting.

22(3) In anticipation of or during an emergency, the board may
23not take any action that requires the vote of the members or is not
24in the corporation’s ordinary course of business, unless the required
25vote of the members was obtained prior to the emergency.

26(4) Any actions taken in good faith in anticipation of or during
27an emergency under this subdivision bind the corporation and may
28not be used to impose liability on a corporate director, officer,
29employee, or agent.

30(5) For purposes of this subdivision, “emergency” means any
31of the following events or circumstances as a result of which, and
32only so long as, a quorum of the corporation’s board of directors
33cannot be readily convened for action:

34(A) A natural catastrophe, including, but not limited to, a
35hurricane, tornado, storm, high water, wind-driven water, tidal
36wave, tsunami, earthquake, volcanic eruption, landslide, mudslide,
37 snowstorm, or, regardless of cause, any fire, flood, or explosion.

38(B) An attack on this state or nation by an enemy of the United
39States of America, or upon receipt by this state of a warning from
P14   1the federal government indicating that an enemy attack is probable
2or imminent.

3(C) An act of terrorism or other manmade disaster that results
4in extraordinary levels of casualties or damage or disruption
5severely affecting the infrastructure, environment, economy,
6government functions, or population, including, but not limited
7to, mass evacuations.

8(D) A state of emergency proclaimed by a Governor or by the
9President of the United States.

10

SEC. 16.  

Section 12331 of the Corporations Code is amended
11to read:

12

12331.  

(a) The bylaws shall set forth (unless such provision
13is contained in the articles, in which case it may only be changed
14by an amendment of the articles) the number of directors of the
15corporation, or the method of determining the number of directors
16of the corporation, or that the number of directors shall be not less
17than a stated minimum or more than a stated maximum with the
18exact number of directors to be fixed, within the limits specified,
19by approval of the board or the members (Sections 12222 and
2012224), in the manner provided in the bylaws, subject to
21subdivision (e). The number or minimum number of directors shall
22not be less than three. Alternate directors may be permitted, in
23which event, the bylaws shall specify the manner and times of
24their election and the conditions to their service in place of a
25director.

26(b) Once members have been admitted, a bylaw specifying or
27changing a fixed number of directors or the maximum or minimum
28number or changing from a fixed to a variable board or vice versa
29may only be adopted by approval of the members.

30(c) The bylaws may contain any provision, not in conflict with
31law or the articles, for the management of the activities and for
32the conduct of the affairs of the corporation, including, but not
33limited to:

34(1) Any provision referred to in subdivision (c) of Section
3512313.

36(2) The time, place and manner of calling, conducting and giving
37notice of members’, directors’, and committee meetings, or of
38conducting mail ballots.

P15   1(3) The qualifications, duties, and compensation of directors;
2the time of their election; and the requirements of a quorum for
3directors’ and committee meetings.

4(4) The appointment of committees, composed of directors or
5nondirectors or both, by the board or any officer and the authority
6of these committees.

7(5) The appointment, duties, compensation, and tenure of
8officers.

9(6) The mode of determination of members of record.

10(7) The making of reports and financial statements to members.

11(8) Setting, imposing, and collecting dues, assessments, and
12membership and transfer fees.

13(9) The time and manner of patronage distributions consistent
14with this part.

15(d) The bylaws may provide for eligibility, the manner of
16admission, withdrawal, suspension, and expulsion of members,
17and the suspension or termination of memberships consistent with
18the requirements of Section 12431.

19(e) The bylaws may require, for any or all corporate actions,
20the vote of a larger proportion of, or all of, the members or the
21members of any class, unit, or grouping of members or the vote
22of a larger proportion of, or all of, the directors, than is otherwise
23required by this part. A provision in the bylaws requiring a greater
24vote shall not be altered, amended, or repealed except by the greater
25vote, unless otherwise provided in the bylaws.

26(f) The bylaws may contain a provision limiting the number of
27members, in total or of any class or series, which the corporation
28is authorized to admit.

29(g) The bylaws may provide for the establishment by the
30corporation of a program for the education of its members, officers,
31 employees, and the general public in the principles and techniques
32of cooperation.

33(h) (1) The bylaws may contain any provision, not in conflict
34with the articles, to manage and conduct the ordinary business
35affairs of the corporation effective only in an emergency as defined
36in Section 12320, including, but not limited to, procedures for
37calling a board meeting, quorum requirements for a board meeting,
38and designation of additional or substitute directors.

39(2) During an emergency, the board may not take any action
40that requires the vote of the members or otherwise is not in the
P16   1corporation’s ordinary course of business, unless the required vote
2of the members was obtained prior to the emergency.

3(3) All provisions of the regular bylaws consistent with the
4emergency bylaws shall remain effective during the emergency,
5and the emergency bylaws shall not be effective after the
6emergency ends.

7(4) Corporate action taken in good faith in accordance with the
8emergency bylaws binds the corporation, and may not be used to
9impose liability on a corporate director, officer, employee, or agent.

10

SEC. 17.  

Section 12353 of the Corporations Code is amended
11to read:

12

12353.  

(a) A corporation shall have (1) a chair of the board,
13who may be given the title chair, chairperson, chairman,
14chairwoman, chair of the board, chairperson of the board, chairman
15of the board, or chairwoman of the board, or a president or both,
16(2) a secretary, (3) a treasurer or a chief financial officer or both,
17and (4) any other officers with any titles and duties as shall be
18stated in the bylaws or determined by the board and as may be
19necessary to enable it to sign instruments. The president, or if there
20is no president the chair of the board, is the chief executive officer
21of the corporation, unless otherwise provided in the articles or
22bylaws. Unless otherwise specified in the articles or the bylaws,
23if there is no chief financial officer, the treasurer is the chief
24financial officer of the corporation. Any number of offices may
25be held by the same person unless the articles or bylaws provide
26otherwise. Either the chair of the board or the president shall be
27elected from among those board members elected by the
28membership of the corporation.

29(b) Except as otherwise provided by the articles or bylaws,
30officers shall be chosen by the board and serve at the pleasure of
31the board, subject to the rights, if any, of an officer under any
32contract of employment. Any officer may resign at any time upon
33written notice to the corporation without prejudice to the rights, if
34any, of the corporation under any contract to which the officer is
35a party.

begin delete
36

SEC. 18.  

Section 13401.5 of the Corporations Code is amended
37to read:

38

13401.5.  

Notwithstanding subdivision (d) of Section 13401
39and any other provision of law, the following licensed persons
40may be shareholders, officers, directors, or professional employees
P17   1of the professional corporations designated in this section so long
2as the sum of all shares owned by those licensed persons does not
3exceed 49 percent of the total number of shares of the professional
4corporation so designated herein, and so long as the number of
5those licensed persons owning shares in the professional
6corporation so designated herein does not exceed the number of
7persons licensed by the governmental agency regulating the
8designated professional corporation. This section does not limit
9employment by a professional corporation designated in this section
10of only those licensed professionals listed under each subdivision.
11Any person duly licensed under Division 2 (commencing with
12Section 500) of the Business and Professions Code, the
13Chiropractic Act, or the Osteopathic Act may be employed to
14render professional services by a professional corporation
15designated in this section.

16(a) Medical corporation.

17(1) Licensed doctors of podiatric medicine.

18(2) Licensed psychologists.

19(3) Registered nurses.

20(4) Licensed optometrists.

21(5) Licensed marriage and family therapists.

22(6) Licensed clinical social workers.

23(7) Licensed physician assistants.

24(8) Licensed chiropractors.

25(9) Licensed acupuncturists.

26(10) Naturopathic doctors.

27(11) Licensed professional clinical counselors.

28(12) Licensed physical therapists.

29(b) Podiatric medical corporation.

30(1) Licensed physicians and surgeons.

31(2) Licensed psychologists.

32(3) Registered nurses.

33(4) Licensed optometrists.

34(5) Licensed chiropractors.

35(6) Licensed acupuncturists.

36(7) Naturopathic doctors.

37(8) Licensed physical therapists.

38(c) Psychological corporation.

39(1) Licensed physicians and surgeons.

40(2) Licensed doctors of podiatric medicine.

P18   1(3) Registered nurses.

2(4) Licensed optometrists.

3(5) Licensed marriage and family therapists.

4(6) Licensed clinical social workers.

5(7) Licensed chiropractors.

6(8) Licensed acupuncturists.

7(9) Naturopathic doctors.

8(10) Licensed professional clinical counselors.

9(d) Speech-language pathology corporation.

10(1) Licensed audiologists.

11(e) Audiology corporation.

12(1) Licensed speech-language pathologists.

13(f) Nursing corporation.

14(1) Licensed physicians and surgeons.

15(2) Licensed doctors of podiatric medicine.

16(3) Licensed psychologists.

17(4) Licensed optometrists.

18(5) Licensed marriage and family therapists.

19(6) Licensed clinical social workers.

20(7) Licensed physician assistants.

21(8) Licensed chiropractors.

22(9) Licensed acupuncturists.

23(10) Naturopathic doctors.

24(11) Licensed professional clinical counselors.

25(g) Marriage and family therapist corporation.

26(1) Licensed physicians and surgeons.

27(2) Licensed psychologists.

28(3) Licensed clinical social workers.

29(4) Registered nurses.

30(5) Licensed chiropractors.

31(6) Licensed acupuncturists.

32(7) Naturopathic doctors.

33(8) Licensed professional clinical counselors.

34(h) Licensed clinical social worker corporation.

35(1) Licensed physicians and surgeons.

36(2) Licensed psychologists.

37(3) Licensed marriage and family therapists.

38(4) Registered nurses.

39(5) Licensed chiropractors.

40(6) Licensed acupuncturists.

P19   1(7) Naturopathic doctors.

2(8) Licensed professional clinical counselors.

3(i) Physician assistants corporation.

4(1) Licensed physicians and surgeons.

5(2) Registered nurses.

6(3) Licensed acupuncturists.

7(4) Naturopathic doctors.

8(j) Optometric corporation.

9(1) Licensed physicians and surgeons.

10(2) Licensed doctors of podiatric medicine.

11(3) Licensed psychologists.

12(4) Registered nurses.

13(5) Licensed chiropractors.

14(6) Licensed acupuncturists.

15(7) Naturopathic doctors.

16(k) Chiropractic corporation.

17(1) Licensed physicians and surgeons.

18(2) Licensed doctors of podiatric medicine.

19(3) Licensed psychologists.

20(4) Registered nurses.

21(5) Licensed optometrists.

22(6) Licensed marriage and family therapists.

23(7) Licensed clinical social workers.

24(8) Licensed acupuncturists.

25(9) Naturopathic doctors.

26(10) Licensed professional clinical counselors.

27(l) Acupuncture corporation.

28(1) Licensed physicians and surgeons.

29(2) Licensed doctors of podiatric medicine.

30(3) Licensed psychologists.

31(4) Registered nurses.

32(5) Licensed optometrists.

33(6) Licensed marriage and family therapists.

34(7) Licensed clinical social workers.

35(8) Licensed physician assistants.

36(9) Licensed chiropractors.

37(10) Naturopathic doctors.

38(11) Licensed professional clinical counselors.

39(m) Naturopathic doctor corporation.

40(1) Licensed physicians and surgeons.

P20   1(2) Licensed psychologists.

2(3) Registered nurses.

3(4) Licensed physician assistants.

4(5) Licensed chiropractors.

5(6) Licensed acupuncturists.

6(7) Licensed physical therapists.

7(8) Licensed doctors of podiatric medicine.

8(9) Licensed marriage and family therapists.

9(10) Licensed clinical social workers.

10(11) Licensed optometrists.

11(12) Licensed professional clinical counselors.

12(n) Dental corporation.

13(1) Licensed physicians and surgeons.

14(2) Dental assistants.

15(3) Registered dental assistants.

16(4) Registered dental assistants in extended functions.

17(5) Registered dental hygienists.

18(6) Registered dental hygienists in extended functions.

19(7) Registered dental hygienists in alternative practice.

20(o) Professional clinical counselor corporation.

21(1) Licensed physicians and surgeons.

22(2) Licensed psychologists.

23(3) Licensed clinical social workers.

24(4) Licensed marriage and family therapists.

25(5) Registered nurses.

26(6) Licensed chiropractors.

27(7) Licensed acupuncturists.

28(8) Naturopathic doctors.

29(p) Physical therapy corporation.

30(1) Licensed physicians and surgeons.

31(2) Licensed doctors of podiatric medicine.

32(3) Licensed acupuncturists.

33(4) Naturopathic doctors.

34(5) Licensed occupational therapists.

35(6) Licensed speech-language therapists.

36(7) Licensed audiologists.

37(8) Registered nurses.

38(9) Licensed psychologists.

39(10) Licensed physician assistants.

P21   1(q) Registered Dental Hygienist in Alternative Practice
2Corporation.

3(1) Dental assistants.

4(2) Licensed dentists.

5(3) Registered dental hygienists.

6(4) Registered dental hygienists in extended functions.

end delete


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