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California Corporations Code Section 1800

Legal Research Home > California Laws > Corporations Code > California Corporations Code Section 1800

1800.  (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 33 1/3 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 (commencing with Section 99) of the Financial
Code), the Public Utilities Act (Part 1 (commencing with 201) of
Division 1 of the Public Utilities Code), the Savings and Loan
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.

Last modified: February 22, 2013