Chapter 5 of the new law applies to any distribution to its shareholders made after the effective date by a corporation existing on the effective date, except that any such distribution effected pursuant to a contract for the purchase or redemption of shares entered into by the corporation prior to the effective date may be made if permissible under Chapter 5 or under the prior law in effect at the time the contract was entered into.

(Added by Stats. 1975, Ch. 682.)

Terms Used In California Corporations Code 2308

  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • effective date: means January 1, 1977. See California Corporations Code 2300
  • new law: means this division of the Corporations Code as amended by act of the California Legislature, 1975-76 Regular Session, effective January 1, 1977, and as in effect on that date. See California Corporations Code 2300
  • prior law: means the applicable law as in effect prior to January 1, 1977. See California Corporations Code 2300
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