AB 1984: Corporate powers: political spending power.
<p>The bill aims to redefine corporate powers in California by explicitly excluding political spending as a right for artificial persons organized under the Corporations Code. It revokes any previously granted powers that allowed corporations to engage in political spending, declaring such activities void and requiring corporations to forfeit their granted powers if they exceed these limitations.</p> <p>The bill also outlines procedures for reinstating forfeited corporate powers after corporations disgorge funds used for prohibited political spending. The Secretary of State would be authorized to create rules regarding this process, while the Attorney General would have enforcement authority.</p> <p>Additionally, the bill states that its provisions are severable and expresses a legislative preference for corporations having no powers at all rather than retaining any form of political sp…
| Apr. 20, 2026 | Re-referred to Com. on B. & F. |
| Apr. 16, 2026 | From committee chair, with author's amendments: Amend, and re-refer to Com. on B. & F. Read second time and amended. |
| Apr. 06, 2026 | In committee: Hearing for testimony only. |
| Mar. 02, 2026 | Referred to Coms. on B. & F. and JUD. |
| Feb. 14, 2026 | From printer. May be heard in committee March 16. |
| Amended IN Assembly April 16, 2026 |
| Introduced by Assembly Member Rogers (Principal coauthor: Assembly Member Kalra) (Principal coauthor: Senator McGuire) (Coauthors: Assembly Members Addis, Connolly, Elhawary, Garcia, Harabedian, Jackson, Lee, and Schiavo) (Coauthors: Senators McNerney and Pérez) |
February 13, 2026 |
LEGISLATIVE COUNSEL'S DIGEST
The people of the State of California do enact as follows:
SECTION 1.
The Legislature finds and declares the following:SECTION 1.SEC. 2.
TITLE 1.5. Corporate Powers
This title applies to all entities organized under this code and the laws of this state, unless expressly identified in statute. This title does not apply to any agency or instrumentality of the state or its political subdivisions.
(a)For purposes of this title, the following definitions apply:
(1)“Ballot issue activity” means paying or contributing in order to directly or indirectly aid, promote, or prevent the passage of a ballot question or initiative.
(2)“Corporation” means an entity whose existence or limited liability shield is conferred by the laws of this state and includes, but is not limited to, all of the following:
(A)A corporation.
(B)A nonprofit corporation.
(C)A limited liability company.
(D)A limited partnership.
(E)A limited liability partnership.
(3)“Election activity” means paying or contributing in order to directly or indirectly aid, promote, or prevent the nomination or election of any person, or to directly or indirectly aid or promote the interests, success, or defeat of any political party or organization.
(b)The definitions in this title apply throughout this code, and unless otherwise provided by law, to all entities formed, organized, or authorized under this code or under any other general law of this state conferring corporate or entity powers.
(a)Upon the effective date of this title, all powers, privileges, and capacities previously granted to corporations under the laws of this state are revoked in their entirety and a corporation operating under the jurisdiction of this state shall possess only those powers, privileges, and capacities specifically granted by this code.
(b)(1)(A)A corporation has perpetual duration and succession in its name.
(B)A corporation possesses every power held by an individual to do all things necessary or convenient to carry out its business and affairs, except to the extent that its articles of incorporation expressly restrict the exercise of such powers.
(C)The powers granted in this paragraph do not grant any power to engage in ballot issue activity or election activity.
(2)A corporation organized under this code has no powers beyond those expressly granted.
(3)This title does not grant or recognize any power to engage in election activity or ballot issue activity.
(c)Any act undertaken by a corporation that lies outside the powers granted in this code is ultra vires and void. A corporation that exercises a power not granted under this code forfeits all corporate privileges, including limited liability and perpetual duration.
(d)A foreign or out-of-state corporation that directly or indirectly undertakes, finances, or directs election activity or ballot issue activity in this state is conclusively deemed to be transacting business in this state for purposes of jurisdiction and enforcement.
(e)Notwithstanding any other law, this title does not invalidate or impair any existing contract, debt instrument, security, or other legal obligation entered into before the effective date of this title.
(a)The provisions of this title are severable. If any provision of this title or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(b)If a provision of this title is deemed invalid or unconstitutional by a court of law, no earlier enacted law or code granting corporate powers shall be revived or reinstated without enactment by the Legislature. It is the intent and preference of the Legislature that corporations hold no powers at all, rather than be vested with powers for election activity or ballot issue activity.
14800.
(a) This title applies to all entities organized under this code and the laws of this state, and to any entity organized under the laws of another jurisdiction that is authorized to transact business, is otherwise transacting business, or holds property in this state.14801.
(a) “Artificial person” means an entity whose existence, legal status, or limited liability shield is conferred by the laws of this state, including an entity organized or existing under the laws of another jurisdiction as described in subdivision (a) of Section 14800.14802.
(a) The definitions in this title apply throughout this code, and to all entities formed, organized, or authorized under this code or any other general law of this state conferring corporate or entity powers.14803.
(a) The creation and continued existence of an artificial person is not a right, but a conditional grant of legal status by the state and remains subject to complete withdrawal at any time. Any powers previously granted to an artificial person under the laws of this state are revoked in their entirety, and an artificial person operating under the jurisdiction of this state shall possess no power unless power is specifically granted by this section.14804.
(a) This title does not invalidate or impair any existing contract, debt instrument, security, or other legal obligation lawfully entered into before the effective date of this title. This title does not authorize the exercise of political spending power on or after the effective date of this title.14805.
The provisions of this title are severable. If any provision of this title or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.