Gary Barrera

Under the new rules, before the third party can submit any of the filings listed below, an authorized user on the business’s account must go to the business’s online CA SOS account and give their attorney, CPA, or other a third party which regularly makes filings for the business “Full Access” to the CA SOS bizfile online account.

Many California businesses incorporate in Delaware. It is a common, and sometimes sensible choice. But incorporating elsewhere does not let a company sidestep the protections California law provides its resident shareholders. A new decision from California’s Court of Appeal, Salamon v. Orchid Global, Inc., drives that point home — and it is required reading for anyone who owns shares in, sits on the board of, or advises a Delaware company that calls California home.

What happens when a judge issues a decision based on legal authority that does not exist? And what happens if the party adversely affected by that phony decision was oblivious to that fact until after the order was issued?