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HomeCorporations CodeCh. 12§ 12575 Corporate Fraud Liability

§ 12575 Corporate Fraud Liability

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

§ 12575 Corporate Fraud Liability

This law says that if people in charge of a company lie about important stuff or mess with records to trick others, they can be held responsible for any harm caused.

Key Takeaways

  • •People in charge of a company can't lie about important things like money or records.
  • •If they lie or change records to trick others, they can be held responsible.
  • •This applies to things like financial reports, records, or any important company documents.

Example

A company's boss tells investors the company is making lots of money, but they know it's actually losing money.

If investors lose money because they believed the lie, the boss can be forced to pay them back.

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

Official Source
View on CA.gov

§ 12575 Corporate Fraud Liability

Any officers, directors, employees or agents of a corporation who do any of the following are liable jointly and severally for all the damages resulting therefrom to the corporation or any person injured thereby who relied thereupon or to both: (a) Make, issue, deliver or publish any prospectus, report, circular, certificate, financial statement, balance sheet, public notice, or document respecting the corporation or its memberships, assets, liabilities, capital, dividends, distributions, patronage distributions, business, earnings, or accounts which is false in any material respect, knowing it to be false, or participate in the making, issuance, delivery, or publication thereof with knowledge that the same is false in a material respect. (b) Make or cause to be made in the books, minutes, records, or accounts of a corporation any entry which is false in any material particular knowing such entry is false. (c) Remove, erase, alter, or cancel any entry in any books or records of the corporation, with intent to deceive. (Added by Stats. 1982, Ch. 1625, Sec. 3. Operative January 1, 1984.)

Last verified: January 10, 2026

Key Terms

jointly and severally liablefalse in any material respectintent to deceive

Related Statutes

  • § 6215 Corporate Fraud Liability
  • § 8215 Corporate Fraud Liability
  • § 28802 Financial Record Fraud Prohibition
  • § 1507 Corporate Fraud Liability
  • § 1200 Corporate Reorganization Approval Rules

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 12575.
View Official Source