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HomeCorporations CodeCh. 9§ 12520 Corporate Property Security Approval

§ 12520 Corporate Property Security Approval

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

§ 12520 Corporate Property Security Approval

This law says a company's board can decide to use the company's property (like buildings or equipment) as a guarantee to pay back a loan or keep a promise, without needing to ask the members or owners first.

Key Takeaways

  • •The board can use company property to secure a loan or promise.
  • •They don't need to ask the members or owners first, unless the company's rules say they do.
  • •This applies to any kind of property the company owns.

Example

A small business needs a loan to buy new equipment.

The board of the company can decide to use the company's building as a guarantee for the loan without needing to ask all the members or owners for permission.

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

Official Source
View on CA.gov

§ 12520 Corporate Property Security Approval

Any mortgage, deed of trust, pledge or other hypothecation of all or any part of the corporation’s property, real or personal, for the purpose of securing the payment or performance of any contract or obligation may be approved by the board. Unless the articles or bylaws otherwise provide, no approval of the members (Section 12224) shall be necessary for such action. (Added by Stats. 1982, Ch. 1625, Sec. 3. Operative January 1, 1984.)

Last verified: January 10, 2026

Key Terms

mortgagedeed of trustpledgehypothecationboardarticlesbylaws

Related Statutes

  • § 5910 Corporate Property Security Approval
  • § 7910 Corporate Property Security Approval
  • § 1000 Corporate Property Security Approval
  • § 9630 Corporate Property Security Approval
  • § 12353 Corporate Officer Requirements

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 12520.
View Official Source