Amendments/Restatements- Domestic Stock Corporations
In order to form a Domestic Stock Corporation (DSC) in the state of California, you need to file the articles of incorporation along with the certificate of determination. However, some documents cannot be filed due to mistakes and errors in the information provided. When making amendments or restatements, Domestic Stock Corporations should keep the following filing tips in mind:
1. The name of the corporation, which is mentioned in on the certificates of amendments or restatement of articles, should match the name in the corporation’s record with the Secretary of State.
2. According to California Corporations Code, sections 905 and 910, an Officer’s Certificate should be used to set forth any restatements or amendments. IF the corporation puts forward their amendments or restatements through attachments with a form of the Officer’s Certificate, it should be clearly mentioned in text “incorporated by reference as if fully set forth”.
3. Under the California Corporations Code, section 910, 907, 905, 193, 173, two appropriate corporate officers must sign the certificate and they should state and verify that the information provided in the certificate is true to their knowledge and it should be dated the actual date when it is signed.
4. Appropriate individuals must sign the certificate and the corporation should avoid any indication, mark, near or above the signature line as this could lead to rejection and a penalty.
5. The number of outstanding shares for every class and series entitled to vote and specify the percentage of votes required by California Corporations Code should also be specified on the Officer’s Certificate. Any additional vote required by protective provisions should also be mentioned.
6. As mentioned in the initial Article of incorporation, the corporation has only one initial agent for service of processes. The address or name of the agent cannot be changed except to correct any errors or mistakes. If the organization needs to change the agent, the corporation should file the appropriate statement required by the California Corporations code.
7. In case an organization is authorized to issue more than one class of shares or if a class of shares has two or more series. California Corporations Code requires the articles to:
I. Designate the total number of shares for each class
II. Designate the total number of shares for each series
III. Designate each class or series
IV. The privileges, rights and restrictions of the respective series
8. There is no legal authority for the articles of incorporation to grant special powers over board decisions to one or more directors.
9. If a corporation does not or is unable to redeem the shares of a series or a class at the same time, the articles must state for partial redemption.
10. Under California Corporations Code, there are three options provided to deal with fractional shares in case the organization decides not to issue them:
I. Pay the fair value in hard cash
II. Issue warrants or scripts
III. Arrange for the disposition of the fractional shares through a broker or an agent so that the holders of the fractional shares can buy or sell their shares.