A contractor formed a corporation in California. What is the minimum number of directors required for the corporation?
Correct Answer
C) One director
Under California Corporations Code, a corporation may have as few as one director, regardless of the number of shareholders, unless the articles of incorporation or bylaws require more.
Why This Is the Correct Answer
Under the California Corporations Code Section 212, a corporation may have a board of directors consisting of one or more directors. There is no minimum requirement of more than one director under California law. A sole director corporation is fully valid.
Why the Other Options Are Wrong
Option A: Two directors
Two directors is not the minimum required by California law. The Corporations Code allows a single director. Two or more directors are only required if the articles of incorporation or bylaws specify a higher number.
Option B: Three directors
Three directors is not the statutory minimum in California. Some may confuse this with the rule that if a corporation has fewer than three shareholders, the number of directors can equal the number of shareholders — but this is a flexibility provision, not a minimum.
Option D: Five directors
Five directors is not required by California law for standard corporations. Some specific types of entities (like certain financial institutions) may have higher requirements, but general corporations formed by contractors have no such requirement.
Memory Technique
Remember: 'One is enough in California.' A sole director corporation is perfectly legal under the California Corporations Code. Think of a small contractor who incorporates as a solo owner — they can be the sole director, officer, and shareholder.
More California Questions
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A California contractor has quarterly payroll of $85,000. What is the State Disability Insurance (SDI) withholding amount if the current SDI rate is 0.9% and the wage base limit is $153,164 annually?
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Which California agency is responsible for administering prevailing wage requirements on public works projects?
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A general contractor subcontracts electrical work to an LLC. The electrician works exclusively for this contractor, uses the contractor's materials, and follows the contractor's daily schedule. Under AB5, this relationship is likely: