(a) One or more persons may form a corporation under this part by executing and filing articles of incorporation.

(b) If initial directors are named in the articles, each director named in the articles shall sign and acknowledge the articles; if initial directors are not named in the articles, the articles shall be signed by one or more persons who thereupon are the incorporators of the corporation.

(c) The corporate existence begins upon the filing of the articles and continues perpetually, unless otherwise expressly provided by law or in the articles.

(a) In the case of an existing unincorporated association, the association may change its status to that of a corporation upon a proper authorization for such by the association in accordance with its rules and procedures.

(b) In addition to the matters required to be set forth in the articles pursuant to Section 7130, the articles in the case of an incorporation authorized by subdivision (a) shall set forth that an existing unincorporated association, stating its name, is being incorporated by the filing of the articles.

(c) The articles filed pursuant to this section shall be accompanied by a verified statement of any two officers or governing board members of the association stating that the incorporation of the association by means of the articles to which the verified statement is attached has been approved by the association in accordance with its rules and procedures.

(d) Upon the change of status of an unincorporated association to a corporation pursuant to subdivision (a), the property of the association becomes the property of the corporation and the members of the association who had any voting rights of the type referred to in Section 5056 become members of the corporation.

(e) The filing for record in the office of the county recorder of any county in this state in which any of the real property of the association is located, of a copy of the articles of incorporation filed pursuant to this section, certified by the Secretary of State, shall evidence record ownership in the corporation of all interests of the association in and to the real property located in that county.

(f) All rights of creditors and all liens upon the property of the association shall be preserved unimpaired. Any action or proceeding pending by or against the unincorporated association may be prosecuted to judgment, which shall bind the corporation, or the corporation may be proceeded against or substituted in its place.

(g) If a corporation is organized by a person who is or was an officer, director or member of an unincorporated association and such corporation is not organized pursuant to subdivision (a), the unincorporated association may continue to use its name and the corporation may not use a name which is the same as or similar to the name of the unincorporated association.

(a) The Secretary of State shall not file articles setting forth a name in which "bank," "trust," "trustee" or related words appear, unless the certificate of approval of the Commissioner of Financial Institutions is attached thereto.

(b) The Secretary of State shall not file articles pursuant to this part setting forth a name which may create the impression that the purpose of the corporation is public, charitable or religious or that it is a charitable foundation.

(c) The Secretary of State shall not file articles which set forth a name which is likely to mislead the public or which is the same as, or resembles so closely as to tend to deceive, the name of a domestic corporation, the name of a foreign corporation which is authorized to transact intrastate business or has registered its name pursuant to Section 2101, a name which a foreign corporation has assumed under subdivision (b) of Section 2106, a name which will become the record name of a domestic or foreign corporation upon the effective date of a filed corporate instrument where there is a delayed effective date pursuant to subdivision (c) of Section 110, or subdivision (c) of Section 5008, or a name which is under reservation pursuant to this section, Section 201, Section 5122, or Section 9122 except that a corporation may adopt a name that is substantially the same as an existing domestic or foreign corporation which is authorized to transact intrastate business or has registered its name pursuant to Section 2101, upon proof of consent by such corporation and a finding by the Secretary of State that under the circumstances the public is not likely to be misled. The use by a corporation of a name in violation of this section may be enjoined notwithstanding the filing of its articles by the Secretary of State.

(d) Any applicant may, upon payment of the fee prescribed therefor in the Government Code, obtain from the Secretary of State a certificate of reservation of any name not prohibited by subdivision (c), and upon the issuance of the certificate the name stated therein shall be reserved for a period of 60 days. The Secretary of State shall not, however, issue certificates reserving the same name for two or more consecutive 60-day periods to the same applicant or for the use or benefit of the same person; nor shall consecutive reservations be made by or for the use or benefit of the same person of names so similar as to fall within the prohibitions of subdivision (c).

(a) The name of the corporation.

(c) The name and address in this state of the corporation's initial agent for service of process in accordance with subdivision (b) of Section 8210.

statement limiting the purposes or powers of the corporation.

(a) The articles of incorporation may set forth any or all of the following provisions, which shall not be

effective unless expressly provided in the articles:

(1) A provision limiting the duration of the corporation's existence to a specified date.

(2) A provision conferring upon the holders of any evidences of indebtedness, issued or to be issued

by a corporation the right to vote in the election of directors and on any other matters on which members may

vote under this part even if the corporation does not have members.

(3) A provision conferring upon members the right to determine the consideration for which

memberships shall be issued.

(4) In the case of a subordinate corporation instituted or created under the authority of a head

organization, a provision setting forth either or both of the following:

(i) That the subordinate corporation shall dissolve whenever its charter is surrendered to, taken

away by, or revoked by the head organization granting it.

(ii) That in the event of its dissolution pursuant to an article provision allowed by subdivision

(a), paragraph (4), clause (i), of this section, or, in the event of its dissolution for any reason, any assets of

the corporation after compliance with the applicable provisions of Chapters 15 (commencing with Section

8510), 16 (commencing with Section 8610), and 17 (commencing with Section 8710) shall be distributed to

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

the head organization.

(b) Nothing contained in subdivision (a) shall affect the enforceability, as between the parties thereto,

of any lawful agreement not otherwise contrary to public policy.

(c) The articles of incorporation may set forth any or all of the following provisions:

(1) The names and addresses of the persons appointed to act as initial directors.

(2) Provisions concerning the transfer of memberships, in accordance with Section 7320.

(3) The classes of members, if any, and if there are two or more classes, the rights, privileges,

preferences, restrictions and conditions attaching to each class.

(4) A provision which would allow any member to have more or less than one vote in any election

or other matter presented to the members for a vote.

(5) A provision that requires an amendment to the articles or to the bylaws, and any amendment or

repeal of that amendment, to be approved in writing by a specified person or persons other than the board or

the members.

(6) Any other provision, not in conflict with law, for the management of the activities and for the

conduct of the affairs of the corporation, including any provision which is required or permitted by this part

to be stated in the bylaws.

a copy of the articles of a corporation duly certified by the Secretary of State is conclusive evidence of the

formation of the corporation and prima facie evidence of its corporate existence.

or incorporators, until the directors are elected, may do whatever is necessary and proper to perfect the

organization of the corporation, including the adoption and amendment of bylaws of the corporation and the

election of directors and officers.

articles of a mutual benefit corporation shall be construed to limit the equitable power of a court to impress

a charitable trust upon any or all of the assets of a mutual benefit corporation or otherwise treat it as a public

benefit corporation.

compliance with other provisions of this division and any other applicable laws, a corporation, in carrying

out its activities, shall have all of the powers of a natural person, including, without limitation, the power to:

(a) Adopt, use, and at will alter a corporate seal, but failure to affix a seal does not affect the validity of

any instrument.

(b) Adopt, amend, and repeal bylaws.

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

(c) Qualify to conduct its activities in any other state, territory, dependency or foreign country.

(d) Issue, purchase, redeem, receive, take or otherwise acquire, own, sell, lend, exchange, transfer or

otherwise dispose of, pledge, use and otherwise deal in and with its own memberships, bonds, debentures,

notes and debt securities.

(e) Pay pensions, and establish and carry out pension, deferred compensation, saving, thrift and other

retirement, incentive and benefit plans, trusts and provisions for any or all of its directors, officers, employees,

and persons providing services to it or any of its subsidiary or related or associated corporations, and to

indemnify and purchase and maintain insurance on behalf of any fiduciary of such plans, trusts, or provisions.

(f) Issue certificates evidencing membership in accordance with the provisions of Section 7313 and issue

identity cards.

(g) Levy dues, assessments, and admission and transfer fees.

(h) Make donations for the public welfare or for community funds, hospital, charitable, educational,

scientific, civic, religious or similar purposes.

(i) Assume obligations, enter into contracts, including contracts of guarantee or suretyship, incur

liabilities, borrow or lend money or otherwise use its credit, and secure any of its obligations, contracts or

liabilities by mortgage, pledge or other encumbrance of all or any part of its property and income.

(j) Participate with others in any partnership, joint venture or other association, transaction or

arrangement of any kind whether or not such participation involves sharing or delegation of control with or

to others.

(k) Act as trustee under any trust incidental to the principal objects of the corporation, and receive, hold,

administer, exchange, and expend funds and property subject to such trust.

(l) Carry on a business at a profit and apply any profit that results from the business activity to any

activity in which it may lawfully engage.

Section 7142:

(a) No limitation upon the activities, purposes, or powers of the corporation or upon the powers of the

members, officers, or directors, or the manner of exercise of such powers, contained in or implied by the

articles or by Chapters 15 (commencing with Section 8510), 16 (commencing with Section 8610), and 17

(commencing with Section 8710) shall be asserted as between the corporation or member, officer or director

and any third person, except in a proceeding:

(1) by a member or the state to enjoin the doing or continuation of unauthorized activities by the

corporation or its officers, or both, in cases where third parties have not acquired rights thereby,

(2) to dissolve the corporation, or

(3) by the corporation or by a member suing in a representative suit against the officers or directors

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

of the corporation for violation of their authority.

(b) Any contract or conveyance made in the name of a corporation which is authorized or ratified by the

board, or is done within the scope of authority, actual or apparent, conferred by the board or within the

agency power of the officer executing it, except as the board's authority is limited by law other than this part,

binds the corporation, and the corporation acquires rights thereunder whether the contract is executed or

wholly or in part executory.

(a) Except as provided in subdivision (c) and Sections 7151, 7220, 7224, 7512, 7613, and 7615, bylaws

may be adopted, amended or repealed by the board unless the action would:

(1) Materially and adversely affect the rights of members as to voting, dissolution, redemption, or

transfer;

(2) Increase or decrease the number of members authorized in total or for any class;

(3) Effect an exchange, reclassification or cancellation of all or part of the memberships; or

(4) Authorize a new class of membership.

(b) Bylaws may be adopted, amended or repealed by approval of the members (Section 5034); provided,

however, that such adoption, amendment or repeal also requires approval by the members of a class if such

action would:

(1) Materially and adversely affect the rights, privileges, preferences, restrictions or conditions of

that class as to voting, dissolution, redemption, or transfer in a manner different than such action affects

another class;

(2) Materially and adversely affect such class as to voting, dissolution, redemption, or transfer by

changing the rights, privileges, preferences, restrictions or conditions of another class;

(3) Increase or decrease the number of memberships authorized for such class;

(4) Increase the number of memberships authorized for another class;

(5) Effect an exchange, reclassification or cancellation of all or part of the memberships of such

class; or

(6) Authorize a new class of memberships.

(c) The articles or bylaws may restrict or eliminate the power of the board to adopt, amend or repeal any

or all bylaws, subject to subdivision (e) of Section 7151.

(d) Bylaws may also provide that the repeal or amendment of those bylaws, or the repeal or amendment

of specified portions of those bylaws, may occur only with the approval in writing of a specified person or

persons other than the board or members.

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

(a) The bylaws shall set forth (unless such provision is contained in the articles, in which case it may

only be changed by an amendment of the articles) the number of directors of the corporation; or that the

number of directors shall be not less than a stated minimum nor more than a stated maximum with the exact

number of directors to be fixed, within the limits specified, by approval of the board or the members (Section

5034), in the manner provided in the bylaws, subject to subdivision (e) of Section 7151. The number or

minimum number of directors may be one or more.

(b) Once members have been admitted, a bylaw specifying or changing a fixed number of directors or

the maximum or minimum number or changing from a fixed to a variable board or vice versa may only be

adopted by approval of the members (Section 5034).

(c) The bylaws may contain any provision, not in conflict with law or the articles, for the management

of the activities and for the conduct of the affairs of the corporation, including but not limited to:

(1) Any provision referred to in subdivision (c) of Section 7132.

(2) The time, place and manner of calling, conducting and giving notice of members', directors' and

committee meetings, or of conducting mail ballots.

(3) The qualifications, duties and compensation of directors; the time of their election; and the

requirements of a quorum for directors' and committee meetings.

(4) The appointment of committees, composed of directors or nondirectors or both, by the board or

any officer and the authority of any such committees.

(5) The appointment, duties, compensation and tenure of officers.

(6) The mode of determination of members of record.

(7) The making of reports and financial statements to members.

(8) Setting, imposing and collecting dues, assessments, and admission and transfer fees.

(d) The bylaws may provide for the manner of admission, withdrawal, suspension, and expulsion of

members, consistent with the requirements of Section 7341.

(e) The bylaws may require, for any or all corporate actions (except as provided in paragraphs (1) and

(2) of subdivision (a) of Section 7222, subdivision (c) of Section 7615, and Section 8610) the vote of a larger

proportion of, or all of, the members or the members of any class, unit, or grouping of members or the vote

of a larger proportion of, or all of, the directors, than is otherwise required by this part. Such a provision in

the bylaws requiring such greater vote shall not be altered, amended or repealed except by such greater vote,

unless otherwise provided in the bylaws.

(f) The bylaws may contain a provision limiting the number of members, in total or of any class, which

the corporation is authorized to admit.

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law not

set forth in this disc.

at its principal office in this state the original or a copy of its articles and bylaws as amended to date, which

shall be open to inspection by the members at all reasonable times during office hours. If the corporation has

no office in this state, it shall upon the written request of any member furnish to such member a copy of the

articles or bylaws as amended to date.

Each corporation shall have a board of directors. Subject to the provisions of this part and any limitations

in the articles or bylaws relating to action required to be approved by the members (Section 5034), or by a

majority of all members (Section 5033), the activities and affairs of a corporation shall be conducted and all

corporate powers shall be exercised by or under the direction of the board. The board may delegate the

management of the activities of the corporation to any person or persons, management company, or

committee however composed, provided that the activities and affairs of the corporation shall be managed

and all corporate powers shall be exercised under the ultimate direction of the board.

(a) Unless otherwise provided in the articles or in the bylaws, all of the following apply:

(1) Meetings of the board may be called by the chair of the board or the president or any vice

president or the secretary or any two directors.

(2) Regular meetings of the board may be held without notice if the time and place of the meetings

are fixed by the bylaws or the board. Special meetings of the board shall be held upon four days' notice by

first-class mail or 48 hours' notice delivered personally or by telephone, including a voice messaging system

notice of a special meeting. A notice, or waiver of notice, need not specify the purpose of any regular or

special meeting of the board.

or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to that

director. These waivers, consents and approvals shall be filed with the corporate records or made a part of

the minutes of the meetings.

(4) A majority of the directors present, whether or not a quorum is present, may adjourn any meeting

to another time and place. If the meeting is adjourned for more than 24 hours, notice of an adjournment to

another time or place shall be given prior to the time of the adjourned meeting to the directors who were not

present at the time of the adjournment.

(5) Meetings of the board may be held at a place within or without the state that has been designated

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law not

set forth in this disc.

in the notice of the meeting or, if not stated in the notice or if there is no notice, designated in the bylaws or

by resolution of the board.

(6) Members of the board may participate in a meeting through use of conference telephone,

pursuant to this subdivision constitutes presence in person at that meeting as long as all members participating

(A) Each member participating in the meeting can communicate with all of the other members

concurrently.

(B) Each member is provided the means of participating in all matters before the board,

including, without limitation, the capacity to propose, or to interpose an objection to, a specific action to be

taken by the corporation.

(7) A majority of the number of directors authorized in the articles or bylaws constitutes a quorum

of the board for the transaction of business. The articles or bylaws may not provide that a quorum shall be

less than one-fifth the number of directors authorized in the articles or bylaws, or less than two, whichever

is larger, unless the number of directors authorized in the articles or bylaws is one, in which case one director

constitutes a quorum.

(8) Subject to the provisions of Sections 7212, 7233, 7234, and subdivision (e) of Section 7237 and

Section 5233, insofar as it is made applicable pursuant to Section 7238, an act or decision done or made by

a majority of the directors present at a meeting duly held at which a quorum is present is the act of the board.

The articles or bylaws may not provide that a lesser vote than a majority of the directors present at a meeting

is the act of the board. A meeting at which a quorum is initially present may continue to transact business

notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the

required quorum for that meeting, or a greater number required by this division, the articles or bylaws.

(b) An action required or permitted to be taken by the board may be taken without a meeting, if all

members of the board shall individually or collectively consent in writing to that action. The written consent

or consents shall be filed with the minutes of the proceedings of the board. The action by written consent

shall have the same force and effect as a unanimous vote of the directors. For the purposes of this section

only, "all members of the board" does not include an "interested director" as defined in Section 5233, insofar

as it is made applicable pursuant to Section 7238.

(c) This section applies also to incorporators, to committees of the board, and to action by those

incorporators or committees mutatis mutandis.

(a) The board may, by resolution adopted by a majority of the number of directors then in office,

provided that a quorum is present, create one or more committees, each consisting of two or more directors,

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law not

set forth in this disc.

to serve at the pleasure of the board. Appointments to such committees shall be by a majority vote of the

directors then in office, unless the articles or bylaws require a majority vote of the number of directors

authorized in the articles or bylaws. The bylaws may authorize one or more committees, each consisting of

two or more directors, and may provide that a specified officer or officers who are also directors of the

corporation shall be a member or members of such committee or committees. The board may appoint one

or more directors as alternate members of any committee, who may replace any absent member at any

meeting of the committee. Any such committee, to the extent provided in the resolution of the board or in

the bylaws, shall have all the authority of the board, except with respect to:

(1) The approval of any action for which this part also requires approval of the members (Section

5034) or approval of a majority of all members (Section 5033).

(2) The filling of vacancies on the board or in any committee which has the authority of the board.

(3) The fixing of compensation of the directors for serving on the board or on any committee.

(4) The amendment or repeal of bylaws or the adoption of new bylaws.

(5) The amendment or repeal of any resolution of the board which by its express terms is not so

amendable or repealable.

(6) The appointment of committees of the board or the members thereof.

(7) The expenditure of corporate funds to support a nominee for director after there are more people

nominated for director than can be elected.

(8) With respect to any assets held in charitable trust, the approval of any self-dealing transaction

except as provided in paragraph (3) of subdivision (d) of Section 5233.

(b) Subdivision (a) shall not apply to any committee which does not exercise the authority of the board.

(c) Unless the bylaws otherwise provide, the board may delegate to any committee, appointed pursuant

to paragraph (4) of subdivision (c) of Section 7151 or otherwise, powers as authorized by Section 7210, but

may not delegate the powers set forth in paragraphs (1) through (8) of subdivision (a) of this section.

(a) A corporation shall have a chairman of the board or a president or both, a secretary, a chief financial

officer and such other officers with such titles and duties as shall be stated in the bylaws or determined by

the board and as may be necessary to enable it to sign instruments. The president, or if there is no president

the chairman of the board, is the general manager and chief executive officer of the corporation, unless

otherwise provided in the articles or bylaws. Any number of offices may be held by the same person unless

the articles or bylaws provide otherwise.

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law not

set forth in this disc.

(b) Except as otherwise provided by the articles or bylaws, officers shall be chosen by the board and

serve at the pleasure of the board, subject to the rights, if any, of an officer under any contract of employment.

Any officer may resign at any time upon written notice to the corporation without prejudice to the rights, if

any, of the corporation under any contract to which the officer is a party.

7142, any note, mortgage, evidence of indebtedness, contract, conveyance or other instrument in writing, and

any assignment or endorsement thereof, executed or entered into between any corporation and any other

person, when signed by any one of the chairman of the board, the president or any vice president and by any

one of the secretary, any assistant secretary, the chief financial officer or any assistant treasurer of such

corporation, is not invalidated as to the corporation by any lack of authority of the signing officers in the

absence of actual knowledge on the part of the other person that the signing officers had no authority to

execute the same.

directors', committee or other meeting or of any resolution adopted by the board or a committee thereof, or

members, certified to be a true copy by a person purporting to be the secretary or an assistant secretary of the

corporation, is prima facie evidence of the adoption of such bylaws or resolution or of the due holding of such

meeting and of the matters stated therein.

(a) Except as provided in subdivision (d), directors shall be elected for such terms, not longer than four

years, as are fixed in the articles or bylaws. However, the terms of directors of a corporation without members

may be up to six years. In the absence of any provision in the articles or bylaws, the term shall be one year.

The articles or bylaws may provide for staggering the terms of directors by dividing the total number of

directors into groups of one or more directors. The terms of office of the several groups and the number of

directors in each group need not be uniform. No amendment of the articles or bylaws may extend the term

of a director beyond that for which the director was elected, nor may any bylaw provision increasing the terms

of directors be adopted without approval of the members (Section 5034).

(b) Unless the articles or bylaws otherwise provide, each director, including a director elected to fill a

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

vacancy, shall hold office until the expiration of the term for which elected and until a successor has been

elected and qualified.

(c) The articles or bylaws may provide for the election of one or more directors by the members of any

class voting as a class.

(d) Subdivisions (a) through (c) notwithstanding, all or any portion of the directors authorized in the

articles or bylaws of a corporation may hold office by virtue of designation or selection as provided by the

articles or bylaws rather than by election by a member or members. Such directors shall continue in office

for the term prescribed by the governing article or bylaw provision, or, if there is no term prescribed, until

the governing article or bylaw provision is duly amended or repealed, except as provided in subdivision (e)

of Section 7222. A bylaw provision authorized by this subdivision may be adopted, amended, or repealed

only by approval of the members (Section 5034).

(e) If a corporation has not issued memberships and

(1) all the directors resign, die, or become incompetent, or

(2) a corporation’s initial directors have not been named in the articles and all incorporators resign,

die, or become incompetent before the election of the initial directors, the superior court of any county may

appoint directors of the corporation upon application by any party in interest.

(a) The board may declare vacant the office of a director who has been declared of unsound mind by a

final order of court, or convicted of a felony, or, in the case of a corporation holding assets in charitable trust,

has been found by a final order or judgment of any court to have breached any duty arising as a result of

Section 7238, or, if at the time a director is elected, the bylaws provide that a director may be removed for

missing a specified number of board meetings, fails to attend the specified number of meetings.

(b) As provided in paragraph (3) of subdivision (c) of Section 7151, the articles or bylaws may prescribe

the qualifications of the directors. The board, by a majority vote of the directors who meet all of the required

qualifications to be a director, may declare vacant the office of any director who fails or ceases to meet any

required qualification that was in effect at the beginning of that director’s current term of office.

(a) Subject to subdivisions (b) and (f) of this section, any or all directors may be removed without cause

if:

(1) In a corporation with fewer than 50 members, the removal is approved by a majority of all

members (Section 5033).

(2) In a corporation with 50 or more members, the removal is approved by the members (Section

5034).

(3) In a corporation with no members, the removal is approved by a majority of the directors then

in office.

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

(b) Except for a corporation having no members, pursuant to Section 7310:

(1) In a corporation in which the articles or bylaws authorize members to cumulate their votes

pursuant to subdivision (a) of Section 7615, no director may be removed (unless the entire board is removed)

when the votes cast against removal, or not consenting in writing to the removal, would be sufficient to elect

the director if voted cumulatively at an election at which the same total number of votes were cast (or, if the

action is taken by written ballot, all memberships entitled to vote were voted) and the entire number of

directors authorized at the time of the director's most recent election were then being elected.

(2) When by the provisions of the articles or bylaws the members of any class, voting as a class, are

entitled to elect one or more directors, any director so elected may be removed only by the applicable vote

of the members of that class.

(3) When by the provisions of the articles or bylaws the members within a chapter or other

organizational unit, or region or other geographic grouping, voting as such, are entitled to elect one or more

directors, any director so elected may be removed only by the applicable vote of the members within the

organizational unit or geographic grouping.

(c) Any reduction of the authorized number of directors or any amendment reducing the number of

classes of directors does not remove any director prior to the expiration of the director's term of office.

(d) Except as provided in this section and Sections 7221 and 7223, a director may not be removed prior

to the expiration of the director's term of office.

(e) Where a director removed under this section or Section 7221 or 7223 was chosen by designation

pursuant to subdivision (d) of Section 7220, then:

(1) Where a different person may be designated pursuant to the governing article or bylaw provision,

the new designation shall be made.

(2) Where the governing article or bylaw provision contains no provision under which a different

person may be designated, the governing article or bylaw provision shall be deemed repealed.

(f) When by the provisions of the articles or bylaws a person or persons are entitled to designate one or

more directors, then:

(1) Unless otherwise provided in the articles or bylaws at the time of designation, any director so

designated may be removed without cause by the designating person or persons.

(2) Any director so designated may only be removed under subdivision (a) with the written consent

of the designating person or persons.

(a) The superior court of the proper county may, at the suit of one of the parties specified in subdivision

(b), remove from office any director in case of fraudulent or dishonest acts or gross abuse of authority or

discretion with reference to the corporation or breach of any duty arising as a result of Section 7238 and may

bar from reelection any director so removed for a period prescribed by the court. The corporation shall be

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

made a party to such action.

(b) An action under subdivision (a) may be instituted by any of the following:

(1) A director.

(2) In the case of a corporation where the total number of votes entitled to be cast for a director is

less than 5,000, twice the authorized number (Section 5036) of members, or 20 members, whichever is less.

(3) In the case of a corporation where the total number of votes entitled to be cast for a director is

5,000 or more, twice the authorized number (Section 5036) of members, or 100 members, whichever is less.

(c) In the case of a corporation holding assets in charitable trust, the Attorney General may bring an

action under subdivision (a), may intervene in such an action brought by any other party and shall be given

notice of any such action brought by any other party.

(a) Unless otherwise provided in the articles or bylaws and except for a vacancy created by the removal

of a director, vacancies on the board may be filled by approval of the board (Section 5032) or, if the number

of directors then in office is less than a quorum, by

(1) the unanimous written consent of the directors then in office,

(2) the affirmative vote of a majority of the directors then in office at a meeting held pursuant to

notice or waivers of notice complying with Section 7211, or

(3) a sole remaining director. Unless the articles or a bylaw approved by the members (Section 5034)

provide that the board may fill vacancies occurring in the board by reason of the removal of directors, or

unless the corporation has no members pursuant to Section 7310, such vacancies may be filled only by

approval of the members (Section 5034).

(b) The members may elect a director at any time to fill any vacancy not filled by the directors.

(c) Any director may resign effective upon giving written notice to the chairman of the board, the

president, the secretary or the board of directors of the corporation, unless the notice specifies a later time for

the effectiveness of such resignation. If the resignation is effective at a future time, a successor may be elected

to take office when the resignation becomes effective.

(a) If a corporation has an even number of directors who are equally divided and cannot agree as to the

management of its affairs, so that its activities can no longer be conducted to advantage or so that there is

danger that its property, activities, or business will be impaired or lost, the superior court of the proper county

may, notwithstanding any provisions of the articles or bylaws and whether or not an action is pending for an

involuntary winding up or dissolution of the corporation, appoint a provisional director pursuant to this

section. Action for such appointment may be brought by any director or by members holding not less than

33 1/3 percent of the voting power.

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

(b) If the members of a corporation are deadlocked so that they cannot elect the directors to be elected

at the time prescribed therefor, the superior court of the proper county may, notwithstanding any provisions

of the articles or bylaws, upon petition of members holding 50 percent of the voting power, appoint a

provisional director or directors pursuant to this section or order such other equitable relief as the court deems

appropriate.

(c) In the case of a corporation holding assets in charitable trust:

(1) Any person bringing an action under subdivision (a) or (b) shall give notice to the Attorney

General, who may intervene; and

(2) The Attorney General may bring an action under subdivision (a) or (b).

(d) A provisional director shall be an impartial person, who is neither a member nor a creditor of the

corporation, nor related by consanguinity or affinity within the third degree according to the common law

to any of the other directors of the corporation or to any judge of the court by which such provisional director

is appointed. A provisional director shall have all the rights and powers of a director until the deadlock in the

board or among members is broken or until such provisional director is removed by order of the court or by

approval of a majority of all members (Section 5033). Such person shall be entitled to such compensation

as shall be fixed by the court unless otherwise agreed with the corporation.

(a) Any duties and liabilities set forth in this article shall apply without regard to whether a director is

compensated by the corporation. (b) Part 4 (commencing with Section 16000) of Division 9 of the Probate

Code does not apply to the directors of any corporation.

(a) A director shall perform the duties of a director, including duties as a member of any committee of

the board upon which the director may serve, in good faith, in a manner such director believes to be in the

best interests of the corporation and with such care, including reasonable inquiry, as an ordinarily prudent

person in a like position would use under similar circumstances.

(b) In performing the duties of a director, a director shall be entitled to rely on information, opinions,

reports or statements, including financial statements and other financial data, in each case prepared or

presented by:

(1) One or more officers or employees of the corporation whom the director believes to be reliable

and competent in the matters presented;

(2) Counsel, independent accountants or other persons as to matters which the director believes to

be within such person's professional or expert competence; or

(3) A committee of the board upon which the director does not serve, as to matters within its

designated authority, which committee the director believes to merit confidence, so long as, in

any such case, the director acts in good faith, after reasonable inquiry when the need therefor is indicated by

the circumstances and without knowledge that would cause such reliance to be unwarranted.

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

(c) A person who performs the duties of a director in accordance with subdivisions (a) and (b) shall have

no liability based upon any alleged failure to discharge the person's obligations as a director, including,

without limiting the generality of the foregoing, any actions or omissions which exceed or defeat a public or

charitable purpose to which assets held by a corporation are dedicated.

(a) Section 7231 governs the duties of directors as to any acts or omissions in connection with the

election, selection, or nomination of directors.

(b) This section shall not be construed to limit the generality of Section 7231.

(a) No contract or other transaction between a corporation and one or more of its directors, or between

a corporation and any domestic or foreign corporation, firm or association in which one or more of its

directors has a material financial interest, is either void or voidable because such director or directors or such

other corporation business corporation, firm or association are parties or because such director or directors

are present at the meeting of the board or a committee thereof which authorizes, approves or ratifies the

contract or transaction, if:

(1) The material facts as to the transaction and as to such director's interest are fully disclosed or

known to the members and such contract or transaction is approved by the members (Section 5034) in good

faith, with any membership owned by any interested director not being entitled to vote thereon;

(2) The material facts as to the transaction and as to such director's interest are fully disclosed or

known to the board or committee, and the board or committee authorizes, approves or ratifies the contract

or transaction in good faith by a vote sufficient without counting the vote of the interested director or directors

and the contract or transaction is just and reasonable as to the corporation at the time it is authorized,

approved or ratified; or

(3) As to contracts or transactions not approved as provided in paragraph (1) or (2) of this

subdivision, the person asserting the validity of the contract or transaction sustains the burden of proving that

the contract or transaction was just and reasonable as to the corporation at the time it was authorized,

approved or ratified.

A mere common directorship does not constitute a material financial interest within the meaning of this

subdivision. A director is not interested within the meaning of this subdivision in a resolution fixing the

compensation of another director as a director, officer or employee of the corporation, notwithstanding the

fact that the first director is also receiving compensation from the corporation.

(b) No contract or other transaction between a corporation and any corporation, business corporation or

association of which one or more of its directors are directors is either void or voidable because such director

or directors are present at the meeting of the board or a committee thereof which authorizes, approves or

ratifies the contract or transaction, if:

(1) The material facts as to the transaction and as to such director's other directorship are fully

disclosed or known to the board or committee, and the board or committee authorizes, approves or ratifies

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

the contract or transaction in good faith by a vote sufficient without counting the vote of the common director

or directors or the contract or transaction is approved by the members (Section 5034) in good faith; or

(2) As to contracts or transactions not approved as provided in paragraph (1) of this subdivision, the

contract or transaction is just and reasonable as to the corporation at the time it is authorized, approved or

ratified.

This subdivision does not apply to contracts or transactions covered by subdivision (a).

determining the presence of a quorum at a meeting of the board or a committee thereof which authorizes,

approves or ratifies a contract or transaction as provided in Section 7233.

(a) Unless prohibited by the articles or bylaws, a corporation may loan money or property to, or

guarantee the obligation of, any director or officer of the corporation or of its parent, affiliate or subsidiary,

provided:

(1) The board determines the loan or guaranty may reasonably be expected to benefit the corporation.

(2) Prior to consummating the transaction or any part thereof, the loan or guaranty is either:

(A) Approved by the members (Section 5034), without counting the vote of the director or

officer, if a member, or

(B) Approved by the vote of a majority of the directors then in office, without counting the vote

of the director who is to receive the loan or the benefit of the guaranty.

(b) Notwithstanding subdivision (a), a corporation may advance money to a director or officer of the

corporation or of its parent, affiliate or subsidiary, for any expenses reasonably anticipated to be incurred in

the performance of the duties of the director or officer of the corporation or of its parent, affiliate or

subsidiary, provided that in the absence of such an advance the director or officer would be entitled to be

reimbursed for these expenses by the corporation, its parent, affiliate, or subsidiary.

(c) The provisions of subdivisions (a) and (b) do not apply to credit unions, or to the payment of

premiums in whole or in part by a corporation on a life insurance policy on the life of a director or officer so

long as repayment to the corporation of the amount paid by it is secured by the proceeds of the policy and

its cash surrender value, or to loans permitted under any statute regulating any special class of corporations.

(a) Subject to the provisions of Section 7231, directors of a corporation who approve any of the

following corporate actions shall be jointly and severally liable to the corporation for the benefit of all of the

creditors entitled to institute an action under paragraph (1) or (2) of subdivision (c) or to the corporation in

an action by the head organization or members under paragraph (1) or (3) of subdivision (c):

(1) The making of any distribution contrary to Chapter 4 (commencing with Section 7410).

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

(2) The distribution of assets after institution of dissolution proceedings of the corporation, without

paying or adequately providing for all known liabilities of the corporation, excluding any claims not filed by

creditors within the time limit set by the court in a notice given to creditors under Chapter 15 (commencing

with Section 8510), Chapter 16 (commencing with Section 8610), and Chapter 17 (commencing with Section

8710). (3) The making of any loan or guaranty contrary to Section 7235.

(b) A director who is present at a meeting of the board, or any committee thereof, at which an action

specified in subdivision (a) is taken and who abstains from voting shall be considered to have approved the

action.

(c) Suit may be brought in the name of the corporation to enforce the liability:

(1) Under paragraph (1) of subdivision (a), against any or all directors liable by the persons entitled

to sue under subdivision (c) of Section 7420.

(2) Under paragraph (2) or (3) of subdivision (a), against any or all directors liable by any one or

more creditors of the corporation whose debts or claims arose prior to the time of the corporate action who

have not consented to the corporate action, whether or not they have reduced their claims to judgment.

(3) Under paragraph (3) of subdivision (a), against any or all directors liable by any one or more

members at the time of any corporate action specified in paragraph (3) of subdivision (a) who have not

consented to the corporate action, without regard to the provisions of Section 7710.

(d) The damages recoverable from a director under this section shall be the amount of the illegal

distribution, or if the illegal distribution consists of property, the fair market value of that property at the time

of the illegal distribution, plus interest thereon from the date of the distribution at the legal rate on judgments

until paid, together with all reasonably incurred costs of appraisal or other valuation, if any, of that property,

or the loss suffered by the corporation as a result of the illegal loan or guaranty, but not exceeding, in the case

of an action for the benefit of creditors, the liabilities of the corporation owed to nonconsenting creditors at

the time of the violation.

(e) Any director sued under this section may implead all other directors liable and may compel

contribution, either in that action or in an independent action against directors not joined in that action.

(f) Directors liable under this section shall also be entitled to be subrogated to the rights of the

corporation:

(1) With respect to paragraph (1) of subdivision (a), against the persons who received the

distribution.

(2) With respect to paragraph (2) of subdivision (a), against the persons who received the

distribution.

(3) With respect to paragraph (3) of subdivision (a), against the person who received the loan or

guaranty. Any director sued under this section may file a cross-complaint against the person or persons who

are liable to the director as a result of the subrogation provided for in this subdivision or may proceed against

them in an independent action.

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

(a) For the purposes of this section, "agent" means any person who is or was a director, officer, employee

or other agent of the corporation, or is or was serving at the request of the corporation as a director, officer,

employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other

enterprise, or was a director, officer, employee or agent of a foreign or domestic corporation which was a

predecessor corporation of the corporation or of another enterprise at the request of such predecessor

corporation; "proceeding" means any threatened, pending or completed action or proceeding, whether civil,

criminal, administrative or investigative; and "expenses" includes without limitation attorneys' fees and any

expenses of establishing a right to indemnification under subdivision (d) or paragraph (3) of subdivision (e).

(b) A corporation shall have power to indemnify any person who was or is a party or is threatened to be

made a party to any proceeding (other than an action by or in the right of the corporation to procure a

judgment in its favor, an action brought under Section 5233 of Part 2 (commencing with Section 5110) made

applicable pursuant to Section 7238, or an action brought by the Attorney General or a person granted relator

status by the Attorney General for any breach of duty relating to assets held in charitable trust) by reason of

the fact that such person is or was an agent of the corporation, against expenses, judgments, fines, settlements

and other amounts actually and reasonably incurred in connection with such proceeding if such person acted

in good faith and in a manner such person reasonably believed to be in the best interests of the corporation

and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was

unlawful. The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of

nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good

faith and in a manner which the person reasonably believed to be in the best interests of the corporation or

that the person had reasonable cause to believe that the person's conduct was unlawful.

(c) A corporation shall have power to indemnify any person who was or is a party or is threatened to be

made a party to any threatened, pending or completed action by or in the right of the corporation, or brought

under Section 5233 of Part 2 (commencing with Section 5110) made applicable pursuant to Section 7238,

or brought by the Attorney General or a person granted relator status by the Attorney General for breach of

duty relating to assets held in charitable trust, to procure a judgment in its favor by reason of the fact that

such person is or was an agent of the corporation, against expenses actually and reasonably incurred by such

person in connection with the defense or settlement of such action if such person acted in good faith, in a

manner such person believed to be in the best interests of the corporation and with such care, including

reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.

No indemnification shall be made under this subdivision:

(1) In respect of any claim, issue or matter as to which such person shall have been adjudged to be

liable to the corporation in the performance of such person's duty to the corporation, unless and only to the

extent that the court in which such proceeding is or was pending shall determine upon application that, in

view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for the

expenses which such court shall determine;

(2) Of amounts paid in settling or otherwise disposing of a threatened or pending action, with or

without court approval; or

(3) Of expenses incurred in defending a threatened or pending action which is settled or otherwise

disposed of without court approval unless such action concerns assets held in charitable trust and is settled

with the approval of the Attorney General.

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

(d) To the extent that an agent of a corporation has been successful on the merits in defense of any

proceeding referred to in subdivision (b) or (c) or in defense of any claim, issue or matter therein, the agent

shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith.

(e) Except as provided in subdivision (d), any indemnification under this section shall be made by the

corporation only if authorized in the specific case, upon a determination that indemnification of the agent is

proper in the circumstances because the agent has met the applicable standard of conduct set forth in

subdivision (b) or (c), by:

(1) A majority vote of a quorum consisting of directors who are not parties to such proceeding;

(2) Approval of the members (Section 5034), with the persons to be indemnified not being entitled

to vote thereon; or

(3) The court in which such proceeding is or was pending upon application made by the corporation

or the agent or the attorney or other person rendering services in connection with the defense, whether or not

such application by the agent, attorney or other person is opposed by the corporation.

(f) Expenses incurred in defending any proceeding may be advanced by the corporation prior to the final

disposition of such proceeding upon receipt of an undertaking by or on behalf of the agent to repay such

amount unless it shall be determined ultimately that the agent is entitled to be indemnified as authorized in

this section. The provisions of subdivision (a) of Section 7235 do not apply to advances made pursuant to this

subdivision.

(g) No provision made by a corporation to indemnify its or its subsidiary's directors or officers for the

defense of any proceeding, whether contained in the articles, bylaws, a resolution of members or directors,

an agreement or otherwise, shall be valid unless consistent with this section. Nothing contained in this section

shall affect any right to indemnification to which persons other than such directors and officers may be

entitled by contract or otherwise.

(h) No indemnification or advance shall be made under this section, except as provided in subdivision

(d) or paragraph (3) of subdivision (e), in any circumstance where it appears:

(1) That it would be inconsistent with a provision of the articles, bylaws, a resolution of the members

or an agreement in effect at the time of the accrual of the alleged cause of action asserted in the proceeding

in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits

indemnification; or

(2) That it would be inconsistent with any condition expressly imposed by a court in approving a

settlement.

(i) A corporation shall have power to purchase and maintain insurance on behalf of any agent of the

corporation against any liability asserted against or incurred by the agent in such capacity or arising out of

the agent's status as such whether or not the corporation would have the power to indemnify the agent against

such liability under the provisions of this section.

(j) This section does not apply to any proceeding against any trustee, investment manager or other

fiduciary of an employee benefit plan in such person's capacity as such, even though such person may also

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

be an agent as defined in subdivision (a) of the employer corporation. A corporation shall have power to

indemnify such trustee, investment manager or other fiduciary to the extent permitted by subdivision (f) of

Section 207.

(a) A corporation may admit persons to membership, as provided in its articles or bylaws, or may provide

in its articles or bylaws that it shall have no members. In the absence of any provision in its articles or bylaws

providing for members, a corporation shall have no members.

(b) In the case of a corporation which has no members:

(1) Any action for which there is no specific provision of this part applicable to a corporation which

has no members and which would otherwise require approval by a majority of all members (Section 5033)

or approval by the members (Section 5034) shall require only approval of the board, any provision of this part

or the articles or bylaws to the contrary notwithstanding.

(2) All rights which would otherwise vest in the members to share in a distribution upon dissolution

shall vest in the directors.

(c) Reference in this part to a corporation which has no members includes a corporation in which the

directors are the only members.

fractional memberships may be held, provided, however, that:

(a) Two or more persons may have an indivisible interest in a single membership when authorized by,

and in a manner or under the circumstances prescribed by, the articles or bylaws subject to Section 7612.

(b) If the articles or bylaws provide for classes of membership and if the articles or bylaws permit a

person to be a member of more than one class, a person may hold a membership in one or more classes.

(c) Any branch, division, or office of any person, which is not formed primarily to be a member, may

hold a separate membership.

(d) In the case of membership in an owners association, (as defined in Section 11003.1 of the Business

and Professions Code, and created in connection with any of the forms of development referred to in Section

11004.5 of the Business and Professions Code) the articles or bylaws may permit a person who owns an

interest, or who has a right of exclusive occupancy, in more than one lot, parcel, area, apartment, or unit to

hold a separate membership in the owners' association for each lot, parcel, area, apartment, or unit.

(e) In the case of membership in a mutual water company, as defined in Section 14300 of the

Corporations Code, the articles or bylaws may permit a person entitled to membership by reason of the

ownership, lease, or right of occupancy of more than one lot, parcel, or other service unit to hold a separate

membership in the mutual water company for each such lot, parcel, or other service unit.

(f) In the case of membership in a mobilehome park acquisition corporation, as described in Section

11010.8 of the Business and Professions Code, a bona fide secured party who has, pursuant to a security

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

interest in a membership, taken title to the membership by way of foreclosure, repossession or voluntary

repossession, and who is actively attempting to resell the membership to a prospective homeowner or resident

of the mobilehome park, may own more than one membership.

(a) A corporation may, but is not required to, issue membership certificates. Nothing in this section shall

restrict a corporation from issuing identity cards or similar devices to members which serve to identify

members qualifying to use facilities or services of the corporation.

(b) Membership certificates issued by corporations shall state the following on the certificate:

(1) The corporation is a nonprofit mutual benefit corporation which may not make distributions to

its members except upon dissolution, or, if the articles or bylaws so provide, that it may not make

distributions to its members during its life or upon dissolution.

(2) If there are restrictions upon the transferability, a statement that a copy of the restrictions are on

file with the secretary of the corporation and are open for inspection by a member on the same basis as the

records of the corporation.

(c) If the membership certificates are transferable only with consent of the corporation, or if there are

no membership certificates, then instead of complying with paragraph (2) of subdivision (b) the corporation

may, or if there are no membership certificates, shall, give notice to the transferee, within a reasonable time

after the corporation is first notified of the proposed transfer, and before the membership is transferred on the

books and records of the corporation, of the information that would otherwise be provided by the legends

required by paragraph (2) of subdivision (b).

(d) If the articles or bylaws are amended so that any statement required by subdivision (b) upon

outstanding membership certificates is no longer accurate, then the board may cancel the outstanding

certificates and issue in their place new certificates conforming to the articles or bylaw amendments.

(e) Where new membership certificates are issued in accordance with subdivision (d), the board may

order holders of outstanding certificates to surrender and exchange them for new certificates within a

reasonable time fixed by the board. The board may further provide that the holder of a certificate so ordered

to be surrendered shall not be entitled to exercise any of the rights of membership until the certificate is

surrendered and exchanged, but rights shall be suspended only after notice of such order is given to the holder

of the certificate and only until the certificate is exchanged. The duty of surrender of any outstanding

certificates may also be enforced by civil action.

(a) No member may be expelled or suspended, and no membership or memberships may be terminated

or suspended, except according to procedures satisfying the requirements of this section. An expulsion,

termination or suspension not in accord with this section shall be void and without effect.

(b) Any expulsion, suspension, or termination must be done in good faith and in a fair and reasonable

manner. Any procedure which conforms to the requirements of subdivision (c) is fair and reasonable, but a

court may also find other procedures to be fair and reasonable when the full circumstances of the suspension,

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law not

set forth in this disc.

termination, or expulsion are considered.

(c) A procedure is fair and reasonable when:

(1) The provisions of the procedure have been set forth in the articles or bylaws, or copies of such

provisions are sent annually to all the members as required by the articles or bylaws;

(2) It provides the giving of 15 days' prior notice of the expulsion, suspension or termination and the

reasons therefor; and

(3) It provides an opportunity for the member to be heard, orally or in writing, not less than five days

before the effective date of the expulsion, suspension or termination by a person or body authorized to decide

that the proposed expulsion, termination or suspension not take place.

(d) Any notice required under this section may be given by any method reasonably calculated to provide

actual notice. Any notice given by mail must be given by first-class or registered mail sent to the last address

of the members shown on the corporation's records.

(e) Any action challenging an expulsion, suspension or termination of membership, including any claim

alleging defective notice, must be commenced within one year after the date of the expulsion, suspension or

termination. In the event such an action is successful the court may order any relief, including reinstatement,

it finds equitable under the circumstances, but no vote of the members or of the board may be set aside solely

because a person was at the time of the vote wrongfully excluded by virtue of the challenged expulsion,

suspension or termination, unless the court finds further that the wrongful expulsion, suspension or

termination 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 procedures for expulsion, suspension or termination and not the

substantive grounds therefor. An expulsion, suspension or termination based upon substantive grounds which

violate contractual or other rights of the member or are otherwise unlawful is not made valid by compliance

with this section.

(g) A member who is expelled or suspended or whose membership is terminated shall be liable for any

charges incurred, services or benefits actually rendered, dues, assessments or fees incurred before the

expulsion, suspension or termination or arising from contract or otherwise.

authorized by the board of directors in its sole discretion, and subject to the requirements of consent in clause

(b) of Section 20 and those guidelines and procedures as the board of directors may adopt, members not

physically present in person (or, if proxies are allowed, by proxy) at a meeting of the members may be

electronic transmission by and to the corporation (sections 20 and 21) or by electronic video screen

communication, participate in a meeting of members, be deemed present in person (or, if proxies are allowed,

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law not

set forth in this disc.

by proxy), and vote at a meeting of members whether that meeting is to be held at a designated place or in

whole or in part by means of electronic transmission by and to the corporation or by electronic video screen

communication, in accordance with subdivision (f).

(b) A regular meeting of members shall be held on a date and time, and with the frequency stated in or

fixed in accordance with the bylaws, but in any event in each year in which directors are to be elected at that

meeting for the purpose of conducting such election, and to transact any other proper business which may

be brought before the meeting.

hold the regular meeting for a period of 60 days after the date designated therefor or, if no date has been

designated, for a period of 15 months after the formation of the corporation or after its last regular meeting,

or if the corporation fails to hold a written ballot for a period of 60 days after the date designated therefor,

then the superior court of the proper county may summarily order the meeting to be held or the ballot to be

it an opportunity to be heard.

constitute a quorum, notwithstanding any provision of the articles or bylaws or in this part to the contrary.

The court may issue such orders as may be appropriate including, without limitation, orders designating the

time and place of the meeting, the record date for determination of members entitled to vote, and the form

of notice of the meeting.

(e) Special meetings of members for any lawful purpose may be called by the board, the chairman of the

board, the president, or such other persons, if any, as are specified in the bylaws. In addition, special

meetings of members for any lawful purpose may be called by 5 percent or more of the members.

(f) A meeting of the members may be conducted, in whole or in part, by electronic transmission by and

to the corporation or by electronic video screen communication

(1) if the corporation implements reasonable measures to provide members in person (or, if proxies

are allowed, by proxy) a reasonable opportunity to participate in the meeting and to vote on matters submitted

to the members, including an opportunity to read or hear the proceedings of the meeting substantially

concurrently with those proceedings, and

(2) if any member votes or takes other action at the meeting by means of electronic transmission to

the corporation or electronic video screen communication, a record of that vote or action is maintained by the

corporation. Any request by a corporation to a member pursuant to clause (b) of Section 20 for consent to

conduct a meeting of members by electronic transmission by and to the corporation, shall include a notice

that absent consent of the member pursuant to clause (b) of Section 20, the meeting shall be held at a physical

location in accordance with subdivision (a).

(a) Whenever members are required or permitted to take any action at a meeting, a written notice of the

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law not

set forth in this disc.

meeting shall be given not less than 10 nor more than 90 days before the date of the meeting to each member

who, on the record date for notice of the meeting, is entitled to vote thereat; provided, however, that if notice

is given by mail, and the notice is not mailed by first-class, registered, or certified mail, that notice shall be

given not less than 20 days before the meeting. Subject to subdivision (f), and subdivision (b) of Section

and to the corporation (Sections 20 and 21) or electronic video screen communication, if any, by which

(1) in the case of a special meeting, the general nature of the business to be transacted, and

no other business may be transacted, or

(2) in the case of the regular meeting, those matters which the board, at the time the notice

is given, intends to present for action by the members, but, except as provided in subdivision (b) of

Section 7512, any proper matter may be presented at the meeting for the action. The notice of any

meeting at which directors are to be elected shall include the names of all those who are nominees

at the time the notice is given to members.

the member appearing on the books of the corporation or given by the member to the corporation for purpose

of notice; or if no such address appears or is given, at the place where the principal office of the corporation

is located or by publication at least once in a newspaper of general circulation in the county in which the

principal office is located. An affidavit of giving of any notice or report in accordance with the provisions

of this part, executed by the secretary, assistant secretary or any transfer agent, shall be prima facie evidence

of the giving of the notice or report.

If any notice or report addressed to the member at the address of the member appearing on the books of

the corporation is returned to the corporation by the United States Postal Service marked to indicate that the

United States Postal Service is unable to deliver the notice or report to the member at the address, all future

notices or reports shall be deemed to have been duly given without further mailing if the same shall be

available for the member upon written demand of the member at the principal office of the corporation for

a period of one year from the date of the giving of the notice or report to all other members.

Notice given by electronic transmission by the corporation under this subdivision shall be valid only if

it complies with Section 20. Notwithstanding the foregoing, notice shall not be given by electronic

transmission by the corporation under this subdivision after either of the following:

(1) The corporation is unable to deliver two consecutive notices to the member by that means.

(2) The inability to so deliver the notices to the member becomes known to the secretary, any

assistant secretary, the transfer agent, or other person responsible for the giving of the notice.

president, vice president, or secretary by any person (other than the board) entitled to call a special meeting

of members, the officer forthwith shall cause notice to be given to the members entitled to vote that a meeting

will be held at a time fixed by the board not less than 35 nor more than 90 days after the receipt of the request.

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law not

set forth in this disc.

If the notice is not given within 20 days after receipt of the request, the persons entitled to call the meeting

may give the notice or the superior court of the proper county shall summarily order the giving of the notice,

after notice to the corporation giving it an opportunity to be heard. The court may issue such orders as may

be appropriate, including, without limitation, orders designating the time and place of the meeting, the record

date for determination of members entitled to vote, and the form of notice.

(d) When a members' meeting is adjourned to another time or place, unless the bylaws otherwise require

and except as provided in this subdivision, notice need not be given of the adjourned meeting if the time and

adjournment is taken. No meeting may be adjourned for more than 45 days. At the adjourned meeting the

corporation may transact any business which might have been transacted at the original meeting. If after the

adjournment a new record date is fixed for notice or voting, a notice of the adjourned meeting shall be given

to each member who, on the record date for notice of the meeting, is entitled to vote at the meeting.

(e) The transactions of any meeting of members however called and noticed, and wherever held, are as

valid as though had at a meeting duly held after regular call and notice, if a quorum is present either in person

or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in

filed with the corporate records or made a part of the minutes of the meeting. Attendance of a person at a

meeting shall constitute a waiver of notice of and presence at the meeting, except when the person objects,

at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called

or convened and except that attendance at a meeting is not a waiver of any right to object to the consideration

of matters required by this part to be included in the notice but not so included, if the objection is expressly

made at the meeting. Neither the business to be transacted at nor the purpose of any regular or special

meeting of members need be specified in any written waiver of notice, consent to the holding of the meeting

or approval of the minutes thereof, unless otherwise provided in the articles or bylaws, except as provided

in subdivision (f).

(f) Any approval of the members required under Section 7222, 7224, 7233, 7812, 8610, or 8719, other

than unanimous approval by those entitled to vote, shall be valid only if the general nature of the proposal

so approved was stated in the notice of meeting or in any written waiver of notice.

(g) A court may find that notice not given in conformity with this section is still valid, if it was given in

a fair and reasonable manner.

(a) One-third of the voting power, represented in person or by proxy, shall constitute a quorum at a

meeting of members, but, subject to subdivisions (b) and (c), a bylaw may set a different quorum. Any bylaw

amendment to increase the quorum may be adopted only by approval of the members (Section 5034). If a

quorum is present, the affirmative vote of the majority of the voting power represented at the meeting, entitled

to vote, and voting on any matter shall be the act of the members unless the vote of a greater number or voting

by classes is required by this part or the articles or bylaws.

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law not

set forth in this disc.

(b) Where a bylaw authorizes a corporation to conduct a meeting with a quorum of less than one-third

of the voting power, then the only matters that may be voted upon at any regular meeting actually attended,

in person or by proxy, by less than one-third of the voting power are matters notice of the general nature of

which was given, pursuant to the first sentence of subdivision (a) of Section 7511.

(c) Subject to subdivision (b), the members present at a duly called or held meeting at which a quorum

is present may continue to transact business until adjournment notwithstanding the withdrawal of enough

members to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a

majority of the members required to constitute a quorum or, if required by this division, or by the articles or

the bylaws, the vote of the greater number or voting by classes.

(d) In the absence of a quorum, any meeting of members may be adjourned from time to time by the vote

of a majority of the votes represented either in person or by proxy, but no other business may be transacted,

except as provided in subdivision (c).

(a) Subject to subdivision (e), and unless prohibited in the articles or bylaws, any action which may be

taken at any regular or special meeting of members may be taken without a meeting if the corporation

articles or bylaws and if approved by the board of directors, that ballot and any related material may be sent

by electronic transmission by the corporation (section 20) and responses may be returned to the corporation

provide an opportunity to specify approval or disapproval of any proposal, and provide a reasonable time

within which to return the ballot to the corporation.

(b) Approval by written ballot pursuant to this section shall be valid only when the number of votes cast

by ballot within the time period specified equals or exceeds the quorum required to be present at a meeting

authorizing the action, and the number of approvals equals or exceeds the number of votes that would be

required to approve at a meeting at which the total number of votes cast was the same as the number of votes

cast by ballot.

(c) Ballots shall be solicited in a manner consistent with the requirements of subdivision (b) of Section

7511 and Section 7514. All such solicitations shall indicate the number of responses needed to meet the

quorum requirement and, with respect to ballots other than for the election of directors, shall state the

percentage of approvals necessary to pass the measure submitted. The solicitation must specify the time by

which the ballot must be received in order to be counted.

(d) Unless otherwise provided in the articles or bylaws, a written ballot may not be revoked.

(e) Directors may be elected by written ballot under this section, where authorized by the articles or

bylaws, except that election by written ballot may not be authorized where the directors are elected by

cumulative voting pursuant to Section 7615.

(f) When directors are to be elected by written ballot and the articles or bylaws prescribe a nomination

procedure, the procedure may provide for a date for the close of nominations prior to the printing and

distributing of the written ballots.

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

(a) Any form of proxy or written ballot distributed to 10 or more members of a corporation with 100 or

more members shall afford an opportunity on the proxy or form of written ballot to specify a choice between

approval and disapproval of each matter or group of related matters intended, at the time the written ballot

or proxy is distributed, to be acted upon at the meeting for which the proxy is solicited or by such written

ballot, and shall provide, subject to reasonable specified conditions, that where the person solicited specifies

a choice with respect to any such matter the vote shall be cast in accordance therewith.

(b) In any election of directors, any form of proxy or written ballot in which the directors to be voted

upon are named therein as candidates and which is marked by a member "withhold" or otherwise marked in

a manner indicating that the authority to vote for the election of directors is withheld shall not be voted either

for or against the election of a director.

(c) Failure to comply with this section shall not invalidate any corporate action taken, but may be the

basis for challenging any proxy at a meeting or written ballot and the superior court may compel compliance

therewith at the suit of any member.

(a) If for any reason it is impractical or unduly difficult for any corporation to call or conduct a meeting

of its members, delegates or directors, or otherwise obtain their consent, in the manner prescribed by its

articles or bylaws, or this part, then the superior court of the proper county, upon petition of a director, officer,

delegate or member, may order that such a meeting be called or that a written ballot or other form of obtaining

the vote of members, delegates or directors be authorized, in such a manner as the court finds fair and

equitable under the circumstances.

(b) The court shall, in an order issued pursuant to this section, provide for a method of notice reasonably

designed to give actual notice to all parties who would be entitled to notice of a meeting held pursuant to the

articles, bylaws and this part, whether or not the method results in actual notice to every such person, or

conforms to the notice requirements that would otherwise apply. In a proceeding under this section the court

may determine who the members or directors are.

(c) The order issued pursuant to this section may dispense with any requirement relating to the holding

of and voting at meetings or obtaining of votes, including any requirement as to quorums or as to the number

or percentage of votes needed for approval, that would otherwise be imposed by the articles, bylaws, or this

part.

(d) Wherever practical any order issued pursuant to this section shall limit the subject matter of the

meetings or other forms of consent authorized to items, including amendments to the articles or bylaws, the

resolution of which will or may enable the corporation to continue managing its affairs without further resort

to this section; provided, however, that an order under this section may also authorize the obtaining of

whatever votes and approvals are necessary for the dissolution, merger, sale of assets or reorganization of the

corporation.

(e) Any meeting or other method of obtaining the vote of members, delegates or directors conducted

pursuant to an order issued under this section, and which complies with all the provisions of such order, is

for all purposes a valid meeting or vote, as the case may be, and shall have the same force and effect as if it

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

complied with every requirement imposed by the articles, bylaws, and this part.

members may be taken without a meeting, if all members shall individually or collectively consent in writing

to the action. The written consent or consents shall be filed with the minutes of the proceedings of the

members. The action by written consent shall have the same force and effect as the unanimous vote of the

members.

(a) If the name signed on a ballot, consent, waiver, or proxy appointment corresponds to the name of a

member, the corporation if acting in good faith is entitled to accept the ballot, consent, waiver or proxy

appointment and give it effect as the act of the member.

(b) If the name signed on a ballot, consent, waiver, or proxy appointment does not correspond to the

record name of a member, the corporation if acting in good faith is nevertheless entitled to accept the ballot,

consent, waiver, or proxy appointment and give it effect as the act of the member if any of the following

occur:

(1) The member is an entity and the name signed purports to be that of an officer or agent of the

entity.

(2) The name signed purports to be that of an attorney-in-fact of the member and if the corporation

requests, evidence acceptable to the corporation of the signatory’s authority to sign for the member has been

presented with respect to the ballot, consent, waiver, or proxy appointment.

(3) Two or more persons hold the membership as contenants or fiduciaries and the name signed

purports to be the name of at least one of the coholders and the person signing appears to be acting on behalf

of all the coholders.

(4) The name signed purports to be that of an administrator, executor, guardian, or conservator

representing the member and, if the corporation requests, evidence of fiduciary status acceptable to the

corporation has been presented with respect to the ballot, consent, waiver, or proxy appointment.

(5) The name signed purports to be that of a receiver or trustee in bankruptcy of the member, and,

if the corporation requests, evidence of this status acceptable to the corporation has been presented with

respect to the ballot, consent, waiver, or proxy appointment.

(c) The corporation is entitled to reject a ballot, consent, waiver, or proxy appointment if the secretary

or other officer or agent authorized to tabulate votes, acting in good faith, has a reasonable basis for doubt

concerning the validity of the signature or the signatory’s authority to sign for the member.

(d) The corporation and any officer or agent thereof who accepts or rejects a ballot, consent, waiver, or

proxy appointment in good faith and in accordance with the standards of this section shall not be liable in

damages to the member for the consequences of the acceptance or rejection.

(e) Corporate action based on the acceptance or rejection of a ballot, consent, waiver, or proxy

appointment under this section is valid unless a court of competent jurisdiction determines otherwise.

The law provided on this disc is current as of January 1, 2005. Check with legal counsel to determine if there have been any changes in the law

not set forth in this disc.

(a) As to directors elected by members, there shall be available to the members reasonable nomination

and election procedures given the nature, size and operations of the corporation.

(b) If a corporation complies with all of the provisions of Sections 7521, 7522, 7523, and 7524 applicable

to a corporation