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New California Law Allows Broader Range of Titles for Corporate Officers

In today’s world the title “Chairman of the Board” is rather outdated. Thousands of companies are started or managed by women, men, and transgender individuals. Such outdated titles are addressed in a new law (i.e. SB 351) introduced by the Committee on Banking and Financial Institutions (Senators Block (Chair), Galgiani, Hall, Hueso, Lara, Morrell, and Vidak) and co-sponsored by the Nonprofit Organizations Committee and the Corporations Committee.

The new law amends various portions of the Corporations Code and aims to provide authorization to act during emergencies for consumer cooperative corporations and to broaden the range of titles for both for-profit and not-for-profit corporate officers.

This new law was signed by Governor Brown on July 15, 2015 and will go into effect on January 1, 2016.

For-profit corporations will be authorized to use gender neutral officer titles. California for-profit corporations will be able to continue to use the title “Chairman of the board” but also may use for that position the title “Chairperson of the board,” “Chairwoman of the board” or “Chair of the board.” The division of the Corporations Code regarding for-profit corporations will now use the term “Chairperson of the board” in the various sections in which that title is referenced.

The bill aims to add Section 156.6 to the Corporations Code in this connection, which is to read as follows: “All references in this division to “Chairperson of the board” shall be deemed to refer to all permissible titles for the chairperson of the board, as permitted by Section 312.”

Nonprofit public benefit, mutual benefit, religious, and consumer cooperative corporations will be authorized to use additional straightforward chair of the board alternative titles to match common usage in the nonprofit community. These nonprofits, which are already authorized to use gender neutral terms for “Chairman of the board,” will be authorized to use the officer titles chair, chairperson, chairman and chairwoman without an “of the Board” modifier.

Consumer cooperative corporations will be authorized to take specified actions to conduct the corporations’ ordinary business operations in anticipation of or during an emergency, including the authority to modify the requirements of giving notice to directors of a meeting of the board of directors in any practicable manner and adopting related bylaws provisions providing procedures for designating additional or substitute directors. Such emergency authorizations have already been provided for the other types of corporations referred to above, effective January 1, 2014, in legislation co-sponsored by the two Committees.

Speak to an Experienced California Business Lawyer Today

How does this new law potentially affect your corporation or non-profit? Get the answer by setting up a time to speak with experienced California business attorney Kristina Reed. She clearly explains the various options for your business or non-profit. Kristina knows how to assist businesses and non-profits with a reliable and dependable resource for legal consultation. Kristina understands the issues of a sole proprietorship, family business, partnership, corporation, non-profit, and all other forms of businesses.