How to Change Officers of a Corporation in California

The process of how to change officers of a corporation in California involves filing the Articles of Incorporation or Organization and adhering to certain California codes.

Removing a California Corporation Officer

In California, various individuals run both the S and C corporations. These people include the following:

• Officers run the daily activities of the corporations.
• Directors elect and fire officers as well as make major decisions for the company, including its corporate planning.
• Shareholders elect the directors and make larger decisions for the company, such as selling the business or authorizing more stock.

When directors opt to hire officers, they typically do this at the annual directors meeting. However, they can also hire them at a special directors meeting as long as they follow the corporation's bylaws so that all directors can attend and vote. When directors meet to act upon a decision, they record the corporate resolutions and agree to sign a unanimous consent.

After making the formal decision and properly recording it, the directors alert the secretary of state so that it can update its records to change the corporation's directors, corporate address, and registered agent. The directors can fill out SI-200 C, which is the statement of information form.

There are several reasons why a California corporation can remove officers:

• Officers can suffer misconduct.
• Officers can neglect official duties.
• Officers can lose money.
• Officers can make poor business decisions.
• Officers can conduct self-dealing.

The corporation can also use the CA Corporations Code Section 304 to remove directors. This uses a superior court who acts on behalf of shareholders to remove directors involved in fraudulent or dishonest acts and conduct an abuse of authority.

In addition, the corporation can use CA Corporations Code Section 302 to remove directors convicted of a felony or deemed of unsound mind by a court.

Adding Officers or Directors to a California C Corporation

When adding officers or directors to a California C corporation, an incorporator must appoint an individual. At the initial board of directors meeting, members can also appoint officers and authorize issuance of stock.

Corporations must also file the statement of information. They can do this once they have officers with the authority to sign the document.

Failing to complete these steps can cause the IRS and state of California to treat the corporation like an existing entity. If you have questions about incorporating, consult an attorney.

Statement of Information

According to California law, every California for-profit corporation and limited liability company (LLC) must file a statement of information within 90 days of filing the Articles of Incorporation or Organization.

A for-profit corporation must re-file the statement of information annually whenever the following occurs:

• The company relocates.
• The company elects new officers.
• The company changes the name of is registered agent.
• The company adds or deletes directors.
• The company changes the type of business the corporation does.

A California LLC must re-file its statement of information biennially whenever the following occurs:

• The LLC changes its name.
• The LLC changes the name or address of the agent for service of process.
• The LLC's principal executive office moves.
• The LLC's manager, officer, or chief executive officer's name or residence changes.
• The LLC's principal business activity changes.

Once you properly complete and sign the form for either the California for-profit corporation or LLC, mail the original to the California secretary of state along with a cover letter, a copy of the signed statement of information, and a self-addressed stamped envelope.

Election of Directors after Formation of California Corporation

For shareholders entitled to vote in elections of directors, they can gather and combine votes by multiplying the number of potential directors by the number of shares each shareholder has. Those shareholders can give the cumulative votes to one candidate or distribute votes to as many candidates as deemed necessary.

If you're unsure, check with the CA Corporations Code Section 709(a), which gives a summary judgment about the validity of electing directors or officers.

According to CA Corporations Code Section 312(a), a corporation must have the following:

• The corporation must have a chairperson of the board or president. It can also have both.
• The corporation must have a secretary.
• The corporation must have a chief financial officer.
• The corporation must have other officers determined by the board or stated in the bylaws. These individuals have the power to sign corporate documents.

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