TheCorporateCounsel.net

Liz recently blogged on the topic of how “homeless” public companies – those that claim not to have a principal executive office in their SEC filings – may create regulatory puzzles. Keith Bishop recently blogged a couple of specific examples of those puzzles under California law:

The designation of a corporation’s principal executive offices, of course, is one factor in determining whether a publicly held corporation is subject to California’s board quota laws. Cal. Corp. Code §§ 301.3, 301.4, 2115.5 & 2115.6. In addition, a domestic or foreign corporation required to file an annual statement of information (Form SI-550) must disclose the address of its principal executive office (no “s”). Cal. Corp. Code §§ 1502(a)(5) & 2117(a)(3).

Those corporations that have decided that they have no principal executive office may want to revisit their bylaws. Some corporate bylaws provide impose advance notice requirements on shareholders wishing either to submit a proposal for a shareholder vote or to nominate candidate(s) for election to the board. Often these provisions require that the notice be received at the corporation’s principal executive offices within a specified timeframe before the meeting. This is problematical if the corporation is taking the position that no such office exists in its filings with the Securities and Exchange Commission.

I know all the cool kids only want to exist in cyberspace or the metaverse or whatever this week’s variation on cloud cuckoo land is, but I think it’s kind of preposterous that the SEC permits companies to get away with offering securities without providing a physical address, particularly since they almost certainly have one. In that regard, this Olshan blog notes that “securities law commentators have suggested that the term “principal executive offices” would mean the place where the CEO and most other executive officers work most of the time.”

– John Jenkins