SELECTED 2022 DEVELOPMENTS IN CALIFORNIA CORPORATE LAW
Written by Rachelle Cohen, Nate Emeritz, Andrew Hirsch, Julia Reigel, and Shannon Treviño*
The following summarizes selected California legislative, case law, and other related developments from January 1, 2022 through December 1, 2022.
SECTIONS 1150, 1151, 1152, 1153, 1155, AND 1157 OF THE CALIFORNIA CORPORATIONS CODE AMENDED; SECTION 1154 ADDED; AND SECTION 1160 REPEALEDâALL RELATING TO CORPORATE CONVERSIONS
On September 2, 2022, Governor Newsom signed Senate Bill 49, 2021-2022 Reg. Sess. ("SB 49), which was proposed by the Corporations Committee of the Business Law Section of the California Lawyers Association. SB 49 amends existing law to allow California corporations to convert into foreign corporations or other forms of foreign business entities in one step, as long as the law of the jurisdiction into which the corporation converts allows that type of conversion. Prior law allowed one-step conversions for California corporations into other forms of California business entities (such as LLCs and partnerships), but California corporations seeking to convert into foreign business entities or foreign corporations (e.g., to a Delaware corporation) typically needed to engage in a series of transactions to accomplish a conversion. Delaware General Corporation Law ("DGCL") already allows a foreign corporation to convert into a Delaware corporation by filing a certificate of conversion.1 SB 49 took effect on January 1, 2023.