(As a matter of full disclosure, I was the co-author of the bill in my capacity as a member of the Corporations Committee of the State Bar of California.)
Under current law, at least 10 days must lapse before corporate reorganizations may be consummated if the reorganization is approved by the written consent of shareholders and the consent of all shareholders is not solicited. The 10-day period: (1) unnecessarily delays the closing of a transaction that has been approved by a corporation's board of directors and shareholders; and (2) subjects the transaction to confidentiality and consummation risks (e.g., facts or circumstances may develop that may cause financing for the relevant transaction to fall through or otherwise may change the landscape of the transaction and affect the ability or obligation of a party to close, etc.).
AB 457 furthers the goals of the legislature when it authorized shareholder action by written consent, promoting efficiency and providing flexibility to corporations, without impairing shareholder protection afforded by other existing laws.
As a practical matter, due to the federal securities laws to which public companies are subject, AB 457 primarily impacts privately-held California corporations. However, public companies and corporations incorporated in other states will benefit from the new law to the extent they acquire California corporations.