AMENDED IN ASSEMBLY APRIL 16, 2026
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
98
Introduced by Assembly Member Rogers
(Coauthors: Assembly Members Addis, Connolly, Elhawary, Garcia, Harabedian, Jackson, Lee, and Schiavo)
February 13, 2026
An act to add Title 1.5 (commencing with Section 14800) to the Corporations Code, relating to corporate powers.
Vote: majority Appropriation: no Fiscal committee: yes Local program: no
LEGISLATIVE COUNSEL’S DIGEST
Existing constitutional law establishes the First Amendment right of freedom of speech. Existing case law, including Citizens United v. Federal Election Commission (2010) 558 U.S. 310 and other judicial precedents, establishes that corporate entities have First Amendment rights to engage in political speech and places limits on the suppression of political speech.
Existing law regulates the formation and operation of various types of business and nonprofit entities, including corporations, nonprofit corporations, limited liability corporations, limited partnerships, limited liability partnerships, and unincorporated associations. associations and sets forth their powers and
duties. Existing law requires the Secretary of State to receive and process corporate and nonprofit entity filings, maintain records of those filings, and perform related duties.
This bill would establish redefine the powers of corporations, as defined, artificial persons, as defined, organized under the Corporations Code. Code to specify that those powers do not include political spending power, as
defined. The bill would revoke all powers, privileges, and capacities previously granted to corporations under state law and provide that a corporation operating under the jurisdiction of this state possesses only those powers, privileges, and capacities specifically granted in the Corporations Code. The bill would grant a corporation perpetual duration and succession in its name and every power held by an individual to do all things necessary or convenient to carry out its business and affairs, except as specified. The bill would specify that these provisions do not grant any power to a corporation to engage in ballot issue activity or election activity. The bill would declare void any act undertaken by a corporation beyond the scope of its granted powers.
The bill would declare void any act undertaken by a corporation beyond the scope of its granted powers, and would require that corporation to forfeit all granted powers. The bill would authorize reinstatement of granted powers after, among other things, disgorgement of all money used in the exercise of political spending power. The bill would authorize the Secretary of State to adopt rules regarding, among other things, reinstatement of forfeited powers. The bill would authorize the Attorney General with authority to enforce its provisions.
This bill would make its provisions severable and would further specify 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. political
spending power. The bill would make related findings and declarations.
The people of the State of California do enact as follows:
SECTION 1.
The Legislature finds and declares the following:
(a) All political power is inherent in the people. Corporations and other artificial persons are creations of statute that exist only by virtue of powers affirmatively extended by this state.
(b) The creation, continued existence, and enjoyment of charter privileges by an artificial person are not natural rights. These are conditional grants of legal status made by this state and accepted subject to the state’s reserved authority to define, limit, revise, or withdraw the powers and privileges it confers.
(c) State law has historically included broad grants of powers to artificial persons, including powers described as necessary or convenient to lawful purposes. These broad formulations have more recently been construed to include the legal capacity to engage in political spending, including both monetary expenditures and expenditures of anything of value, to support or oppose the outcome of a vote of the electorate.
(d) Because general grants of powers to artificial persons have been construed to include political spending power in a manner that does not reflect the will of the people, it is necessary to enact this title to redefine those grants and make their contents explicit. This ensures that the legal privileges conferred on artificial persons by the people through the state are not used to compromise the integrity of the political process.
(e) An artificial person formed under the laws of this state, or authorized to transact business or hold property in this state, accepts its legal status and any charter privileges subject to the continuing authority of the state to define the scope of the entity’s powers. An artificial person does not acquire a vested right to the continuation of a particular statutory grant of power.
(f) The purpose of this title is to do all of the following:
(1) Establish that state-conferred legal status and charter privileges are granted to an artificial person only on the condition that the artificial person operates within the powers extended by the state.
(2) Make explicit that political spending power is not among the powers extended to artificial persons, except as expressly provided by law for political committees.
(3) Establish a single, uniform definition of the powers extended to artificial persons.
(4) Provide clear and enforceable consequences for the exercise of political spending power not extended by the state.
(5) Leave wholly undisturbed the constitutional rights of natural persons.
SECTION 1.SEC. 2.
Title 1.5 (commencing with Section 14800) is added to the Corporations Code, to read:
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.
14801.
(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.
14802.
(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.
14803.
(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.
(b) This title does not apply to any of the following:
(1) A natural person acting solely in an individual capacity.
(2) The state or any agency, authority, or political subdivision of the state.
(3) A public body, corporate and politic, expressly identified as such by statute.
(c) This act does not restrict the lawful activities of political committees organized and regulated under the election laws of this state or under federal law.
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.
(b) “Artificial person powers” means the powers necessary or convenient for an artificial person to carry out lawful business, charitable, cooperative, or organizational purposes, excluding any political spending power.
(c) “Charter privilege” means any legal benefit that exists only because the state confers it on an artificial person, including, but not limited to, limited liability, perpetual duration, succession in the entity’s name, or any statutory limitation on personal liability.
(d) (1) “Political spending power” means the legal capacity to pay, contribute, expend, transfer, or disburse money or anything of value to support or oppose either of the following:
(A) A candidate, political party, or political committee in an election held in this state.
(B) An initiative, referendum, recall, constitutional amendment, charter amendment, or any other question formally certified or submitted to the electors of this state or any political subdivision of this state.
(2) “Political spending power” does not include the distribution of any bona fide news story, commentary, or editorial distributed through the facilities of a broadcasting station or of any print, online, or digital newspaper, magazine, blog, or other periodical publication, unless the facility is owned or controlled by a political party, political committee, or candidate.
(3) “Political spending power” does not include the activities of a political committee organized and regulated under the election laws of this state or under federal law, provided that those activities are conducted in accordance with those laws.
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.
(b) No provision of the laws of this state governing corporations or other entities shall be construed to extend political spending power to an artificial person except as expressly provided by law for political committees.
(c) Any grant of power, authority, or capacity to an artificial person that could otherwise be construed to include political spending power is superseded by this title and shall be given no effect.
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.
(b) Each artificial person is hereby granted the artificial person powers defined in Section 14801 and elsewhere in this title and no other powers.
(c) Any act undertaken by an artificial person that constitutes an exercise of political spending power not extended by the state is ultra vires and void from the beginning.
(d) Any act undertaken by an artificial person that constitutes an exercise of political spending power not extended by the state shall not be ratified, validated, or given effect by consent, waiver, estoppel, reliance, course of dealing, or any other equitable doctrine, and creates no enforceable rights, obligations, or defenses.
(e) An out-of-state artificial person that directly or indirectly undertakes, finances, or directs acts constituting political spending power in California is conclusively deemed to be transacting business in this state for purposes of jurisdiction and enforcement.
(f) (1) An artificial person that exercises political spending power not extended by the state forfeits all charter privileges as a matter of law.
(2) An artificial person whose charter privileges are forfeited may be reinstated only pursuant to procedures administered by the Secretary of State and only upon full disgorgement of all money or things of value expended or disbursed in the exercise of political spending power and certification of future compliance with this title.
(g) The Secretary of State shall administer this title and may adopt rules necessary to implement the forfeiture, reinstatement, disgorgement, and certification processes described in this section.
(h) The Attorney General may bring an action to enforce this title, including, but not limited to, actions for declaratory relief, injunctive relief, disgorgement, and the revocation of an artificial person’s charter or authority to transact business in this state.
(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.
(b) A power, privilege, or capacity withdrawn or not extended by this title shall not be revived, reinstated, or implied by operation of law or judicial construction.
(c) If any portion of this title is held invalid, it is the intent of the Legislature that an artificial person shall possess no powers at all rather than acquire political spending power.
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.