2011 California Code
Corporations Code
TITLE 1. CORPORATIONS [100 - 14551]
ARTICLE 2. Required Records, Reports to Directors and Members
Section 12592

(a) Any provision of the articles or bylaws notwithstanding, every corporation shall furnish annually to its members and directors a statement of any transaction or indemnification of a kind described in subdivision (d) or (e), if any such transaction or indemnification took place. If the corporation issues an annual report to all members, this subdivision shall be satisfied by including the required information in the annual report. A corporation which does not issue an annual report to all members, pursuant to subdivision (c) of Section 12591, shall satisfy this section by mailing or delivering to its members the required statement within 120 days after the close of the corporation s fiscal year. Unless otherwise provided by the articles or bylaws and if approved by the board of directors, that statement may be sent by electronic transmission by the corporation (Section 20).

(b) Except as provided in subdivision (c), a covered transaction under this section is a transaction in which the corporation, its parent, or its subsidiary was a party, and in which either of the following had a direct or indirect material financial interest:

(1) Any director or officer of the corporation, or its parent or subsidiary.

(2) Any holder of more than 10 percent of the voting power of the corporation, its parent or its subsidiary.

For the purpose of subdivision (d), an interested person is any person described in paragraph (1) or (2).

(c) Transactions approved by the members of a corporation, under subdivision (a) of Section 12373, are not covered transactions. For the purpose of subdivision (b), neither a mere common directorship nor a member-patron relationship on terms available to all members constitutes a material financial interest.

(d) The statement required by subdivision (a) shall describe briefly:

(1) Any covered transaction (excluding compensation of officers and directors) during the previous fiscal year involving more than one thousand dollars ($1,000), or which was one of a number of covered transactions in which the same interested person had a direct or indirect material financial interest, and which transactions in the aggregate involved more than one thousand dollars ($1,000).

(2) The names of the interested persons involved in such transactions, stating such person s relationship to the corporation, the nature of such person s interest in the transaction and, where practicable, the amount of such interest; provided, that in the case of a transaction with a partnership of which such person is a partner, only the interest of the partnership need be stated.

(e) The statement required by subdivision (a) shall describe briefly the amount and circumstances of any loans, guaranties, indemnifications, or advances aggregating more than one thousand dollars ($1,000) paid or made during the fiscal year to any officer or director of the corporation pursuant to Section 12377; provided that no such report need be made in the case of a loan, guaranty, or indemnification approved by the members under paragraph (2) of subdivision (e) of Section 12377 or a loan or guaranty not subject to the provisions of subdivision (a) of Section 12375.

(Amended by Stats. 2004, Ch. 254, Sec. 43. Effective January 1, 2005.)