(a)A verified complaint for involuntary dissolution of a corporation on any one or more of the grounds specified in subdivision (b) may be filed in the superior court of the proper county by any of the following persons:
(1)One-half or more of the directors in office.
(2)A shareholder or shareholders who hold shares representing not less than 3313 percent of (i) the total number of outstanding shares (assuming conversion of any preferred shares convertible into common shares) or (ii) the outstanding common shares or (iii) the equity of the corporation,
exclusive in each case of shares owned by persons who have personally participated in any of the transactions enumerated in paragraph (4) of subdivision (b), or any shareholder or shareholders of a close corporation.
(3)Any shareholder if the ground for dissolution is that the period for which the corporation was formed has terminated without extension thereof.
(4)Any other person expressly authorized to do so in the articles.
(b)The grounds for involuntary dissolution are that:
(1)The corporation has abandoned its business for more than one year.
(2)The corporation has an even number of directors who are equally divided and cannot agree as to the management of its affairs, so that
its business can no longer be conducted to advantage or so that there is danger that its property and business will be impaired or lost, and the holders of the voting shares of the corporation are so divided into factions that they cannot elect a board consisting of an uneven number.
(3)There is internal dissension and two or more factions of shareholders in the corporation are so deadlocked that its business can no longer be conducted with advantage to its shareholders or the shareholders have failed at two consecutive annual meetings at which all voting power was exercised, to elect successors to directors whose terms have expired or would have expired upon election of their successors.
(4)Those in control of the corporation have been guilty of or have knowingly countenanced persistent and pervasive fraud, mismanagement or abuse of authority or persistent unfairness toward any
shareholders or its property is being misapplied or wasted by its directors or officers.
(5)In the case of any corporation with 35 or fewer shareholders (determined as provided in Section 605), liquidation is reasonably necessary for the protection of the rights or interests of the complaining shareholder or shareholders.
(6)The period for which the corporation was formed has terminated without extension of such period.
(c)At any time prior to the trial of the action any shareholder or creditor may intervene therein.
(d)This section does not apply to any corporation subject to the Banking Law (Division
1.1 (commencing with Section 1000) of the Financial Code), the Public Utilities Act (Part 1 (commencing with 201) of Division 1 of the Public Utilities Code), the Savings
Association Law (Division 2 (commencing with Section 5000) of the Financial Code) or Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1 of the Insurance Code.
(e)For the purposes of this section, “shareholder” includes a beneficial owner of shares who has entered into an agreement under Section 300 or 706.
Notes of Decisions
Waller v. Truck Ins. Exch., Inc., 900 P.2d 619 (Cal. 1995).
· cites it 2× “Amey sued Marmac, Waller, and the four Marmac officers under 11 causes of action: involuntary dissolution (Corp. Code, § 1800, subd. (b)(4) & (5)); breach of fiduciary duty; breach of statutory duty of good faith ( id.”
Meiselman v. Meiselman, 307 S.E.2d 551 (N.C. 1983).
· cites it 3× “” Cal. Corp. Code § 1800 (b)(4) (West 1977) (“persistent unfairness”); Mich.”
Howard v. Shay, 100 F.3d 1484 (9th Cir. 1996).
· cites it 6× “” Also, Arthur Young relied on Pacific attorney Carol May’s assertion that Cal. Corp.Code § 1800, the statute that protects minority interest shareholders, did not give the ESOP the right to trigger an involuntary dissolution: “Our opinion is based upon the representation by…”
Gold v. Gold Realty Co., 8 Cal. Rptr. 3d 118 (Cal. Ct. App. 2003).
· cites it 2× “) More specifically, Corporations Code section 1800 gives the superior court jurisdiction over an action for the involuntary dissolution of a corporation.”
Gong v. RFG Oil, Inc., 166 Cal. App. 4th 209 (Cal. Ct. App. 2008).
“(Corp. Code, § 1800, subd. (b)(4).) Although Jeffrey has not yet filed a derivative claim seeking damages on behalf of the corporation (which David and RFG admit would require Lawton’s disqualification), Jeffrey’s complaint alleges damage to RFG through David’s personal use of…”
Veyna v. Orange Cnty. Nursery, Inc., 170 Cal. App. 4th 146 (Cal. Ct. App. 2009).
“(Corp. Code, § 1800, subd. (b).) The corporation (the purchasing party), through its president, Robert Veyna, elected to buy out the moving parties in order to avoid dissolution.”
Hoiles v. Superior Court, 157 Cal. App. 3d 1192 (Cal. Ct. App. 1984).
“(FNI), brought suit for breach of fiduciary duty and to dissolve the corporation (Corp. Code, § 1800, subd. (b)). In this original proceeding he and other members of his immediate family seek a writ of mandate after the superior court sustained corporate counsel’s invocation of…”
Anmaco, Inc. v. Bohlken, 93 Cal. Daily Op. Serv. 1299 (Cal. Ct. App. 1993).
“(b)(5)); and involuntary dissolution of the corporation (Corp. Code, § 1800). The cause of action requesting a receiver in Pearlman’s second amended complaint was inappropriate in this case because it was sought solely as a remedy for the improperly asserted corporate causes of…”
Kline Hawkes California SBIC, L.P. v. Superior Court, 2004 Cal. Daily Op. Serv. 2694 (Cal. Ct. App. 2004).
· cites it 5× “*188 QUESTION PRESENTED Under California Corporations Code section 1800, subdivision (a)(2)(iii), a complaint for the involuntary dissolution of a corporation may be filed by a shareholder or shareholders who hold shares representing not less than 33 1/3 percent of the equity of…”
— Cal. Corporations Code § 1800(a) — 1 case
— Cal. Corporations Code § 1800(a)(2) — 1 case
— Cal. Corporations Code § 1800(b)(4) — 3 cases
Meiselman v. Meiselman, 307 S.E.2d 551 (N.C. 1983).
“” Cal. Corp. Code § 1800 (b)(4) (West 1977) (“persistent unfairness”); Mich.”
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