State Codes and Statutes

Statutes > California > Corp > 2200-2260

CORPORATIONS CODE
SECTION 2200-2260



2200.  Every corporation that neglects, fails, or refuses: (a) to
keep or cause to be kept or maintained the record of shareholders or
books of account required by this division to be kept or maintained,
(b) to prepare or cause to be prepared or submitted the financial
statements required by this division to be prepared or submitted, or
(c) to give any shareholder of record the advice required by
subdivision (f) of Section 2115, is subject to penalty as provided in
this section.
   The penalty shall be twenty-five dollars ($25) for each day that
the failure or refusal continues, up to a maximum of one thousand
five hundred dollars ($1,500), beginning 30 days after receipt of the
written request that the duty be performed from one entitled to make
the request, except that, in the case of a failure to give advice
required by subdivision (f) of Section 2115, the 30-day period shall
run from the date of receipt of the request made pursuant to
subdivision (f) of Section 2115, and no additional request is
required by this section.
   The penalty shall be paid to the shareholder or shareholders
jointly making the request for performance of the duty, and damaged
by the neglect, failure, or refusal, if suit therefor is commenced
within 90 days after the written request is made, including any
request made pursuant to subdivision (f) of Section 2115; but the
maximum daily penalty because of failure to comply with any number of
separate requests made on any one day or for the same act shall be
two hundred fifty dollars ($250).



2201.  Any officer of a corporation charged with the duty of
entering a transfer of shares upon the books of the corporation and
issuing a share certificate or, with respect to uncertificated
securities, an initial transaction statement or written statements,
who unreasonably neglects, fails or refuses to perform such duty
after written request by any person entitled thereto is subject to a
penalty of one hundred dollars ($100) and the further penalty of ten
dollars ($10) for each day that such default continues, beginning
five days after receipt of the request, up to a maximum of five
hundred dollars ($500). The penalty shall be paid to each person
aggrieved. It may be enforced by action and shall be in addition to
all other remedies.
   Every director or other officer unreasonably causing such neglect,
failure or refusal to make such entries upon the books of the
corporation or to issue a certificate or, with respect to
uncertificated securities, an initial transaction statement or
written statements, for shares to a person entitled thereto is
subject to a like penalty.



2202.  Any penalty prescribed by Section 2200 or Section 2201 shall
be in addition to any remedy by injunction or action for damages or
by writ of mandate for the nonperformance of acts and duties enjoined
by law upon the corporation or its directors or officers.
   The court in which an action for any such penalty is brought may
reduce, remit or suspend the penalty on such terms and conditions as
it may deem reasonable when it is made to appear that the neglect,
failure or refusal was inadvertent or excusable.



2203.  (a) Any foreign corporation which transacts intrastate
business and which does not hold a valid certificate from the
Secretary of State may be subject to a penalty of twenty dollars
($20) for each day that unauthorized intrastate business is
transacted; and the foreign corporation, by transacting unauthorized
intrastate business, shall be deemed to consent to the jurisdiction
of the courts of California in any civil action arising in this state
in which the corporation is named a party defendant.
   (b) The penalty established by subdivision (a) of this section
shall be assessed according to the number of days it is found that
the corporation has been willfully doing unauthorized intrastate
business. Prosecution under this section may be brought, and the
money penalty recovered thereby shall be paid, in the manner provided
by Section 2258 for a prosecution brought under that section. The
amount of the penalty assessed shall be determined by the court based
upon the circumstances, including the size of the corporation and
the willfulness of the violation.
   (c) A foreign corporation subject to the provisions of Chapter 21
(commencing with Section 2100) which transacts intrastate business
without complying with Section 2105 shall not maintain any action or
proceeding upon any intrastate business so transacted in any court of
this state, commenced prior to compliance with Section 2105, until
it has complied with the provisions thereof and has paid to the
Secretary of State a penalty of two hundred fifty dollars ($250) in
addition to the fees due for filing the statement and designation
required by Section 2105 and has filed with the clerk of the court in
which the action is pending receipts showing the payment of the fees
and penalty and all franchise taxes and any other taxes on business
or property in this state that should have been paid for the period
during which it transacted intrastate business.



2204.  (a) Upon the failure of a corporation to file the statement
required by Section 1502, the Secretary of State shall mail a notice
of that delinquency to the corporation. The notice shall also contain
information concerning the application of this section, advise the
corporation of the penalty imposed by Section 19141 of the Revenue
and Taxation Code for failure to timely file the required statement
after notice of delinquency has been mailed by the Secretary of
State, and shall advise the corporation of its right to request
relief from the Secretary of State because of reasonable cause or
unusual circumstances that justify the failure to file. If, within 60
days after the mailing of the notice of delinquency, a statement
pursuant to Section 1502 has not been filed by the corporation, the
Secretary of State shall certify the name of the corporation to the
Franchise Tax Board.
   (b) Upon certification pursuant to subdivision (a), the Franchise
Tax Board shall assess against the corporation the penalty provided
in Section 19141 of the Revenue and Taxation Code.
   (c) The penalty herein provided shall not apply to a corporation
that on or prior to the date of certification pursuant to subdivision
(a) has dissolved or has been merged into another corporation.
   (d) The penalty herein provided shall not apply and the Secretary
of State need not mail a notice of delinquency to a corporation if
the corporate powers, rights, and privileges have been suspended by
the Franchise Tax Board pursuant to Section 23301, 23301.5, or 23775
of the Revenue and Taxation Code on or prior to, and remain suspended
on, the last day of the filing period pursuant to Section 1502. The
Secretary of State need not mail a form pursuant to Section 1502 to a
corporation if the corporate powers, rights and privileges have been
so suspended by the Franchise Tax Board on or prior to, and remain
suspended on, the day the Secretary of State prepares the forms for
mailing.
   (e) If, after certification pursuant to subdivision (a), the
Secretary of State finds (1) the required statement was filed before
the expiration of the 60-day period after mailing of the notice of
delinquency, or (2) the failure to provide notice of delinquency was
due to an error of the Secretary of State, the Secretary of State
shall promptly decertify the name of the corporation to the Franchise
Tax Board. The Franchise Tax Board shall then promptly abate any
penalty assessed against the corporation pursuant to Section 19141 of
the Revenue and Taxation Code.
   (f) If the Secretary of State determines that the failure of a
corporation to file the statement required by Section 1502 is
excusable because of reasonable cause or unusual circumstances that
justify the failure, the Secretary of State may waive the penalty
imposed by this section and by Section 19141 of the Revenue and
Taxation Code, in which case the Secretary of State shall not certify
the name of the corporation to the Franchise Tax Board, or if
already certified, the Secretary of State shall promptly decertify
the name of the corporation.


2205.  (a) A corporation that (1) fails to file a statement pursuant
to Section 1502 for an applicable filing period, (2) has not filed a
statement pursuant to Section 1502 during the preceding 24 months,
and (3) was certified for penalty pursuant to Section 2204 for the
same filing period,is subject to suspension pursuant to this section
rather than to penalty pursuant to Section 2204.
   (b) When subdivision (a) is applicable, the Secretary of State
shall mail a notice to the corporation informing the corporation that
its corporate powers, rights, and privileges will be suspended after
60 days if it fails to file a statement pursuant to Section 1502.
   (c) After the expiration of the 60-day period without any
statement filed pursuant to Section 1502, the Secretary of State
shall notify the Franchise Tax Board of the suspension and mail a
notice of the suspension to the corporation, and thereupon, the
corporate powers, rights, and privileges of the corporation are
suspended, except for the purpose of filing an application for exempt
status or amending the articles of incorporation as necessary either
to perfect that application or to set forth a new name.
   (d) A statement pursuant to Section 1502 may be filed
notwithstanding suspension of the corporate powers, rights, and
privileges pursuant to this section or Section 23301, 23301.5, or
23775 of the Revenue and Taxation Code. Upon the filing of a
statement pursuant to Section 1502 by a corporation that has suffered
suspension pursuant to this section, the Secretary of State shall
certify that fact to the Franchise Tax Board and the corporation may
thereupon be relieved from suspension unless the corporation is held
in suspension by the Franchise Tax Board by reason of Section 23301,
23301.5, or 23775 of the Revenue and Taxation Code.



2206.  (a) Sections 2204 and 2205 apply to foreign corporations with
respect to the statements required to be filed by Section 2117. For
this purpose, the suspension of the corporate powers, rights, and
privileges of a domestic corporation shall mean the forfeiture of the
exercise of the corporate powers, rights, and privileges of a
foreign corporation in this state.
   (b) A foreign nonprofit corporation which has suffered the
forfeiture of the exercise of the corporate powers, rights, and
privileges in this state may nevertheless file an application for
exempt status as specified in Section 23301 of the Revenue and
Taxation Code.
   (c) The forfeiture of the exercise of the corporate powers,
rights, and privileges of a foreign corporation in this state as used
in subdivision (a) does not prohibit the transaction of business in
this state by a foreign corporation if the business transacted
subsequent to the forfeiture would not, considered as an entirety,
require the foreign corporation to obtain a certificate of
qualification pursuant to Sections 191 and 2105.



2207.  (a) A corporation is liable for a civil penalty in an amount
not exceeding one million dollars ($1,000,000) if the corporation
does both of the following:
   (1) Has actual knowledge that an officer, director, manager, or
agent of the corporation does any of the following:
   (A) Makes, publishes, or posts, or has made, published, or posted,
either generally or privately to the shareholders or other persons,
either of the following:
   (i) An oral, written, or electronically transmitted report,
exhibit, notice, or statement of its affairs or pecuniary condition
that contains a material statement or omission that is false and
intended to give the shares of stock in the corporation a materially
greater or a materially less apparent market value than they really
possess.
   (ii) An oral, written, or electronically transmitted report,
prospectus, account, or statement of operations, values, business,
profits, or expenditures, that includes a material false statement or
omission intended to give the shares of stock in the corporation a
materially greater or a materially less apparent market value than
they really possess.
   (B) Refuses or has refused to make any book entry or post any
notice required by law in the manner required by law.
   (C) Misstates or conceals or has misstated or concealed from a
regulatory body a material fact in order to deceive a regulatory body
to avoid a statutory or regulatory duty, or to avoid a statutory or
regulatory limit or prohibition.
   (2) Within 30 days after actual knowledge is acquired of the
actions described in paragraph (1), the corporation knowingly fails
to do both of the following:
   (A) Notify the Attorney General or appropriate government agency
in writing, unless the corporation has actual knowledge that the
Attorney General or appropriate government agency has been notified.
   (B) Notify its shareholders in writing, unless the corporation has
actual knowledge that the shareholders have been notified.
   (b) The requirement for notification under this section is not
applicable if the action taken or about to be taken by the
corporation, or by an officer, director, manager, or agent of the
corporation under paragraph (1) of subdivision (a), is abated within
the time prescribed for reporting, unless the appropriate government
agency requires disclosure by regulation.
   (c) If the action reported to the Attorney General pursuant to
this section implicates the government authority of an agency other
than the Attorney General, the Attorney General shall promptly
forward the written notice to that agency.
   (d) If the Attorney General was not notified pursuant to
subparagraph (A) of paragraph (2) of subdivision (a), but the
corporation reasonably and in good faith believed that it had
complied with the notification requirements of this section by
notifying a government agency listed in paragraph (5) of subdivision
(e), no penalties shall apply.
   (e) For purposes of this section:
   (1) "Manager" means a person having both of the following:
   (A) Management authority over a business entity.
   (B) Significant responsibility for an aspect of a business that
includes actual authority for the financial operations or financial
transactions of the business.
   (2) "Agent" means a person or entity authorized by the corporation
to make representations to the public about the corporation's
financial condition and who is acting within the scope of the agency
when the representations are made.
   (3) "Shareholder" means a person or entity that is a shareholder
of the corporation at the time the disclosure is required pursuant to
subparagraph (B) of paragraph (2) of subdivision (a).
   (4) "Notify its shareholders" means to give sufficient description
of an action taken or about to be taken that would constitute acts
or omissions as described in paragraph (1) of subdivision (a). A
notice or report filed by a corporation with the United States
Securities and Exchange Commission that relates to the facts and
circumstances giving rise to an obligation under paragraph (1) of
subdivision (a) shall satisfy all notice requirements arising under
paragraph (2) of subdivision (a), but shall not be the exclusive
means of satisfying the notice requirements, provided that the
Attorney General or appropriate agency is informed in writing that
the filing has been made together with a copy of the filing or an
electronic link where it is available online without charge.
   (5) "Appropriate government agency" means an agency on the
following list that has regulatory authority with respect to the
financial operations of a corporation:
   (A) Department of Corporations.
   (B) Department of Insurance.
   (C) Department of Financial Institutions.
   (D) Department of Managed Health Care.
   (E) United States Securities and Exchange Commission.
   (6) "Actual knowledge of the corporation" means the knowledge an
officer or director of a corporation actually possesses or does not
consciously avoid possessing, based on an evaluation of information
provided pursuant to the corporation's disclosure controls and
procedures.
   (7) "Refuse to make a book entry" means the intentional decision
not to record an accounting transaction when all of the following
conditions are satisfied:
   (A) The independent auditors required recordation of an accounting
transaction during the course of an audit.
   (B) The audit committee of the corporation has not approved the
independent auditor's recommendation.
   (C) The decision is made for the primary purpose of rendering the
financial statements materially false or misleading.
   (8) "Refuse to post any notice required by law" means an
intentional decision not to post a notice required by law when all of
the following conditions exist:
   (A) The decision not to post the notice has not been approved by
the corporation's audit committee.
   (B) The decision is intended to give the shares of stock in the
corporation a materially greater or a materially less apparent market
value than they really possess.
   (9) "Misstate or conceal material facts from a regulatory body"
means an intentional decision not to disclose material facts when all
of the following conditions exist:
   (A) The decision not to disclose material facts has not been
approved by the corporation's audit committee.
   (B) The decision is intended to give the shares of stock in the
corporation a materially greater or a materially less apparent market
value than they really possess.
   (10) "Material false statement or omission" means an untrue
statement of material fact or an omission to state a material fact
necessary in order to make the statements made under the
circumstances under which they were made not misleading.
   (11) "Officer" means any person as set forth in Rule 16A-1
promulgated under the Securities Exchange Act of 1934 or any
successor regulation thereto, except an officer of a subsidiary
corporation who is not also an officer of the parent corporation.
   (f) This section only applies to corporations that are issuers, as
defined in Section 2 of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
Sec. 7201 and following).
   (g) An action to enforce this section may only be brought by the
Attorney General or a district attorney or city attorney in the name
of the people of the State of California.


2251.  Any promoter, director or officer of a corporation who
knowingly and willfully issues or consents to the issuance of
certificates for certificated securities, or initial transaction
statements or written statements for uncertificated securities, in
violation of this division with intent to defraud present or future
shareholders, subscribers, purchasers of shares or creditors is
guilty of a misdemeanor punishable by a fine of not more than one
thousand dollars ($1,000) or imprisonment for not more than one year
or both.


2252.  Every person (a) who signs the name of a fictitious person to
any subscription for or agreement to take stock in any domestic or
foreign corporation, existing or proposed, or (b) who signs to any
subscription or agreement the name of any person, knowing that the
person has no means or does not intend in good faith to comply with
all the terms thereof or that there is any understanding or agreement
that the terms of the subscription or agreement are not to be
complied with or enforced, is guilty of a misdemeanor.



2253.  Any director of a stock corporation, domestic or foreign, who
concurs in any vote or act of the directors of the corporation or
any of them, knowingly and with dishonest or fraudulent purpose, to
make any dividend or distribution of assets except in the cases and
in the manner allowed by law, either with the design of defrauding
creditors or shareholders or of giving a false appearance to the
value of the stock and thereby defrauding subscribers or purchasers,
is guilty of a misdemeanor, punishable by a fine of not more than one
thousand dollars ($1,000) or imprisonment for not more than one year
or both.


2254.  Every director, officer or agent of any corporation, domestic
or foreign, is guilty of a felony (a) who knowingly concurs in
making, publishing or posting either generally or privately to the
shareholders or other persons (1) any written report, exhibit,
statement of its affairs or pecuniary condition or notice containing
any material statement which is false, or (2) any untrue or willfully
or fraudulenty exaggerated report, prospectus, account, statement of
operations, values, business, profits, expenditures or prospects, or
(3) any other paper or document intend to produce or give, or having
a tendency to produce or give, the shares of stock in such
corporation a greater value or a less apparent or market value than
they really possess, or (b) who refuses to make any book entry or
post any notice required by the law in manner required by law.



2255.  (a) Every director, officer or agent of any corporation,
domestic or foreign, who knowingly receives or acquires possession of
any property of the corporation, 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 corporation is guilty of a public offense.
   (b) Every director, officer, agent or shareholder of any
corporation, domestic or foreign, who, with intent to defraud,
destroys, alters, mutilates or falsifies any of the books, papers,
writings or securities belonging to the corporation or makes or
concurs in omitting to make any material entry in any book of
accounts or other record or document kept by the corporation 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
for not exceeding one year, or a fine not exceeding one thousand
dollars ($1,000), or by both such fine and imprisonment.



2256.  Every officer, agent or clerk of any corporation, domestic or
foreign, or any person proposing to organize such a corporation or
to increase the capital stock of any such corporation, who knowingly
exhibits any false, forged or altered book, paper, voucher, security
or other instrument of evidence to any public officer or board
authorized by law to examine the organization of such corporation or
to investigate its affairs or to allow an increase of its capital,
with intent to deceive such officer or board in respect thereto, is
punishable by imprisonment in a state prison, or by imprisonment in a
county jail for not exceeding one year.



2257.  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 corporation, domestic or foreign, whether 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, shareholder or promoter of such
corporation, when in fact no such relationship exists to the
knowledge of such person, is guilty of a misdemeanor.



2258.  Any foreign corporation subject to the provisions of Chapter
21 which transacts intrastate business without complying therewith is
guilty of a misdemeanor, punishable by fine of not less than five
hundred dollars ($500) nor more than one thousand dollars ($1,000),
to be recovered in any court of competent jurisdiction.
   Prosecution under this section may be brought by the Attorney
General or by any district attorney. If brought by the latter,
one-half of the fine collected shall be paid to the treasurer of the
county in which the conviction was had and one-half to the State
Treasurer. If brought by the Attorney General the entire amount of
fine collected shall be paid to the State Treasurer to the credit of
the General Fund of the state.



2259.  Any person who transacts intrastate business on behalf of a
foreign corporation which is not authorized to transact such business
in this state, knowing that it is not so authorized, is guilty of a
misdemeanor punishable by fine of not less than fifty dollars ($50)
nor more than six hundred dollars ($600).


2260.  In a prosecution for a violation of Section 2252, 2253, 2254,
2255, 2256 or 2257, the fact that the corporation was a foreign
corporation is not a defense, if it was carrying on business or
keeping an office therefor within this state.


State Codes and Statutes

Statutes > California > Corp > 2200-2260

CORPORATIONS CODE
SECTION 2200-2260



2200.  Every corporation that neglects, fails, or refuses: (a) to
keep or cause to be kept or maintained the record of shareholders or
books of account required by this division to be kept or maintained,
(b) to prepare or cause to be prepared or submitted the financial
statements required by this division to be prepared or submitted, or
(c) to give any shareholder of record the advice required by
subdivision (f) of Section 2115, is subject to penalty as provided in
this section.
   The penalty shall be twenty-five dollars ($25) for each day that
the failure or refusal continues, up to a maximum of one thousand
five hundred dollars ($1,500), beginning 30 days after receipt of the
written request that the duty be performed from one entitled to make
the request, except that, in the case of a failure to give advice
required by subdivision (f) of Section 2115, the 30-day period shall
run from the date of receipt of the request made pursuant to
subdivision (f) of Section 2115, and no additional request is
required by this section.
   The penalty shall be paid to the shareholder or shareholders
jointly making the request for performance of the duty, and damaged
by the neglect, failure, or refusal, if suit therefor is commenced
within 90 days after the written request is made, including any
request made pursuant to subdivision (f) of Section 2115; but the
maximum daily penalty because of failure to comply with any number of
separate requests made on any one day or for the same act shall be
two hundred fifty dollars ($250).



2201.  Any officer of a corporation charged with the duty of
entering a transfer of shares upon the books of the corporation and
issuing a share certificate or, with respect to uncertificated
securities, an initial transaction statement or written statements,
who unreasonably neglects, fails or refuses to perform such duty
after written request by any person entitled thereto is subject to a
penalty of one hundred dollars ($100) and the further penalty of ten
dollars ($10) for each day that such default continues, beginning
five days after receipt of the request, up to a maximum of five
hundred dollars ($500). The penalty shall be paid to each person
aggrieved. It may be enforced by action and shall be in addition to
all other remedies.
   Every director or other officer unreasonably causing such neglect,
failure or refusal to make such entries upon the books of the
corporation or to issue a certificate or, with respect to
uncertificated securities, an initial transaction statement or
written statements, for shares to a person entitled thereto is
subject to a like penalty.



2202.  Any penalty prescribed by Section 2200 or Section 2201 shall
be in addition to any remedy by injunction or action for damages or
by writ of mandate for the nonperformance of acts and duties enjoined
by law upon the corporation or its directors or officers.
   The court in which an action for any such penalty is brought may
reduce, remit or suspend the penalty on such terms and conditions as
it may deem reasonable when it is made to appear that the neglect,
failure or refusal was inadvertent or excusable.



2203.  (a) Any foreign corporation which transacts intrastate
business and which does not hold a valid certificate from the
Secretary of State may be subject to a penalty of twenty dollars
($20) for each day that unauthorized intrastate business is
transacted; and the foreign corporation, by transacting unauthorized
intrastate business, shall be deemed to consent to the jurisdiction
of the courts of California in any civil action arising in this state
in which the corporation is named a party defendant.
   (b) The penalty established by subdivision (a) of this section
shall be assessed according to the number of days it is found that
the corporation has been willfully doing unauthorized intrastate
business. Prosecution under this section may be brought, and the
money penalty recovered thereby shall be paid, in the manner provided
by Section 2258 for a prosecution brought under that section. The
amount of the penalty assessed shall be determined by the court based
upon the circumstances, including the size of the corporation and
the willfulness of the violation.
   (c) A foreign corporation subject to the provisions of Chapter 21
(commencing with Section 2100) which transacts intrastate business
without complying with Section 2105 shall not maintain any action or
proceeding upon any intrastate business so transacted in any court of
this state, commenced prior to compliance with Section 2105, until
it has complied with the provisions thereof and has paid to the
Secretary of State a penalty of two hundred fifty dollars ($250) in
addition to the fees due for filing the statement and designation
required by Section 2105 and has filed with the clerk of the court in
which the action is pending receipts showing the payment of the fees
and penalty and all franchise taxes and any other taxes on business
or property in this state that should have been paid for the period
during which it transacted intrastate business.



2204.  (a) Upon the failure of a corporation to file the statement
required by Section 1502, the Secretary of State shall mail a notice
of that delinquency to the corporation. The notice shall also contain
information concerning the application of this section, advise the
corporation of the penalty imposed by Section 19141 of the Revenue
and Taxation Code for failure to timely file the required statement
after notice of delinquency has been mailed by the Secretary of
State, and shall advise the corporation of its right to request
relief from the Secretary of State because of reasonable cause or
unusual circumstances that justify the failure to file. If, within 60
days after the mailing of the notice of delinquency, a statement
pursuant to Section 1502 has not been filed by the corporation, the
Secretary of State shall certify the name of the corporation to the
Franchise Tax Board.
   (b) Upon certification pursuant to subdivision (a), the Franchise
Tax Board shall assess against the corporation the penalty provided
in Section 19141 of the Revenue and Taxation Code.
   (c) The penalty herein provided shall not apply to a corporation
that on or prior to the date of certification pursuant to subdivision
(a) has dissolved or has been merged into another corporation.
   (d) The penalty herein provided shall not apply and the Secretary
of State need not mail a notice of delinquency to a corporation if
the corporate powers, rights, and privileges have been suspended by
the Franchise Tax Board pursuant to Section 23301, 23301.5, or 23775
of the Revenue and Taxation Code on or prior to, and remain suspended
on, the last day of the filing period pursuant to Section 1502. The
Secretary of State need not mail a form pursuant to Section 1502 to a
corporation if the corporate powers, rights and privileges have been
so suspended by the Franchise Tax Board on or prior to, and remain
suspended on, the day the Secretary of State prepares the forms for
mailing.
   (e) If, after certification pursuant to subdivision (a), the
Secretary of State finds (1) the required statement was filed before
the expiration of the 60-day period after mailing of the notice of
delinquency, or (2) the failure to provide notice of delinquency was
due to an error of the Secretary of State, the Secretary of State
shall promptly decertify the name of the corporation to the Franchise
Tax Board. The Franchise Tax Board shall then promptly abate any
penalty assessed against the corporation pursuant to Section 19141 of
the Revenue and Taxation Code.
   (f) If the Secretary of State determines that the failure of a
corporation to file the statement required by Section 1502 is
excusable because of reasonable cause or unusual circumstances that
justify the failure, the Secretary of State may waive the penalty
imposed by this section and by Section 19141 of the Revenue and
Taxation Code, in which case the Secretary of State shall not certify
the name of the corporation to the Franchise Tax Board, or if
already certified, the Secretary of State shall promptly decertify
the name of the corporation.


2205.  (a) A corporation that (1) fails to file a statement pursuant
to Section 1502 for an applicable filing period, (2) has not filed a
statement pursuant to Section 1502 during the preceding 24 months,
and (3) was certified for penalty pursuant to Section 2204 for the
same filing period,is subject to suspension pursuant to this section
rather than to penalty pursuant to Section 2204.
   (b) When subdivision (a) is applicable, the Secretary of State
shall mail a notice to the corporation informing the corporation that
its corporate powers, rights, and privileges will be suspended after
60 days if it fails to file a statement pursuant to Section 1502.
   (c) After the expiration of the 60-day period without any
statement filed pursuant to Section 1502, the Secretary of State
shall notify the Franchise Tax Board of the suspension and mail a
notice of the suspension to the corporation, and thereupon, the
corporate powers, rights, and privileges of the corporation are
suspended, except for the purpose of filing an application for exempt
status or amending the articles of incorporation as necessary either
to perfect that application or to set forth a new name.
   (d) A statement pursuant to Section 1502 may be filed
notwithstanding suspension of the corporate powers, rights, and
privileges pursuant to this section or Section 23301, 23301.5, or
23775 of the Revenue and Taxation Code. Upon the filing of a
statement pursuant to Section 1502 by a corporation that has suffered
suspension pursuant to this section, the Secretary of State shall
certify that fact to the Franchise Tax Board and the corporation may
thereupon be relieved from suspension unless the corporation is held
in suspension by the Franchise Tax Board by reason of Section 23301,
23301.5, or 23775 of the Revenue and Taxation Code.



2206.  (a) Sections 2204 and 2205 apply to foreign corporations with
respect to the statements required to be filed by Section 2117. For
this purpose, the suspension of the corporate powers, rights, and
privileges of a domestic corporation shall mean the forfeiture of the
exercise of the corporate powers, rights, and privileges of a
foreign corporation in this state.
   (b) A foreign nonprofit corporation which has suffered the
forfeiture of the exercise of the corporate powers, rights, and
privileges in this state may nevertheless file an application for
exempt status as specified in Section 23301 of the Revenue and
Taxation Code.
   (c) The forfeiture of the exercise of the corporate powers,
rights, and privileges of a foreign corporation in this state as used
in subdivision (a) does not prohibit the transaction of business in
this state by a foreign corporation if the business transacted
subsequent to the forfeiture would not, considered as an entirety,
require the foreign corporation to obtain a certificate of
qualification pursuant to Sections 191 and 2105.



2207.  (a) A corporation is liable for a civil penalty in an amount
not exceeding one million dollars ($1,000,000) if the corporation
does both of the following:
   (1) Has actual knowledge that an officer, director, manager, or
agent of the corporation does any of the following:
   (A) Makes, publishes, or posts, or has made, published, or posted,
either generally or privately to the shareholders or other persons,
either of the following:
   (i) An oral, written, or electronically transmitted report,
exhibit, notice, or statement of its affairs or pecuniary condition
that contains a material statement or omission that is false and
intended to give the shares of stock in the corporation a materially
greater or a materially less apparent market value than they really
possess.
   (ii) An oral, written, or electronically transmitted report,
prospectus, account, or statement of operations, values, business,
profits, or expenditures, that includes a material false statement or
omission intended to give the shares of stock in the corporation a
materially greater or a materially less apparent market value than
they really possess.
   (B) Refuses or has refused to make any book entry or post any
notice required by law in the manner required by law.
   (C) Misstates or conceals or has misstated or concealed from a
regulatory body a material fact in order to deceive a regulatory body
to avoid a statutory or regulatory duty, or to avoid a statutory or
regulatory limit or prohibition.
   (2) Within 30 days after actual knowledge is acquired of the
actions described in paragraph (1), the corporation knowingly fails
to do both of the following:
   (A) Notify the Attorney General or appropriate government agency
in writing, unless the corporation has actual knowledge that the
Attorney General or appropriate government agency has been notified.
   (B) Notify its shareholders in writing, unless the corporation has
actual knowledge that the shareholders have been notified.
   (b) The requirement for notification under this section is not
applicable if the action taken or about to be taken by the
corporation, or by an officer, director, manager, or agent of the
corporation under paragraph (1) of subdivision (a), is abated within
the time prescribed for reporting, unless the appropriate government
agency requires disclosure by regulation.
   (c) If the action reported to the Attorney General pursuant to
this section implicates the government authority of an agency other
than the Attorney General, the Attorney General shall promptly
forward the written notice to that agency.
   (d) If the Attorney General was not notified pursuant to
subparagraph (A) of paragraph (2) of subdivision (a), but the
corporation reasonably and in good faith believed that it had
complied with the notification requirements of this section by
notifying a government agency listed in paragraph (5) of subdivision
(e), no penalties shall apply.
   (e) For purposes of this section:
   (1) "Manager" means a person having both of the following:
   (A) Management authority over a business entity.
   (B) Significant responsibility for an aspect of a business that
includes actual authority for the financial operations or financial
transactions of the business.
   (2) "Agent" means a person or entity authorized by the corporation
to make representations to the public about the corporation's
financial condition and who is acting within the scope of the agency
when the representations are made.
   (3) "Shareholder" means a person or entity that is a shareholder
of the corporation at the time the disclosure is required pursuant to
subparagraph (B) of paragraph (2) of subdivision (a).
   (4) "Notify its shareholders" means to give sufficient description
of an action taken or about to be taken that would constitute acts
or omissions as described in paragraph (1) of subdivision (a). A
notice or report filed by a corporation with the United States
Securities and Exchange Commission that relates to the facts and
circumstances giving rise to an obligation under paragraph (1) of
subdivision (a) shall satisfy all notice requirements arising under
paragraph (2) of subdivision (a), but shall not be the exclusive
means of satisfying the notice requirements, provided that the
Attorney General or appropriate agency is informed in writing that
the filing has been made together with a copy of the filing or an
electronic link where it is available online without charge.
   (5) "Appropriate government agency" means an agency on the
following list that has regulatory authority with respect to the
financial operations of a corporation:
   (A) Department of Corporations.
   (B) Department of Insurance.
   (C) Department of Financial Institutions.
   (D) Department of Managed Health Care.
   (E) United States Securities and Exchange Commission.
   (6) "Actual knowledge of the corporation" means the knowledge an
officer or director of a corporation actually possesses or does not
consciously avoid possessing, based on an evaluation of information
provided pursuant to the corporation's disclosure controls and
procedures.
   (7) "Refuse to make a book entry" means the intentional decision
not to record an accounting transaction when all of the following
conditions are satisfied:
   (A) The independent auditors required recordation of an accounting
transaction during the course of an audit.
   (B) The audit committee of the corporation has not approved the
independent auditor's recommendation.
   (C) The decision is made for the primary purpose of rendering the
financial statements materially false or misleading.
   (8) "Refuse to post any notice required by law" means an
intentional decision not to post a notice required by law when all of
the following conditions exist:
   (A) The decision not to post the notice has not been approved by
the corporation's audit committee.
   (B) The decision is intended to give the shares of stock in the
corporation a materially greater or a materially less apparent market
value than they really possess.
   (9) "Misstate or conceal material facts from a regulatory body"
means an intentional decision not to disclose material facts when all
of the following conditions exist:
   (A) The decision not to disclose material facts has not been
approved by the corporation's audit committee.
   (B) The decision is intended to give the shares of stock in the
corporation a materially greater or a materially less apparent market
value than they really possess.
   (10) "Material false statement or omission" means an untrue
statement of material fact or an omission to state a material fact
necessary in order to make the statements made under the
circumstances under which they were made not misleading.
   (11) "Officer" means any person as set forth in Rule 16A-1
promulgated under the Securities Exchange Act of 1934 or any
successor regulation thereto, except an officer of a subsidiary
corporation who is not also an officer of the parent corporation.
   (f) This section only applies to corporations that are issuers, as
defined in Section 2 of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
Sec. 7201 and following).
   (g) An action to enforce this section may only be brought by the
Attorney General or a district attorney or city attorney in the name
of the people of the State of California.


2251.  Any promoter, director or officer of a corporation who
knowingly and willfully issues or consents to the issuance of
certificates for certificated securities, or initial transaction
statements or written statements for uncertificated securities, in
violation of this division with intent to defraud present or future
shareholders, subscribers, purchasers of shares or creditors is
guilty of a misdemeanor punishable by a fine of not more than one
thousand dollars ($1,000) or imprisonment for not more than one year
or both.


2252.  Every person (a) who signs the name of a fictitious person to
any subscription for or agreement to take stock in any domestic or
foreign corporation, existing or proposed, or (b) who signs to any
subscription or agreement the name of any person, knowing that the
person has no means or does not intend in good faith to comply with
all the terms thereof or that there is any understanding or agreement
that the terms of the subscription or agreement are not to be
complied with or enforced, is guilty of a misdemeanor.



2253.  Any director of a stock corporation, domestic or foreign, who
concurs in any vote or act of the directors of the corporation or
any of them, knowingly and with dishonest or fraudulent purpose, to
make any dividend or distribution of assets except in the cases and
in the manner allowed by law, either with the design of defrauding
creditors or shareholders or of giving a false appearance to the
value of the stock and thereby defrauding subscribers or purchasers,
is guilty of a misdemeanor, punishable by a fine of not more than one
thousand dollars ($1,000) or imprisonment for not more than one year
or both.


2254.  Every director, officer or agent of any corporation, domestic
or foreign, is guilty of a felony (a) who knowingly concurs in
making, publishing or posting either generally or privately to the
shareholders or other persons (1) any written report, exhibit,
statement of its affairs or pecuniary condition or notice containing
any material statement which is false, or (2) any untrue or willfully
or fraudulenty exaggerated report, prospectus, account, statement of
operations, values, business, profits, expenditures or prospects, or
(3) any other paper or document intend to produce or give, or having
a tendency to produce or give, the shares of stock in such
corporation a greater value or a less apparent or market value than
they really possess, or (b) who refuses to make any book entry or
post any notice required by the law in manner required by law.



2255.  (a) Every director, officer or agent of any corporation,
domestic or foreign, who knowingly receives or acquires possession of
any property of the corporation, 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 corporation is guilty of a public offense.
   (b) Every director, officer, agent or shareholder of any
corporation, domestic or foreign, who, with intent to defraud,
destroys, alters, mutilates or falsifies any of the books, papers,
writings or securities belonging to the corporation or makes or
concurs in omitting to make any material entry in any book of
accounts or other record or document kept by the corporation 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
for not exceeding one year, or a fine not exceeding one thousand
dollars ($1,000), or by both such fine and imprisonment.



2256.  Every officer, agent or clerk of any corporation, domestic or
foreign, or any person proposing to organize such a corporation or
to increase the capital stock of any such corporation, who knowingly
exhibits any false, forged or altered book, paper, voucher, security
or other instrument of evidence to any public officer or board
authorized by law to examine the organization of such corporation or
to investigate its affairs or to allow an increase of its capital,
with intent to deceive such officer or board in respect thereto, is
punishable by imprisonment in a state prison, or by imprisonment in a
county jail for not exceeding one year.



2257.  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 corporation, domestic or foreign, whether 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, shareholder or promoter of such
corporation, when in fact no such relationship exists to the
knowledge of such person, is guilty of a misdemeanor.



2258.  Any foreign corporation subject to the provisions of Chapter
21 which transacts intrastate business without complying therewith is
guilty of a misdemeanor, punishable by fine of not less than five
hundred dollars ($500) nor more than one thousand dollars ($1,000),
to be recovered in any court of competent jurisdiction.
   Prosecution under this section may be brought by the Attorney
General or by any district attorney. If brought by the latter,
one-half of the fine collected shall be paid to the treasurer of the
county in which the conviction was had and one-half to the State
Treasurer. If brought by the Attorney General the entire amount of
fine collected shall be paid to the State Treasurer to the credit of
the General Fund of the state.



2259.  Any person who transacts intrastate business on behalf of a
foreign corporation which is not authorized to transact such business
in this state, knowing that it is not so authorized, is guilty of a
misdemeanor punishable by fine of not less than fifty dollars ($50)
nor more than six hundred dollars ($600).


2260.  In a prosecution for a violation of Section 2252, 2253, 2254,
2255, 2256 or 2257, the fact that the corporation was a foreign
corporation is not a defense, if it was carrying on business or
keeping an office therefor within this state.



State Codes and Statutes

State Codes and Statutes

Statutes > California > Corp > 2200-2260

CORPORATIONS CODE
SECTION 2200-2260



2200.  Every corporation that neglects, fails, or refuses: (a) to
keep or cause to be kept or maintained the record of shareholders or
books of account required by this division to be kept or maintained,
(b) to prepare or cause to be prepared or submitted the financial
statements required by this division to be prepared or submitted, or
(c) to give any shareholder of record the advice required by
subdivision (f) of Section 2115, is subject to penalty as provided in
this section.
   The penalty shall be twenty-five dollars ($25) for each day that
the failure or refusal continues, up to a maximum of one thousand
five hundred dollars ($1,500), beginning 30 days after receipt of the
written request that the duty be performed from one entitled to make
the request, except that, in the case of a failure to give advice
required by subdivision (f) of Section 2115, the 30-day period shall
run from the date of receipt of the request made pursuant to
subdivision (f) of Section 2115, and no additional request is
required by this section.
   The penalty shall be paid to the shareholder or shareholders
jointly making the request for performance of the duty, and damaged
by the neglect, failure, or refusal, if suit therefor is commenced
within 90 days after the written request is made, including any
request made pursuant to subdivision (f) of Section 2115; but the
maximum daily penalty because of failure to comply with any number of
separate requests made on any one day or for the same act shall be
two hundred fifty dollars ($250).



2201.  Any officer of a corporation charged with the duty of
entering a transfer of shares upon the books of the corporation and
issuing a share certificate or, with respect to uncertificated
securities, an initial transaction statement or written statements,
who unreasonably neglects, fails or refuses to perform such duty
after written request by any person entitled thereto is subject to a
penalty of one hundred dollars ($100) and the further penalty of ten
dollars ($10) for each day that such default continues, beginning
five days after receipt of the request, up to a maximum of five
hundred dollars ($500). The penalty shall be paid to each person
aggrieved. It may be enforced by action and shall be in addition to
all other remedies.
   Every director or other officer unreasonably causing such neglect,
failure or refusal to make such entries upon the books of the
corporation or to issue a certificate or, with respect to
uncertificated securities, an initial transaction statement or
written statements, for shares to a person entitled thereto is
subject to a like penalty.



2202.  Any penalty prescribed by Section 2200 or Section 2201 shall
be in addition to any remedy by injunction or action for damages or
by writ of mandate for the nonperformance of acts and duties enjoined
by law upon the corporation or its directors or officers.
   The court in which an action for any such penalty is brought may
reduce, remit or suspend the penalty on such terms and conditions as
it may deem reasonable when it is made to appear that the neglect,
failure or refusal was inadvertent or excusable.



2203.  (a) Any foreign corporation which transacts intrastate
business and which does not hold a valid certificate from the
Secretary of State may be subject to a penalty of twenty dollars
($20) for each day that unauthorized intrastate business is
transacted; and the foreign corporation, by transacting unauthorized
intrastate business, shall be deemed to consent to the jurisdiction
of the courts of California in any civil action arising in this state
in which the corporation is named a party defendant.
   (b) The penalty established by subdivision (a) of this section
shall be assessed according to the number of days it is found that
the corporation has been willfully doing unauthorized intrastate
business. Prosecution under this section may be brought, and the
money penalty recovered thereby shall be paid, in the manner provided
by Section 2258 for a prosecution brought under that section. The
amount of the penalty assessed shall be determined by the court based
upon the circumstances, including the size of the corporation and
the willfulness of the violation.
   (c) A foreign corporation subject to the provisions of Chapter 21
(commencing with Section 2100) which transacts intrastate business
without complying with Section 2105 shall not maintain any action or
proceeding upon any intrastate business so transacted in any court of
this state, commenced prior to compliance with Section 2105, until
it has complied with the provisions thereof and has paid to the
Secretary of State a penalty of two hundred fifty dollars ($250) in
addition to the fees due for filing the statement and designation
required by Section 2105 and has filed with the clerk of the court in
which the action is pending receipts showing the payment of the fees
and penalty and all franchise taxes and any other taxes on business
or property in this state that should have been paid for the period
during which it transacted intrastate business.



2204.  (a) Upon the failure of a corporation to file the statement
required by Section 1502, the Secretary of State shall mail a notice
of that delinquency to the corporation. The notice shall also contain
information concerning the application of this section, advise the
corporation of the penalty imposed by Section 19141 of the Revenue
and Taxation Code for failure to timely file the required statement
after notice of delinquency has been mailed by the Secretary of
State, and shall advise the corporation of its right to request
relief from the Secretary of State because of reasonable cause or
unusual circumstances that justify the failure to file. If, within 60
days after the mailing of the notice of delinquency, a statement
pursuant to Section 1502 has not been filed by the corporation, the
Secretary of State shall certify the name of the corporation to the
Franchise Tax Board.
   (b) Upon certification pursuant to subdivision (a), the Franchise
Tax Board shall assess against the corporation the penalty provided
in Section 19141 of the Revenue and Taxation Code.
   (c) The penalty herein provided shall not apply to a corporation
that on or prior to the date of certification pursuant to subdivision
(a) has dissolved or has been merged into another corporation.
   (d) The penalty herein provided shall not apply and the Secretary
of State need not mail a notice of delinquency to a corporation if
the corporate powers, rights, and privileges have been suspended by
the Franchise Tax Board pursuant to Section 23301, 23301.5, or 23775
of the Revenue and Taxation Code on or prior to, and remain suspended
on, the last day of the filing period pursuant to Section 1502. The
Secretary of State need not mail a form pursuant to Section 1502 to a
corporation if the corporate powers, rights and privileges have been
so suspended by the Franchise Tax Board on or prior to, and remain
suspended on, the day the Secretary of State prepares the forms for
mailing.
   (e) If, after certification pursuant to subdivision (a), the
Secretary of State finds (1) the required statement was filed before
the expiration of the 60-day period after mailing of the notice of
delinquency, or (2) the failure to provide notice of delinquency was
due to an error of the Secretary of State, the Secretary of State
shall promptly decertify the name of the corporation to the Franchise
Tax Board. The Franchise Tax Board shall then promptly abate any
penalty assessed against the corporation pursuant to Section 19141 of
the Revenue and Taxation Code.
   (f) If the Secretary of State determines that the failure of a
corporation to file the statement required by Section 1502 is
excusable because of reasonable cause or unusual circumstances that
justify the failure, the Secretary of State may waive the penalty
imposed by this section and by Section 19141 of the Revenue and
Taxation Code, in which case the Secretary of State shall not certify
the name of the corporation to the Franchise Tax Board, or if
already certified, the Secretary of State shall promptly decertify
the name of the corporation.


2205.  (a) A corporation that (1) fails to file a statement pursuant
to Section 1502 for an applicable filing period, (2) has not filed a
statement pursuant to Section 1502 during the preceding 24 months,
and (3) was certified for penalty pursuant to Section 2204 for the
same filing period,is subject to suspension pursuant to this section
rather than to penalty pursuant to Section 2204.
   (b) When subdivision (a) is applicable, the Secretary of State
shall mail a notice to the corporation informing the corporation that
its corporate powers, rights, and privileges will be suspended after
60 days if it fails to file a statement pursuant to Section 1502.
   (c) After the expiration of the 60-day period without any
statement filed pursuant to Section 1502, the Secretary of State
shall notify the Franchise Tax Board of the suspension and mail a
notice of the suspension to the corporation, and thereupon, the
corporate powers, rights, and privileges of the corporation are
suspended, except for the purpose of filing an application for exempt
status or amending the articles of incorporation as necessary either
to perfect that application or to set forth a new name.
   (d) A statement pursuant to Section 1502 may be filed
notwithstanding suspension of the corporate powers, rights, and
privileges pursuant to this section or Section 23301, 23301.5, or
23775 of the Revenue and Taxation Code. Upon the filing of a
statement pursuant to Section 1502 by a corporation that has suffered
suspension pursuant to this section, the Secretary of State shall
certify that fact to the Franchise Tax Board and the corporation may
thereupon be relieved from suspension unless the corporation is held
in suspension by the Franchise Tax Board by reason of Section 23301,
23301.5, or 23775 of the Revenue and Taxation Code.



2206.  (a) Sections 2204 and 2205 apply to foreign corporations with
respect to the statements required to be filed by Section 2117. For
this purpose, the suspension of the corporate powers, rights, and
privileges of a domestic corporation shall mean the forfeiture of the
exercise of the corporate powers, rights, and privileges of a
foreign corporation in this state.
   (b) A foreign nonprofit corporation which has suffered the
forfeiture of the exercise of the corporate powers, rights, and
privileges in this state may nevertheless file an application for
exempt status as specified in Section 23301 of the Revenue and
Taxation Code.
   (c) The forfeiture of the exercise of the corporate powers,
rights, and privileges of a foreign corporation in this state as used
in subdivision (a) does not prohibit the transaction of business in
this state by a foreign corporation if the business transacted
subsequent to the forfeiture would not, considered as an entirety,
require the foreign corporation to obtain a certificate of
qualification pursuant to Sections 191 and 2105.



2207.  (a) A corporation is liable for a civil penalty in an amount
not exceeding one million dollars ($1,000,000) if the corporation
does both of the following:
   (1) Has actual knowledge that an officer, director, manager, or
agent of the corporation does any of the following:
   (A) Makes, publishes, or posts, or has made, published, or posted,
either generally or privately to the shareholders or other persons,
either of the following:
   (i) An oral, written, or electronically transmitted report,
exhibit, notice, or statement of its affairs or pecuniary condition
that contains a material statement or omission that is false and
intended to give the shares of stock in the corporation a materially
greater or a materially less apparent market value than they really
possess.
   (ii) An oral, written, or electronically transmitted report,
prospectus, account, or statement of operations, values, business,
profits, or expenditures, that includes a material false statement or
omission intended to give the shares of stock in the corporation a
materially greater or a materially less apparent market value than
they really possess.
   (B) Refuses or has refused to make any book entry or post any
notice required by law in the manner required by law.
   (C) Misstates or conceals or has misstated or concealed from a
regulatory body a material fact in order to deceive a regulatory body
to avoid a statutory or regulatory duty, or to avoid a statutory or
regulatory limit or prohibition.
   (2) Within 30 days after actual knowledge is acquired of the
actions described in paragraph (1), the corporation knowingly fails
to do both of the following:
   (A) Notify the Attorney General or appropriate government agency
in writing, unless the corporation has actual knowledge that the
Attorney General or appropriate government agency has been notified.
   (B) Notify its shareholders in writing, unless the corporation has
actual knowledge that the shareholders have been notified.
   (b) The requirement for notification under this section is not
applicable if the action taken or about to be taken by the
corporation, or by an officer, director, manager, or agent of the
corporation under paragraph (1) of subdivision (a), is abated within
the time prescribed for reporting, unless the appropriate government
agency requires disclosure by regulation.
   (c) If the action reported to the Attorney General pursuant to
this section implicates the government authority of an agency other
than the Attorney General, the Attorney General shall promptly
forward the written notice to that agency.
   (d) If the Attorney General was not notified pursuant to
subparagraph (A) of paragraph (2) of subdivision (a), but the
corporation reasonably and in good faith believed that it had
complied with the notification requirements of this section by
notifying a government agency listed in paragraph (5) of subdivision
(e), no penalties shall apply.
   (e) For purposes of this section:
   (1) "Manager" means a person having both of the following:
   (A) Management authority over a business entity.
   (B) Significant responsibility for an aspect of a business that
includes actual authority for the financial operations or financial
transactions of the business.
   (2) "Agent" means a person or entity authorized by the corporation
to make representations to the public about the corporation's
financial condition and who is acting within the scope of the agency
when the representations are made.
   (3) "Shareholder" means a person or entity that is a shareholder
of the corporation at the time the disclosure is required pursuant to
subparagraph (B) of paragraph (2) of subdivision (a).
   (4) "Notify its shareholders" means to give sufficient description
of an action taken or about to be taken that would constitute acts
or omissions as described in paragraph (1) of subdivision (a). A
notice or report filed by a corporation with the United States
Securities and Exchange Commission that relates to the facts and
circumstances giving rise to an obligation under paragraph (1) of
subdivision (a) shall satisfy all notice requirements arising under
paragraph (2) of subdivision (a), but shall not be the exclusive
means of satisfying the notice requirements, provided that the
Attorney General or appropriate agency is informed in writing that
the filing has been made together with a copy of the filing or an
electronic link where it is available online without charge.
   (5) "Appropriate government agency" means an agency on the
following list that has regulatory authority with respect to the
financial operations of a corporation:
   (A) Department of Corporations.
   (B) Department of Insurance.
   (C) Department of Financial Institutions.
   (D) Department of Managed Health Care.
   (E) United States Securities and Exchange Commission.
   (6) "Actual knowledge of the corporation" means the knowledge an
officer or director of a corporation actually possesses or does not
consciously avoid possessing, based on an evaluation of information
provided pursuant to the corporation's disclosure controls and
procedures.
   (7) "Refuse to make a book entry" means the intentional decision
not to record an accounting transaction when all of the following
conditions are satisfied:
   (A) The independent auditors required recordation of an accounting
transaction during the course of an audit.
   (B) The audit committee of the corporation has not approved the
independent auditor's recommendation.
   (C) The decision is made for the primary purpose of rendering the
financial statements materially false or misleading.
   (8) "Refuse to post any notice required by law" means an
intentional decision not to post a notice required by law when all of
the following conditions exist:
   (A) The decision not to post the notice has not been approved by
the corporation's audit committee.
   (B) The decision is intended to give the shares of stock in the
corporation a materially greater or a materially less apparent market
value than they really possess.
   (9) "Misstate or conceal material facts from a regulatory body"
means an intentional decision not to disclose material facts when all
of the following conditions exist:
   (A) The decision not to disclose material facts has not been
approved by the corporation's audit committee.
   (B) The decision is intended to give the shares of stock in the
corporation a materially greater or a materially less apparent market
value than they really possess.
   (10) "Material false statement or omission" means an untrue
statement of material fact or an omission to state a material fact
necessary in order to make the statements made under the
circumstances under which they were made not misleading.
   (11) "Officer" means any person as set forth in Rule 16A-1
promulgated under the Securities Exchange Act of 1934 or any
successor regulation thereto, except an officer of a subsidiary
corporation who is not also an officer of the parent corporation.
   (f) This section only applies to corporations that are issuers, as
defined in Section 2 of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
Sec. 7201 and following).
   (g) An action to enforce this section may only be brought by the
Attorney General or a district attorney or city attorney in the name
of the people of the State of California.


2251.  Any promoter, director or officer of a corporation who
knowingly and willfully issues or consents to the issuance of
certificates for certificated securities, or initial transaction
statements or written statements for uncertificated securities, in
violation of this division with intent to defraud present or future
shareholders, subscribers, purchasers of shares or creditors is
guilty of a misdemeanor punishable by a fine of not more than one
thousand dollars ($1,000) or imprisonment for not more than one year
or both.


2252.  Every person (a) who signs the name of a fictitious person to
any subscription for or agreement to take stock in any domestic or
foreign corporation, existing or proposed, or (b) who signs to any
subscription or agreement the name of any person, knowing that the
person has no means or does not intend in good faith to comply with
all the terms thereof or that there is any understanding or agreement
that the terms of the subscription or agreement are not to be
complied with or enforced, is guilty of a misdemeanor.



2253.  Any director of a stock corporation, domestic or foreign, who
concurs in any vote or act of the directors of the corporation or
any of them, knowingly and with dishonest or fraudulent purpose, to
make any dividend or distribution of assets except in the cases and
in the manner allowed by law, either with the design of defrauding
creditors or shareholders or of giving a false appearance to the
value of the stock and thereby defrauding subscribers or purchasers,
is guilty of a misdemeanor, punishable by a fine of not more than one
thousand dollars ($1,000) or imprisonment for not more than one year
or both.


2254.  Every director, officer or agent of any corporation, domestic
or foreign, is guilty of a felony (a) who knowingly concurs in
making, publishing or posting either generally or privately to the
shareholders or other persons (1) any written report, exhibit,
statement of its affairs or pecuniary condition or notice containing
any material statement which is false, or (2) any untrue or willfully
or fraudulenty exaggerated report, prospectus, account, statement of
operations, values, business, profits, expenditures or prospects, or
(3) any other paper or document intend to produce or give, or having
a tendency to produce or give, the shares of stock in such
corporation a greater value or a less apparent or market value than
they really possess, or (b) who refuses to make any book entry or
post any notice required by the law in manner required by law.



2255.  (a) Every director, officer or agent of any corporation,
domestic or foreign, who knowingly receives or acquires possession of
any property of the corporation, 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 corporation is guilty of a public offense.
   (b) Every director, officer, agent or shareholder of any
corporation, domestic or foreign, who, with intent to defraud,
destroys, alters, mutilates or falsifies any of the books, papers,
writings or securities belonging to the corporation or makes or
concurs in omitting to make any material entry in any book of
accounts or other record or document kept by the corporation 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
for not exceeding one year, or a fine not exceeding one thousand
dollars ($1,000), or by both such fine and imprisonment.



2256.  Every officer, agent or clerk of any corporation, domestic or
foreign, or any person proposing to organize such a corporation or
to increase the capital stock of any such corporation, who knowingly
exhibits any false, forged or altered book, paper, voucher, security
or other instrument of evidence to any public officer or board
authorized by law to examine the organization of such corporation or
to investigate its affairs or to allow an increase of its capital,
with intent to deceive such officer or board in respect thereto, is
punishable by imprisonment in a state prison, or by imprisonment in a
county jail for not exceeding one year.



2257.  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 corporation, domestic or foreign, whether 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, shareholder or promoter of such
corporation, when in fact no such relationship exists to the
knowledge of such person, is guilty of a misdemeanor.



2258.  Any foreign corporation subject to the provisions of Chapter
21 which transacts intrastate business without complying therewith is
guilty of a misdemeanor, punishable by fine of not less than five
hundred dollars ($500) nor more than one thousand dollars ($1,000),
to be recovered in any court of competent jurisdiction.
   Prosecution under this section may be brought by the Attorney
General or by any district attorney. If brought by the latter,
one-half of the fine collected shall be paid to the treasurer of the
county in which the conviction was had and one-half to the State
Treasurer. If brought by the Attorney General the entire amount of
fine collected shall be paid to the State Treasurer to the credit of
the General Fund of the state.



2259.  Any person who transacts intrastate business on behalf of a
foreign corporation which is not authorized to transact such business
in this state, knowing that it is not so authorized, is guilty of a
misdemeanor punishable by fine of not less than fifty dollars ($50)
nor more than six hundred dollars ($600).


2260.  In a prosecution for a violation of Section 2252, 2253, 2254,
2255, 2256 or 2257, the fact that the corporation was a foreign
corporation is not a defense, if it was carrying on business or
keeping an office therefor within this state.