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HomeHealth and Safety CodeDiv. 101Pt. 4Ch. 6Art. 3§ 101868 Corporate Compliance Legal Actions

§ 101868 Corporate Compliance Legal Actions

Health and Safety Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 101868 Corporate Compliance Legal Actions

This law lets anyone who cares about a corporation’s actions go to court to stop or check violations of the corporation’s own rules, and it also lets the corporation ask the court to confirm its policies.

Key Takeaways

  • •Anyone with an interest can sue to stop or check a corporation’s rule violations.
  • •The corporation can also ask the court to confirm its own policies.
  • •Lawsuits must be filed within 30 days of the action, but fixing the problem later doesn’t count as proof of a violation.
  • •Certain actions (like issuing bonds or creating contracts) can’t be thrown out even if challenged.

Example

A community group thinks a nonprofit charity is giving out loans that break its own lending policy, so they ask a court to stop the charity from doing that.

The group can file a lawsuit asking the court to order the charity to stop the illegal loans or to declare that the loans are against the charity’s rules. The charity can also ask the court to say its policy is valid.

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

Official Source
View on CA.gov

§ 101868 Corporate Compliance Legal Actions

(a)  Any interested person may institute proceedings for injunctive or declaratory relief or writ of mandate in any court of competent jurisdiction for the purpose of stopping or preventing violations or threatened violations of Article 2 (commencing with Section 101861) by the corporation. In addition, the corporation may institute proceedings for declaratory relief, or validation of its policy or policies under Article 2 (commencing with Section 101861). In the event the corporation institutes proceedings, the corporation shall give written notice, to the person or persons with an interest in the corporation’s compliance with Article 2 (commencing with Section 101861), of the right to participate in the proceedings. (b)  Any interested person, including a corporation subject to this chapter, may institute proceedings for injunctive or declaratory relief or mandate in any court of competent jurisdiction for the purpose of obtaining a judicial determination as to whether an action taken by the corporation was in violation of Article 2 (commencing with Section 101861). In the event the corporation institutes proceedings, the corporation shall give written notice, to the person or persons with an interest in the corporation’s compliance with Article 2 (commencing with Section 101861), of the right to participate in the proceedings. (c)  Any action seeking a judicial determination under this section shall be commenced within 30 days from the date the action was taken. Nothing in this section shall be construed to prevent the corporation from curing or correcting an action that is subject to review pursuant to this section. The fact that the corporation takes a subsequent action to cure or correct an action taken pursuant to this section shall not be construed or admissible as evidence of a violation of this chapter. Nothing in this section shall permit discovery of communications that are protected by the attorney-client privilege. (d)  An action shall not be determined to be null and void if any of the following conditions exist: (1)  The action taken was in connection with the sale or issuance of notes, bonds, or other evidences of indebtedness or any contract, instrument, or agreement related thereto. (2)  The action taken gave rise to a contractual obligation. (3)  The action taken was in substantial compliance with this chapter. (4)  Invalidation of the action taken would substantially impair the corporation’s ability to accomplish its primary public benefit purposes by either depriving the corporation of a material competitive or economic benefit, or exposing the corporation to a material competitive or economic risk. (Added by Stats. 1997, Ch. 927, Sec. 2. Effective January 1, 1998.)

Last verified: January 11, 2026

Key Terms

corporationcomplianceterminationliendiscoveryjurisdictionviolationaddition

Related Statutes

  • § 100890 Laboratory Certification Penalties
  • § 9676 Mausoleum Violation Penalties
  • § 25400.22 Contaminated Property Lien Requirements
  • § 42400.2 Air Contaminant Emission Penalties
  • § 101863 Meeting Agenda Posting Rules

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Health and Safety Code. Section 101868.
View Official Source