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<ns0:Id>20250AB__198499INT</ns0:Id>
<ns0:VersionNum>99</ns0:VersionNum>
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<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-13</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
<ns0:SessionNum>0</ns0:SessionNum>
<ns0:MeasureType>AB</ns0:MeasureType>
<ns0:MeasureNum>1984</ns0:MeasureNum>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Rogers</ns0:AuthorText>
<ns0:AuthorText authorType="PRINCIPAL_COAUTHOR_OPPOSITE">(Principal coauthor: Senator McGuire)</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Rogers</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>McGuire</ns0:Name>
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<ns0:Title> An act to add Title 1.5 (commencing with Section 14800) to the Corporations Code, relating to corporate powers. </ns0:Title>
<ns0:RelatingClause>corporate powers</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Corporate powers.</ns0:Subject>
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<html:p>Existing constitutional law establishes the First Amendment right of freedom of speech. Existing case law, including Citizens United v. Federal Election Commission (2010) 558 U.S. 310 and other judicial precedents, establishes that corporate entities have First Amendment rights to engage in political speech and places limits on the suppression of political speech.</html:p>
<html:p>Existing law regulates the formation and operation of various types of business and nonprofit entities, including corporations, nonprofit corporations, limited liability corporations, limited partnerships, limited liability partnerships, and unincorporated associations. Existing law requires the Secretary of State to receive and process corporate and nonprofit entity filings, maintain records of those filings, and perform related duties.</html:p>
<html:p>This
bill would establish the powers of corporations, as defined, organized under the Corporations Code. The bill would revoke all powers, privileges, and capacities previously granted to corporations under state law and provide that a corporation operating under the jurisdiction of this state possesses only those powers, privileges, and capacities specifically granted in the Corporations Code. The bill would grant a corporation perpetual duration and succession in its name and every power held by an individual to do all things necessary or convenient to carry out its business and affairs, except as specified. The bill would specify that these provisions do not grant any power to a corporation to engage in ballot issue activity or election activity. The bill would declare void any act undertaken by a corporation beyond the scope of its granted powers.</html:p>
<html:p>This bill would make its provisions severable and would further specify the intent and preference of the Legislature that
corporations hold no powers at all, rather than be vested with powers for election activity or ballot issue activity.</html:p>
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<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
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<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
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<ns0:Urgency>NO</ns0:Urgency>
<ns0:TaxLevy>NO</ns0:TaxLevy>
<ns0:Election>NO</ns0:Election>
<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
<ns0:BudgetBill>NO</ns0:BudgetBill>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_801E44BA-D3FE-4850-A57F-077A658BCCAE">
<ns0:Num>SECTION 1.</ns0:Num>
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Title 1.5 (commencing with Section 14800) is added to the
<ns0:DocName>Corporations Code</ns0:DocName>
, to read:
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<ns0:Num>1.5.</ns0:Num>
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<ns0:LawHeadingText>Corporate Powers</ns0:LawHeadingText>
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<ns0:Num>14800.</ns0:Num>
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<html:p>This title applies to all entities organized under this code and the laws of this state, unless expressly identified in statute. This title does not apply to any agency or instrumentality of the state or its political subdivisions.</html:p>
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<ns0:LawSection id="id_9DB646C4-088D-4803-9FC7-1A7DE78D3253">
<ns0:Num>14801.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
For purposes of this title, the following definitions apply:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Ballot issue activity” means paying or contributing in order to directly or indirectly aid, promote, or prevent the passage of a ballot question or initiative.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Corporation” means an entity whose existence or limited liability shield is conferred by the laws of this state and includes, but is not limited to, all of the following:
</html:p>
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(A)
<html:span class="EnSpace"/>
A corporation.
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<html:p>
(B)
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A nonprofit corporation.
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<html:p>
(C)
<html:span class="EnSpace"/>
A limited liability company.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
A limited partnership.
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<html:p>
(E)
<html:span class="EnSpace"/>
A limited liability partnership.
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<html:p>
(3)
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“Election activity” means paying or contributing in order to directly or indirectly aid, promote, or prevent the nomination or election of any person, or to directly or indirectly aid or promote the interests, success, or defeat of any political party or organization.
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<html:p>
(b)
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The definitions in this title apply throughout this code, and unless otherwise provided by law, to all entities formed, organized, or authorized under this code or under any other general law of this state conferring corporate or entity powers.
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<ns0:LawSection id="id_16604C45-2FD4-48EC-8965-CF7566F0D67E">
<ns0:Num>14802.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
Upon the effective date of this title, all powers, privileges, and capacities previously granted to corporations under the laws of this state are revoked in their entirety and a corporation operating under the jurisdiction of this state shall possess only those powers, privileges, and capacities specifically granted by this code.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
A corporation has perpetual duration and succession in its name.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A corporation possesses every power held by an individual to do all things necessary or convenient to carry out its business and affairs, except to the extent that its articles of incorporation expressly restrict the exercise of
such powers.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The powers granted in this paragraph do not grant any power to engage in ballot issue activity or election activity.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A corporation organized under this code has no powers beyond those expressly granted.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
This title does not grant or recognize any power to engage in election activity or ballot issue activity.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
Any act undertaken by a corporation that lies outside the powers granted in this code is ultra vires and void. A corporation that exercises a power not granted under this code forfeits all corporate privileges, including limited liability and perpetual duration.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
A foreign or out-of-state corporation that directly or indirectly undertakes, finances, or
directs election activity or ballot issue activity in this state is conclusively deemed to be transacting business in this state for purposes of jurisdiction and enforcement.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
Notwithstanding any other law, this title does not invalidate or impair any existing contract, debt instrument, security, or other legal obligation entered into before the effective date of this title.
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<ns0:LawSection id="id_2FBADC0C-B4BA-4184-84CF-2CF919DBB52F">
<ns0:Num>14803.</ns0:Num>
<ns0:LawSectionVersion id="id_6D1992CA-5E3F-47D7-861B-06CA91F398B8">
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<html:p>
(a)
<html:span class="EnSpace"/>
The provisions of this title are severable. If any provision of this title or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
If a provision of this title is deemed invalid or unconstitutional by a court of law, no earlier enacted law or code granting corporate powers shall be revived or reinstated without enactment by the Legislature. It is the intent and preference of the Legislature that corporations hold no powers at all, rather than be vested with powers for election activity or ballot issue activity.
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