Can a corporation make political contributions?

Subject to any limitation contained in the corporation’s articles of incorporation, a corporation other than a corporation subject to the banking law or a professional corporation may engage in “any business activity.” Cal. Corp. Code § 206. In carrying out its business activities, a corporation has “all of the powers of a natural person.” Cal. Corp. Code § 207. As such, in the absence of express restrictions in its articles, a corporation has the discretionary authority to do any legal act that is deemed reasonably incidental to its business purposes, including entering into contracts and other transactions. A California court has determined that a corporation’s broad authority in this regard extends to expending corporate funds to resist the adoption of an initiative proposal that the corporation’s board of directors reasonably believes would have a direct, adverse bearing on the corporation’s business affairs. Marsili v. Pac. Gas & Elec. Co., 51 Cal. App. 3d 313, 124 Cal. Rptr. 313 (1975). In that case, the corporation’s executive committee determined that the ballot initiative would have adversely impacted the corporation in various ways, including increasing the tax rate applicable to the company’s facilities and embroiling the company in a contested political campaign every time it wished to construct a building more than 72 feet tall. Under those circumstances, the court determined that the board had the authority, in the exercise of its business judgment, to contribute $10,000 to a group advocating the defeat of the ballot initiative. Therefore, a corporation can make political contributions, as long as the “corporation’s political speech advances the corporation’s interest in making profits.” Citizens United v. Fed. Election Comm’n, 558 U.S. 310, 370 (2010).