[5] It is apparent that Scott signed the contract with Nongard at a time when Scott was president of the defendant corporation and was acting for it with the knowledge and approval of a majority of its officers and board of directors and that the benefits accrued to the corporation and were accepted and retained by it and the contract is, therefore, binding upon it. ( Coachella Valley Lbr. etc. Co. v. Hollenbeck, 145 Cal.App.2d 722, 729 [ 303 P.2d 98].) The trial court found that Scott signed the agreement in his official capacity as president of defendant corporation, that it was intended that Nongard and the corporation should be the sole contracting parties.
California allows the directors of closely held corporations to make a corporate decision in an informal manner, if all the directors participate or acquiesce in such decision. Coachella Valley Lumber & Supply Co. v. Hollenbeck, 145 Cal.app.2d 722, 303 P.2d 98 (4th Dist. Ct. App. 1956); Brainard v. De La Montanya, 18 Cal.2d 502, 116 P.2d 66, 70 (1941); 2 Fletcher, Cyclopedia Corporations, ch. 11, sec. 395 (1969); see Note, ‘Extent to Which Corporate Directors May Act Without a Formal Board Meeting, ‘ 11 Syracuse L. Rev. 68 (1960). Furthermore, in determining the validity of transactions involving closely held corporations, the courts of California look at the substance of such transactions and disregard mere irregularities in paper work.