Foreign corporations.

Existing law requires foreign corporations, qualified to conduct business in the state, meeting certain tests, and excluding a wholly-owned or publicly traded foreign corporation, to abide by specified provisions of the Corporations Code, to the exclusion of comparable provisions of the state corporate law under which the foreign corporation is incorporated, including provisions relating to the election and removal of directors, shareholders' rights, vote requirements, and mergers. This bill would repeal these provisions. Existing law imposes on directors of a foreign corporation transacting intrastate business liability to the corporation, its shareholders, creditors, receiver, liquidator, or trustee in bankruptcy for making an unauthorized dividend or other specified actions constituting a violation of official duty under the domestic laws under which the corporation is incorporated or organized. Existing law also authorizes courts of this state to enforce that liability. This bill would specify that these provisions pertaining to foreign corporations qualified to do business in the state shall not be construed to authorize the state to regulate the organization or internal affairs of those foreign corporations, except to the extent of the existing law provisions imposing liability on directors of a foreign corporation, and authorizing courts of this state to enforce that liability. The bill would make conforming changes.