The California Corporations Code is a misnomer. While the Corporations Code does in fact govern corporations, it also governs a wide variety of unincorporated entities, including general partnerships, limited partnerships, and limited liability companies. Paradoxically, the Corporations Code even includes a title devoted to unincorporated associations. See Unincorporated Association Governance - Waiting For The Legislature.

Earlier this year, I wrote about a bill, AB 2432, that would authorize a court to impose a "white collar criminal enhancement" if "a corporation is convicted of a misdemeanor or felony offense . . .". The amount of the enhancement may be the greater of (1) two times the value of the taking or loss, whichever is greater, if the offense resulted in the taking of, or loss to, another person’s or entity’s money, labor, or real or personal property and (2) $25,000,000. When the bill was pending in the legislature, I criticized its unusual definition of "corporation". California Legislator Proposes To Enhance Criminal Fines For California, But Not Delaware, Business Entities and Strangers In A Strange Land - In California, Bumblebees, Crabs and Snails Are Fishes And A General Partnership May Soon Be A Corporation. The legislature subsequently amended the bill to define "corporation" to mean "a firm, association, organization, partnership, business trust, company, corporation, limited liability company, public entity, or any other legal entity".

This is definition is, of course, ridiculous. It is akin to defining an "apple" to mean a banana, orange, mango, apple, or any other legal fruit. Some of the terms in the definition are hopelessly vague - e.g., "firm", "company", "organization" and "public entity". For example, is a sole proprietorship a "company"?

AB 2432 is now on Governor Gavin Newsom's desk awaiting a possible signature.