Business Law
Governor Newsom Signs AB 2908 Removing Sunset Date for Fully Remote Member and Shareholder Meetings
The Nonprofit Organizations Committee and the Corporations Committee of the Business Law Section of the California Lawyers Association are pleased to announce that, on July 18, 2024, Governor Newsom signed their sponsored bill, AB 2908 (Assemblymember Chen). It had previously passed the Assembly and Senate unanimously and without opposition.
Existing law authorized fully remote shareholder meetings for California for-profit corporations and fully remote member meetings for California nonprofit public benefit, mutual benefit, religious, and cooperative corporations. This statutory authorization had a sunset date of December 31, 2025. AB 2908 eliminates the sunset date.
Restrictions imposed on group and travel activity as a result of the COVID-19 pandemic revealed that certain provisions of the Corporations Code relating to the governance of California corporations had not kept up with technological advances, even in the absence of an emergency. Challenges in accessibility that arose also demonstrated that existing provisions that provided some flexibility to California corporations during an emergency did not adequately recognize the need for such flexibility outside the context of an emergency. As a result, the Corporations Code was revised to authorize California corporations to conduct nonemergency remote meetings of shareholders and members, as applicable, if the corporation implements reasonable measures to provide the shareholders and members a reasonable opportunity to participate and vote, among other conditions. These statutory provisions had a sunset date of December 31, 2025.
This bill eliminates the December 31, 2025 sunset date applicable to these provisions. These provisions removed barriers to participation in corporate governance and have been beneficial. We are not aware of any problems due to the allowance of nonemergency remote meetings. This bill is a commonsense measure that was necessary to create a permanent solution.
Moreover, this bill was needed to avoid a last-minute bill introduced later (2025, rather than 2024) for California corporations to continue to hold such nonemergency remote meetings. If a bill were not introduced until 2025, California corporations might only have had two months’ notice of the change (if signed by the Governor in October 2025). However, these corporations schedule their annual shareholder or member meetings significantly in advance of such meetings. Thus, waiting until late 2025 to confirm the change would have undermined efficiency and effectiveness in the practice of such corporations.
This e-Bulletin was prepared by Joel Corwin, Nonprofit Organizations Committee Vice Chair – Legislation, and Saul Bercovitch, Chief Governmental Affairs Officer, California Lawyers Association.