California Corporations code section to know

California Corporations code section to know

118. Any reference in this division to the time a notice is given

or sent means, unless otherwise expressly provided, (a) the time a

written notice by mail is deposited in the United States mails,

postage prepaid; or (b) the time any other written notice, including

facsimile, telegram, or electronic mail message, is personally

delivered to the recipient or is delivered to a common carrier for

transmission, or actually transmitted by the person giving the notice

by electronic means, to the recipient; or (c) the time any oral

notice is communicated, in person or by telephone, including a voice

messaging system or other system or technology designed to record and

communicate messages, or wireless, to the recipient, including the

recipient's designated voice mailbox or address on such a system, or

to a person at the office of the recipient who the person giving the

notice has reason to believe will promptly communicate it to the

recipient. [notice can be given by electronic means]

152. "Approved by (or approval of) the outstanding shares" means

approved by the affirmative vote of a majority of the outstanding

shares entitled to vote. Such approval shall include the affirmative

vote of a majority of the outstanding shares of each class or series

entitled, by any provision of the articles or of this division, to

vote as a class or series on the subject matter being voted upon and

shall also include the affirmative vote of such greater proportion

(including all) of the outstanding shares of any class or series if

such greater proportion is required by the articles or this division.

153. "Approved by (or approval of) the shareholders" means approved

or ratified by the affirmative vote of a majority of the shares

represented and voting at a duly held meeting at which a quorum is

present (which shares voting affirmatively also constitute at least a

majority of the required quorum) or by the written consent of

shareholders (Section 603) or by the affirmative vote or written

consent of such greater proportion (including all) of the shares of

any class or series as may be provided in the articles or in this

division for all or any specified shareholder action.

200. (a) One or more natural persons, partnerships, associations or

corporations, domestic or foreign, may form a corporation under this

division 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 described in subdivision (a) who

thereupon are the incorporators of the corporation.

and continues perpetually, unless otherwise expressly provided by

law or in the articles.

202. The articles of incorporation shall set forth:

(a) The name of the corporation; provided, however, that in order

for the corporation to be subject to the provisions of this division

applicable to a close corporation (Section 158), the name of the

corporation must contain the word "corporation", "incorporated" or

"limited" or an abbreviation of one of such words.

(b) (1) The applicable one of the following statements:

(i) The purpose of the corporation is to engage in any lawful act

or activity for which a corporation may be organized under the

General Corporation Law of California other than the banking

business, the trust company business or the practice of a profession

permitted to be incorporated by the California Corporations Code; or

(ii) The purpose of the corporation is to engage in the profession

of ____ (with the insertion of a profession permitted to be

incorporated by the California Corporations Code) and any other

lawful activities (other than the banking or trust company business)

not prohibited to a corporation engaging in such profession by

applicable laws and regulations.

(2) In case the corporation is a corporation subject to the

Banking Law, the articles shall set forth a statement of purpose

which is prescribed in the applicable provision of the Banking Law.

(3) In case the corporation is a corporation subject to the

Insurance Code as an insurer, the articles shall additionally state

that the business of the corporation is to be an insurer.

The articles shall not set forth any further or additional

statement with respect to the purposes or powers of the corporation,

except by way of limitation or except as expressly required by any

law of this state other than this division or any federal or other

statute or regulation (including the Internal Revenue Code and

regulations thereunder as a condition of acquiring or maintaining a

particular status for tax purposes).

initial agent for service of process in accordance with subdivision

(b) of Section 1502.

(d) If the corporation is authorized to issue only one class of

shares, the total number of shares which the corporation is

authorized to issue.

(e) If the corporation is authorized to issue more than one class

of shares, or if any class of shares is to have two or more series:

(1) The total number of shares of each class the corporation is

authorized to issue, and the total number of shares of each series

which the corporation is authorized to issue or that the board is

authorized to fix the number of shares of any such series;

(2) The designation of each class, and the designation of each

series or that the board may determine the designation of any such

series; and

(3) The rights, preferences, privileges and restrictions granted

to or imposed upon the respective classes or series of shares or the

holders thereof, or that the board, within any limits and

restrictions stated, may determine or alter the rights, preferences,

privileges and restrictions granted to or imposed upon any wholly

unissued class of shares or any wholly unissued series of any class

of shares. As to any series the number of shares of which is

authorized to be fixed by the board, the articles may also authorize

the board, within the limits and restrictions stated therein or

stated in any resolution or resolutions of the board originally

fixing the number of shares constituting any series, to increase or

decrease (but not below the number of shares of such series then

outstanding) the number of shares of any such series subsequent to

the issue of shares of that series. In case the number of shares of

any series shall be so decreased, the shares constituting such

decrease shall resume the status which they had prior to the adoption

of the resolution originally fixing the number of shares of such

series.

207. Subject to any limitations contained in the articles and to

compliance with other provisions of this division and any other

applicable laws, a corporation shall have all of the powers of a

natural person in carrying out its business activities, 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.

dependency or foreign country.

(d) Subject to the provisions of Section 510, issue, purchase,

redeem, receive, take or otherwise acquire, own, hold, sell, lend,

exchange, transfer or otherwise dispose of, pledge, use and otherwise

deal in and with its own shares, bonds, debentures and other

securities.

(e) Make donations, regardless of specific corporate benefit, for

the public welfare or for community fund, hospital, charitable,

educational, scientific, civic or similar purposes.

(f) Pay pensions, and establish and carry out pension,

profit-sharing, share bonus, share purchase, share option, savings,

thrift and other retirement, incentive and benefit plans, trusts and

provisions for any or all of the directors, officers and employees of

the corporation or any of its subsidiary or affiliated corporations,

and to indemnify and purchase and maintain insurance on behalf of

any fiduciary of such plans, trusts or provisions.

(g) Subject to the provisions of Section 315, assume obligations,

enter into contracts, including contracts of guaranty or suretyship,

incur liabilities, borrow and lend money and 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, franchises and income.

(h) 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.

208. (a) No limitation upon the business, purposes or powers of the

corporation or upon the powers of the shareholders, officers or

directors, or the manner of exercise of such powers, contained in or

implied by the articles or by Chapters 18, 19 and 20 or by any

shareholders' agreement shall be asserted as between the corporation

or any shareholder and any third person, except in a proceeding (1)

by a shareholder or the state to enjoin the doing or continuation of

unauthorized business by the corporation or its officers, or both, in

cases where third parties have not acquired rights thereby, or (2)

to dissolve the corporation or (3) by the corporation or by a

shareholder suing in a representative suit against the officers or

directors 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 the 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 division, binds

the corporation, and the corporation acquires rights thereunder,

whether the contract is executed or wholly or in part executory.

foreign corporations in this state and to all conveyances by foreign

corporations of real property situated in this state.

212. (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 (which in no case

shall be greater than two times the stated minimum minus one), with

the exact number of directors to be fixed, within the limits

specified, by approval of the board or the shareholders (Section 153)

in the manner provided in the bylaws, subject to paragraph (5) of

subdivision (a) of Section 204. The number or minimum number of

directors shall not be less than three; provided, however, that (1)

before shares are issued, the number may be one, (2) before shares

are issued, the number may be two, (3) so long as the corporation has

only one shareholder, the number may be one, (4) so long as the

corporation has only one shareholder, the number may be two, and (5)

so long as the corporation has only two shareholders, the number may

be two. After the issuance of shares, 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 outstanding shares (Section 152);

provided, however, that a bylaw or amendment of the articles reducing

the fixed number or the minimum number of directors to a number less

than five cannot be adopted if the votes cast against its adoption

at a meeting or the shares not consenting in the case of action by

written consent are equal to more than 162/3 percent of the

outstanding shares entitled to vote.

(b) The bylaws may contain any provision, not in conflict with law

or the articles for the management of the business and for the

conduct of the affairs of the corporation, including but not limited

to:

(1) Any provision referred to in subdivision (b), (c) or (d) of

Section 204.

(2) The time, place and manner of calling, conducting and giving

notice of shareholders', directors' and committee meetings.

(3) The manner of execution, revocation and use of proxies.

(4) The qualifications, duties and compensation of directors; the

time of their annual election; and the requirements of a quorum for

directors' and committee meetings.

(5) The appointment and authority of committees of the board.

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

(7) The mode of determination of holders of record of its shares.

(8) The making of annual reports and financial statements to the

shareholders.

300. (a) Subject to the provisions of this division and any

limitations in the articles relating to action required to be

approved by the shareholders (Section 153) or by the outstanding

shares (Section 152), or by a less than majority vote of a class or

series of preferred shares (Section 402.5), the business and affairs

of the corporation shall be managed and all corporate powers shall be

exercised by or under the direction of the board. [this makes it very clear that it is the BOD which manages the corporation.] The board may

delegate the management of the day-to-day operation of the business

of the corporation to a management company or other person provided

that the business and affairs of the corporation shall be managed and

all corporate powers shall be exercised under the ultimate direction

of the board.

(b) Notwithstanding subdivision (a) or any other provision of this

division, but subject to subdivision (c), no shareholders'

agreement, which relates to any phase of the affairs of a close

corporation, including but not limited to management of its business,

division of its profits or distribution of its assets on

liquidation, shall be invalid as between the parties thereto on the

ground that it so relates to the conduct of the affairs of the

corporation as to interfere with the discretion of the board or that

it is an attempt to treat the corporation as if it were a partnership

or to arrange their relationships in a manner that would be

appropriate only between partners. A transferee of shares covered by

such an agreement which is filed with the secretary of the

corporation for inspection by any prospective purchaser of shares,

who has actual knowledge thereof or notice thereof by a notation on

the certificate pursuant to Section 418, is bound by its provisions

and is a party thereto for the purposes of subdivision (d). Original

issuance of shares by the corporation to a new shareholder who does

not become a party to the agreement terminates the agreement, except

that if the agreement so provides it shall continue to the extent it

is enforceable apart from this subdivision. The agreement may not be

modified, extended or revoked without the consent of such a

transferee, subject to any provision of the agreement permitting

modification, extension or revocation by less than unanimous

agreement of the parties. A transferor of shares covered by such an

agreement ceases to be a party thereto upon ceasing to be a

shareholder of the corporation unless the transferor is a party

thereto other than as a shareholder. An agreement made pursuant to

this subdivision shall terminate when the corporation ceases to be a

close corporation, except that if the agreement so provides it shall

continue to the extent it is enforceable apart from this subdivision.

This subdivision does not apply to an agreement authorized by

subdivision (a) of Section 706.

alter or waive any of the provisions of Sections 158, 417, 418, 500,

501, and 1111, subdivision (e) of Section 1201, Sections 2009, 2010,

and 2011, or of Chapters 15 (commencing with Section 1500), 16

(commencing with Section 1600), 18 (commencing with Section 1800),

and 22 (commencing with Section 2200). All other provisions of this

division may be altered or waived as between the parties thereto in a

shareholders' agreement, except the required filing of any document

with the Secretary of State.

(d) An agreement of the type referred to in subdivision (b) shall,

to the extent and so long as the discretion or powers of the board

in its management of corporate affairs is controlled by such

agreement, impose upon each shareholder who is a party thereto

liability for managerial acts performed or omitted by such person

pursuant thereto that is otherwise imposed by this division upon

directors, and the directors shall be relieved to that extent from

such liability.

(e) The failure of a close corporation to observe corporate

formalities relating to meetings of directors or shareholders in

connection with the management of its affairs, pursuant to an

agreement authorized by subdivision (b), shall not be considered a

factor tending to establish that the shareholders have personal

liability for corporate obligations.

307. notice requirements

600. (a) Meetings of shareholders may be held at such place within

or without this state as may be stated in or fixed in accordance with

the bylaws. If no other place is stated or so fixed, shareholder

meetings shall be held at the principal executive office of the

corporation.

(b) An annual meeting of shareholders shall be held for the

election of directors on a date and at a time stated in or fixed in

accordance with the bylaws. However, if the corporation is a

regulated management company, as defined in Section 23701m of the

Revenue and Taxation Code, a meeting of shareholders shall be held as

required by the Federal Investment Company Act of 1940 (15 U.S.C.

Sec. 80a-1, et seq.). Any other proper business may be transacted at

the annual meeting.

of 60 days after the date designated therefor or, if no date has been

designated, for a period of 15 months after the organization of the

corporation or after its last annual meeting, the superior court of

the proper county may summarily order a meeting to be held upon the

application of any shareholder after notice to the corporation giving

it an opportunity to be heard. The shares represented at such

meeting, either in person or by proxy, and entitled to vote thereat

shall constitute a quorum for the purpose of such meeting,

notwithstanding any provision of the articles or bylaws or in this

division to the contrary. The court may issue such orders as may be

appropriate, including, without limitation, orders designating the

time and place of such meeting, the record date for determination of

shareholders entitled to vote and the form of notice of such meeting.

(d) Special meetings of the shareholders may be called by the

board, the chairman of the board, the president or the holders of

shares entitled to cast not less than 10 percent of the votes at the

meeting or such additional persons as may be provided in the articles

or bylaws.

601. (a) Whenever shareholders are required or permitted to take

any action at a meeting a written notice of the meeting shall be

given not less than 10 (or, if sent by third-class mail, 30) nor more

than 60 days before the date of the meeting to each shareholder

entitled to vote thereat. Such notice shall state the place, date

and hour of the meeting and (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 annual meeting,

those matters which the board, at the time of the mailing of the

notice, intends to present for action by the shareholders, but

subject to the provisions of subdivision (f) any proper matter may be

presented at the meeting for such action. The notice of any meeting

at which directors are to be elected shall include the names of

nominees intended at the time of the notice to be presented by the

board for election.

(b) Notice of a shareholders' meeting or any report shall be given

either personally or by first-class mail, or, in the case of a

corporation with outstanding shares held of record by 500 or more

persons (determined as provided in Section 605) on the record date

for the shareholders' meeting, notice may be sent third-class mail,

or other means of written communication, addressed to the shareholder

at the address of such shareholder appearing on the books of the

corporation or given by the shareholder to the corporation for the

purpose of notice; or if no such address appears or is given, at the

place where the principal executive 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 executive office is

located. The notice or report shall be deemed to have been given at

the time when delivered personally or deposited in the mail or sent

by other means of written communication. An affidavit of mailing of

any notice or report in accordance with the provisions of this

division, 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 shareholder at the

address of such shareholder 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 shareholder at such 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

shareholder upon written demand of the shareholder at the principal

executive office of the corporation for a period of one year from the

date of the giving of the notice or report to all other

shareholders.

president, vice president or secretary by any person (other than the

board) entitled to call a special meeting of shareholders, the

officer forthwith shall cause notice to be given to the shareholders

entitled to vote that a meeting will be held at a time requested by

the person or persons calling the meeting, not less than 35 nor more

than 60 days after the receipt of the request. 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 procedure provided in subdivision (c) of Section 305

shall apply to such application. 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 shareholders entitled to vote and the form of notice.

(d) When a shareholders' 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 place thereof are announced at the meeting at which

the adjournment is taken. At the adjourned meeting the corporation

may transact any business which might have been transacted at the

original meeting. If the adjournment is for more than 45 days or if

after the adjournment a new record date is fixed for the adjourned

meeting, a notice of the adjourned meeting shall be given to each

shareholder of record entitled to vote at the meeting.

(e) The transactions of any meeting of shareholders, 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

person or by proxy, signs a written waiver of notice or a consent to

the holding of the meeting or an approval of the minutes thereof.

All such waivers, consents and approvals shall be 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 such 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 division to

be included in the notice but not so included, if such objection is

expressly made at the meeting. Neither the business to be transacted

at nor the purpose of any regular or special meeting of shareholders

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 shareholder approval at a meeting, other than unanimous

approval by those entitled to vote, pursuant to Section 310, 902,

1201, 1900 or 2007 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.

902. (a) After any shares have been issued, amendments may be

adopted if approved by the board and approved by the outstanding

shares (Section 152), either before or after the approval by the

board.[shareholders cannot amend articles by themselves; requires approval of the board]

(b) Notwithstanding subdivision (a), an amendment extending the

corporate existence or making the corporate existence perpetual may

be adopted by a corporation organized prior to August 14, 1929, with

approval by the board alone.

more than one class of shares outstanding, an amendment effecting

only a stock split (including an increase in the authorized number of

shares in proportion thereto) may be adopted with approval by the

board alone.

(d) Notwithstanding subdivision (a), an amendment deleting the

names and addresses of the first directors or the name and address of

the initial agent may be adopted with approval by the board alone.

(e) Whenever the articles require for corporate action the vote of

a larger proportion or of all of the shares of any class or series,

or of a larger proportion or of all of the directors, than is

otherwise required by this division, the provision in the articles

requiring such greater vote shall not be altered, amended or repealed

except by such greater vote unless otherwise provided in the

articles.

(f) Notwithstanding subdivision (a), any amendment reducing the

vote required for an amendment pursuant to subdivision (c) of Section

158 may not be adopted unless approved by the affirmative vote of at

least two-thirds of each class of outstanding shares or such other

vote as may then be specified by the articles of the corporation.

1001. (a) A corporation may sell, lease, convey, exchange, transfer

or otherwise dispose of all or substantially all of its assets when

the principal terms are (1) Approved by the board, and (2) Unless

the transaction is in the usual and regular course of its business,

approved by the outstanding shares (Section 152), either before or

after approval by the board and before or after the transaction. A

transaction constituting a reorganization (Section 181) is subject to

the provisions of Chapter 12 (commencing with Section 1200) and not

this section (other than subdivision (d) hereof). [needs to be approved by both the BOD and the outstanding shares.]

16101. (7) "Partnership" means an association of two or more persons to

carry on as co-owners a business for profit formed under Section

16202, predecessor law, or comparable law of another jurisdiction,

and includes, for all purposes of the laws of this state, a

registered limited liability partnership.

16103. (a) Except as otherwise provided in subdivision (b),

relations among the partners and between the partners and the

partnership are governed by the partnership agreement. To the extent

the partnership agreement does not otherwise provide, this chapter

governs relations among the partners and between the partners and the

partnership.

(b) The partnership agreement may not do any of the following:

(1) Vary the rights and duties under Section 16105 except to

eliminate the duty to provide copies of statements to all of the

partners.

(2) Unreasonably restrict the right of access to books and records

under subdivision (b) of Section 16403, or the right to be furnished

with information under subdivision (c) of Section 16403.

(3) Eliminate the duty of loyalty under subdivision (b) of Section

16404 or paragraph (3) of subdivision (b) of Section 16603, but, if

not manifestly unreasonable, may do either of the following:

(A) The partnership agreement may identify specific types or

categories of activities that do not violate the duty of loyalty.

(B) All of the partners or a number or percentage specified in the

partnership agreement may authorize or ratify, after full disclosure

of all material facts, a specific act or transaction that otherwise

would violate the duty of loyalty.

(4) Unreasonably reduce the duty of care under subdivision (c) of

Section 16404 or paragraph (3) of subdivision (b) of Section 16603.

(5) Eliminate the obligation of good faith and fair dealing under

subdivision (d) of Section 16404, but the partnership agreement may

prescribe the standards by which the performance of the obligation is

to be measured, if the standards are not manifestly unreasonable.

(6) Vary the power to dissociate as a partner under subdivision

(a) Section 16602, except to require the notice under paragraph (1)

of Section 16601 to be in writing.

(7) Vary the right of a court to expel a partner in the events

specified in paragraph (5) of Section 16601.

(8) Vary the requirement to wind up the partnership business in

cases specified in paragraph (4), (5), or (6) of Section 16801.

(9) Restrict rights of third parties under this chapter.

(10) Vary the law applicable to a registered limited liability

partnership under subdivision (b) of Section 16106.

16202. (a) Except as otherwise provided in subdivision (b), the

association of two or more persons to carry on as coowners a business

for profit forms a partnership, whether or not the persons intend to

form a partnership.

16302. (a) Partnership property may be transferred as follows:

(1) Subject to the effect of a statement of partnership authority

under Section 16303, partnership property held in the name of the

partnership may be transferred by an instrument of transfer executed

by a partner in the partnership name.

(2) Partnership property held in the name of one or more partners

with an indication in the instrument transferring the property to

them of their capacity as partners or of the existence of a

partnership, but without an indication of the name of the

partnership, may be transferred by an instrument of transfer executed

by the persons in whose name the property is held.

(3) Partnership property held in the name of one or more persons

other than the partnership, without an indication in the instrument

transferring the property to them of their capacity as partners or of

the existence of a partnership, may be transferred by an instrument

of transfer executed by the persons in whose name the property is

held.

(b) A partnership may recover partnership property from a

transferee only if it proves that execution of the instrument of

initial transfer did not bind the partnership under Section 16301 and

either of the following applies:

(1) As to a subsequent transferee who gave value for property

transferred under paragraph (1) or (2) of subdivision (a), proves

that the subsequent transferee knew or had received a notification

that the person who executed the instrument of initial transfer

lacked authority to bind the partnership.

(2) As to a transferee who gave value for property transferred

under paragraph (3) of subdivision (a), proves that the transferee

knew or had received a notification that the property was partnership

property and that the person who executed the instrument of initial

transfer lacked authority to bind the partnership.

subsequent transferee if the partnership would not have been entitled

to recover the property, under subdivision (b), from any earlier

transferee of the property.

(d) If a person holds all of the partners' interests in the

partnership, all of the partnership property vests in that person.

The person may execute a document in the name of the partnership to

evidence vesting of the property in that person and may file or

record the document.

16306. (a) Except as otherwise provided in subdivisions (b) and (c), all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law.

16308. Except with respect to registered limited liability

partnerships and foreign limited liability partnerships:

(a) If a person, by words or conduct, purports to be a partner, or

consents to being represented by another as a partner, in a

partnership or with one or more persons not partners, the purported

partner is liable to a person to whom the representation is made, if

that person, relying on the representation, enters into a transaction

with the actual or purported partnership. If the representation,

either by the purported partner or by a person with the purported

partner's consent, is made in a public manner, the purported partner

is liable to a person who relies upon the purported partnership even

if the purported partner is not aware of being held out as a partner

to the claimant. If partnership liability results, the purported

partner is liable with respect to that liability as if the purported

partner were a partner. If no partnership liability results, the

purported partner is liable with respect to that liability jointly

and severally with any other person consenting to the representation.

(b) If a person is thus represented to be a partner in an existing

partnership, or with one or more persons not partners, the purported

partner is an agent of persons consenting to the representation to

bind them to the same extent and in the same manner as if the

purported partner were a partner, with respect to persons who enter

into transactions in reliance upon the representation. If all of the

partners of the existing partnership consent to the representation,

a partnership act or obligation results. If fewer than all of the

partners of the existing partnership consent to the representation,

the person acting and the partners consenting to the representation

are jointly and severally liable.

is named by another in a statement of partnership authority.

(d) A person does not continue to be liable as a partner merely

because of a failure to file a statement of dissociation or to amend

a statement of partnership authority to indicate the partner's

dissociation from the partnership.

(e) Except as otherwise provided in subdivisions (a) and (b),

persons who are not partners as to each other are not liable as

partners to other persons.

16401. (a) Each partner is deemed to have an account that is

subject to both of the following:

(1) Credited with an amount equal to the money plus the value of

any other property, net of the amount of any liabilities, the partner

contributes to the partnership and the partner's share of the

partnership profits.

(2) Subject to Sections 16306 and 16957, charged with an amount

equal to the money plus the value of any other property, net of the

amount of any liabilities, distributed by the partnership to the

partner and the partner's share of the partnership losses.

(b) Each partner is entitled to an equal share of the partnership

profits and, subject to Sections 16306 and 16957, is chargeable with

a share of the partnership losses in proportion to the partner's

share of the profits.

indemnify a partner for liabilities incurred by the partner in the

ordinary course of the business of the partnership or for the

preservation of its business or property.

(d) A partnership shall reimburse a partner for an advance to the

partnership beyond the amount of capital the partner agreed to

contribute.

(e) A payment or advance made by a partner that gives rise to a

partnership obligation under subdivision (c) or (d) constitutes a

loan to the partnership that accrues interest from the date of the

payment or advance.

(f) Each partner has equal rights in the management and conduct of

the partnership business.

(g) A partner may use or possess partnership property only on

behalf of the partnership.

(h) A partner is not entitled to remuneration for services

performed for the partnership, except for reasonable compensation for

services rendered in winding up the business of the partnership.

(i) A person may become a partner only with the consent of all of

the partners.

(j) A difference arising as to a matter in the ordinary course of

business of a partnership may be decided by a majority of the

partners. An act outside the ordinary course of business of a

partnership and an amendment to the partnership agreement may be

undertaken only with the consent of all of the partners.

(k) This section does not affect the obligations of a partnership

to other persons under Section 16301.

16404. (a) The fiduciary duties a partner owes to the partnership

and the other partners are the duty of loyalty and the duty of care

set forth in subdivisions (b) and (c).

(b) A partner's duty of loyalty to the partnership and the other

partners includes all of the following:

(1) To account to the partnership and hold as trustee for it any

property, profit, or benefit derived by the partner in the conduct

and winding up of the partnership business or derived from a use by

the partner of partnership property or information, including the

appropriation of a partnership opportunity.

(2) To refrain from dealing with the partnership in the conduct or

winding up of the partnership business as or on behalf of a party

having an interest adverse to the partnership.

(3) To refrain from competing with the partnership in the conduct

of the partnership business before the dissolution of the

partnership.

partners in the conduct and winding up of the partnership business is

limited to refraining from engaging in grossly negligent or reckless

conduct, intentional misconduct, or a knowing violation of law.

(d) A partner shall discharge the duties to the partnership and

the other partners under this chapter or under the partnership

agreement and exercise any rights consistently with the obligation of

good faith and fair dealing.

(e) A partner does not violate a duty or obligation under this

chapter or under the partnership agreement merely because the partner'

s conduct furthers the partner's own interest.

(f) A partner may lend money to and transact other business with

the partnership, and as to each loan or transaction, the rights and

obligations of the partner regarding performance or enforcement are

the same as those of a person who is not a partner, subject to other

applicable law.

(g) This section applies to a person winding up the partnership

business as the personal or legal representative of the last

surviving partner as if the person were a partner.

16405. (a) A partnership may maintain an action against a partner

for a breach of the partnership agreement, or for the violation of a

duty to the partnership, causing harm to the partnership.

(b) A partner may maintain an action against the partnership or

another partner for legal or equitable relief, with or without an

accounting as to partnership business, to do any of the following:

(1) Enforce the partner's rights under the partnership agreement.

(2) Enforce the partner's rights under this chapter, including all

of the following:

(A) The partner's rights under Section 16401, 16403, or 16404.

(B) The partner's right on dissociation to have the partner's

interest in the partnership purchased pursuant to Section 16701 or

16701.5, or to enforce any other right under Article 6 (commencing

with Section 16601) or 7 (commencing with Section 16701).

the partnership business under Section 16801 or enforce any other

right under Article 8 (commencing with Section 16801).

(3) Enforce the rights and otherwise protect the interests of the

partner, including rights and interests arising independently of the

partnership relationship.

for a remedy under this section is governed by other law. A right to

an accounting upon a dissolution and winding up does not revive a

claim barred by law.

16807. (a) In winding up a partnership's business, the assets of

the partnership, including the contributions of the partners required

by this section, shall be applied to discharge its obligations to

creditors, including, to the extent permitted by law, partners who

are creditors. Any surplus shall be applied to pay in cash the net

amount distributable to partners in accordance with their right to

distributions under subdivision (b).

(b) Each partner is entitled to a settlement of all partnership

accounts upon winding up the partnership business. In settling

accounts among the partners, the profits and losses that result from

the liquidation of the partnership assets shall be credited and

charged to the partners' accounts. The partnership shall make a

distribution to a partner in an amount equal to any excess of the

credits over the charges in the partner's account. Except for

registered limited liability partnerships and foreign limited

liability partnerships, a partner shall contribute to the partnership

an amount equal to any excess of the charges over the credits in the

partner's account.

partner is obligated to contribute under subdivision (b), all of the

other partners shall contribute, in the proportions in which those

partners share partnership losses, the additional amount necessary to

satisfy the partnership obligations for which they are liable under

Section 16306. A partner or partner's legal representative may

recover from the other partners any contributions the partner makes

to the extent the amount contributed exceeds that partner's share of

the partnership obligations for which the partner is personally

liable under Section 16306.

(d) After the settlement of accounts, each partner shall

contribute, in the proportion in which the partner shares partnership

losses, the amount necessary to satisfy partnership obligations that

were not known at the time of the settlement and for which the

partner is personally liable under Section 16306.

(e) The estate of a deceased partner is liable for the partner's

obligation to contribute to the partnership.

(f) An assignee for the benefit of creditors of a partnership or a

partner, or a person appointed by a court to represent creditors of

a partnership or a partner, may enforce a partner's obligation to

contribute to the partnership.