Law:Division 2. Healing Arts (California)

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Contents

Part 1. General Provisions

Chapter 1. Definitions

Ca Codes (corp:18000-18035) Corporations Code Section 18000-18035



18000. Unless the provision or context otherwise requires, the definitions in this chapter govern the construction of this title.


18003. "Board" means the board of directors or other governing body of an unincorporated association.


18005. "Director" means a natural person serving as a member of the board or other governing body of the unincorporated association.


18008. "Governing document" means a constitution, articles of association, bylaws, or other writing that governs the purpose or operation of an unincorporated association or the rights or obligations of its members.


18010. "Governing principles" means the principles stated in an unincorporated association's governing documents. If an association has no governing documents or the governing documents do not include a provision governing an issue, the association's governing principles regarding that issue may be inferred from its established practices. For the purpose of this section, "established practices" means the practices used by an unincorporated association without material change or exception during the most recent five years of its existence, or if it has existed for less than five years, during its entire existence.

18015. (a) If the governing principles of an unincorporated association define the membership of the association, "member" has the meaning provided by the governing principles. (b) If the governing principles of an unincorporated association do not define the membership of the association, "member" means a person who, pursuant to the governing principles of the unincorporated association, has a right to participate in the selection of persons authorized to manage the affairs of the unincorporated association or in the development of policy of the unincorporated association, but does not include a person who participates solely as director, officer, or agent of the association.

18020. (a) "Nonprofit association" means an unincorporated association with a primary common purpose other than to operate a business for profit. (b) A nonprofit association may carry on a business for profit and apply any profit that results from the business activity to any activity in which it may lawfully engage.


18025. "Officer" means a natural person serving as an unincorporated association's chair, president, secretary, chief financial officer, or other position of authority that is established pursuant to the association's governing principles.


18030. "Person" includes a natural person, corporation, partnership, or other unincorporated organization, government, or governmental subdivision or agency, or any other entity.


18035. (a) "Unincorporated association" means an unincorporated group of two or more persons joined by mutual consent for a common lawful purpose, whether organized for profit or not. (b) Joint tenancy, tenancy in common, community property, or other form or property tenure does not by itself establish an unincorporated association, even if coowners share ownership of the property for a common purpose. (c) Marriage or creation of a registered domestic partnership does not by itself establish an unincorporated association.


Chapter 2. Application Of Title

Ca Codes (corp:18055-18070) Corporations Code Section 18055-18070



18055. This title does not apply to any of the following persons: (a) A corporation. (b) A government or governmental subdivision or agency. (c) A partnership or joint venture. (d) A limited liability company. (e) A labor organization, labor federation, labor council, or labor committee, that is governed by a constitution or bylaws. As used in this subdivision, "labor organization" means any organization of any kind, or any agency or employee representation committee or plan, where employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.

18060. If a statute specific to a particular type of unincorporated association is inconsistent with a general provision of this title, the specific statute prevails to the extent of the inconsistency.


18065. Except to the extent this title provides a specific rule, the general law of agency, including Article 2 (commencing with Section 2019) of Chapter 2 of Title 6 of, and Title 9 (commencing with Section 2295) of, Part 4 of Division 3 of the Civil Code, applies to an unincorporated association.


18070. A provision of this title, insofar as it is substantially the same as a previously existing provision relating to the same subject matter, shall be considered as a restatement and continuation thereof and not as a new enactment, and a reference in a statute to the provision shall be deemed to include a reference to the previously existing provision unless a contrary intent appears.


Chapter 3. Property

Ca Codes (corp:18100-18135) Corporations Code Section 18100-18135



18100. The interest of a member in an unincorporated association is personal property.


18105. An unincorporated association may, in its name, acquire, hold, manage, encumber, or transfer an interest in real or personal property.

18110. Property acquired by or for an unincorporated association is property of the unincorporated association and not of the members individually.

18115. The acquisition, transfer, or encumbrance of an interest in real property by an unincorporated association shall be executed by its president and secretary or other comparable officers, or by a person specifically designated by a resolution adopted by the association, or by a committee or other body or person authorized to act by the governing principles of the association.


18120. (a) An unincorporated association may record in a county in which it has an interest in real property a verified and acknowledged statement of authority stating the name of the association, and the names, title, or capacity of its officers and other persons who are authorized on its behalf to acquire, transfer, or encumber real property. For the purposes of this section, "statement of authority" includes a certified copy of a statement recorded in another county. (b) An unincorporated association may revoke a statement of authority by recording either of the following documents in the county in which the statement of authority is recorded: (1) A new statement of authority that satisfies the requirements of subdivision (a). The new statement supersedes the revoked statement. (2) A verified and acknowledged document that expressly revokes the statement of authority. (c) It shall be conclusively presumed in favor of a bona fide transferor, or purchaser, or encumbrancer for value of real property of the association located in the county in which a statement of authority has been recorded pursuant to subdivision (a), that a person designated in the statement is authorized to acquire, transfer, or encumber real property on behalf of the association. (d) The presumption provided in subdivision (c) does not apply if, before the acquisition, transfer, or encumbrance, either of the following occurs: (1) The statement of authority is revoked by the unincorporated association. (2) A person claiming to be a member, director, or officer of the unincorporated association records, in the county in which the property is located, a verified and acknowledged document stating that the statement of authority is erroneous or unauthorized.


18125. No limitation on the power of an unincorporated association to acquire, hold, manage, pledge, encumber, or transfer an interest in real or personal property, or the manner of exercise of those powers, shall be asserted as between the unincorporated association or a member of the unincorporated association and a third person, except in the following proceedings: (a) A proceeding to enjoin an unauthorized act, or the continuation of an unauthorized act, where a third person has not yet acquired rights that would be adversely affected by the injunction, or where, at the time of the unauthorized act, the third person had actual knowledge that the act was unauthorized. (b) A proceeding to dissolve the unincorporated association. (c) A proceeding against a director, officer, or agent of the unincorporated association for violation of that person's authority.


18130. After all of the known debts and liabilities of an unincorporated association in the process of winding up its affairs have been paid or adequately provided for, the assets of the association shall be distributed in the following manner: (a) Assets held upon a valid condition requiring return, transfer, or conveyance of the assets, which condition has occurred or will occur, shall be returned, transferred, or conveyed in accordance with the condition. (b) After complying with subdivision (a), any remaining assets that are held in trust shall be distributed in accordance with the trust. (c) After complying with subdivisions (a) and (b), any remaining assets shall be distributed in accordance with the governing principles of the association. If the governing principles do not provide the manner of distribution of the assets, the assets shall be distributed pro rata to the current members of the association.


18135. (a) Notwithstanding Section 18260, a cause of action against an unincorporated association may be enforced against a person who received assets distributed under Section 18130. Liability under this section shall be limited to the value of the assets distributed to the person or the person's pro rata share of the claim against the unincorporated association, whichever is less. (b) An action under this section shall be commenced before the earlier of the following dates: (1) Expiration of the statute of limitations applicable to the cause of action. (2) Four years after dissolution of the unincorporated association. This paragraph does not apply in a quiet title action.


Chapter 4. Designation Of Agent For Service Of Process

Ca Codes (corp:18200-18220) Corporations Code Section 18200-18220



18200. (a) An unincorporated association may file with the Secretary of State, on a form prescribed by the Secretary of State, a statement containing either of the following: (1) A statement designating the location and complete address of the unincorporated association's principal office in this state. Only one place may be designated. (2) A statement (A) designating the location and complete address of the unincorporated association's principal office in this state in accordance with paragraph (1) or, if the unincorporated association does not have an office in this state, designating the complete address of the unincorporated association to which the Secretary of State shall send any notices required to be sent to the association under Sections 18210 and 18215, and (B) designating as agent of the association for service of process any natural person residing in this state or any corporation that has complied with Section 1505 and whose capacity to act as an agent has not terminated. (b) If a natural person is designated as agent for service of process, the statement shall include the person's complete business or residence address. If a corporate agent is designated, no address for it shall be included. (c) Filing is deemed complete on acceptance by the Secretary of State of the statement, a copy of the statement, and the filing fee. The Secretary of State shall return the copy of the statement to the unincorporated association, with notations that indicate the file number and filing date of the original. (d) At any time, an unincorporated association that has filed a statement under this section may file a new statement superseding the last previously filed statement. If the new statement does not designate an agent for service of process, the filing of the new statement shall be deemed to revoke the designation of an agent previously designated. A statement filed under this section expires five years from December 31 following the date it was filed in the office of the Secretary of State, unless previously superseded by the filing of a new statement. (e) Delivery by hand of a copy of any process against the unincorporated association (1) to any natural person designated by it as agent, or (2) if the association has designated a corporate agent, to any person named in the last certificate of the corporate agent filed pursuant to Section 1505 at the office of the corporate agent shall constitute valid service on the association. (f) For filing a statement as provided in this section, the Secretary of State shall charge and collect the fee provided in paragraph (1) of subdivision (b) of Section 12191 of the Government Code for filing a designation of agent. (g) Notwithstanding Section 18055, a statement filed by a partnership under former Section 24003 is subject to this chapter until the statement is revoked or expires.


18205. (a) The Secretary of State shall mark each statement filed under Section 18200 with a consecutive file number and the date of filing. In lieu of retaining the original statement, the Secretary of State may retain a copy in accordance with Section 14756 of the Government Code. (b) The Secretary of State shall index each statement filed under Section 18200 according to the name of the unincorporated association as set out in the statement and shall enter in the index the file number and the address of the association as set out in the statement and, if an agent for service of process is designated in the statement, the name of the agent and, if a natural person is designated as the agent, the address of that person. (c) Upon request of any person, the Secretary of State shall issue a certificate showing whether, according to the Secretary of State's records, there is on file on the date of the certificate, any presently effective statement filed under Section 18200 for an unincorporated association using a specific name designated by the person making the request. If a statement is on file, the certificate shall include the information required by subdivision (b) to be included in the index. The fee for the certificate is the fee provided in Section 12183 of the Government Code. (d) When a statement has expired under subdivision (d) of Section 18200, the Secretary of State shall enter that fact in the index together with the date of the expiration. (e) Four years after a statement has expired, the Secretary of State may destroy or otherwise dispose of the statement and delete information concerning that statement from the index.


18210. (a) An agent designated by an unincorporated association for the service of process may file with the Secretary of State a signed and acknowledged written statement of resignation as agent of the unincorporated association. The resignation is effective when filed. The Secretary of State shall mail written notice of the filing to the unincorporated association at its address set out in the statement filed by the association. (b) An unincorporated association may at any time file with the Secretary of State a revocation of a designation of an agent for service of process. The revocation is effective when filed. (c) Notwithstanding subdivisions (a) and (b), service made on an agent designated by an unincorporated association for service of process in the manner provided in subdivision (e) of Section 18200 is effective if made within 30 days after the statement of resignation or the revocation is filed with the Secretary of State.


18215. Between the first day of October and the first day of December immediately preceding the expiration date of a statement filed under Section 18200, the Secretary of State shall send by first-class mail a notice, indicating the date on which the statement will expire and the file number assigned to the statement, to the unincorporated association at its address as set out in the statement. Neither the failure of the Secretary of State to mail the notice as provided in this section nor the failure of the notice to reach the unincorporated association shall continue the statement in effect after the date of its expiration. Neither the state nor any officer or employee of the state is liable for damages for failure to mail the notice as required by this section.


18220. If designation of an agent for the purpose of service of process has not been made as provided in Section 18200, or if the agent designated cannot with reasonable diligence be found at the address specified in the index referred to in Section 18205 for delivery by hand of the process, and it is shown by affidavit to the satisfaction of a court or judge that process against an unincorporated association cannot be served with reasonable diligence upon the designated agent by hand or the unincorporated association in the manner provided for in Section 415.10 or 415.30 of the Code of Civil Procedure or subdivision (a) of Section 415.20 of the Code of Civil Procedure, the court or judge may make an order that service be made upon the unincorporated association by delivery of a copy of the process to one or more of the association's members designated in the order and by mailing a copy of the process to the association at its last known address. Service in this manner constitutes personal service upon the unincorporated association.


Chapter 5. Liability And Enforcement Of Judgments

Ca Codes (corp:18250-18270) Corporations Code Section 18250-18270



18250. Except as otherwise provided by law, an unincorporated association is liable for its act or omission and for the act or omission of its director, officer, agent, or employee, acting within the scope of the office, agency, or employment, to the same extent as if the association were a natural person.


18260. A money judgment against an unincorporated association, whether organized for profit or not, may be enforced only against the property of the association.


18270. (a) A judgment creditor of a member, director, officer, or agent of an unincorporated association may not levy execution against the assets of the member, director, officer, or agent to satisfy a judgment based on a claim against the unincorporated association unless a judgment based on the same claim has been obtained against the unincorporated association and any of the following conditions is satisfied: (1) A writ of execution on the judgment against the unincorporated association has been returned unsatisfied in whole or in part. (2) The unincorporated association is a debtor in bankruptcy. (3) The member, director, officer, or agent has agreed that the creditor need not exhaust the assets of the unincorporated association. (4) A court grants permission to the judgment creditor to levy execution against the assets of a member, director, officer, or agent based on a finding that the assets of the unincorporated association subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of the assets of the unincorporated association is excessively burdensome, or that the grant of permission is an appropriate exercise of the court's equitable powers. (b) Nothing in this section affects the right of a judgment creditor to levy execution against the assets of a member, director, officer, or agent of an unincorporated association if the claim against the member, director, officer, or agent is not based on a claim against the unincorporated association.


Chapter 6. Governance

Article 1. (reserved)

Ca Codes (corp:18300) Corporations Code Section 18300



18300. It is the intent of the Legislature to enact legislation relating to the governance of unincorporated associations.


Article 2. Termination Or Suspension Of Membership

Ca Codes (corp:18310-18320) Corporations Code Section 18310-18320



18310. (a) Unless otherwise provided by an unincorporated association's governing principles, membership in the unincorporated association is terminated by any of the following events: (1) Resignation of the member. (2) Expiration of the fixed term of the membership, unless the membership is renewed before its expiration. (3) Expulsion of the member. (4) Death of the member. (5) Termination of the legal existence of a member that is not a natural person. (b) Termination of membership does not relieve a person from an obligation incurred as a member before termination. (c) Termination of membership does not affect the right of an unincorporated association to enforce an obligation against a person incurred as a member before termination, or to obtain damages for its breach.


18320. (a) This section only applies if membership in an unincorporated association includes a property right or if expulsion or suspension of a member would affect an important, substantial economic interest. This section does not apply to an unincorporated association that has a religious purpose. (b) Expulsion or suspension of a member shall be done in good faith and in a fair and reasonable manner. A procedure that satisfies the requirements of subdivision (c) is fair and reasonable, but a court may also determine that another procedure is fair and reasonable taking into account the full circumstances of the expulsion or suspension. (c) A procedure for expulsion or suspension of a member that satisfies the following requirements is fair and reasonable: (1) The procedure is included in the unincorporated association's governing documents. (2) The member to be expelled or suspended is given notice, including a statement of the reasons for the expulsion or suspension. The notice shall be delivered at least 15 days before the effective date of the expulsion or suspension. (3) The member to be expelled or suspended is given an opportunity to be heard by the person or body deciding the matter, orally or in writing, not less than five days before the effective date of the expulsion or suspension. (d) A notice pursuant to this section may be delivered by any method reasonably calculated to provide actual notice. A notice delivered by mail shall be sent by first-class, certified, or registered mail to the last address of the member shown on the unincorporated association's records. (e) A member may commence a proceeding to challenge the expulsion or suspension of the member, including a claim alleging defective notice, within one year after the effective date of the expulsion or suspension. The court may order any relief, including reinstatement, it determines is equitable under the circumstances. A vote of the members or of the board may not be set aside solely because a person was wrongfully excluded from voting by virtue of the challenged expulsion or suspension, unless the court determines that the wrongful expulsion or suspension was in bad faith and for the purpose, and with the effect, of wrongfully excluding the member from the vote or from the meeting at which the vote took place, so as to affect the outcome of the vote. (f) This section governs only the procedure for expulsion or suspension and not the substantive grounds for expulsion or suspension. An expulsion or suspension based on substantive grounds that violate contractual or other rights of the member or are otherwise unlawful is not made valid by compliance with this section.


Article 3. Member Voting

Ca Codes (corp:18330) Corporations Code Section 18330



18330. Except as otherwise provided by statute or by an unincorporated association's governing principles, the following rules govern a member vote conducted pursuant to this chapter: (a) A vote may be conducted either at a member meeting at which a quorum is present or by a written ballot in which the number of votes cast equals or exceeds the number required for a quorum. Approval of a matter voted on requires an affirmative majority of the votes cast. (b) Written notice of the vote shall be delivered to all members entitled to vote on the date of delivery. The notice shall be delivered or mailed or sent electronically to the member addresses shown in the association's records a reasonable time before the vote is to be conducted. The notice shall not be delivered electronically, unless the recipient has consented to electronic delivery of the notice. The notice shall state the matter to be decided and describe how and when the vote is to be conducted. (c) If the vote is to be conducted by written ballot, the notice of the vote shall serve as the ballot. It shall set forth the proposed action, provide an opportunity to specify approval or disapproval of any proposal, and provide a reasonable time within which to return the ballot to the unincorporated association. (d) One-third the voting power of the association constitutes a quorum. (e) The voting power of the association is the total number of votes that can be cast by members on a particular issue at the time the member vote is held.


Article 4. Amendment Of Governing Documents

Ca Codes (corp:18340) Corporations Code Section 18340



18340. If an unincorporated association's governing principles do not provide a procedure to amend the association's governing documents, the governing documents may be amended by a vote of the members.


Article 5. Merger

Ca Codes (corp:18350-18400) Corporations Code Section 18350-18400



18350. The following definitions govern the construction of this article: (a) "Constituent entity" means an entity that is merged with one or more other entities and includes the surviving entity. (b) "Disappearing entity" means a constituent entity that is not the surviving entity. (c) "Surviving entity" means an entity into which one or more other entities are merged.

18360. An unincorporated association may merge with a domestic or foreign corporation, domestic or foreign limited partnership, domestic or foreign general partnership, or domestic or foreign limited liability company. Notwithstanding this section, a merger may be effected only if each constituent entity is authorized to effect the merger by the laws under which it was organized.


18370. A merger involving an unincorporated association is subject to the following requirements: (a) Each party to the merger shall approve an agreement of merger. The agreement shall include the following provisions: (1) The terms of the merger. (2) Any amendments the merger would make to the articles, bylaws, or other governing documents of the surviving entity. (3) The name, place of organization, and type of entity of each constituent entity. (4) The name of the constituent entity that will be the surviving entity. (5) If the name of the surviving entity will be changed in the merger, the new name of the surviving entity. (6) The disposition of the memberships or ownership interests of each constituent entity. (7) Other details or provisions, if any, including any details or provisions required by the law under which a constituent entity is organized. (b) The principal terms of the merger agreement shall be approved by the board, the members, and any person whose approval is required by the association's governing documents. Unless otherwise provided in the governing documents, the members shall approve the agreement in the manner provided for amendment of the association's governing documents. The members may approve the agreement before or after the board approves the agreement. (c) A merger agreement that would cause the members of an unincorporated association to become individually liable for an obligation of a constituent or surviving entity shall be approved by all of the members of the unincorporated association. Approval by all members is not required under this subdivision if the agreement of merger provides for purchase by the surviving entity of the membership interest of a member who votes against approval of the merger agreement. (d) A merger agreement may be amended by the board, unless the amendment would change a principal term of the agreement, in which case it shall be approved as provided in subdivision (b). (e) Subject to the contractual rights of third parties, the board may abandon a merger without the approval of the members.


18380. (a) A merger pursuant to this article has the following effect: (1) The separate existence of the disappearing entity ceases. (2) The surviving entity succeeds, without other transfer, to the rights and property of the disappearing entity. (3) The surviving entity is subject to all the debts and liabilities of the disappearing entity. A trust or other obligation governing property of the disappearing entity applies as if it were incurred by the surviving entity. (b) All rights of creditors and all liens on or arising from the property of each of the constituent entities are preserved unimpaired, provided that a lien on property of a disappearing entity is limited to the property subject to the lien immediately before the merger is effective. (c) An action or proceeding pending by or against a disappearing entity or other party to the merger may be prosecuted to judgment, which shall bind the surviving entity, or the surviving entity may be proceeded against or substituted in its place. (d) A merger does not affect an existing liability of a member, director, officer, or agent of a constituent unincorporated association for an obligation of the unincorporated association.


18390. If, as a consequence of merger, a surviving entity succeeds to ownership of real property located in this state, the surviving entity's record ownership of that property may be evidenced by recording in the county in which the property is located a copy of the agreement of merger that is signed by the president and secretary or other comparable officers of the constituent entities and is verified and acknowledged as provided in Sections 149 and 193.


18400. A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance that is made to a disappearing entity and that takes effect or remains payable after the merger inures to the benefit of the surviving entity. A trust obligation that would govern property if transferred to the disappearing entity applies to property that is instead transferred to the surviving entity under this section.


Article 6. Dissolution

Ca Codes (corp:18410-18420) Corporations Code Section 18410-18420



18410. An unincorporated association may be dissolved by any of the following methods: (a) If the association's governing documents provide a method for dissolution, by that method. (b) If the association's governing documents do not provide a method for dissolution, by the affirmative vote of a majority of the voting power of the association. (c) If the association's operations have been discontinued for at least three years, by the board or, if the association has no incumbent board, by the members of its last preceding incumbent board. (d) If the association's operations have been discontinued, by court order.

18420. Promptly after commencement of dissolution of an unincorporated association, the board or, if none, the members shall promptly wind up the affairs of the association, pay or provide for its known debts or liabilities, collect any amounts due to it, take any other action as is necessary or appropriate for winding up, settling, and liquidating its affairs, and dispose of its assets as provided in Section 18130.


Part 2. Nonprofit Associations

Chapter 1. Liability

Ca Codes (corp:18605-18640) Corporations Code Section 18605-18640



18605. A member, director, or agent of a nonprofit association is not liable for a debt, obligation, or liability of the association solely by reason of being a member, director, officer, or agent.


18610. A member of a nonprofit association is not liable for a contractual obligation of the association unless one of the following conditions is satisfied: (a) The member expressly assumes personal responsibility for the obligation in a signed writing that specifically identifies the obligation assumed. (b) The member expressly authorizes or ratifies the specific contract, as evidenced by a writing. This subdivision does not apply if the member authorizes or ratifies a contract solely in the member' s capacity as a director, officer, or agent of the association. (c) With notice of the contract, the member receives a benefit under the contract. Liability under this subdivision is limited to the value of the benefit received. (d) The member executes the contract without disclosing that the member is acting on behalf of the association. (e) The member executes the contract without authority to execute the contract.

18615. A director, officer, or agent of a nonprofit association is not liable for a contractual obligation of the association unless one of the following conditions is satisfied: (a) The director, officer, or agent expressly assumes responsibility for the obligation in a signed writing that specifically identifies the obligation assumed. (b) The director, officer, or agent executes the contract without disclosing that the director, officer, or agent is acting on behalf of the association. (c) The director, officer, or agent executes the contract without authority to execute the contract.


18620. (a) A member, director, officer, or agent of a nonprofit association shall be liable for injury, damage, or harm caused by an act or omission of the association or an act or omission of a director, officer, or agent of the association, if any of the following conditions is satisfied: (1) The member, director, officer, or agent expressly assumes liability for injury, damage, or harm caused by particular conduct and that conduct causes the injury, damage, or harm. (2) The member, director, officer, or agent engages in tortious conduct that causes the injury, damage, or harm. (3) The member, director, officer, or agent is otherwise liable under any other statute. (b) This section provides a nonexclusive list of existing grounds for liability, and does not foreclose any common law grounds for liability.


18630. Notwithstanding any other provision of this chapter, a member or person in control of a nonprofit association may be subject to liability for a debt, obligation, or liability of the association under common law principles governing alter ego liability of shareholders of a corporation, taking into account the differences between a nonprofit association and a corporation.


18640. Nothing in this chapter limits application of the Uniform Fraudulent Transfer Act (Chapter 1 (commencing with Section 3439) of Title 2 of Part 2 of Division 4 of the Civil Code).


Chapter 3. Medical Associations

Ca Codes (corp:21200) Corporations Code Section 21200



21200. Any unincorporated association that is an organized medical society limiting its membership to licensed physicians and surgeons and that has as members at least 25 percent of the eligible physicians and surgeons residing in the area in which it functions (which must be at least one county) may, without incorporation, purchase, receive, own, hold, lease, mortgage, pledge, or encumber by deed of trust or otherwise, manage and sell all the real estate and other property as may be convenient for the purposes and objects of the association. However, if the association has less than 100 members, it shall have as members at least a majority of the eligible persons or licensees in the geographic area served by the particular association. The members of that unincorporated association are not individually or personally liable for debts or liabilities contracted or incurred by the association in the acquisition of lands or leases or the purchase, leasing, construction, repairing or furnishing of buildings or other structures to be used for the purposes of the association or for debts or liabilities contracted or incurred by the association in the carrying out or performance of any of its purposes; provided, that the purposes are within the purposes stated in Section 18020.


Chapter 4. Insignia

Ca Codes (corp:21300-21310) Corporations Code Section 21300-21310



21300. As used in this chapter, the following terms have the meanings set forth in this section, unless the context otherwise requires: (a) "Association" includes any lodge, order, beneficial association, fraternal or beneficial society or association, historical, military, or veterans organization, labor union, foundation, or federation, or any other society, organization, or association, or degree, branch, subordinate lodge, or auxiliary thereof. (b) "Insignia" includes badge, motto, button, decoration, charm, emblem, or rosette.

21301. Any association, the principles and activities of which are not repugnant to the Constitution or laws of the United States or of this State, may register in the office of the Secretary of State a facsimile or description of its name or insignia and may by reregistration alter or cancel it.


21302. An association shall not be permitted to register any name or insignia similar to or so nearly resembling another name or insignia already registered as may be likely to deceive.


21303. Application for such registration, alteration, or cancellation shall be made by the chief officer or officers of the association, upon blanks to be provided by the Secretary of State. Such registration shall be for the use and benefit and on behalf of the association, the individual members, and those hereafter to become members thereof.


21304. The Secretary of State shall charge and collect a fee as set forth in paragraph (2) of subdivision (b) of Section 12191 of the Government Code for each registration made under this chapter.


21305. Upon the registration, the Secretary of State shall issue his certificate setting forth the fact of the registration.


21306. The Secretary of State shall keep a properly indexed record of the registrations provided for by this chapter, which record shall also show any altered or canceled registration.


21307. Any person who willfully wears, exhibits, or uses for any purpose a name or insignia registered under this chapter, unless he is entitled to use, wear, or exhibit the name or insignia under the constitution, bylaws, or rules of the association which registered it, is guilty of a misdemeanor punishable by fine of not to exceed two hundred dollars ($200) or by imprisonment in the county jail for a period not to exceed 60 days.


21308. Any court of competent jurisdiction may restrain by injunction: 1. The wearing or use of the insignia of any association, unless the person wearing or using the insignia is entitled to wear or use the insignia under the constitution, by-laws or rules of the association. 2. The use of the name of any association in a commercial venture, trade or business or in the solicitation of subscriptions for or advertising in any newspaper or other publication or in the solicitation of donations by any person representing directly or indirectly that such commercial venture, trade or business, newspaper or other publication or donation or solicitation for donation, is sponsored, endorsed or being offered by any association, unless the person so using the name is entitled to use the name under the constitution, by-laws or rules of the association or by the written consent of such association to such use.


21309. In any action under Section 21308 it is not necessary to allege or prove actual damages or the threat thereof, or actual injury or the threat thereof to the plaintiff, but in addition to injunctive relief any plaintiff in any such action is entitled to recover the amount of the actual damages, if any, sustained by such plaintiff.


21310. The use of the name or insignia of any association by any person not entitled to use the same under the constitution, by-laws, rules or regulations of the association or by the written consent of such association, is presumptive evidence of the unlawful use of or traffic in such name or insignia.


Chapter 5. Death Benefit Payments By Fraternal Societies

Ca Codes (corp:21400-21401) Corporations Code Section 21400-21401



21400. Whenever any fraternal society or lodge, other than a society subject to supervision by the Insurance Commissioner, pays benefits contingent on the death of a member, beneficiaries other than the following relatives by blood, marriage, or adoption shall be paid only the excess of the amount of the benefits over the expense of burial of the member: Spouse, relative by blood to the fourth degree, father-in-law, mother-in-law, son-in-law, daughter-in-law, stepfather, stepmother, stepchildren, children by legal adoption, and parents by legal adoption.


21401. Any fraternal society or lodge which makes any payment in violation of this chapter is liable for the expense of burial of the member to the extent of the amount paid in violation thereof.


Part 3. Joint Stock Associations

Ca Codes (corp:22000-22003) Corporations Code Section 22000-22003



22000. Every person who, without being authorized so to do, subscribes the name of another to or inserts the name of another in any prospectus, circular, or other advertisement, or announcement of any joint stock association, existing or intended to be formed, with intent to permit the document to be published, and thereby to lead persons to believe that the person whose name is so subscribed is an officer, agent, member, or promoter of such association, is guilty of a misdemeanor.


22001. Every director, officer, or agent of any joint stock association is guilty of a felony who knowingly concurs in making, publishing, or posting either generally or privately to the stockholders or other persons, any written report, exhibit, or statement of its affairs or pecuniary condition, or book or notice containing any material statement which is false, or any untrue or wilfully or fraudulently exaggerated report, prospectus, account, statement of operations, values, business, profits, expenditures, or prospects, or any other paper or document intended to produce or give, or having a tendency to produce or give, the shares of stock in such association a greater value or a less apparent or market value than they really possess.


22002. (a) Every director, officer, or agent of any joint stock association, who knowingly receives or possesses himself of any property of the association, otherwise than in payment of a just demand, and, with intent to defraud, omits to make, or to cause or direct to be made, a full and true entry thereof in the books or accounts of the association, is guilty of a public offense. (b) Every director, officer, agent, or member of any joint stock association who, with intent to defraud, destroys, alters, mutilates, or falsifies any of the books, papers, writings, or securities belonging to the association, or makes or concurs in making any false entries, or omits or concurs in omitting to make any material entry in any book of accounts or other record or document kept by the association, is guilty of a public offense. (c) Each public offense specified in this section is punishable by imprisonment in a state prison, or by imprisonment in a county jail not exceeding one year, or a fine not exceeding one thousand dollars ($1,000), or by both such fine and imprisonment.


22002. (a) Every director, officer, or agent of any joint stock association, who knowingly receives or possesses himself of any property of the association, otherwise than in payment of a just demand, and, with intent to defraud, omits to make, or to cause or direct to be made, a full and true entry thereof in the books or accounts of the association, is guilty of a public offense. (b) Every director, officer, agent, or member of any joint stock association who, with intent to defraud, destroys, alters, mutilates, or falsifies any of the books, papers, writings, or securities belonging to the association, or makes or concurs in making any false entries, or omits or concurs in omitting to make any material entry in any book of accounts or other record or document kept by the association, is guilty of a public offense. (c) Each public offense specified in this section is punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or by imprisonment in a county jail not exceeding one year, or a fine not exceeding one thousand dollars ($1,000), or by both that fine and imprisonment.


22003. For the purposes of this part every director of a joint stock association is deemed to possess such knowledge of the affairs of his association as to enable him to determine whether any act, proceeding, or omission of its directors is a violation of this part.


Part 4. Real Estate Investment Trusts

Ca Codes (corp:23000-23006) Corporations Code Section 23000-23006



23000. "Real estate investment trust" as used in this part means any unincorporated association or trust formed to engage in business and managed by, or under the direction of, one or more trustees for the benefit of the holders or owners (hereinafter in this part "shareowners") of transferable shares of beneficial interest in the trust estate (hereinafter in this part "shares") and which meets one of the following two tests: (a) It received, prior to the effective date of this part, an order, permit or qualification from the Commissioner of Corporations pursuant to the provisions of the Corporate Securities Law of 1968 or any predecessor statute finding that it was a real estate investment trust, notwithstanding the subsequent amendment, suspension or revocation of any such finding, order, permit or qualification, and it has for one or more of its three fiscal years immediately prior to the effective date of this part complied with, or in good faith filed a federal income tax return on the basis that it has complied with the requirements for real estate investment trusts set forth in Section 856 of the Federal Internal Revenue Code; or (b) It is formed for the purpose of engaging in business as a real estate investment trust under Part II of Subchapter M of Chapter 1 of Subtitle A of the Federal Internal Revenue Code of 1954, as amended from time to time; the sale of its shares has been qualified at any time by the Commissioner of Corporations pursuant to the Corporate Securities Law of 1968; and in good faith it has commenced business as a real estate investment trust. An unincorporated association or trust which otherwise meets the requirements of this section shall not be affected in its status as a real estate investment trust whether or not it is in fact taxable for any year or years under Part II of Subchapter M of Chapter 1 of Subtitle A of the Federal Internal Revenue Code of 1954, as amended from time to time.


23001. No shareowner of a real estate investment trust shall be personally liable as such for any liabilities, debts or obligations of, or claims against, the real estate investment trust, whether arising before or after such shareowner became the owner or holder of the shares thereof.


23002. Section 23001 shall apply to any real estate investment trust organized under the laws of this state with respect to liabilities, debts, obligations and claims wherever arising, and to any real estate investment trust organized under the laws of a foreign jurisdiction with respect to liabilities, debts, obligations and claims arising in this state.


23003. A real estate investment trust shall not issue any security redeemable at the option of the holder of the security.


23004. Section 23001 shall apply with respect to all liabilities, debts, obligations of, and claims against, a real estate investment trust arising after the effective date of this part, and prior law shall continue to govern with respect to liabilities, debts, obligations and claims existing on the effective date of this part. No implication shall be created by the adoption of this part that the holders or owners of shares of beneficial interest in business trusts which do not meet the definition of real estate investment trust in Section 23000 are, or are not, as such, personally liable for the liabilities, debts or obligations of, or claims against, any such trust.


23005. The provisions of Sections 1400 and 1402 governing bankruptcy reorganizations for corporations also apply to real estate investment trusts. For that purpose where the term "corporation" is used in such sections it shall also include the term "real estate investment trust," the terms "director" or "board of directors" shall include "trustee" or "board of trustees," the term "articles" shall include "declaration of trust" and the term "capital stock" shall include "shares of beneficial interest."


23006. (a) The following entities may be merged pursuant to this article: (1) Any two or more real estate investment trusts into one real estate investment trust, provided that the merger is specifically permitted by the declarations of trust, and that procedure is detailed in those declarations. (2) One or more real estate investment trusts with one or more limited partnerships into one limited partnership, provided that the merger is specifically permitted by the declarations of trust, and that procedure is detailed in those declarations. (3) One or more real estate investment trusts with one or more limited partnerships into one real estate investment trust, provided that the merger is specifically permitted by the declarations of trust, and that procedure is detailed in those declarations. (b) Any merger under this section shall only be effective upon the approval of the holders of a majority of the shares of beneficial interest of the real estate investment trust.


Part 5. Liability Of Director Or Officer Of Nonprofit Medical Association

Ca Codes (corp:24001.5) Corporations Code Section 24001.5



24001.5. (a) The Legislature finds and declares that the services of directors or officers of nonprofit medical associations, as defined in Section 21200, who serve without compensation are critical to the efficient conduct and management of the public service and charitable affairs of the people of California. The willingness of volunteers to offer their services has been deterred by a perception that their personal assets are at risk for these activities. The unavailability and unaffordability of appropriate liability insurance makes it difficult for these associations to protect the personal assets of their volunteer decisionmakers with adequate insurance. It is the public policy of this state to provide incentive and protection to the individuals who perform these important functions. (b) Except as provided in this section, no cause of action for monetary damages shall arise against any person serving without compensation as a director or officer of a nonprofit medical association, as defined in Section 21200, on account of any negligent act or omission occurring (1) within the scope of that person's duties as a director acting as a board member, or within the scope of that person's duties as an officer acting in an official capacity; (2) in good faith; (3) in a manner that the person believes to be in the best interest of the association; and (4) is in the exercise of his or her policymaking judgment. (c) This section shall not limit the liability of a director or officer for any of the following: (1) Self-dealing transactions, as described in Sections 5233 and 9243. (2) Conflicts of interest, as described in Section 7233. (3) Actions described in Sections 5237, 7236, and 9245. (4) In the case of a charitable trust, an action or proceeding against a trustee brought by a beneficiary of that trust. (5) Any action or proceeding brought by the Attorney General. (6) Intentional, wanton, or reckless acts, gross negligence, or an action based on fraud, oppression, or malice. (7) Any action brought under Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code. (d) This section only applies to nonprofit organizations organized to provide charitable, educational, scientific, social, or other forms of public service that are exempt from federal income taxation under Section 501(c)(3) or 501(c)(6) of the Internal Revenue Code. (e) This section applies only if the nonprofit association maintains a liability insurance policy with an amount of coverage of at least the following amounts: (1) If the association's annual budget is less than fifty thousand dollars ($50,000), the minimum required amount is five hundred thousand dollars ($500,000). (2) If the association's annual budget equals or exceeds fifty thousand dollars ($50,000), the minimum required amount is one million dollars ($1,000,000). This section applies only if the liability insurance policy is applicable to the claim. (f) For the purposes of this section, the payment of actual expenses incurred in attending meetings or otherwise in the execution of the duties of a director or officer shall not constitute compensation. (g) Nothing in this section shall be construed to limit the liability of a nonprofit association for any negligent act or omission of a director, officer, employee, agent, or servant occurring within the scope of his or her duties. (h) This section does not apply to any association that unlawfully restricts membership, services, or benefits conferred on the basis of political affiliation, age, or any characteristic listed or defined in subdivision (b) or (e) of Section 51 of the Civil Code. (i) This section does not apply to any volunteer director or officer who receives compensation from the association in any other capacity, including, but not limited to, as an employee.


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