Notwithstanding the provisions of this chapter, a negotiable instrument issued by a corporation for the purchase or redemption of shares shall be enforceable by a holder in due course (§ 3302 of the Commercial Code) without notice that it was issued for that purpose or by a person who acquired the instrument through such a holder.

(Added by Stats. 1978, Ch. 370.)

Terms Used In California Corporations Code 511

  • 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.
  • Person: includes a corporation as well as a natural person. See California Corporations Code 18
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