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HomeCorporations CodeCh. 1Art. 4§ 12313 Optional Corporate Articles Provisions

§ 12313 Optional Corporate Articles Provisions

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 12313 Optional Corporate Articles Provisions

The law lets a corporation's articles of incorporation include special rules, such as setting an end date, giving leftover assets to charity, and defining membership classes and rights.

Key Takeaways

  • •Corporations can set a specific end date in their articles.
  • •They can require leftover assets go to a charitable trust after debts are paid.
  • •The articles can also set membership details and let the board set rights for new memberships.

Example

A small nonprofit corporation wants to dissolve and give its leftover money to a charity.

Because of section (a)(2), the corporation can write in its articles that after paying all debts, any remaining assets must go to a charitable trust, so when it shuts down the money automatically goes to the charity.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 12313 Optional Corporate Articles Provisions

(a) The articles of incorporation may set forth any or all of the following provisions, which shall not be effective unless expressly provided in the articles: (1) A provision limiting the duration of the corporation’s existence to a specified date. (2) A provision providing for the distribution of the remaining assets of the corporation, after payment or adequate provision for all of its debts and liabilities, to a charitable trust. (b) Nothing contained in subdivision (a) shall affect the enforceability, as between the parties thereto, of any lawful agreement not otherwise contrary to public policy. (c) The articles of incorporation may set forth any or all of the following provisions: (1) The names and addresses of the persons appointed to act as initial directors. (2) Provisions concerning the transfer of memberships, in accordance with Section 12410. (3) The classes of members, if any, and if there are two or more classes, the rights, privileges, preferences, restrictions, and conditions attaching to each class. (4) Any other provision, not in conflict with law, for the management of the activities and for the conduct of the affairs of the corporation, including any provision which is required or permitted by this part to be stated in the bylaws. (5) A provision conferring upon members the right to determine the consideration for which memberships shall be issued. (6) A provision authorizing the board of directors, within any limits or restrictions stated, to fix the rights, privileges, preferences, restrictions, and conditions attaching to any wholly unissued class of memberships authorized in the bylaws or the articles. (7) If the bylaws or articles authorize a class of memberships to be divisible into series, a provision authorizing the board of directors, within any limits or restrictions stated, to fix the rights, privileges, preferences, restrictions, and conditions attaching to any wholly unissued series of a membership class authorized to be divisible into series, and to fix the number of memberships in the series and the designation of the series. As to any series, the number of which is authorized to be fixed by the board, the articles may also authorize the board to increase or decrease, but not below the number of memberships then outstanding, the number of memberships of any such series subsequent to the issuance of that series. Unless the articles or bylaws provide otherwise, in case the number of memberships of any series is decreased, the memberships constituting this decrease shall resume the status which they had prior to the adoption of the board resolution originally fixing the number of memberships of the series. (Amended by Stats. 2013, Ch. 538, Sec. 3. (AB 1255) Effective January 1, 2014.)

Last verified: January 10, 2026

Key Terms

corporationconsiderationagreementdirectordurationmembershipmanagementexistence

Related Statutes

  • § 14005 Small Business Corporation Naming
  • § 9132 Corporate Duration And Dissolution
  • § 9151 Director Number Requirements
  • § 109 Corporate Filing Error Correction
  • § 12213 Correction Of Corporate Filings

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 12313.
View Official Source