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HomeCorporations CodeCh. 2Art. 2§ 5223 Director Removal For Misconduct

§ 5223 Director Removal For Misconduct

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 5223 Director Removal For Misconduct

Key Takeaways

  • •If a director of a company does really bad stuff like lying, stealing, or misusing their power, they can be kicked out of their job.
  • •A group of members or another director can ask the court to remove the bad director.
  • •The court can also stop the bad director from being elected again for a while.
  • •The company must be part of the court case, and the Attorney General can join in or start the case too.

Example

Imagine a director of a local sports club starts using the club's money to buy fancy stuff for themselves instead of paying for the kids' sports equipment.

The other members or directors of the club can go to court and ask to remove this director because they are stealing and not doing their job right. The court can kick them out and even stop them from being a director again for some time.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 5223 Director Removal For Misconduct

(a) The superior court of the proper county may, at the suit of a director, or twice the authorized number (Section 5036) of members or 20 members, whichever is less, remove from office any director in case of fraudulent or dishonest acts or gross abuse of authority or discretion with reference to the corporation or breach of any duty arising under Article 3 (commencing with Section 5230) of this chapter, and may bar from reelection any director so removed for a period prescribed by the court. The corporation shall be made a party to such action. (b) The Attorney General may bring an action under subdivision (a), may intervene in such an action brought by any other party and shall be given notice of any such action brought by any other party. (Amended by Stats. 1981, Ch. 587, Sec. 6.)

Last verified: January 23, 2026

Key Terms

fraudulent or dishonest actsgross abuse of authority or discretionArticle 3Attorney General

Related Statutes

  • § 7223 Director Removal For Misconduct
  • § 12363 Director Removal For Misconduct
  • § 5226 Director Resignation Restrictions
  • § 9223 Director Removal For Fraud
  • § 12360 Director Term Limits

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 5223.
View Official Source