Detailed Answer
Disclaimer: This article is for educational purposes only and does not constitute legal advice.
When a decedent owned or held shares in a California corporation, the personal representative (executor or administrator) has the right and duty to gather and review corporate formation documents, bylaws, and related records. These materials help determine the value of the decedent’s business interest and ensure proper estate administration.
- Identify the Entity Type and Name. Verify the exact name and entity type (corporation, LLC, partnership). You’ll need this information to search official records.
- Search the California Secretary of State’s Records. Visit the California Secretary of State’s business search at businesssearch.sos.ca.gov. Enter the entity name to obtain the “Date Filed,” “Entity Number,” and current agent for service of process. You can order certified copies of:
- Articles of Incorporation (Corp. Code § 1502)
- Statement of Information (annual update)
- Request Internal Corporate Records. Bylaws, minute books, stock ledgers, and other internal documents are not filed with the Secretary of State. Under California Corporations Code Section 1601 (Corp. Code § 1601), any shareholder or their authorized agent (including a personal representative) may examine books and records for a proper purpose. To request these:
- Send a written demand to the corporate secretary or registered agent.
- State your status as personal representative and cite Corp. Code § 1601.
- Allow at least five business days for the corporation to respond.
- Use Probate Court Powers if Records Are Withheld. If the corporation refuses to produce records, you can petition the probate court under California Probate Code Section 9803 (Prob. Code § 9803) for an order compelling delivery of estate property, including corporate records.
- Review Bylaws and Amendments. Once you obtain the bylaws, verify:
- Amendment history (usually at the end of the document).
- Shareholder voting requirements and transfer restrictions (Corp. Code § 211, § 300).
- Provisions on buying out a decedent’s shares or involuntary transfers.
- Assess Estate Valuation and Distribution. Use the information from formation documents and bylaws to:
- Determine the decedent’s ownership percentage.
- Identify any restrictions on transfer of shares.
- Calculate fair market value for estate tax and probate purposes.
Helpful Hints
- Always obtain certified copies of Articles of Incorporation from the Secretary of State to confirm original formation details.
- Keep detailed correspondence records when requesting internal books and records.
- Check for annual amendments or restatements of bylaws—these may override older versions.
- If you hit roadblocks, consider filing a petition in probate court under Prob. Code § 9803 to enforce your right to records.
- Consult a probate attorney experienced in business valuations to avoid pitfalls and ensure compliance with California law.
Additional Resources: California Corporations Code: https://leginfo.legislature.ca.gov/faces/codes.xhtml?lawCode=CORP
California Probate Code: https://leginfo.legislature.ca.gov/faces/codes.xhtml?lawCode=PROB