Legal Question in Business Law in California

California Corporate Code 5227 states that

(a) Any other provision of this part notwithstanding, not

more than 49 percent of the persons serving on the board of any

corporation may be interested persons.

Any brother, sister, ancestor, descendant, spouse,

brother-in-law, sister-in-law, son-in-law, daughter-in-law,

mother-in-law, or father-in-law of any such person.

So if I was being paid and a person of interest on the board would my husbands, sisters, son also be a person of interest because of me.


Asked on 5/19/10, 6:18 pm

3 Answers from Attorneys

Yes, but bear in mind the section you are quoting only applies to Non-Profit Public Benefit Corporations, not any other corporations.

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Answered on 5/24/10, 9:46 pm
Kevin B. Murphy Franchise Foundations, APC

The other attorney correctly points out, the code section you refer to applies only to Non-Profit Corporations. That section does not apply to regular corporations that most are familiar with. Consult with an attorney in your area for specific advice.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

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Answered on 5/25/10, 6:39 am
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

I disagree with Mr. McCormick. Your husband's sister's son is not one of the relatives listed in Corporations Code section 5227(b)(2). The son of your sister-in-law is neither your sister-in-law nor your ancestor or descendant. Further, by definition, the list is exclusive. However, you also need to consider 5227(b)(1).

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Answered on 5/25/10, 8:33 am


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