Corporations Code — Part 8 | CORP — United States — California law | Esheria

Corporations Code

Part 8 of 13 · provisions 1,401–1,600

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This section repeals the listed acts and sections, but it does not affect certain pre-1873 corporations that did not elect to continue under the Civil Code. This section repeals the acts and code sections listed in it. This section repeals the listed acts and code sections. This section repeals the listed acts and code sections. This section repeals Chapter 183 of the Statutes of 1941.

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Provisions of Corporations Code

Showing 200 of 2,411

  1. 25706.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. )

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    This section keeps certain Real Estate Syndicate Act permits, orders, consents, and related conditions in effect, and routes related applications and review proceedings under specified rules.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. ) ## 25706. (a) All effective permits, orders, and consents under the Real Estate Syndicate Act, all administrative orders relating to the Real Estate Syndicate Act, and all conditions imposed upon the Real Estate Syndicate Act remain in effect so long as they would have remained in effect if such act had not been repealed, but shall be considered to have been filed, entered, or imposed under this law. An application to amend, extend, modify, revoke, or set aside any such permits, orders, or consents shall be filed under and be subject to the provisions of this division. (b) Any application pending under the Real Estate Syndicate Act, upon the effective date of this section, shall be processed by the Real Estate Commissioner pursuant to the provisions of the Real Estate Syndicate Act in effect on December 31, 1977, until such application is granted or denied by such commissioner. (c) Except as expressly provided by this section, the Real Estate Syndicate Act continues to govern all suits, actions, prosecutions, or proceedings which are pending prior to, or which may be initiated thereunder on the basis of facts or circumstances occurring prior to, the effective date of this section. (d) No civil suit or action may be maintained to enforce any liability under the Real Estate Syndicate Act, unless brought within any period of limitation which applied the time the cause of action accrued. (e) Judicial review of all administrative orders under the Real Estate Syndicate Act as to which review proceedings have not been commenced prior to the effective date of this section shall be governed by Section 25609, except that no review proceeding may be commenced unless the petition is filed within the applicable period of limitation which applied to a review proceeding when the order was issued and except that judicial review of administrative orders of the Real Estate Commissioner made pursuant to subdivision (b) shall be governed by the provisions of law applicable to such proceedings on December 31, 1977. (Added by Stats. 1977, Ch. 991.)
  2. 25707.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. )

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    This section keeps certain permits, orders, conditions, applications, actions, and review proceedings tied to the old rules or the new division depending on timing.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. ) ## 25707. (a) All permits and orders issued under Article 6 (commencing with Section 10237) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code, and all conditions imposed pursuant to those provisions, shall remain in effect for the period of time that they would have remained in effect if those provisions had not been repealed by the act enacting this section. Following the repeal of those provisions, the permits, orders, and conditions shall be deemed to have been issued or imposed under this division. An application to amend, extend, modify, revoke, or set aside a permit or order shall be filed under this division and is subject to this division. (b) An application pending under Article 6 (commencing with Section 10237) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code, on the effective date of this section, shall be processed by the Real Estate Commissioner subject to those provisions as they were in effect on December 31, 1996, until each application that was pending on the effective date of this section is granted or denied by the Real Estate Commissioner. (c) Except as expressly provided by this section, all actions, prosecutions, or proceedings under Article 6 (commencing with Section 10237) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code that are pending prior to the effective date of this section, or that otherwise could be initiated based on facts or circumstances occurring prior to the effective date of this section, shall be governed by those provisions. (d) No civil action may be brought to enforce any liability under Article 6 (commencing with Section 10237) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code, unless it is brought within the period of limitations that applied to the action at the time the action accrued. (e) Judicial review of orders under Article 6 (commencing with Section 10237) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code that had not commenced prior to the effective date of this section shall be governed by Section 25609, except that no review proceeding shall be commenced unless the petition is filed within the applicable period of limitations that applied to a review proceeding when the order was issued. Judicial review of an order of the Real Estate Commissioner made pursuant to subdivision (b) shall be governed by the provisions of law applicable to those proceedings on December 31, 1996. (Added by Stats. 1996, Ch. 592, Sec. 16. Effective January 1, 1997.)
  3. 2600.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. )

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    A qualifying group may form a social purpose corporation by filing articles of incorporation. If initial directors are named, those directors must sign and acknowledge the articles; if not, one or more qualifying incorporators must sign them. Corporate existence starts when the articles are filed and continues perpetually unless law or the articles say otherwise.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2600. (a) One or more natural persons, partnerships, associations, social purpose corporations, or corporations, domestic or foreign, may form a social purpose corporation under this division by executing and filing articles of incorporation. (b) If initial directors are named in the articles, each director named in the articles shall sign and acknowledge the articles. If initial directors are not named in the articles, the articles shall be signed by one or more incorporators who shall be persons described in subdivision (a). (c) The corporate existence begins upon the filing of the articles and continues perpetually, unless otherwise expressly provided by law or in the articles. (Amended by Stats. 2014, Ch. 694, Sec. 35. (SB 1301) Effective January 1, 2015.)
  4. 2600.5.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. )

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    A qualifying trust-organized business association may incorporate under this division if its trustees and required beneficial-interest holders approve, and the filing papers meet the section’s requirements.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2600.5. (a) An existing business association organized as a trust under the laws of this state or of a foreign jurisdiction may incorporate under this division upon approval by its board of trustees or similar governing body and approval by the affirmative vote of two-thirds of the outstanding voting shares of beneficial interest, or a greater proportion of the outstanding shares of beneficial interest or the vote of those other classes of shares of beneficial interest as may be specifically required by its declaration of trust or bylaws, and the filing of articles with a certificate attached pursuant to this chapter. (b) In addition to the matters required to be set forth in the articles pursuant to Section 2602, the articles filed pursuant to this section shall state that an existing unincorporated association, stating its name, is being incorporated by the filing of the articles. (c) The articles filed pursuant to this section shall be signed by the president, or any vice president, and the secretary, or any assistant secretary, of the existing association and shall be accompanied by a certificate signed and verified by those officers signing the articles and stating that the incorporation of the association has been approved by the trustees and by the required vote of holders of shares of beneficial interest in accordance with subdivision (a). (d) Upon the filing of articles pursuant to this section, the social purpose corporation shall succeed automatically to all of the rights and property of the association being incorporated and shall be subject to all of its debts and liabilities in the same manner as if the social purpose corporation had itself incurred them. The incumbent trustees of the association shall constitute the initial directors of the social purpose corporation and shall continue in office until the next annual meeting of the shareholders or their earlier death, resignation, or removal. All rights of creditors and all liens upon the property of the association shall be preserved unimpaired. Any action or proceeding pending by or against the association may be prosecuted to judgment, which shall bind the social purpose corporation, or the social purpose corporation may be proceeded against or substituted in its place. (e) The filing for record in the office of the county recorder of any county in this state in which any of the real property of the association is located of a copy of the articles filed pursuant to this section, certified by the Secretary of State, shall evidence record ownership in the social purpose corporation of all interests of the association in and to the real property located in that county. (Amended by Stats. 2014, Ch. 694, Sec. 36. (SB 1301) Effective January 1, 2015.)
  5. 2601.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. )

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    The Secretary of State cannot file certain corporate articles unless a required approval certificate is attached, and social purpose corporations must use names that are not misleading and are distinguishable on the Secretary of State’s records.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2601. (a) The Secretary of State shall not file articles setting forth a name in which “bank,” “trust,” “trustee,” or related words appear, unless the certificate of approval of the Commissioner of Financial Protection and Innovation is attached to the articles. This subdivision does not apply to the articles of any social purpose corporation subject to the Banking Law on which is endorsed the approval of the Commissioner of Financial Protection and Innovation. (b) (1) The name of a social purpose corporation shall not be a name that the Secretary of State determines is likely to mislead the public and shall be distinguishable in the records of the Secretary of State from all of the following: (A) The name of any corporation. (B) The name of any foreign corporation authorized to transact intrastate business in this state. (C) Each name that is under reservation pursuant to this title. (D) The name of a foreign corporation that has registered its name pursuant to Section 2101. (E) An alternate name of a foreign corporation under subdivision (b) of Section 2106. (F) A name that will become the record name of a domestic or foreign corporation upon a corporate instrument when there is a delayed effective or file date. (2) The use by a social purpose corporation of a name in violation of this section may be enjoined notwithstanding the filing of its articles by the Secretary of State. (3) A corporation formed pursuant to this division before January 1, 2015, may elect to change its status from a flexible purpose corporation to a social purpose corporation by amending its articles of incorporation to change its name to replace “flexible purpose corporation” with “social purpose corporation” and to replace the term “flexible purpose corporation” with “social purpose corporation” as applicable in any statements contained in the articles. For any flexible purpose corporation formed before January 1, 2015, that has not amended its articles of incorporation to change its status to a social purpose corporation, any reference in this division to social purpose corporation shall be deemed a reference to “flexible purpose corporation.” (c) Any applicant may, upon payment of the fee prescribed in Article 3 (commencing with Section 12180) of Chapter 3 of Part 2 of Division 3 of Title 2 of the Government Code, obtain from the Secretary of State a certificate of reservation of any name not prohibited by subdivision (b), and upon the issuance of the certificate the name stated in the certificate shall be reserved for a period of 60 days. The Secretary of State shall not, however, issue certificates reserving the same name for two or more consecutive 60-day periods to the same applicant or for the use or benefit of the same person. No consecutive reservations shall be made by or for the use or benefit of the same person of names so similar as to fall within the prohibitions of subdivision (b). (Amended by Stats. 2022, Ch. 617, Sec. 41. (SB 1202) Effective January 1, 2023.)
  6. 2602.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. )

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    Social purpose corporation articles must include specific name, purpose, address, and share information, and they may not add extra purpose-or-power statements except in limited cases.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2602. The articles of incorporation shall set forth: (a) The name of the social purpose corporation that shall contain the words “social purpose corporation” or an abbreviation of those words. (b) (1) Either of the following statements, as applicable: (A) “The purpose of this social purpose corporation is to engage in any lawful act or activity for which a social purpose corporation may be organized under Division 1.5 of the California Corporations Code, other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code, for the benefit of the overall interests of the social purpose corporation and its shareholders and in furtherance of the following enumerated purposes ____.” (B) “The purpose of this social purpose corporation is to engage in the profession of ____ (with the insertion of a profession permitted to be incorporated by the California Corporations Code) and any other lawful activities, other than the banking or trust company business, not prohibited to a social purpose corporation engaging in that profession by applicable laws and regulations, for the benefit of the overall interests of the social purpose corporation and its shareholders and in furtherance of the following enumerated purposes ____.” (2) A statement that a purpose of the social purpose corporation, in addition to the purpose stated pursuant to paragraph (1), is to engage in one or more of the following enumerated purposes, as also specified in the statement set forth pursuant to paragraph (1): (A) One or more charitable or public purpose activities that a nonprofit public benefit corporation is authorized to carry out. (B) The purpose of promoting positive effects of, or minimizing adverse effects of, the social purpose corporation’s activities upon any of the following, provided that the corporation consider the purpose in addition to or together with the financial interests of the shareholders and compliance with legal obligations, and take action consistent with that purpose: (i) The social purpose corporation’s employees, suppliers, customers, and creditors. (ii) The community and society. (iii) The environment. (3) (A) For any corporation organized under this division before January 1, 2015, that has not elected to change its status to a social purpose corporation, a statement that the corporation is organized as a flexible purpose corporation under the Corporate Flexibility Act of 2011. Such a corporation is not required to revise the statements required in paragraphs (1) and (2) to conform to the changes made by the act adding this subparagraph. (B) For any corporation organized under this division on and after January 1, 2015, or that has elected to change its status to a social purpose corporation pursuant to paragraph (2) of subdivision (b) of Section 2601, a statement that the corporation is organized as a social purpose corporation under the Social Purpose Corporations Act. (4) If the social purpose corporation is a social purpose corporation subject to the Banking Law (Division 1.1 (commencing with Section 1000) of the Financial Code), the articles shall set forth a statement of purpose that is prescribed by the applicable provision of the Banking Law (Division 1.1 (commencing with Section 1000) of the Financial Code). (5) If the social purpose corporation is a social purpose corporation subject to the Insurance Code as an insurer, the articles shall additionally state that the business of the social purpose corporation is to be an insurer. (6) If the social purpose corporation is intended to be a professional corporation within the meaning of the Moscone-Knox Professional Corporation Act (Part 4 (commencing with Section 13400) of Division 3), the articles shall additionally contain the statement required by Section 13404. The articles shall not set forth any further or additional statement with respect to the purposes or powers of the social purpose corporation, except by way of limitation or except as expressly required by any law of this state, other than this division, or any federal or other statute or regulation, including the Internal Revenue Code and regulations thereunder as a condition of acquiring or maintaining a particular status for tax purposes. (7) If the social purpose corporation is a close social purpose corporation, a statement as required by subdivision (a) of Section 158. (c) The name and street address in this state of the social purpose corporation’s initial agent for service of process in accordance with subdivision (b) of Section 1502. (d) The initial street address of the corporation. (e) The initial mailing address of the corporation, if different from the initial street address. (f) If the social purpose corporation is authorized to issue only one class of shares, the total number of shares that the social purpose corporation is authorized to issue. (g) If the social purpose corporation is authorized to issue more than one class of shares, or if any class of shares is to have two or more series, the articles shall state: (1) The total number of shares of each class that the social purpose corporation is authorized to issue and the total number of shares of each series that the social purpose corporation is authorized to issue or that the board is authorized to fix the number of shares of any such series. (2) The designation of each class and the designation of each series or that the board may determine the designation of any such series. (3) The rights, preferences, privileges, and restrictions granted to or imposed upon the respective classes or series of shares or the holders thereof, or that the board, within any limits and restrictions stated, may determine or alter the rights, preferences, privileges, and restrictions granted to or imposed upon any wholly unissued class of shares or any wholly unissued series of any class of shares. As to any series the number of shares of which is authorized to be fixed by the board, the articles may also authorize the board, within the limits and restrictions stated in the article or in any resolution or resolutions of the board originally fixing the number of shares constituting any series, to increase or decrease, but not below the number of shares of such series then outstanding, the number of shares of any series subsequent to the issue of shares of that series. If the number of shares of any series shall be so decreased, the shares constituting that decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of that series. (Amended by Stats. 2014, Ch. 694, Sec. 38. (SB 1301) Effective January 1, 2015.)
  7. 2603.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. )

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    A social purpose corporation’s articles of incorporation may include listed governance provisions, but they are only effective if expressly stated in the articles.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2603. The articles of incorporation may set forth: (a) Any or all of the following provisions, which shall not be effective unless expressly provided in the articles: (1) Granting, with or without limitations, the power to levy assessments upon the shares or any class of shares. (2) Granting to shareholders preemptive rights to subscribe to any or all issues of shares or securities. (3) Special qualifications of persons who may be shareholders. (4) A provision limiting the duration of the social purpose corporation’s existence to a specified date. (5) A provision requiring, for any or all corporate actions, except as provided in Section 303, subdivision (b) of Section 402.5, subdivision (c) of Section 708, and Section 1900, the vote of a larger proportion or of all of the shares of any class or series, or the vote or quorum for taking action of a larger proportion or of all of the directors, than is otherwise required by Division 1 (commencing with Section 100) or this division. (6) So long as consistent with the purpose of the social purpose corporation as set forth in the articles in accordance with subdivision (b) of Section 2602, a provision limiting or restricting the business in which the social purpose corporation may engage or the powers which the social purpose corporation may exercise, or both. (7) A provision conferring upon the holders of any evidences of indebtedness, issued or to be issued by the social purpose corporation, the right to vote in the election of the directors and on any other matters on which shareholders may vote. (8) A provision conferring upon shareholders the right to determine the consideration for which shares shall be issued. (9) A provision requiring the approval of the shareholders (Section 153) or the approval of the outstanding shares (Section 152) for any corporate action, even though not otherwise required by Division 1 (commencing with Section 100) or this division. (10) Provisions eliminating or limiting the personal liability of a director for monetary damages in an action brought by or in the right of the social purpose corporation for breach of a director’s duties to the social purpose corporation and its shareholders, as set forth in Section 2700, subject to the following: (A) The provision may not eliminate or limit the liability of directors (i) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) for acts or omissions that a director believes to be contrary to the best interests of the social purpose corporation or its shareholders and its corporate purposes as expressed in its articles, or that involve the absence of good faith on the part of the director, (iii) for any transaction from which a director derived an improper personal benefit, (iv) for acts or omissions that show a reckless disregard for the director’s duty to the social purpose corporation or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director’s duties, of a risk of serious injury to the social purpose corporation, its shareholders, or its corporate purposes as expressed in its articles, (v) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director’s duty to the social purpose corporation, its shareholders, or its corporate purposes as expressed in its articles pursuant to Section 2602, or (vi) under Section 310 or 2701. (B) The provision shall not eliminate or limit the liability of a director for any act or omission occurring prior to the date on which the provision becomes effective. (C) The provision shall not eliminate or limit the liability of an officer for any act or omission as an officer, notwithstanding that the officer is also a director or that his or her actions, if negligent or improper, have been ratified by the directors. (11) A provision authorizing, whether by bylaw, agreement, or otherwise, the indemnification of agents of the social purpose corporation for breach of duty to the social purpose corporation and its shareholders, provided, however, that the provision may not provide for indemnification of any agent for any acts or omissions or transactions from which a director may not be relieved of liability as described in subparagraphs (A), (B), and (C) of paragraph (10). Notwithstanding this subdivision, bylaws may require, for all or any actions by the board, the affirmative vote of a majority of the authorized number of directors. Nothing contained in this subdivision shall affect the enforceability, as between the parties thereto, of any lawful agreement not otherwise contrary to public policy. (b) Reasonable restrictions upon the right to transfer or hypothecate shares of any class or classes or series, except that no restriction shall be binding with respect to shares issued prior to the adoption of the restriction unless the holders of those shares voted in favor of the restriction. (c) The names and addresses of the persons appointed to act as initial directors. (d) Any other provision, not in conflict with law, for the management of the business and for the conduct of the affairs of the social purpose corporation, including any provision that is required or permitted by this division to be stated in the bylaws. (e) This section shall become operative on January 1, 2022. (Repealed and added by Stats. 2018, Ch. 889, Sec. 4. (SB 838) Effective January 1, 2019. Section operative January 1, 2022, by its own provisions.)
  8. 2604.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. )

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    Most social purpose corporations may engage in any business activity, but only if they comply with article limits, other applicable laws, and the corporation’s special purpose. Banking Law and professional social purpose corporations are limited to activities not prohibited by the statutes and regulations that apply to them.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2604. Subject to any limitation contained in the articles, to compliance with any other applicable laws, and to consistency with the special purpose of the social purpose corporation, any social purpose corporation other than a social purpose corporation subject to the Banking Law or a professional social purpose corporation may engage in any business activity. A social purpose corporation subject to the Banking Law or a professional social purpose corporation may engage in any business activity not prohibited by the respective statutes and regulations to which it is subject. (Amended by Stats. 2014, Ch. 694, Sec. 40. (SB 1301) Effective January 1, 2015.)
  9. 2605.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. )

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    A social purpose corporation has broad powers to run its business, subject to its articles, other applicable laws, and its special purpose.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 2. Organization and Bylaws [2600 - 2605] ( Chapter 2 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2605. Subject to any limitations contained in the articles, to compliance with other provisions of this division and any other applicable laws, and to consistency with the special purpose of the social purpose corporation, a social purpose corporation shall have all the powers of a natural person in carrying out its business activities, including, without limitation, the power to: (a) Adopt, use, and at will alter a corporate seal. Failure to affix a seal does not affect the validity of any instrument. (b) Adopt, amend, and repeal bylaws. (c) Qualify to do business in any other state, territory, dependency, or foreign country. (d) Subject to the provisions of Section 510, issue, purchase, redeem, receive, take or otherwise acquire, own, hold, sell, lend, exchange, transfer or otherwise dispose of, pledge, use, and otherwise deal in and with its own shares, bonds, debentures, and other securities. (e) Make donations, regardless of specific corporate benefit, for the public welfare or for a community fund, hospital, charitable, educational, scientific, civic, or similar purposes. (f) Pay pensions, and establish and carry out pension, profit-sharing, share bonus, share purchase, share option, savings, thrift, and other retirement, incentive, and benefit plans, trusts, and provisions for any or all of the directors, officers, and employees of the social purpose corporation or any of its subsidiaries or affiliates, and to indemnify and purchase and maintain insurance on behalf of any fiduciary of these plans, trusts, or provisions. (g) Subject to the provisions of Section 315, assume obligations, enter into contracts, including contracts of guaranty or suretyship, incur liabilities, borrow and lend money and otherwise use its credit, and secure any of its obligations, contracts, or liabilities by mortgage, pledge, or other encumbrance of all or any part of its property, franchises, and income. (h) Participate with others in any partnership, joint venture, or other association, transaction, or arrangement of any kind, whether or not that participation involves sharing or delegation of control with or to others. (Amended by Stats. 2014, Ch. 694, Sec. 41. (SB 1301) Effective January 1, 2015.)
  10. 2700.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 3. Directors and Management [2700 - 2702] ( Chapter 3 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    This section sets duties and liability rules for directors of a social purpose corporation.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 3. Directors and Management [2700 - 2702] ( Chapter 3 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2700. (a) A director shall perform the duties of a director, including duties as a member of any committee of the board upon which the director may serve, in good faith, in a manner the director believes to be in the best interests of the social purpose corporation and its shareholders, and with that care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. (b) In performing the duties of a director, a director shall be entitled to rely upon information, opinions, reports, or statements, including financial statements and other financial data, in each case prepared or presented by any of the following: (1) An officer or employee of the social purpose corporation whom the director believes to be reliable and competent in the matters presented. (2) Counsel, independent accountants, or other persons as to matters which the director believes to be within that person’s professional or expert competence. (3) A committee of the board upon which the director does not serve, as to matters within its designated authority, which committee the director believes to merit confidence, so long as the director acts in good faith, after reasonable inquiry when the need therefor is indicated by the circumstances and without knowledge that would cause that reliance to be unwarranted. (c) In discharging his or her duties, a director shall consider those factors, and give weight to those factors, as the director deems relevant, including the overall prospects of the social purpose corporation, the best interests of the social purpose corporation and its shareholders, and the purposes of the social purpose corporation as set forth in its articles. (d) A person who performs the duties of a director in accordance with subdivisions (a), (b), and (c) shall have no liability based upon any alleged failure to discharge the person’s obligations as a director. The liability of a director for monetary damages may be eliminated or limited by a social purpose corporation’s articles to the extent provided in paragraph (10) of subdivision (a) of Section 2603. (e) Notwithstanding any of the purposes set forth in its articles, a social purpose corporation shall not be deemed to hold any of its assets for the benefit of any party other than its shareholders. However, nothing in this division shall be construed as negating existing charitable trust principles or the Attorney General’s authority to enforce any charitable trust created. (f) Nothing in this section, express or implied, is intended to create or grant or shall create or grant any right in or for any person or any cause of action by or for any person, and a director shall not be responsible to any party other than the social purpose corporation and its shareholders. (Amended by Stats. 2014, Ch. 694, Sec. 42. (SB 1301) Effective January 1, 2015.)
  11. 27000.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 1. Definitions and General Provisions [27000 - 27003] ( Chapter 1 added by Stats. 1949, Ch. 385. )

    Verify source ↗

    Words used in this division generally take the meanings given in Part 1 of the Corporate Securities Law, unless the provision or context indicates otherwise or this chapter expressly provides otherwise.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 1. Definitions and General Provisions [27000 - 27003] ( Chapter 1 added by Stats. 1949, Ch. 385. ) ## 27000. Unless the provision or the context otherwise indicates, and except as expressly otherwise provided in this chapter, words used in this division have the meanings prescribed in Part 1 (commencing with Section 25000) of the Corporate Securities Law. (Amended by Stats. 1968, Ch. 88.)
  12. 27001.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 1. Definitions and General Provisions [27000 - 27003] ( Chapter 1 added by Stats. 1949, Ch. 385. )

    Verify source ↗

    This section defines “security” for this division to include the items listed in Section 25019, plus shares, stock, and investment certificates defined in the Savings Association Law.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 1. Definitions and General Provisions [27000 - 27003] ( Chapter 1 added by Stats. 1949, Ch. 385. ) ## 27001. As used in this division “security” includes all of the things enumerated in Section 25019 and also includes shares, stock, and investment certificates as defined in the Savings Association Law. (Amended by Stats. 1996, Ch. 458, Sec. 1. Effective January 1, 1997.)
  13. 27002.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 1. Definitions and General Provisions [27000 - 27003] ( Chapter 1 added by Stats. 1949, Ch. 385. )

    Verify source ↗

    This section defines “individual” for this division and lists several people and organizations that are included or excluded.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 1. Definitions and General Provisions [27000 - 27003] ( Chapter 1 added by Stats. 1949, Ch. 385. ) ## 27002. (a) As used in this division, “individual” includes every natural person, domestic or foreign private corporation, nonprofit corporation, unincorporated association, company, partnership of whatever kind, syndicate, joint stock company, trustee, protective committee, depositors’ league, and other similar organization however described. (b) As used in this division, “individual” does not include any of the following persons: (1) Any licensed practicing attorney rendering or performing services in connection with the practice of law. (2) Any person holding a broker-dealer’s or investment adviser’s certificate then in effect issued by the commissioner, rendering or performing services as such. (3) Any holder of a permit then in effect, granted by the commissioner under the Corporate Securities Law, permitting the issue of certificates of deposit. (4) Any securities depository as defined in Section 30004 of the Financial Code, which is licensed under Section 30200 of the Financial Code or exempted from licensing thereunder by Section 30005 or 30006 of the Financial Code. (5) Any broker licensed by the Real Estate Commissioner of this state rendering or performing services with respect to securities, if the person would not be subject to the broker-dealer certification requirements for effecting transactions in the securities. (6) Any security owner or holder who, without compensation of any kind, induces or attempts to induce, other security holders or owners of the same issuer into entering into agreements with persons who are excluded from “individual” by virtue of paragraphs (1) to (5), inclusive. (Amended by Stats. 1996, Ch. 458, Sec. 2. Effective January 1, 1997.)
  14. 27003.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 1. Definitions and General Provisions [27000 - 27003] ( Chapter 1 added by Stats. 1949, Ch. 385. )

    Verify source ↗

    If part of this division is held invalid, the rest of the division still remains effective.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 1. Definitions and General Provisions [27000 - 27003] ( Chapter 1 added by Stats. 1949, Ch. 385. ) ## 27003. If any provision of this division, or the application thereof to any person or circumstance, is held invalid, the remainder of this division, or the application of such provision to other persons or circumstances, shall not be affected thereby. (Added by renumbering Section 27007 by Stats. 1996, Ch. 458, Sec. 7. Effective January 1, 1997.)
  15. 2701.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 3. Directors and Management [2700 - 2702] ( Chapter 3 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    Directors of a social purpose corporation can be jointly and severally liable for approving certain unlawful distributions, asset distributions, loans, or guaranties.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 3. Directors and Management [2700 - 2702] ( Chapter 3 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2701. (a) Subject to Section 2700, directors of a social purpose corporation who approve any of the following corporate actions shall be jointly and severally liable to the social purpose corporation for the benefit of all of the creditors or shareholders entitled to institute an action under subdivision (c): (1) The making of any distribution to its shareholders to the extent that it is contrary to the provisions of Sections 500 to 503, inclusive. (2) The distribution of assets to shareholders after institution of dissolution proceedings of the social purpose corporation, without paying or adequately providing for all known liabilities of the social purpose corporation, excluding any claims not filed by creditors within the time limit set by the court in a notice given to creditors under Chapter 18 (commencing with Section 1800) of Division 1, Chapter 20 (commencing with Section 1900) of Division 1, and Chapter 20 (commencing with Section 2000). (3) The making of any loan or guaranty contrary to Section 2715. (b) A director who is present at a meeting of the board, or any committee of the board, at which an action specified in subdivision (a) is taken and who abstains from voting, shall be deemed to have approved the action. (c) Suit may be brought in the name of the social purpose corporation to enforce the liability as follows: (1) Under paragraph (1) of subdivision (a) against any or all directors liable, by the persons entitled to sue under subdivision (b) of Section 506. (2) Under paragraph (2) or (3) of subdivision (a) against any or all directors liable, by any one or more creditors of the social purpose corporation whose debts or claims arose prior to the time of any of the corporate actions specified in paragraph (2) or (3) of subdivision (a) and who have not consented to the corporate action, regardless of whether they have reduced their claims to judgment. (3) Under paragraph (3) of subdivision (a) against any or all directors liable, by any one or more holders of shares outstanding at the time of any corporate action specified in paragraph (3) of subdivision (a) who have not consented to the corporate action, without regard to the provisions of Section 2900. (d) The damages recoverable from a director under this section shall be the amount of the illegal distribution, or if the illegal distribution consists of property, the fair market value of that property at the time of the illegal distribution, plus interest thereon from the date of the distribution at the legal rate on judgments until paid, together with all reasonably incurred costs of appraisal or other valuation, if any, of that property or loss suffered by the social purpose corporation as a result of the illegal loan or guaranty, respectively, but not exceeding the liabilities of the social purpose corporation owed to nonconsenting creditors at the time of the violation and the injury suffered by nonconsenting shareholders. (e) Any director sued under this section may implead all other directors liable and may compel contribution, either in that action or in an independent action against directors not joined in that action. (f) Directors liable under this section shall also be entitled to be subrogated to the rights of the social purpose corporation: (1) With respect to paragraph (1) of subdivision (a), against shareholders who received the distribution. (2) With respect to paragraph (2) of subdivision (a), against shareholders who received the distribution of assets. (3) With respect to paragraph (3) of subdivision (a), against the person who received the loan or guaranty. Any director sued under this section may file a cross-complaint against the person or persons who are liable to the director as a result of the subrogation provided for in this subdivision or may proceed against them in an independent action. (Amended by Stats. 2014, Ch. 694, Sec. 43. (SB 1301) Effective January 1, 2015.)
  16. 2702.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 3. Directors and Management [2700 - 2702] ( Chapter 3 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    A social purpose corporation may indemnify agents, advance defense expenses, and buy insurance for agents, subject to stated limits and exceptions.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 3. Directors and Management [2700 - 2702] ( Chapter 3 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2702. (a) For the purposes of this section: (1) “Agent” means any person who is or was a director, officer, employee, or other agent of the social purpose corporation, or is or was serving at the request of the social purpose corporation as a director, officer, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, or was a director, officer, employee, or agent of a foreign or domestic corporation which was a predecessor corporation of the social purpose corporation or of another enterprise at the request of the predecessor corporation. (2) “Proceeding” means any threatened, pending, or completed action or proceeding, whether civil, criminal, administrative, or investigative. (3) “Expenses” includes without limitation attorneys’ fees and any expenses of establishing a right to indemnification under subdivision (b). (b) Subject to the standards and restrictions, if any, set forth in its articles or bylaws, and subject to the limitations required by paragraph (11) of subdivision (a) of Section 2603, a social purpose corporation may indemnify and hold harmless any agent or any other person from and against any and all claims and demands whatsoever. (c) Expenses incurred in defending any proceeding may be advanced by the social purpose corporation prior to the final disposition of the proceeding. The provisions of subdivision (a) of Section 315 do not apply to advances made pursuant to this subdivision. (d) A social purpose corporation may purchase and maintain insurance on behalf of any of its agents against any liability asserted against or incurred by the agent in that capacity or arising out of the agent’s status as an agent regardless of whether the social purpose corporation would have the power to indemnify the agent against that liability under this section. The fact that a social purpose corporation owns all or a portion of the shares of the company issuing a policy of insurance shall not render this subdivision inapplicable if either of the following conditions are satisfied: (1) The insurance provided by this subdivision is limited as indemnification is required to be limited by paragraph (11) of subdivision (a) of Section 2603. (2) (A) The company issuing the insurance policy is organized, licensed, and operated in a manner that complies with the insurance laws and regulations applicable to its jurisdiction of organization. (B) The company issuing the policy provides procedures for processing claims that do not permit that company to be subject to the direct control of the social purpose corporation that purchased that policy. (C) The policy issued provides for some manner of risk sharing between the issuer and purchaser of the policy, on one hand, and some unaffiliated person or persons, on the other, such as by providing for more than one unaffiliated owner of the company issuing the policy or by providing that a portion of the coverage furnished will be obtained from some unaffiliated insurer or reinsurer. (e) This section does not apply to any proceeding against any trustee, investment manager, or other fiduciary of an employee benefit plan in that person’s capacity as such, even though the person may also be an agent as defined in subdivision (a) of the employer social purpose corporation. A social purpose corporation shall have power to indemnify a trustee, investment manager, or other fiduciary to the extent permitted by subdivision (f) of Section 2605. (Amended by Stats. 2014, Ch. 694, Sec. 44. (SB 1301) Effective January 1, 2015.)
  17. 27100.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 2. Unlawful and Fraudulent Conduct [27100 - 27101] ( Chapter 2 repealed and added by Stats. 1996, Ch. 458, Sec. 9. )

    Verify source ↗

    An individual who, in California, solicits or collects money or subscriptions from security owners for the purpose of protecting or representing their rights is subject to this division.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 2. Unlawful and Fraudulent Conduct [27100 - 27101] ( Chapter 2 repealed and added by Stats. 1996, Ch. 458, Sec. 9. ) ## 27100. Any individual who, within this state, solicits, receives, collects, or solicits any subscription or contract to pay, any contributions, fees, funds, or compensation of any kind, from any owner or holder of any security, for the purpose of protecting, enforcing, or representing the rights of the security owners or holders evidenced by the security, shall be subject to the provisions of this division. (Repealed and added by Stats. 1996, Ch. 458, Sec. 9. Effective January 1, 1997.)
  18. 27101.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 2. Unlawful and Fraudulent Conduct [27100 - 27101] ( Chapter 2 repealed and added by Stats. 1996, Ch. 458, Sec. 9. )

    Verify source ↗

    An individual may not, in this securities-related setting, use fraud, false statements, deceptive practices, or misappropriation of another person’s property.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 2. Unlawful and Fraudulent Conduct [27100 - 27101] ( Chapter 2 repealed and added by Stats. 1996, Ch. 458, Sec. 9. ) ## 27101. It is unlawful for any individual, directly or indirectly, in connection with the solicitation, receipt, or collection of, or solicitation of any subscription or contract to pay any contributions, fees, funds, or compensation of any kind, from any owner or holder of any security, for the purpose of protecting, enforcing, or representing the rights of the security owners or holders evidenced by the security, to do any of the following: (a) Employ any device, scheme, or artifice to defraud. (b) By means of any written or oral communication, make any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. (c) Engage in any transaction, act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. (d) Misappropriate or convert the funds, security, or property of any other person. (Repealed and added by Stats. 1996, Ch. 458, Sec. 9. Effective January 1, 1997.)
  19. 27200.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 3. Civil Liability and Crimes [27200 - 27202] ( Heading of Chapter 3 amended by Stats. 1996, Ch. 458, Sec. 10. )

    Verify source ↗

    A person who solicits, receives, collects, or contracts for payment of contributions, fees, funds, or other compensation in violation of this division must return the full amount and pay reasonable attorney’s fees.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 3. Civil Liability and Crimes [27200 - 27202] ( Heading of Chapter 3 amended by Stats. 1996, Ch. 458, Sec. 10. ) ## 27200. Every individual who solicits, receives, collects, or contracts for the payment of, any contributions, fees, funds, or compensation of any kind, in violation of this division, is civilly liable for the return of the full amount of that contribution, fee, or fund, together with reasonable attorney’s fees. This liability is both joint and several. (Amended by Stats. 1996, Ch. 458, Sec. 11. Effective January 1, 1997.)
  20. 27201.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 3. Civil Liability and Crimes [27200 - 27202] ( Heading of Chapter 3 amended by Stats. 1996, Ch. 458, Sec. 10. )

    Verify source ↗

    A lawsuit to enforce liability under Section 27200 must be filed within the stated time limits.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 3. Civil Liability and Crimes [27200 - 27202] ( Heading of Chapter 3 amended by Stats. 1996, Ch. 458, Sec. 10. ) ## 27201. No action shall be maintained to enforce any liability created under Section 27200 unless brought before the expiration of two years after the violation upon which it is based or the expiration of one year after the discovery by the plaintiff of the facts constituting the violation, whichever shall first expire. (Added by renumbering Section 27200.1 by Stats. 1996, Ch. 458, Sec. 12. Effective January 1, 1997.)
  21. 27202.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 3. Civil Liability and Crimes [27200 - 27202] ( Heading of Chapter 3 amended by Stats. 1996, Ch. 458, Sec. 10. )

    Verify source ↗

    An individual who willfully violates Section 27101 commits a public offense and may be fined, imprisoned, or both.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2. SECURITY OWNERS PROTECTION [27000 - 27202] ( Division 2 added by Stats. 1949, Ch. 385. ) ## CHAPTER 3. Civil Liability and Crimes [27200 - 27202] ( Heading of Chapter 3 amended by Stats. 1996, Ch. 458, Sec. 10. ) ## 27202. Every individual who willfully violates Section 27101 is guilty of a public offense punishable by a fine not exceeding two hundred fifty thousand dollars ($250,000), or by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for two, three, or four years, or by both fine and imprisonment. (Amended by Stats. 2011, Ch. 15, Sec. 49. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)
  22. 27500.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. )

    Verify source ↗

    This section defines key terms used in Chapter 1 on fair investment practices by venture capital companies.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. ) ## 27500. For purposes of this chapter, the following definitions apply: (a) “Commissioner” means the Commissioner of Financial Protection and Innovation. (b) “Covered entity” means a venture capital company that meets both of the following criteria: (1) The venture capital company primarily engages in the business of investing in, or providing financing to, startup, early-stage, or emerging growth companies. (2) The venture capital company meets any of the following criteria: (A) The venture capital company is headquartered in California. (B) The venture capital company has a significant presence or operational office in California. (C) The venture capital company makes venture capital investments in businesses that are located in, or have significant operations in, California. (D) The venture capital company solicits or receives investments from a person who is a resident of California. (c) “Department” means the Department of Financial Protection and Innovation. (d) “Diverse founding team member” means a founding team member who self-identifies as a woman, nonbinary, Black, African American, Hispanic, Latino-Latina, Asian, Pacific Islander, Native American, Native Hawaiian, Alaskan Native, disabled, veteran or disabled veteran, lesbian, gay, bisexual, transgender, or queer. (e) “Founding team member” means either of the following: (1) A person who satisfies all of the following conditions: (A) The person owned initial shares or similar ownership interests of the business. (B) The person contributed to the concept of, research for, development of, or work performed by the business before initial shares were issued. (C) The person was not a passive investor in the business. (2) A person who has been designated as the chief executive officer or president. (f) “Primarily founded by diverse founding team members” means a founding team for which more than one-half of the founding team members responded to the survey described in paragraph (1) of subdivision (c) of Section 27501 and at least one-half of the founding team members are diverse founding team members. (g) “Venture capital company” has the same meaning as defined in paragraph (4) of subdivision (a) of Section 260.204.9 of Title 10 of the California Code of Regulations. (h) “Venture capital investment” has the same meaning as defined in paragraph (5) of subdivision (a) of Section 260.204.9 of Title 10 of the California Code of Regulations. (Added by Stats. 2024, Ch. 41, Sec. 21. (SB 164) Effective June 29, 2024.)
  23. 27501.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. )

    Verify source ↗

    A covered entity must report specified venture-capital funding information to the department, update contact information, and follow survey and disclosure rules before and after investments.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. ) ## 27501. (a) (1) Commencing March 1, 2026, a covered entity shall submit to the department the following information in a manner prescribed by the department: (A) The name of the covered entity. (B) The name, title, and email address of the person who serves as the designated point of contact for the covered entity. (C) The designated email address, telephone number, physical address, and internet website of the covered entity. (2) The covered entity shall keep the information provided under paragraph (1) updated by submitting any changes to that information when filing the report required by subdivision (b). (3) (A) If a covered entity fails to update the information provided under paragraph (1) in the report required by subdivision (b) by April 1 of any year, the department shall notify the covered entity that the covered entity has 60 calendar days from the date of the notification to submit the updated information without penalty. (B) If a covered entity has not submitted the updated information after the 60-day period described in subparagraph (A) has elapsed, the department may pursue any remedy provided under this chapter. (b) By April 1, 2026, and annually thereafter, a covered entity shall report to the department all of the following information about its funding determinations: (1) At an aggregated level, all of the following information for the founding teams of all of the businesses in which the covered entity made a venture capital investment in the prior calendar year to the extent the information was provided pursuant to the survey described in paragraph (1) of subdivision (c): (A) The gender identity of each member of the founding team, including nonbinary and gender-fluid identities. (B) The race of each member of the founding team. (C) The ethnicity of each member of the founding team. (D) The disability status of each member of the founding team. (E) Whether any member of the founding team identifies as LGBTQ+. (F) Whether any member of the founding team is a veteran or a disabled veteran. (G) Whether any member of the founding team is a resident of California. (H) Whether any member of the founding team declined to provide any of the information described in subparagraphs (A) to (G), inclusive. (2) (A) During the prior calendar year, the number of venture capital investments to businesses primarily founded by diverse founding team members, as a percentage of the total number of venture capital investments the covered entity made, in the aggregate and broken down into the categories described in subparagraphs (A) to (H), inclusive, of paragraph (1). (B) The information provided pursuant to this subparagraph shall be anonymized to the extent possible. (3) During the prior calendar year, the total amount of venture capital investments to businesses primarily founded by diverse founding team members, as a percentage of venture capital investments made by the covered entity, in the aggregate and broken down into the categories described in subparagraphs (A) to (H), inclusive, of paragraph (1). (4) The total amount of money in venture capital investments the covered entity invested in each business during the prior calendar year. (5) The principal place of business of each company in which the covered entity made a venture capital investment during the prior calendar year. (c) (1) A covered entity shall obtain the information required by subdivision (b) by providing each founding team member of a business that has received funding from a covered entity with an opportunity to participate in a survey for the purpose of collecting the information. (2) The survey described in paragraph (1) of subdivision (b) shall be provided pursuant to a standardized form specified by the department. The survey shall include a “decline to state” option for each question on the survey. (3) A covered entity shall provide a written disclosure to each founding team member prior to, or concurrently with, the survey described in paragraph (1) of subdivision (b) that states all of the following: (A) The founding team member’s decision to disclose their demographic information is voluntary. (B) No adverse action will be taken against the founding team member if they decline to participate in the survey. (C) The aggregate data collected for each demographic category will be reported to the department. (4) A covered entity shall not provide the survey described in paragraph (1) of subdivision (b) and the disclosure described in paragraph (3) to a founding team member until after the covered entity has executed an investment agreement with the business and made the first transfer of funds. (5) Neither a covered entity nor the department shall in any way encourage, incentivize, or attempt to influence the decision of a founding team member to participate in the survey described in paragraph (1) of subdivision (b). (d) A covered entity required to conduct the survey described in paragraph (1) of subdivision (c) shall do both of the following: (1) Collect survey response data from the founding team members in a manner that does not associate the survey response data with an individual founding team member. (2) Report the survey response data pursuant to paragraph (1) in a manner that does not associate the survey response data with an individual founding team member. (3) A covered entity may satisfy the requirements of this chapter by providing a report prepared by a business that controls each covered entity at any time during the prior calendar year if the report contains all of the information required by subdivision (b). (Added by Stats. 2024, Ch. 41, Sec. 21. (SB 164) Effective June 29, 2024.)
  24. 27502.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. )

    Verify source ↗

    The department must make certain reports easy to access online. Covered entities must keep related records for at least five years, and the commissioner may inspect records and require documents or written answers.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. ) ## 27502. (a) (1) The department shall make the reports received pursuant to subdivision (b) of Section 27501 readily accessible, easily searchable, and easily downloadable on the department’s internet website. (2) The department may publish aggregate results or aggregate information based on the information received pursuant to this chapter. (b) The department may use any information collected pursuant to this chapter in furtherance of its statutory duties, including, but not limited to, using the information in a civil action brought by the department under this chapter or other law. (c) (1) A covered entity shall make and keep records related to its obligation under this chapter. All records related to a report delivered to the department pursuant to subdivision (b) of Section 27501 shall be preserved for at least five years after the covered entity delivers the report. (2) The commissioner may examine the records of a covered entity to determine their compliance with this chapter using powers set forth in Sections 11180 to 11191, inclusive, of the Government Code and may further require a covered entity to do either of the following: (A) Produce documentary material for inspection and copying or reproduce in the form or medium requested by the department. (B) File written reports or answers to questions. (d) The department shall charge and collect fees from covered entities to cover the expenses incurred in the administration of this chapter, not to exceed the reasonable costs of that administration. (1) The fee per report shall be at least one hundred seventy-five dollars ($175). (2) The department may adjust this fee as necessary to meet the reasonable costs of administration. (e) (1) If a covered entity fails to file a report required by subdivision (b) of Section 27501 by April 1 of any year, the department shall notify the covered entity that the covered entity has 60 calendar days from the date of the notification to submit the report without penalty. (2) If a covered entity has not submitted a report after the 60 calendar days described in paragraph (1) has elapsed, the department may pursue all remedies provided under this chapter. (Added by Stats. 2024, Ch. 41, Sec. 21. (SB 164) Effective June 29, 2024.)
  25. 27503.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. )

    Verify source ↗

    The commissioner may, at their discretion, investigate and publish information about possible violations under this chapter.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. ) ## 27503. With respect to the investigative powers of the commissioner under this chapter, the commissioner may do the following at their discretion: (a) Make public or private investigations within or outside of this state as they deem necessary to determine whether a covered entity has violated or is about to violate any provision of this chapter, any rule or order pursuant to this chapter or to aid in the enforcement of this chapter in the prescribing of rules and forms pursuant to this chapter. (b) Publish information concerning any violations of this chapter or of any rule or order pursuant to this chapter. (Added by Stats. 2024, Ch. 41, Sec. 21. (SB 164) Effective June 29, 2024.)
  26. 27504.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. )

    Verify source ↗

    The commissioner and department may enforce this chapter against covered entities, including ordering them to stop violations and pay penalties.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. ) ## 27504. (a) With respect to the enforcement powers of the commissioner and the department under this chapter, all of the following apply: (1) The commissioner may take any action authorized by this chapter against a covered entity who fails to meet the requirements of Section 27501 or who makes an untrue statement of a material fact in any report filed with the department. (2) Relief under this chapter may include, but is not limited to, any of the following: (A) An order requiring the covered entity to desist and refrain from the violation. (B) An order requiring costs, representing reasonable attorney’s fees and investigative expenses for the services rendered, for deposit into the Financial Protection Fund for use by the department. (C) An order requiring the payment of monetary penalties, as set forth by subdivision (b). (b) (1) In any civil or administrative action brought pursuant to this chapter in which the commissioner orders penalties, the following penalty amounts apply: (A) For any violation of this chapter, rule or final order pursuant to this chapter, or condition imposed in writing by the department, a penalty shall not exceed five thousand dollars ($5,000) for each day during which the violation or failure to pay continues. (B) Notwithstanding subparagraph (A), for any reckless violation by a covered entity subject to this chapter, rule or final order pursuant to this chapter, or condition imposed by the department, a penalty that is sufficient to deter the covered entity from failing to comply with this chapter as determined by the commissioner under paragraph (2), and exceeds the penalty amount provided in subparagraph (A) for each day during which the violation continues. (C) Notwithstanding subparagraphs (A) or (B), for any knowing violation by a covered entity subject to this chapter, rule or final order pursuant to this chapter, or condition imposed by the department, a penalty that is sufficient to deter the covered entity from failing to comply with this chapter as determined by the commissioner under paragraph (2), and exceeds the penalty amount provided in subparagraph (B) for each day during which the violation continues. (2) In determining the amount of any penalty ordered under this chapter, the commissioner shall take into account mitigating factors and the appropriateness of the penalty with respect to all of the following: (A) The financial standing of the covered entity. (B) The number of assets under management by the covered entity. (C) The nature of the covered entity’s failure to comply with this chapter. (D) The amount of financial resources available to the covered entity. (E) The covered entity’s history of previous violations. (3) The commissioner may compromise, modify, or remit any penalty that may be ordered or that has already been ordered. (Added by Stats. 2024, Ch. 41, Sec. 21. (SB 164) Effective June 29, 2024.)
  27. 27505.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. )

    Verify source ↗

    This section sets the hearing, final-order, review, enforcement, and service rules for orders against a covered entity.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. ) ## 27505. (a) (1) If, after an order has been served pursuant to Section 27504, a request for hearing is filed in writing within 30 days of the date of service of the order on the covered entity, a hearing shall be conducted in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the commissioner shall have all of the powers granted under that chapter. (2) If a covered entity fails to file a written request for a hearing within 30 days from the date of service of the order, the order shall be deemed a final order of the commissioner and is not subject to review by any court or agency, notwithstanding subdivision (b). (b) Every final order, decision, or other official act of the commissioner is subject to judicial review in accordance with law. (c) The commissioner may file a certified copy of the final order with the clerk of the superior court or any court of competent jurisdiction. The final order filed has the same effect as a judgment of the court and may be recorded, enforced, or satisfied in the same manner as a judgment of the court. (d) (1) If a covered entity does not comply with an order under this chapter, the commissioner may petition the superior court or any court of competent jurisdiction to enforce the order. (2) The court shall not require the commissioner to post a bond in an action or proceeding under this chapter. (3) If the court finds, after service and opportunity for hearing, that the covered entity was not in compliance with the order, the court may adjudge the covered entity in civil contempt of the order. The court may impose a further civil penalty against the covered entity for contempt and may grant any other relief the court determines is just and proper under the circumstances. (e) When a covered entity, including a nonresident of this state, engages in conduct prohibited or made actionable by this chapter or any rule or order pursuant to this chapter, whether or not the covered entity has filed a consent to service of process, and personal jurisdiction over the covered entity cannot otherwise be obtained in this state, that conduct shall be considered equivalent to the covered entity’s appointment of the commissioner or the commissioner’s successor in office to be the covered entity’s attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against the covered entity or the covered entity’s successor, executor, or administrator that grows out of that conduct and that is brought under this chapter or any rule or order pursuant to this chapter, with the same force and validity as if served on the covered entity personally. Service may be made by leaving a copy of the process in the office of the commissioner, but it is not in effect unless the following conditions are met: (1) The plaintiff, who may be the commissioner in a suit, action, or proceeding instituted by commissioner, sends notice of the service and a copy of the process by registered or certified mail to the covered entity at the covered entity’s last known address or take other steps that are reasonably calculated to give actual notice. (2) The plaintiff’s affidavit of compliance with this chapter is filed in the case on or before the return day of the process, if any, or within such further time as the court allows. (Added by Stats. 2024, Ch. 41, Sec. 21. (SB 164) Effective June 29, 2024.)
  28. 27506.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. )

    Verify source ↗

    The commissioner may issue, amend, and cancel rules, forms, and orders needed to carry out this chapter, and money collected under the chapter must be deposited in the Financial Protection Fund.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 2.5. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Division 2.5 added by Stats. 2024, Ch. 41, Sec. 21. ) ## CHAPTER 1. Fair Investment Practices by Venture Capital Companies [27500 - 27506] ( Chapter 1 added by Stats. 2024, Ch. 41, Sec. 21. ) ## 27506. (a) The commissioner may make, amend, and rescind any rules, forms, and orders as are necessary to carry out the provisions of this chapter, including rules and forms governing applications and reports, and defining any terms, whether or not used in this chapter, insofar as the definitions are not inconsistent with the provisions of this chapter. (b) Moneys collected pursuant to this chapter shall be deposited in the Financial Protection Fund established pursuant to Section 12895 of the Government Code. It is the intent of the Legislature that the moneys collected pursuant to this chapter be appropriated in the annual Budget Act to the department for administration of this chapter. (Added by Stats. 2024, Ch. 41, Sec. 21. (SB 164) Effective June 29, 2024.)
  29. 2800.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 4. Shares and Share Certificates [2800- 2800.] ( Chapter 4 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    Share certificates for social purpose corporations must include required legends and statements; certain transfer restrictions are only enforceable if stated, and some older corporations may reissue certificates.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 4. Shares and Share Certificates [2800- 2800.] ( Chapter 4 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2800. (a) All certificates representing shares of a social purpose corporation shall contain, in addition to any other statements required by this section, the following conspicuous language on the face of the certificate. “This entity is a social purpose corporation organized under Division 1.5 of the California Corporations Code. The articles of this corporation state one or more purposes required by law. Refer to the articles on file with the Secretary of State, and the bylaws and any agreements on file with the secretary of the corporation, for further information.” (b) There shall also appear on the certificate, the initial transaction statement, and written statements, unless stated or summarized under subdivision (a) or (b) of Section 417, the statements required by all of the following, to the extent applicable: (1) The fact that the shares are subject to restrictions upon transfer. (2) If the shares are assessable or are not fully paid, a statement that they are assessable or the statements required by subdivision (d) of Section 409 if they are not fully paid. (3) The fact that the shares are subject to a voting agreement under subdivision (a) of Section 706 or an irrevocable proxy under subdivision (e) of Section 705 or restrictions upon voting rights contractually imposed by the social purpose corporation. (4) The fact that the shares are redeemable. (5) The fact that the shares are convertible and the period for conversion. Statements or references to statements on the face of the certificate, the initial transaction statement, and written statements required by paragraph (1) or (2) shall be conspicuous. (c) Unless stated on the certificate, the initial transaction statement, and written statements as required by subdivision (a), no restriction upon transfer, no right of redemption and no voting agreement under subdivision (a) of Section 706, no irrevocable proxy under subdivision (e) of Section 705, and no voting restriction imposed by the social purpose corporation shall be enforceable against a transferee of the shares without actual knowledge of the restriction, right, agreement, or proxy. With regard only to liability to assessment or for the unpaid portion of the subscription price, unless stated on the certificate as required by subdivision (a), that liability shall not be enforceable against a transferee of the shares. For the purpose of this subdivision, “transferee” includes a purchaser from the social purpose corporation. (d) All certificates representing shares of a close social purpose corporation shall contain, in addition to any other statements required by this section, the following conspicuous legend on the face thereof: “This social purpose corporation is a close social purpose corporation. The number of holders of record of its shares of all classes cannot exceed ____ (a number not in excess of 35). Any attempted voluntary inter vivos transfer which would violate this requirement is void. Refer to the articles, bylaws, and any agreements on file with the secretary of the social purpose corporation for further restrictions.” (e) Any attempted voluntary inter vivos transfer of the shares of a close social purpose corporation that would result in the number of holders of record of its shares exceeding the maximum number specified in its articles is void if the certificate contains the legend required by subdivision (c). (f) Notwithstanding any other subdivision, the certificates representing shares of a corporation formed pursuant to this division as a “flexible purpose corporation” before January 1, 2015, shall continue to be valid even if the certificates reference a “flexible purpose corporation.” A corporation formed pursuant to this division before January 1, 2015, may, but is not required to, reissue certificates to replace “flexible purpose corporation” with “social purpose corporation” as applicable. Any reference to a “flexible purpose corporation” or any abbreviation of that term in certificates representing shares of a corporation formed pursuant to this division before January 1, 2015, shall also be a reference to “social purpose corporation.” (Amended by Stats. 2014, Ch. 694, Sec. 45. (SB 1301) Effective January 1, 2015.)
  30. 28000.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Short Title and Construction [28000 - 28004] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    This division may be cited as the “Capital Access Company Law.”

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Short Title and Construction [28000 - 28004] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28000. This division shall be known and may be cited as the “Capital Access Company Law.” (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  31. 28001.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Short Title and Construction [28000 - 28004] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    This division must be interpreted broadly to carry out its purposes.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Short Title and Construction [28000 - 28004] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28001. This division shall be liberally construed to accomplish its purposes. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  32. 28002.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Short Title and Construction [28000 - 28004] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The Corporate Securities Law of 1968 applies to licensees.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Short Title and Construction [28000 - 28004] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28002. The provisions of the Corporate Securities Law of 1968 (Division 1 (commencing with Section 25000) of Title 4) shall apply to licensees. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  33. 28003.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Short Title and Construction [28000 - 28004] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The Legislature states that California should license and regulate capital access companies to help them operate under a federal exemption and support jobs and small business growth.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Short Title and Construction [28000 - 28004] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28003. The Legislature finds all of the following: (a) It is necessary to increase job opportunities in the state. (b) Promoting the establishment, growth, and expansion of small business firms in this state is an efficient way to increase job opportunities in the state. (c) Small business firms are unable to grow and create job opportunities unless they have access to risk capital. (d) Congress has exempted from the provisions of the federal Investment Company Act of 1940, certain companies that are not in the business of issuing redeemable securities, the operations of which are subject to state regulation governing entities that provide financial or managerial assistance to enterprises doing business, or proposing to do business, in that state. (e) Therefore, in order for the state to obtain the full benefits of that exemption, it is necessary that the state provide for the licensure and regulation of capital access companies, to permit these companies to operate pursuant to the exemption from regulation under the federal Investment Company Act of 1940. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  34. 28004.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Short Title and Construction [28000 - 28004] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    This section says the division is intended to license and regulate capital access companies, and the commissioner must administer the division according to that stated purpose.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Short Title and Construction [28000 - 28004] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28004. (a) The purpose of this division is to provide for the licensure and regulation of capital access companies that will provide risk capital and management assistance, primarily to small business firms in the state, to enable those companies to operate pursuant to the exemption from regulation under the federal Investment Company Act of 1940. (b) The purpose of this division as set forth in subdivision (a) constitutes the standard that the commissioner shall observe in administering the provisions of this division. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  35. 28030.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    The definitions in this article apply throughout this division, unless the context requires otherwise, and subject to any additional definitions in the division for specific provisions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28030. Subject to additional definitions contained in this division which are applicable to specific provisions of this division, and unless the context otherwise requires, the definitions in this article apply throughout this division. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  36. 28031.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    “Accredited investor” is defined as a person meeting the listed federal-securities criteria or a person designated by the Securities and Exchange Commission, and who buys a licensee’s securities to provide investment funds for small business financing.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28031. “Accredited investor” means a person who is defined in Section 2(a)(15) of the Securities Act of 1933, or any other person that the Securities and Exchange Commission may so designate by rule, regulation, or order, who, by purchasing the securities of a licensee, provides the investment funds with which the licensee will provide financial assistance to small business firms. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  37. 28032.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section defines “Affiliate” as a person or group of persons that controls, is controlled by, or is under common control with other specified persons.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28032. “Affiliate” means any person or persons controlling, controlled by, or under common control with, other specified persons. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  38. 28033.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section defines “Commissioner” as the Commissioner of Financial Protection and Innovation, or that person’s designee for a particular matter.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28033. “Commissioner” means the Commissioner of Financial Protection and Innovation or their designee with respect to a particular matter. (Amended by Stats. 2022, Ch. 452, Sec. 86. (SB 1498) Effective January 1, 2023.)
  39. 28034.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section defines “company” as certain business entities organized under California law.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28034. “Company” means a corporation, limited partnership, limited liability company, or other form of business entity, which is organized under the laws of the State of California. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  40. 28035.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    “Control” means having the direct or indirect power to direct, or cause the direction of, another person’s management and policies.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28035. “Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a specified person. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  41. 28036.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section defines “controlling person” as a person who controls a specified person, directly or indirectly, including through intermediaries.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28036. “Controlling person,” when used with respect to a specified person, means any person who controls the specified person, directly or indirectly, through one or more intermediaries. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  42. 28037.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section defines “insolvent” for a person.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28037. “Insolvent,” when used with respect to any person, means a person who has ceased to pay his or her debts in the ordinary course of business, who cannot pay his or her debts as they become due, or whose liabilities exceed his or her assets. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  43. 28038.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section defines “license” for this division as a license that authorizes a licensee to do business as a capital access company.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28038. “License” means a license issued under this division authorizing a licensee to transact business as a capital access company. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  44. 28039.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section defines “licensee” as a company licensed under this division.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28039. “Licensee” means a company that is licensed under this division. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  45. 28040.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section defines “officer” for a corporation and for certain other specified persons.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28040. “Officer” means either of the following: (a) When used with respect to a corporation, any person appointed or designated as an officer of the corporation by or pursuant to applicable law or the articles of incorporation or bylaws of the corporation or any person who performs with respect to the corporation functions usually performed by an officer of a corporation. (b) When used with respect to a specified person other than a natural person or a corporation, any person who performs with respect to the specified person functions usually performed by an officer of a corporation with respect to the corporation. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  46. 28041.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section defines “order” as certain case-specific actions or requirements issued by the commissioner, and it also includes license conditions and agreements with the commissioner.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28041. “Order” means any approval, consent, authorization, exemption, denial, prohibition, or requirement applicable to a specific case issued by the commissioner. “Order” includes any condition of a license and any agreement made by any person with the commissioner under this division. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  47. 28042.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section defines “Parent” for a specified person that is not a natural person.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28042. “Parent,” when used with respect to a specified person other than a natural person, means any person other than a natural person that controls the specified person, directly or indirectly, through one or more intermediaries. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  48. 28043.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    “Person” includes many entity types and, for control-related use, can also mean two or more persons acting in concert.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28043. “Person” means any natural person, proprietorship, joint venture, partnership, trust, business trust, syndicate, association, joint stock company, corporation, limited liability company, government, agency of any government, or any other organization. However, “person,” when used with respect to acquiring control of or controlling a specified person, includes any combination of two or more persons acting in concert. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  49. 28044.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section defines “principal security holder” as a person who owns 10% or more of the issuer’s voting power, directly or indirectly, and whether of record or beneficially.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28044. “Principal security holder,” means any person who owns, directly or indirectly, of record or beneficially, securities representing 10 percent or more of the voting power of the issuer of those securities. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  50. 28045.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section defines “to provide financing assistance to a person” as buying securities issued by that person, either directly or through a securities underwriter.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28045. “To provide financing assistance to a person” means to purchase securities issued by the person, either directly from the person, or indirectly through a securities underwriter. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  51. 28046.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    “Security” is defined by reference to Section 25019.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28046. “Security” has the meaning set forth in Section 25019. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  52. 28047.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    This section defines “small business firm” for this chapter.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28047. “Small business firm” means a person that proposes to transact, or transacts, business on a regular and continuous basis in California and, together with its affiliates, has a net worth of not more than eighteen million dollars ($18,000,000) and average net income after federal income taxes, excluding any carryover losses, for the preceding two years no greater than six million dollars ($6,000,000). (Amended by Stats. 2010, Ch. 516, Sec. 2. (SB 1155) Effective January 1, 2011.)
  53. 28047.1.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    “Smaller business firm” means a business that operates regularly in California and meets the stated net worth and income limits.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28047.1. “Smaller business firm” means a person that proposes to transact, or transacts, business on a regular and continuous basis in California and, together with its affiliates, has a net worth of not more than six million dollars ($6,000,000), and average net income after federal income taxes, excluding any carryover losses, for the preceding two years no greater than two million dollars ($2,000,000). (Added by Stats. 2010, Ch. 516, Sec. 3. (SB 1155) Effective January 1, 2011.)
  54. 28048.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    This section defines “subsidiary” for a non-natural person as a person controlled directly or indirectly through one or more intermediaries.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28048. “Subsidiary,” when used with respect to a specified person other than a natural person, means any person other than a natural person controlled by the specified person, directly or indirectly, through one or more intermediaries. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  55. 28049.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    This section defines “voting power” by pointing to Section 194.5.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 1. General Provisions [28000 - 28049] ( Chapter 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Definitions [28030 - 28049] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28049. “Voting power” has the meaning set forth in Section 194.5. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  56. 28100.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner must administer and enforce this division in a way that supports the legislative purposes in Section 28004 and protects investors.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28100. The commissioner shall administer and enforce the provisions of this division in a manner that facilitates the legislative purposes set forth in Section 28004, consistent with protection of investors. (Amended by Stats. 2010, Ch. 516, Sec. 4. (SB 1155) Effective January 1, 2011.)
  57. 28101.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    When the commissioner issues an order or license under this division, the commissioner may add conditions the commissioner considers necessary to carry out the division.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28101. Whenever the commissioner issues an order or license under this division, the commissioner may impose any conditions that are in his or her opinion necessary to carry out the provisions and purposes of this division. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  58. 28102.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may require applications filed under this division to use a required form and to be accompanied, signed, and verified in a required manner.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28102. Any application filed with the commissioner under this division or under any regulation or order issued under this division shall be in a form, shall contain information, shall be signed in a manner, and shall be verified in a manner, that the commissioner may by regulation or order require. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  59. 28103.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may consider an applicant’s proposals when deciding whether to approve an application, and must add conditions if approval is based on a proposal.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28103. In determining whether to approve any application filed under this division or under any regulation or order issued under this division, the commissioner may consider proposals made by the applicant, including, but not limited to, proposals to appoint officers, sell securities, obtain financing, or purchase securities of small business firms, and, if in the opinion of the commissioner it is probable that the applicant will be able to implement the proposal, the commissioner may make findings on the basis of the proposal. However, whenever the commissioner approves an application on the basis, in whole or in part, of a proposal made by the applicant, the commissioner shall impose upon the approval appropriate conditions requiring that the applicant implement the proposal within a period of time specified by the commissioner. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  60. 28104.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may investigate, publish violation information, and use subpoenas and evidence-gathering powers; the superior court may order compliance when someone ignores a subpoena.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28104. (a) The commissioner may do both of the following: (1) Make public or private investigations within or outside this state that he or she deems necessary to determine whether to approve any application filed under this division or under any regulation or order issued under this division, to determine whether any person has violated or may violate any provision of this division or of any regulation or order issued under this division, to aid in the enforcement of any provision of this division or of any regulation or order issued under this division, or to aid in the issuing of regulations or orders under this division. (2) Publish information concerning any violation of any provision of this division or of any regulation or order issued under this division. (b) For purposes of any investigation, examination, or other proceeding under this division, the commissioner may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records that the commissioner deems relevant or material to the inquiry. (c) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the superior court, upon application by the commissioner, may issue to the person an order requiring him or her to appear before the commissioner, and to produce documentary evidence, if so ordered, or to give evidence relevant to the matter under investigation or in question. Failure to obey the order of the court may be punished by the court as a contempt. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  61. 28105.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may share or receive information about a licensee, or its parent or subsidiary, with any governmental agency.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28105. The commissioner may provide information relating to a licensee or any parent or subsidiary of the licensee to, or receive information relating to a licensee or any parent or subsidiary of the licensee from, any governmental agency. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  62. 28106.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    If the commissioner lets certain persons inspect or copy a record, or provides the record or a copy, specified Government Code confidentiality provisions continue to apply to that record as they did before.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28106. If the commissioner permits any licensee, any affiliate of the licensee, or any governmental agency to inspect or make copies of any record relating to the licensee or to any director, officer, employee, or affiliate of the licensee, or if the commissioner provides the record, or a copy thereof, to any of those persons, Section 7922.000 of the Government Code, subdivision (a) of Section 7922.540 of the Government Code, and each provision listed in Section 7920.505 of the Government Code shall continue to apply to the record to the extent that these provisions applied to the record prior to that action by the commissioner. (Amended by Stats. 2021, Ch. 615, Sec. 59. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)
  63. 28107.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may refer evidence of certain criminal violations to the county district attorney, and the district attorney may start criminal proceedings with or without that referral.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28107. The commissioner may refer any evidence available concerning any violation of this division or of any regulation or order issued under this division that constitutes a crime to the district attorney of the county in which the violation occurred, who may, with or without that reference, institute appropriate criminal proceedings. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  64. 28108.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    Before a license is issued, the applicant and its parents/subsidiaries must file an irrevocable consent with the commissioner for service of process. New parents or subsidiaries must file within 30 days. If service is left at the commissioner’s office, notice, mailing, and an affidavit are also required for the service to be effective.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28108. Before any applicant for a license is issued a license, the applicant and each parent and subsidiary of the applicant shall file, and each person that becomes a parent or subsidiary of a licensee shall file, not less than 30 days after becoming a parent or subsidiary of the licensee, with the commissioner, in the form the commissioner may by regulation or order require, an irrevocable consent appointing the commissioner to be the person’s attorney-in-fact to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the person, or the person’s successor, executor, or administrator, which arises under this division or under any regulation or order issued under this division after the consent has been filed, with the same force and validity as if served personally on the person. Service may be made by leaving a copy of the process at any office of the commissioner, but the service is not effective unless (a) the party making the service, who may be the commissioner, forthwith sends notice of the service and a copy of the process by registered or certified mail to the person served at the person’s last address on file with the commissioner, and (b) an affidavit of compliance with this section by the party making service is filed on or before the return date, if any, or within that further time as the court, in the case of a judicial proceeding, or the administrative agency, in the case of an administrative proceeding, allows. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  65. 28109.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    If a person engages in covered conduct and personal jurisdiction cannot otherwise be obtained, the person is treated as appointing the commissioner to receive service of process. Service can be made by leaving a copy with the commissioner’s office, but it is effective only if notice and a copy are promptly mailed or otherwise given, and an affidavit is filed on time.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28109. Whenever any person, including any nonresident of this state, engages in conduct prohibited or made actionable by this division or by any regulation or order issued under this division, whether or not the person has filed a consent to service of process under Section 28108, and if personal jurisdiction over the person cannot otherwise be obtained in this state, that conduct shall be considered equivalent to the person’s appointment of the commissioner to be the person’s attorney-in-fact to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the person or the person’s successor, executor, or administrator, which grows out of that conduct and which is brought under this division or under any regulation or order issued under this division, with the same force and validity as if served on the person personally. Service may be made by leaving a copy of the process in any office of the commissioner, but the service is not effective unless (a) the party making the service, who may be the commissioner, forthwith sends notice of the service and a copy of the process by registered or certified mail to the person served at the person’s last known address or takes other steps which are reasonably calculated to give actual notice, and (b) an affidavit of compliance with this section by the party making service is filed in the case on or before the return date, if any, or within that further time as the court, in the case of a judicial proceeding, or the administrative agency, in the case of an administrative proceeding, allows. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  66. 28110.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    Applications and certain examinations under this section require fees paid to the commissioner, and filing fees are not refundable.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28110. (a) Fees shall be paid to, and collected by, the commissioner, as follows: (1) The fee for filing with the commissioner an application for a license shall be no greater than two thousand dollars ($2,000). (2) The fee for filing with the commissioner an application for approval to acquire control of a licensee shall be no greater than one thousand dollars ($1,000). (3) The fee for filing with the commissioner an application for approval for a licensee to merge with another company, an application for approval for a licensee to purchase all or substantially all of the business of another person, or an application for approval for a licensee to sell all or substantially all of its business or of the business of any of its offices to another licensee, shall be no greater than one thousand dollars ($1,000). However, whenever two or more applications relating to the same merger, purchase, or sale are filed with the commissioner, the fee for filing each application shall be the quotient determined by dividing one thousand dollars ($1,000) by the number of the applications. (4) Whenever the commissioner examines, audits, or investigates any licensee or any affiliate of a licensee, that licensee shall pay, within 10 days after receipt of a statement from the commissioner, a fee that equals the amount of the salary or other compensation paid to the persons making the examination, audit, or investigation plus the amount of expenses, including overhead, reasonably incurred in the performance of the work. The licensee shall be given a preliminary estimate of the fee before the commissioner commences an examination, audit, or investigation. In determining the costs associated with an examination, audit, or investigation, the commissioner may use the estimated average hourly cost for all departmental persons performing examinations, audits, or investigations for the fiscal year. (b) (1) Each fee for filing an application with the commissioner shall be paid at the time the application is filed with the commissioner. (2) No fee for filing an application with the commissioner shall be refundable, regardless of whether the application is approved, denied, withdrawn, or abandoned. (c) All fees charged and collected under this section shall be transmitted to the Treasurer at least weekly, accompanied by a detailed statement therefor, and shall be credited to the State Corporations Fund. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  67. 28111.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may treat certain compliant small business investment company licensees as complying with this division, with listed exceptions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 2. Administration [28100 - 28111] ( Chapter 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28111. (a) If a licensee becomes licensed as a small business investment company and is subject to regulation by the Small Business Administration under the federal Small Business Investment Act of 1958, the commissioner may by rule or order provide that a licensee in compliance with those federal regulations shall be deemed to be in compliance with the regulatory requirements under this division except those provisions required to exempt licensees from regulation under the federal Investment Company Act of 1940, and the provisions of Chapter 8 (commencing with Section 28550), Chapter 9 (commencing with Section 28600), Chapter 10 (commencing with Section 28650), Chapter 11 (commencing with Section 28700), Chapter 12 (commencing with Section 28800), Chapter 13 (commencing with Section 28900), and Chapter 14 (commencing with Section 28950). (b) A violation by a licensee of any regulation promulgated by the Small Business Administration that the commissioner has by rule or order deemed to be consistent with the regulatory requirements under this division shall constitute a violation of this division. The commissioner shall have all of the powers granted in this division to enforce those federal regulations against a licensee. (Added by Stats. 2010, Ch. 516, Sec. 5. (SB 1155) Effective January 1, 2011.)
  68. 28150.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 3. Licensing [28150 - 28155] ( Chapter 3 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    People other than licensees may not use a name or title that suggests they are a capital access company or a licensee, unless subdivision (b) allows it for certain license applicants.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 3. Licensing [28150 - 28155] ( Chapter 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28150. (a) Except as provided in subdivision (b), no person proposing to transact or transacting business in this state, other than a licensee, shall use any name or title that indicates that it is a capital access company or otherwise represent that it is a capital access company or that it is a licensee. (b) Any company that proposes to apply for a license or that has applied for a license, may, before being issued a license, use a name or title that indicates that it is a capital access company if it meets all of the following requirements: (1) The company appends to the name the designation “proposed,” “in organization,” or “in formation,” or any similar designation that the commissioner may approve. The designation shall be set forth at least as conspicuously as the name or title. (2) The company performs only those acts that may be necessary to (A) apply for and obtain the license and (B) prepare to commence transacting business as a licensee. (3) The company does not represent that it is a licensee. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  69. 28151.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 3. Licensing [28150 - 28155] ( Chapter 3 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A license under this division may not be issued to anyone who does not meet the definition of a licensee.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 3. Licensing [28150 - 28155] ( Chapter 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28151. No person other than a person who meets the definition of a licensee may be issued a license under this division. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  70. 28152.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 3. Licensing [28150 - 28155] ( Chapter 3 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner must approve a license application if the listed financial and fitness requirements are met, and must deny it if they are not after notice and a hearing.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 3. Licensing [28150 - 28155] ( Chapter 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28152. If the commissioner finds all of the following with respect to an application for a license, the commissioner shall approve the application: (a) That the applicant has a tangible net worth, exclusive of the funds to invest under subdivision (b), in an amount that is not less than two hundred fifty thousand dollars ($250,000) and that the tangible net worth is adequate for the applicant to transact business as a capital access company. (b) That the applicant has funds to invest in an amount that is not less than five million dollars ($5,000,000). (c) That the applicant has, in addition to the requirements of subdivisions (a) and (b), financial resources in an amount that is adequate for the applicant to pay its expenses in transacting business as a capital access company for a period of not less than three years from the date of licensure. (d) That the directors, officers, and controlling persons of the applicant are each of good character and sound financial standing, that the directors and officers of the applicant are each competent to perform their functions with respect to the applicant, and that the directors and officers of the applicant are collectively adequate to manage the business of the applicant as a capital access company. For purposes of this subdivision, the commissioner shall accord weight to the prior or current successful operation of a commercial or investment enterprise. (e) That none of the following persons are subject to any act or omission enumerated in subdivision (a), (e), (f), or (g) of Section 25212, or has been convicted of, or pled nolo contendere to, any offense or been held liable in any civil action specified in subdivision (b) of Section 25212, or is enjoined from any act, conduct, or practice specified in subdivision (c) of Section 25212, or is subject to any order specified in subdivision (d) of Section 25212: (1) A person who is or will be a controlling person of the applicant. (2) A person who makes or will make recommendations with respect to the investment of funds of the applicant. (3) A person who is or will be a partner, principal executive officer, manager, or director of the applicant. (4) A person who occupies or will occupy a similar status or who performs or will perform similar functions to those listed above in paragraphs (1) to (3), inclusive. (5) An employee who materially aids or assists or will materially aid or assist in the applicant’s investment-related functions. (6) A broker-dealer or agent who materially aids or assists or will materially aid or assist in the sale or distribution of any securities of the applicant. (f) That it is reasonable to believe that the applicant, if licensed, will comply with the provisions of Section 6(a)(5) of the Investment Company Act of 1940, the applicable provisions of the Corporate Securities Law of 1968, this division, and of any regulation adopted or order issued under this division. If, after notice and a hearing, the commissioner finds otherwise, the commissioner shall deny the application. (Amended by Stats. 2010, Ch. 516, Sec. 6. (SB 1155) Effective January 1, 2011.)
  71. 28153.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 3. Licensing [28150 - 28155] ( Chapter 3 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may find that certain people connected to an applicant are not of good character, or that the applicant is unlikely to comply, if there has been a fraud- or dishonesty-related conviction or nolo contendere plea.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 3. Licensing [28150 - 28155] ( Chapter 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28153. (a) For purposes of Section 28152, the commissioner may find: (1) That a director, officer, or controlling person of an applicant is not of good character if the director, officer, or controlling person or any director or officer of the controlling person has been convicted of, or has pleaded nolo contendere to, a crime involving fraud or dishonesty. (2) That it is not reasonable to believe that an applicant, if licensed, will comply with all applicable provisions of this division and of any regulation or order issued under this division if the applicant has been convicted of, or has pleaded nolo contendere to, a crime involving fraud or dishonesty. (b) Subdivision (a) shall not be deemed to be the only grounds upon which the commissioner may find, for purposes of Section 28152, that a director, officer, or controlling person of an applicant is not of good character or that it is not reasonable to believe that an applicant, if licensed, will comply with all applicable provisions of the Investment Company Act of 1940, the Corporate Securities Law of 1968, this division, and of any regulation or order issued under this division. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  72. 28154.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 3. Licensing [28150 - 28155] ( Chapter 3 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A license may not be transferred or assigned, except as allowed by Section 28551.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 3. Licensing [28150 - 28155] ( Chapter 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28154. Except pursuant to Section 28551, no license shall be transferable or assignable. (Amended by Stats. 2010, Ch. 516, Sec. 7. (SB 1155) Effective January 1, 2011.)
  73. 28155.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 3. Licensing [28150 - 28155] ( Chapter 3 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A licensee may not falsely imply commissioner approval or publish misleading advertising about its business, and may not omit material facts needed to keep statements truthful.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 3. Licensing [28150 - 28155] ( Chapter 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28155. No licensee shall represent that it is sponsored, recommended, or approved by, or that its abilities or qualifications have in any respect been passed upon by, the commissioner. No licensee shall advertise, print, display, publish, distribute, or broadcast, or cause or permit to be advertised, printed, displayed, published, distributed, or broadcast in any manner, any statement or representation with regard to the business subject to the provisions of this division that is false, misleading, or deceptive, or that omits material information that is necessary to make the statements not false, misleading, or deceptive, or in the case of a licensee, that refers to the supervision of business by the state or any department or official of the state. Nothing in this section shall be deemed to prohibit a licensee from stating that it is licensed if the effect of such license is not misrepresented. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  74. 28200.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 4. Organizational Matters [28200 - 28212] ( Chapter 4 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Organization and Name [28200 - 28201] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The licensee’s organizational documents must include specific restrictions on its activities, securities, investors, and investments.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 4. Organizational Matters [28200 - 28212] ( Chapter 4 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Organization and Name [28200 - 28201] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28200. The organizational documents of the licensee shall include the following statement: (a) The activities of the licensee are limited to the promotion of economic, business, or industrial development in the State of California through the provision of financial or managerial assistance primarily to small business firms and to other activities that are incidental or necessary to carry out that purpose. (b) The licensee will not engage in the business of issuing redeemable securities. (c) The security holders of the licensee are limited, on a class-by-class basis, to persons who reside in the State of California, or who have a substantial business presence in the State of California, and who hold not less than 80 percent of the licensee’s securities. (d) The securities of the licensee will be sold solely to accredited investors (Section 28031) and the licensee will not purchase any securities issued by an investment company as defined in Section 3 of the Investment Company Act of 1940 or issued by any company that would be an investment company except for the exclusions from that definition under paragraph (1) or (7) of Section 3(a) of that act, other than (1) any debt security that is rated investment grade by not less than one nationally recognized statistical rating organization or (2) any security issued by a registered open-end investment company that is required by its investment policies to invest not less than 65 percent of its total assets in securities described in paragraph (1) or securities that are determined by that registered open-end investment company to be comparable in quality to securities described in paragraph (1). (e) The licensee will engage in the transaction of business pursuant to the exemption from registration under the Investment Company Act of 1940 afforded to economic, business, and industrial development companies as provided for by Section 6(a)(5) of the Investment Company Act of 1940, as amended (15 U.S.C. Sec. 80a-6(a)), and a license pursuant to the Capital Access Company Law (Division 3 (commencing with Section 28000)). (f) The investment of funds by the licensee will be limited by and subject to the provisions of Section 6(a)(5) of the Investment Company Act of 1940, the Corporate Securities Law of 1968, and the Capital Access Company Law. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  75. 28201.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 4. Organizational Matters [28200 - 28212] ( Chapter 4 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Organization and Name [28200 - 28201] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A licensee may not do business under a name other than its corporate name unless it first gives written notice to the commissioner.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 4. Organizational Matters [28200 - 28212] ( Chapter 4 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Organization and Name [28200 - 28201] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28201. No licensee shall, except by prior written notice to the commissioner, transact business under any name other than its corporate name. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  76. 28210.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 4. Organizational Matters [28200 - 28212] ( Chapter 4 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Directors [28210 - 28212] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    Each licensee must have a board of directors, executive committee, or other policy body with at least three members.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 4. Organizational Matters [28200 - 28212] ( Chapter 4 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Directors [28210 - 28212] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28210. Each licensee shall have a board of directors, executive committee, or other policy body, which shall consist of not less than three members. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  77. 28211.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 4. Organizational Matters [28200 - 28212] ( Chapter 4 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Directors [28210 - 28212] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    Each licensee’s board, executive committee, or other policy body must meet at least once every calendar year.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 4. Organizational Matters [28200 - 28212] ( Chapter 4 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Directors [28210 - 28212] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28211. The board of directors, executive committee, or other policy body of each licensee shall hold a meeting not less frequently than once each calendar year. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  78. 28212.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 4. Organizational Matters [28200 - 28212] ( Chapter 4 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Directors [28210 - 28212] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    Each licensee’s board, executive committee, or other policy body must approve the contract with a person who will make recommendations about investing the licensee’s funds.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 4. Organizational Matters [28200 - 28212] ( Chapter 4 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Directors [28210 - 28212] ( Article 2 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28212. The board of directors, executive committee, or other policy body of each licensee shall approve the contract to be entered into between the licensee and any person who will make recommendations with respect to the investment of funds of the licensee. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  79. 28320.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 5. Offices [28320- 28320.] ( Chapter 5 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Establishing, Relocating, and Closing Offices [28320- 28320.] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A licensee must notify the commissioner before moving its head office, and must file notice with the commissioner after establishing, relocating, or closing any other office.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 5. Offices [28320- 28320.] ( Chapter 5 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. Establishing, Relocating, and Closing Offices [28320- 28320.] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28320. (a) No licensee shall relocate its head office without prior written notice to the commissioner. (b) No licensee shall establish, relocate, or close any office (other than its head office) unless it files a notice with the commissioner not less than two business days after taking the action. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  80. 28400.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 6. Transaction of Business [28400 - 28405] ( Chapter 6 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A licensee may only do the listed business activities, and at least 20% of its financing assistance must be through purchases of securities of smaller business firms in California or businesses proposed to operate there.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 6. Transaction of Business [28400 - 28405] ( Chapter 6 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28400. No licensee shall engage in any business other than the following: (a) The business of providing financing assistance through the purchase of securities of small business firms or smaller business firms doing business or proposing to do business wholly or substantially in this state. (b) The business of providing managerial assistance (including managerial and technical assistance) to small business firms or smaller business firms doing business or proposing to do business wholly or substantially in this state. (c) At least 20 percent of all financing assistance provided by the licensee shall be through purchase of securities of smaller business firms doing business or proposing to do business wholly or substantially in this state. (Amended by Stats. 2010, Ch. 516, Sec. 8. (SB 1155) Effective January 1, 2011.)
  81. 28404.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 6. Transaction of Business [28400 - 28405] ( Chapter 6 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A licensee must not provide financing assistance to a small business firm if the purpose is to evade this division’s requirements.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 6. Transaction of Business [28400 - 28405] ( Chapter 6 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28404. No licensee shall provide financing assistance to any small business firm for the purpose of evading the requirements of this division. (Amended by Stats. 2010, Ch. 516, Sec. 12. (SB 1155) Effective January 1, 2011.)
  82. 28405.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 6. Transaction of Business [28400 - 28405] ( Chapter 6 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    This section creates an exempt class of persons and says the constitutional interest-rate restrictions do not apply to evidence of indebtedness purchased by a licensee.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 6. Transaction of Business [28400 - 28405] ( Chapter 6 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28405. This section creates and authorizes an exempt class of persons pursuant to Section 1 of Article XV of the California Constitution. The restrictions upon rates of interest contained in Section 1 of Article XV of the California Constitution shall not apply to any evidence of indebtedness purchased by any licensee. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  83. 28500.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 7. Records, Reports, and Examinations [28500 - 28505] ( Chapter 7 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    Each licensee must keep books, accounts, and other records in whatever form, manner, place, and retention period the commissioner requires by regulation or order.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 7. Records, Reports, and Examinations [28500 - 28505] ( Chapter 7 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28500. Each licensee shall make and keep books, accounts, and other records in the form and in the manner that the commissioner may by regulation or order require. All records so required shall be kept at the place and shall be preserved for the time that the commissioner may by regulation or order specify. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  84. 28501.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 7. Records, Reports, and Examinations [28500 - 28505] ( Chapter 7 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    Each licensee must file an audit report with the commissioner within 90 days after the end of each fiscal year, unless the commissioner sets a longer period.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 7. Records, Reports, and Examinations [28500 - 28505] ( Chapter 7 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28501. Each licensee shall, not more than 90 days after the close of each of its fiscal years or within a longer period that the commissioner may by regulation or order specify, file with the commissioner an audit report containing all of the following: (a) Financial statements (including balance sheets, statements of income or loss, statements of changes in capital accounts, and statements of cashflows or, in the case of a licensee that is a California nonprofit corporation, comparable financial statements) for, or as of, the end of the fiscal year, prepared, with audit, by an independent certified public accountant in accordance with generally accepted accounting principles. (b) A report, certificate, or opinion of the independent certified public accountant or independent public accountant, stating that the financial statements were prepared in accordance with generally accepted accounting principles. (c) Any other information that the commissioner may by regulation or order require. (Amended by Stats. 2006, Ch. 214, Sec. 10. Effective January 1, 2007.)
  85. 28502.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 7. Records, Reports, and Examinations [28500 - 28505] ( Chapter 7 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    Covered licensees and related persons must file commissioner-required reports on the required timeline and in the required form.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 7. Records, Reports, and Examinations [28500 - 28505] ( Chapter 7 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28502. Each licensee, director, officer, and employee of a licensee, and each parent and subsidiary of a licensee shall file with the commissioner all reports that the commissioner may by regulation or order require within the timeframe specified. In addition, each affiliate of a licensee (other than a parent or subsidiary of the licensee) shall file with the commissioner all reports regarding transactions between the affiliate and the licensee that the commissioner may require within the timeframe specified. Each report shall be in a form, shall contain information, shall be signed in a manner, and shall be verified in a manner, that the commissioner may by regulation or order require. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  86. 28503.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 7. Records, Reports, and Examinations [28500 - 28505] ( Chapter 7 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner must examine each licensee at least once a year and may also examine certain related entities at any time.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 7. Records, Reports, and Examinations [28500 - 28505] ( Chapter 7 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28503. (a) The commissioner shall examine each licensee not less frequently than once each calendar year. (b) (1) The commissioner may at any time examine any licensee or any parent or subsidiary of a licensee. (2) The commissioner may at any time examine any affiliate of a licensee (other than a parent or subsidiary of the licensee), but only with respect to matters relating to transactions between the affiliate and the licensee. (c) The directors, officers, and employees of any licensee or of any affiliate of a licensee being examined by the commissioner and any other person having custody of any of the books, accounts, or records of the licensee or of the affiliate shall exhibit to the commissioner, on request, any or all of the books, accounts, and other records of the licensee or of the affiliate and shall otherwise facilitate the examination so far as it may be in their power to do so. However, in the case of an examination of an affiliate of a licensee other than a parent or subsidiary of the licensee, only books, accounts, and records of the affiliate that relate to transactions between the affiliate and the licensee shall be subject to this subdivision. (d) The commissioner may, if in his or her opinion it is necessary in the examination of any licensee or of any affiliate of a licensee, retain any certified public accountant, attorney, appraiser, or other person to assist him or her, and the licensee shall pay, within 10 days after receipt of a statement from the commissioner, the fees of the person retained. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  87. 28504.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 7. Records, Reports, and Examinations [28500 - 28505] ( Chapter 7 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A licensee may let another person keep its books and records only after approval by the licensee’s board or similar policy body; if another person does so, the division’s rules still apply to that person as if they were the licensee or affiliate.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 7. Records, Reports, and Examinations [28500 - 28505] ( Chapter 7 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28504. (a) A licensee may, after the approval of the board of directors, executive committee, or other policy body of the licensee, cause or permit any other person to make or keep any of its books, accounts, or other records. (b) If any person other than a licensee makes or keeps any of the books, accounts, or other records of the licensee, the provisions of this division and of any regulation or order issued under this division shall apply to the person with respect to the performance of those services and with respect to those books, accounts, and other records to the same extent as if the person were the licensee. (c) If any person other than an affiliate of a licensee makes or keeps any of the books, accounts, or other records of the affiliate or, in the case of an affiliate other than a parent or subsidiary of the licensee, the books, accounts, and other records of the affiliate that relate to transactions between the affiliate and the licensee, the provisions of this division and of any regulation or order issued under this division shall apply to the person with respect to those books, accounts, and other records to the same extent as if the person were the affiliate. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  88. 28505.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 7. Records, Reports, and Examinations [28500 - 28505] ( Chapter 7 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may make public any report filed under this division, subject to Rules 250.10 and 250.10.5.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 7. Records, Reports, and Examinations [28500 - 28505] ( Chapter 7 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28505. Subject to the provisions of Rules 250.10 and 250.10.5 of the Commissioner of Financial Protection and Innovation (10 C.C.R. Secs. 250.10 and 250.10.5), the commissioner may make available to the public any report filed with the commissioner under this division or under any regulations or order issued under this division. (Amended by Stats. 2022, Ch. 452, Sec. 87. (SB 1498) Effective January 1, 2023.)
  89. 28550.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 8. Acquisition of Control [28550 - 28552] ( Chapter 8 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A person may not acquire control of a licensee unless the commissioner gives prior written approval.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 8. Acquisition of Control [28550 - 28552] ( Chapter 8 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28550. No person shall, except with the prior written approval of the commissioner, acquire control of a licensee. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  90. 28551.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 8. Acquisition of Control [28550 - 28552] ( Chapter 8 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner must approve an application to acquire control of a licensee only after notice and a hearing, and only if the stated findings are made.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 8. Acquisition of Control [28550 - 28552] ( Chapter 8 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28551. The commissioner shall approve an application for approval to acquire control of a licensee only if, after notice and a hearing, the commissioner finds all of the following: (a) That the applicant and the directors and officers of the applicant are of good character and sound financial standing. (b) That it is reasonable to believe that, if the applicant acquires control of the licensee, the applicant will comply with all applicable provisions of this division and of any regulation or order issued under this division. (c) That the applicant’s plans, if any, to make any major change in the business, corporate structure, or management of the licensee are not detrimental to the safety and soundness of the licensee or the accredited investors of the licensee, or to the public convenience and advantage. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  91. 28552.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 8. Acquisition of Control [28550 - 28552] ( Chapter 8 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may find that certain applicants, directors, or officers are not of good character, and may find that a management-change plan is detrimental when it would put a person with fraud- or dishonesty-related convictions into a director or officer role.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 8. Acquisition of Control [28550 - 28552] ( Chapter 8 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28552. (a) For purposes of Section 28551, the commissioner may find: (1) That an applicant or a director or officer of an applicant is not of good character if the person has been convicted of, or has pleaded nolo contendere to, a crime involving fraud or dishonesty. (2) That an applicant’s plan to make a major change in the management of a licensee is detrimental to the safety and soundness of the licensee or the accredited investors of the licensee and to the public convenience and advantage if the plan provides for a person who has been convicted of, or has pleaded nolo contendere to, a crime involving fraud or dishonesty to become a director or officer of the licensee. (b) Subdivision (a) shall not be deemed to be the only grounds upon which the commissioner may find, for purposes of Section 28551, that an applicant or a director or officer of an applicant is not of good character or that an applicant’s plan to make a major change in the management of a licensee is detrimental to the safety and soundness of a licensee or to the accredited investors of the licensee, or to the public convenience and advantage. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  92. 28600.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 9. Merger and Purchase or Sale of Business [28600 - 28604] ( Chapter 9 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    This section defines “acquiring licensee,” “disappearing company,” and “surviving company” for this chapter.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 9. Merger and Purchase or Sale of Business [28600 - 28604] ( Chapter 9 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28600. For purposes of this chapter: (a) “Acquiring licensee” means either of the following: (1) In the case of a merger, the licensee that is the surviving company. (2) In the case of a purchase or sale, the licensee that is the purchaser. (b) “Disappearing company” has the meaning set forth in Section 165. (c) “Surviving company” has the meaning set forth in Section 190. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  93. 28601.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 9. Merger and Purchase or Sale of Business [28600 - 28604] ( Chapter 9 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A licensee may not merge with another company unless the merger is first approved by the commissioner, with different conditions depending on whether the licensee survives or disappears in the merger.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 9. Merger and Purchase or Sale of Business [28600 - 28604] ( Chapter 9 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28601. No licensee shall merge with any other company unless either of the following apply: (a) If the licensee is to be the surviving company, the merger is first approved by the commissioner. (b) If the licensee is to be a disappearing company, the surviving company is a licensee and the merger is first approved by the commissioner. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  94. 28602.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 9. Merger and Purchase or Sale of Business [28600 - 28604] ( Chapter 9 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A licensee may not buy all or substantially all of another person’s business unless the commissioner first approves the purchase.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 9. Merger and Purchase or Sale of Business [28600 - 28604] ( Chapter 9 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28602. No licensee shall purchase all or substantially all of the business of any other person unless the purchase is first approved by the commissioner. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  95. 28603.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 9. Merger and Purchase or Sale of Business [28600 - 28604] ( Chapter 9 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A licensee may not sell all or substantially all of its business unless the buyer is also a licensee and the sale is first approved by the commissioner.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 9. Merger and Purchase or Sale of Business [28600 - 28604] ( Chapter 9 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28603. No licensee shall sell all or substantially all of its business to any other person unless the other person is a licensee and the sale is first approved by the commissioner. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  96. 28604.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 9. Merger and Purchase or Sale of Business [28600 - 28604] ( Chapter 9 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may approve a merger, purchase, or sale application only after notice and a hearing, and only if the required findings are made.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 9. Merger and Purchase or Sale of Business [28600 - 28604] ( Chapter 9 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28604. The commissioner shall approve an application for approval of a merger, purchase, or sale, only if, after notice and a hearing, the commissioner finds all of the following: (a) That the merger, purchase, or sale will be safe and sound with respect to the acquiring licensee. (b) That it is reasonable to believe that, upon consummation of the merger, purchase, or sale, the acquiring licensee will comply with all applicable provisions of this division and of any regulation or order issued under this division. (c) That the merger, purchase, or sale will not be detrimental to the licensee or the accredited investors of the licensee, or the public convenience and advantage, or, if the merger, purchase, or sale would be detrimental to any of the foregoing, then it is necessary in the interests of the safety and soundness of any of the parties to it. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  97. 28650.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 10. Voluntary Surrender of License [28650 - 28651] ( Chapter 10 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A licensee may offer to surrender its license by filing the license and a report with the commissioner.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 10. Voluntary Surrender of License [28650 - 28651] ( Chapter 10 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28650. Any licensee may offer to surrender its license by filing with the commissioner the license and a report, which shall (a) be in a form, (b) contain information, and (c) be signed and verified in a manner, that the commissioner may by regulation or order require. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  98. 28651.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 10. Voluntary Surrender of License [28650 - 28651] ( Chapter 10 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A voluntary surrender of a license becomes effective when the commissioner issues an order accepting it, together with the required Section 28650 report, unless subdivision (b) applies.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 10. Voluntary Surrender of License [28650 - 28651] ( Chapter 10 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28651. (a) Except as otherwise provided in subdivision (b), a voluntary surrender of a license shall be effective upon the issuance of an order by the commissioner accepting the offer of surrender and the report required under Section 28650. (b) If a proceeding to revoke or suspend a license is pending at the time when the license and the report required under Section 28650 are filed with the commissioner or if a proceeding to revoke or suspend a license or to impose conditions upon the surrender of a license is instituted before the license and the report called for in Section 28650 are filed with the commissioner, the voluntary surrender of the license shall become effective at the time and upon the conditions that the commissioner may by order specify. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  99. 28700.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    This section defines “office with a licensee” and “subject person” for this chapter.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28700. For purposes of this chapter, unless the context otherwise requires: (a) “Office with a licensee” means the position of director, officer, or employee of the licensee or of any subsidiary of the licensee. (b) “Subject person,” when used with respect to a licensee, means any of the following: (1) Any controlling person or affiliate of the licensee. (2) Any director, officer, or employee of the licensee or of any of the persons specified in paragraph (1). (3) Any other person who participates in the conduct of the business of the licensee. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  100. 28701.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    If the commissioner believes a violation may have occurred or may occur, the commissioner may sue in superior court to stop the violation or enforce compliance. The court can grant injunctive relief, appoint a receiver or conservator, and cannot require the commissioner to post bond.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28701. Whenever it appears to the commissioner that any person has violated, or that there is reasonable cause to believe that any person may violate, any provision of this division or of any regulation or order issued under this division, the commissioner may bring an action in the name of the people of this state in the superior court to enjoin the violation or to enforce compliance with this division or with any regulation or order issued under this division. Upon a proper showing, a restraining order, preliminary or permanent injunction, or writ of mandate shall be granted, and a receiver or a conservator may be appointed for the defendant or the defendant’s assets. The court may not require the commissioner to post a bond. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  101. 28702.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may order someone to stop violating Section 28150 until the person is licensed, and the person can ask for a hearing and later judicial review.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28702. (a) If the commissioner finds that any person has violated, or that there is reasonable cause to believe that any person may violate, Section 28150, the commissioner may order the person to cease and desist from the violation unless and until the person is issued a license. (b) (1) Within 30 days after an order is issued pursuant to subdivision (a), the person to whom the order is directed may file with the commissioner an application for a hearing on the order. If the commissioner fails to commence a hearing within 15 business days after the application is filed with him or her (or within any longer period to which the person consents), the order shall be deemed rescinded. Upon the completion of the hearing, the commissioner shall affirm, modify, or rescind the order. (2) The right of any person to whom an order is issued under subdivision (a) to petition for judicial review of the order shall not be affected by the failure of the person to apply to the commissioner for a hearing on the order pursuant to paragraph (1). (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  102. 28703.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may issue a cease and desist order, including corrective action, after notice and a hearing if specified violations or unsafe practices are found.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28703. The commissioner may issue a cease and desist order, including an order to take appropriate corrective action, if, after notice and a hearing, the commissioner finds either of the following: (a) That any licensee or any subject person of a licensee has violated, is violating, or that there is reasonable cause to believe that any licensee or any subject person of a licensee may violate, any provision of this division or of any regulation or order issued under this division or any provision of any other applicable law. (b) That any licensee or any subject person of a licensee has engaged or participated in, is engaging or participating in, or that there is reasonable cause to believe that any licensee or any subject person of a licensee may engage or participate in, any unsafe or unsound act with respect to the business of the licensee. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  103. 28704.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may issue a cease and desist order, including corrective action, if specific statutory conditions are met.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28704. (a) The commissioner may issue a cease and desist order, including an order to take appropriate corrective action, if the commissioner finds both of the following: (1) That any of the factors set forth in Section 28703 is true with respect to any licensee or any subject person of a licensee. (2) That the action or violation is likely to cause the insolvency of, or substantial dissipation of the assets or earnings of, the licensee, or is likely to seriously weaken the condition of the licensee or otherwise to seriously prejudice the interests of the licensee or the accredited investors of the licensee, prior to the completion of proceedings conducted pursuant to Section 28703. (b) (1) Within 30 days after an order is issued pursuant to subdivision (a), any licensee or subject person of a licensee to whom the order is directed may file with the commissioner an application for a hearing on the order. The filing of an application for a hearing shall not stay the effectiveness of the order. If the commissioner fails to commence a hearing within 15 business days after the application is filed (or within any longer period to which the licensee or subject person consents), the order shall be deemed rescinded. Upon the completion of the hearing, the commissioner shall affirm, modify, or rescind the order. (2) The right of any licensee or subject person of a licensee to whom an order is issued under subdivision (a) to petition for judicial review of the order shall not be affected by the failure of the licensee or subject person to apply to the commissioner for a hearing on the order pursuant to paragraph (1). (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  104. 28705.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may, after notice and a hearing, order a subject person removed from office and barred from further participating in the licensee’s business if specified misconduct and harm findings are made.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28705. The commissioner may issue an order removing a subject person from that person’s office with the licensee, if any, and prohibiting that person from further participating in any manner in the conduct of the business of the licensee, if, after notice and a hearing, the commissioner finds all of the following: (a) (1) That the subject person of a licensee has violated a provision of this division or of any regulation or order issued under this division or any provision of any other applicable law; (2) That the subject person of a licensee has engaged or participated in any unsafe or unsound act with respect to the business of the licensee; or (3) That the subject person of a licensee has engaged or participated in any act which constitutes a breach of his or her fiduciary duty as a subject person. (b) (1) That the act, violation, or breach of fiduciary duty has caused or is likely to cause substantial financial loss or other damage to the licensee or the accredited investors of the licensee; or (2) That the act, violation, or breach of fiduciary duty has seriously prejudiced or is likely to seriously prejudice the interests of the licensee or the accredited investors of the licensee; or (3) That the subject person has received financial gain by reason of the act, violation, or breach of fiduciary duty. (c) That the act, violation, or breach of fiduciary duty either involves dishonesty on the part of the subject person or demonstrates the subject person’s gross negligence with respect to the business of the licensee or a willful disregard for the safety and soundness of the licensee. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  105. 28706.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may remove a subject person from office and bar further participation in the licensee’s business, unless the commissioner consents.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28706. The commissioner may issue an order removing a subject person from his or her office, if any, with the licensee and prohibiting him or her from further participating in any manner in the conduct of the business of the licensee, except with the prior consent of the commissioner, if the commissioner finds, after notice and a hearing, that the subject person of a licensee has, by engaging or participating in any act with respect to any financial or other business institution which resulted in substantial financial loss or other damage, demonstrated either of the following: (a) Dishonesty. (b) Willful or continuing disregard for the safety and soundness of the financial or other business institution. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  106. 28707.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may suspend a subject person and bar further participation in the licensee’s business if specified findings are made.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28707. (a) The commissioner may issue an order suspending a subject person from his or her office, if any, with the licensee and prohibiting him or her from further participating in any manner in the conduct of the business of the licensee, except with the consent of the commissioner, if the commissioner finds both of the following: (1) That the factors set forth in subdivisions (a), (b), and (c) of Section 28705 or the factors set forth in subdivision (a) of Section 28706 are true with respect to the subject person of a licensee. (2) That it is necessary for the protection of the interests of the licensee or the accredited investors of the licensee, or for the protection of the public interest that the commissioner immediately suspend the subject person from his or her office, if any, with the licensee and prohibit him or her from further participating in any manner in the conduct of the business of the licensee. (b) (1) Within 30 days after an order is issued pursuant to subdivision (a), any subject person of a licensee to whom the order is directed may file with the commissioner an application for a hearing on the order. The filing of an application for a hearing shall not stay the effectiveness of the order. If the commissioner fails to begin a hearing within 15 business days after the application is filed (or within any longer period to which the subject person consents), the order shall be deemed rescinded. Upon the completion of the hearing, the commissioner shall affirm, modify, or rescind the order. (2) The right of any subject person of a licensee to whom an order is issued under subdivision (a) to petition for judicial review of the order shall not be affected by the failure of the subject person to apply to the commissioner for a hearing on the order pursuant to paragraph (1). (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  107. 28708.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may suspend or remove certain licensee-related persons and bar them from participating in the licensee’s business if specified dishonesty- or trust-related criminal findings are made. Affected persons may request a hearing, and the commissioner must begin it within 15 business days after the request or the order is rescinded.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28708. (a) The commissioner may issue an order suspending a subject person from his or her office, if any, with the licensee and prohibiting him or her from further participating in any manner in the conduct of the business of the licensee, except with the consent of the commissioner, if the commissioner finds both of the following: (1) That the subject person of a licensee has been indicted by a grand jury for, or held to answer by a magistrate for, a crime involving dishonesty or breach of trust. (2) That the continuation of that person as a subject person of the licensee may threaten the interests of the licensee or the accredited investors of the licensee, or may threaten to impair public confidence in the licensee. (b) The commissioner may issue an order suspending or removing the subject person or former subject person from his or her office, if any, with the licensee and prohibiting him or her from further participating in any manner in the conduct of the business of the licensee, except with the prior consent of the commissioner, if the commissioner finds both of the following: (1) That the subject person or former subject person of a licensee to whom an order was issued pursuant to subdivision (a) or any other subject person of a licensee has been finally convicted of a crime which is punishable by imprisonment for a term exceeding one year and which involves dishonesty or breach of trust. (2) That the continuation or resumption by that person as a subject person of the licensee may threaten the interests of the licensee or the accredited investors of the licensee, or may threaten to impair public confidence in the licensee. (c) (1) Within 30 days after an order is issued pursuant to subdivision (a) or (b), any subject person of a licensee to whom the order is directed may file with the commissioner an application for a hearing on the order. If the commissioner fails to commence a hearing within 15 business days after the application is filed (or within any longer period to which the subject person consents), the order shall be deemed rescinded. Upon the completion of the hearing, the commissioner shall affirm, modify, or rescind the order. (2) The right of any subject person or former subject person of a licensee to whom an order is issued under subdivision (a) or (b) to petition for judicial review of the order shall not be affected by the failure of the person to apply to the commissioner for a hearing on the order pursuant to paragraph (1). (d) The fact that any subject person of a licensee charged with a crime involving dishonesty or breach of trust is not finally convicted of the crime shall not preclude the commissioner from issuing an order to the subject person pursuant to any other section of this division. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  108. 28709.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A person subject to certain orders may ask the commissioner to modify or cancel the order, and the commissioner may grant it only if doing so is in the public interest and the person is reasonably expected to comply with applicable rules and orders.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28709. Any person to whom an order is issued under Section 28705, 28706, 28707, or 28708 may apply to the commissioner to modify or rescind the order. The commissioner shall not grant the application unless the commissioner finds that it is in the public interest to do so and that it is reasonable to believe that the person will, if and when he or she becomes a subject person of a licensee, comply with all applicable provisions of this division and of any regulation or order issued under this division. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  109. 28710.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may suspend or revoke a license after notice and a hearing if certain grounds are found.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28710. The commissioner may issue an order suspending or revoking the license of a licensee, if, after notice and a hearing, the commissioner finds any of the following: (a) That the licensee or any controlling person or affiliate of the licensee has violated any provision of this division or of any regulation or order issued under this division or any provision of any other applicable law. (b) That the licensee is conducting its business in an unsafe and unsound manner. (c) That the licensee is in a condition that it is unsafe or unsound for it to transact business. (d) That the licensee has ceased to transact business as a capital access company. (e) That the licensee is insolvent. (f) That the licensee has suspended payment of its obligations, has made an assignment for the benefit of its creditors, or has admitted in writing its inability to pay its debts as they become due. (g) That the licensee is the subject of an order for relief in bankruptcy or has sought other similar relief under any other bankruptcy, reorganization, insolvency, or moratorium law, or that any person has applied for any of that relief under any of those laws against any licensee and the licensee has by any affirmative act approved of or consented to the action or the relief has been granted. (h) That any fact or condition exists which, if it had existed at the time when any licensee applied for its license, would have been grounds for denying the application. (Amended by Stats. 2009, Ch. 500, Sec. 31. (AB 1059) Effective January 1, 2010.)
  110. 28711.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may suspend or revoke a license if certain factors are found and public protection requires it.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28711. (a) If the commissioner finds that any of the factors set forth in Section 28710 is true with respect to any licensee and that it is necessary for the protection of the public interest that the commissioner immediately suspend or revoke the license of the licensee, the commissioner may issue an order suspending or revoking the license of the licensee. (b) Within 30 days after an order is issued pursuant to subdivision (a), any licensee to whom the order is directed may file with the commissioner a request for a hearing on the order. If the commissioner fails to commence a hearing within 15 business days after the request is filed (or within any longer period to which the licensee consents), the order shall be deemed rescinded. Upon the completion of the hearing, the commissioner shall affirm, modify, or rescind the order. (Amended by Stats. 2007, Ch. 101, Sec. 7. Effective January 1, 2008.)
  111. 28712.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    If a person’s license is suspended or revoked, they must immediately deliver the license to the commissioner.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28712. Any person whose license is suspended or revoked shall immediately deliver the license to the commissioner. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  112. 28713.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A person subject to certain orders may ask the commissioner to modify or rescind the order, but the commissioner may grant it only if doing so is in the public interest and future compliance is reasonably likely.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28713. Any person to whom an order is issued under Section 28709 or 28710 may apply to the commissioner to modify or rescind the order. The commissioner shall not grant the application unless the commissioner finds that it is in the public interest to do so and that it is reasonable to believe that the person will, if and when it becomes a licensee, comply with all applicable provisions of this division and of any regulation or order issued under this division. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  113. 28714.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    If certain conditions are met, the commissioner may take possession of a licensee’s property and business; the licensee may seek court review within 10 days; and the commissioner must conserve or liquidate the property and business once in possession.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28714. (a) If the commissioner finds that any of the factors set forth in Section 28709 is true with respect to any licensee and that it is necessary for the protection of the interests of the licensee or the accredited investors of the licensee, or for the protection of the public interest that the commissioner take immediate possession of the property and business of the licensee, the commissioner may forthwith take possession of the property and business of the licensee and retain possession until the licensee resumes business or is finally liquidated. The licensee may, with the consent of the commissioner, resume business upon any conditions that the commissioner may prescribe. (b) Whenever the commissioner takes possession of the property and business of a licensee pursuant to subdivision (a), the licensee may apply within 10 days to the superior court in the county in which the head office of the licensee is located to enjoin further proceedings. The court, after citing the commissioner to show cause why further proceedings should not be enjoined and after a hearing, may dismiss the application or enjoin the commissioner from further proceedings and order the commissioner to surrender the property and business of the licensee to the licensee or make any further order that may be just. (c) An appeal may be taken from the judgment of the superior court by the commissioner or by the licensee in the manner provided by law for appeals from the judgment of a superior court. An appeal from the judgment of the superior court shall operate as a stay of the judgment. No bond need be given if the appeal is taken by the commissioner, but if the appeal is taken by the licensee, a bond shall be given as required by the Code of Civil Procedure. (d) Whenever the commissioner takes possession of the property and business of a licensee pursuant to subdivision (a), the commissioner shall conserve or liquidate the property and business of the licensee. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  114. 28715.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    Government Code sections 11041, 11042, and 11043 do not apply to the Commissioner of Financial Protection and Innovation.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28715. Sections 11041, 11042, and 11043 of the Government Code do not apply to the Commissioner of Financial Protection and Innovation. (Amended by Stats. 2022, Ch. 452, Sec. 88. (SB 1498) Effective January 1, 2023.)
  115. 28716.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A person must not tamper with records or make false entries, and must not make untrue statements to the commissioner, when doing so to obstruct this division’s administration or enforcement.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 11. Enforcement [28700 - 28716] ( Chapter 11 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28716. (a) It is unlawful for any person to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the administration or enforcement of this division. (b) It is unlawful for any person to knowingly make an untrue statement to the commissioner during the course of licensing, investigation, or examination, with the intent to impede, obstruct, or influence the administration or enforcement of any provision of this division. (Added by Stats. 2007, Ch. 101, Sec. 8. Effective January 1, 2008.)
  116. 28800.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. General Provisions [28800 - 28802] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A person may not willfully make a false material statement or willfully omit a required material fact in filings made to the commissioner under this division or related regulations/orders.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. General Provisions [28800 - 28802] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28800. It shall be unlawful for any person willfully to make any untrue statement of a material fact in any application, report, or other document filed with the commissioner under this division or under any regulation or order issued under this division, or willfully to omit to state in any application, report or other document filed with the commissioner under this division any material fact which is required to be stated therein. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  117. 28801.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. General Provisions [28800 - 28802] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A person who controls a licensee’s books or records must not willfully refuse the commissioner’s request to inspect or copy them.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. General Provisions [28800 - 28802] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28801. It shall be unlawful for any person having custody of any of the books, accounts, or other records of a licensee willfully to refuse to allow the commissioner, upon request, to inspect or make copies of any of those books, accounts, or other records. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  118. 28802.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. General Provisions [28800 - 28802] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A person must not, with intent to deceive specified people or agencies, make false entries in a licensee’s books or records, omit required entries, or alter, conceal, or destroy those records.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 1. General Provisions [28800 - 28802] ( Article 1 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28802. It shall be unlawful for any person, with intent to deceive any director, officer, employee, auditor, or attorney of a licensee, the commissioner or any governmental agency, to make any false entry in any of the books, accounts or other records of the licensee, to omit to make any entry in those books, accounts or other records which the person is required to make, or to alter, conceal, or destroy any of those books, accounts, or other records. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  119. 28820.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Conflicts of Interest [28820 - 28821] ( Article 2 repealed and added by Stats. 2010, Ch. 516, Sec. 14. )

    Verify source ↗

    This section defines “associate” and “close relative” for this article.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Conflicts of Interest [28820 - 28821] ( Article 2 repealed and added by Stats. 2010, Ch. 516, Sec. 14. ) ## 28820. In this article, unless the context otherwise requires: (a) (1) “Associate,” when used with respect to a licensee, means all of the following: (A) Any principal shareholder, director, officer, manager, agent, or adviser of the licensee. (B) Any director, officer, partner, general manager, agent, employer, or employee of any person referred to in subparagraph (A). (C) Any person who controls, is controlled by, or is under common control with, any person referred to in subparagraph (A), directly or indirectly, through one or more intermediaries. (D) Any close relative of any person referred to in subparagraph (A). (E) Any person of whom any person referred to in subparagraphs (A) to (D), inclusive, is a director or officer. (F) Any person in whom any person referred to in subparagraphs (A) to (D), inclusive, or any combination of persons acting in concert owns or controls, directly or indirectly, a 10-percent or greater equity interest. (2) For purposes of this subdivision, any person who is in any of the relationships referred to in subparagraphs (A) to (F), inclusive, of paragraph (1) within six months before or after a licensee provides financing assistance shall be deemed to be in the relationship as of the date when the licensee provides the financing assistance. (3) For purposes of this subdivision, if a licensee, in order to protect its interests, designates any person to serve as a director of, officer of, or in any capacity in the management of, a small business firm to which the licensee provides financing assistance, the person shall not, on that account, be deemed to have any relationship with the small business firm. However, this paragraph shall not apply in any case where the person has, directly or indirectly, any other financial interest in the small business firm or where the person, at any time before the licensee provides the financing assistance, served as a director of, officer of, or in any other capacity in the management of, the small business firm for a period of 30 days or more. (b) “Close relative” means ancestor, lineal descendant, brother or sister and lineal descendants of either, spouse, father-in-law, mother-in-law, son-in-law, brother-in-law, daughter-in-law, or sister-in-law. (Repealed and added by Stats. 2010, Ch. 516, Sec. 14. (SB 1155) Effective January 1, 2011.)
  120. 28821.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Conflicts of Interest [28820 - 28821] ( Article 2 repealed and added by Stats. 2010, Ch. 516, Sec. 14. )

    Verify source ↗

    Licensees and their associates are restricted from conflicted financial assistance, borrowing, and benefit-taking unless the commissioner gives prior written approval or an exemption in specified cases.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 2. Conflicts of Interest [28820 - 28821] ( Article 2 repealed and added by Stats. 2010, Ch. 516, Sec. 14. ) ## 28821. (a) A licensee shall not provide financial or managerial assistance to, or for the benefit of, any person to the detriment of a small business firm or smaller business firm, the licensee, its shareholders, or partners. Unless a licensee obtains a prior written exemption from the commissioner for special instances in which providing financial assistance may further the purposes of this division despite presenting a conflict of interest, a licensee shall not directly or indirectly do any of the following: (1) Provide financial assistance to any of the licensee’s associates. (2) Provide financial assistance to an associate of another licensee, if one of the licensee’s associates has received or will receive any direct or indirect financial assistance or a commitment from that licensee or a third licensee, including financial assistance or commitments received under any understanding, agreement, or cross dealing, reciprocal or circular arrangement. (3) Borrow money from any of the following: (A) A small business firm or smaller business firm to which the licensee has provided financial assistance. (B) An officer, director, or owner of at least a 10-percent equity interest in the business. (C) A close relative of a person described in subparagraph (B). (4) Provide financial assistance to a small business firm or smaller business firm to discharge an obligation to a licensee’s associate or to make other funds available to pay the obligation, except if the obligation is to an associate lending institution and is a line of credit or other obligation incurred in the normal course of business. (5) Provide financial assistance to a small business firm or smaller business firm for the purpose of purchasing property from a licensee’s associate. (b) Without the commissioner’s prior written approval, a licensee’s associates shall not, directly or indirectly, do either of the following: (1) Borrow money from any person described in paragraph (3) of subdivision (a). (2) Receive from a small business firm or smaller business firm any compensation in connection with any financial assistance a licensee provides or anything of value for procuring, attempting to procure, or influencing a licensee’s action with respect to that financial assistance. (c) (1) Without the commissioner’s prior written approval, a licensee shall not provide financial assistance to any business in which the licensee’s associate has either a voting equity interest, or total equity interests, including potential interests, of at least 5 percent. (2) If a licensee and its associate provide financial assistance to the same small business firm or smaller business firm, whether at the same time or different times, a licensee shall demonstrate to the commissioner’s satisfaction that the terms and conditions are, or were, fair and equitable to the licensee, taking into account any differences in the timing of each party’s financial transactions. (3) Financial assistance that meets either of the following criteria is exempt from the prior approval requirement in paragraph (1) and shall be presumed to be fair and equitable to the licensee for the purposes of paragraph (2): (A) The licensee’s associate is a lending institution that is providing financing under a credit facility in order to meet the operational needs of a small business firm or smaller business firm, and the terms of that financing are usual and customary. (B) The licensee’s associate invests in the small business firm or smaller business firm on the same terms and conditions and at the same time as the licensee. (d) To protect a licensee’s investment, a licensee may designate an associate to serve as an officer, director, or other participant in the management of a small business firm or smaller business firm. The licensee shall identify this associate in the licensee’s records maintained and made available for the commissioner’s review. Without the commissioner’s prior written approval, the associate shall not do any of the following: (1) Have any other direct or indirect financial interest in the small business firm or smaller business firm that exceeds, or has the potential to exceed, 5 percent of the firm’s equity. (2) Have served for more than 30 days as an officer, director, or other participant in the management of the small business firm or smaller business firm before the licensee provided the financial assistance. (3) Receive any income or anything of value from the small business firm or smaller business firm unless it is for the licensee’s benefit, with the exception of director’s fees, expenses, and distributions based upon the associate’s ownership interest in the small business firm or smaller business firm. (Repealed and added by Stats. 2010, Ch. 516, Sec. 14. (SB 1155) Effective January 1, 2011.)
  121. 28880.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 3. Criminal Penalties [28880 - 28881] ( Article 3 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    A person who willfully violates any provision in this chapter can be fined or imprisoned, or both.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 3. Criminal Penalties [28880 - 28881] ( Article 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28880. Any person who willfully violates any provision under this chapter shall upon conviction be fined not more than two hundred fifty thousand dollars ($250,000) or be imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail for not more than one year, or be punished by both that fine and imprisonment. (Amended by Stats. 2011, Ch. 15, Sec. 50. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)
  122. 28881.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 3. Criminal Penalties [28880 - 28881] ( Article 3 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    This section says the division does not limit the state's power to punish crimes under any statute.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 12. Crimes and Criminal Penalties [28800 - 28881] ( Chapter 12 added by Stats. 1998, Ch. 668, Sec. 3. ) ## ARTICLE 3. Criminal Penalties [28880 - 28881] ( Article 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28881. Nothing in this division limits the power of the state to punish any person for any act which constitutes a crime under any statute. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  123. 28900.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 13. Civil Penalties [28900 - 28901] ( Chapter 13 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    After notice and a hearing, the commissioner may order a person who violated this division, or a related regulation or order, to pay a civil penalty.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 13. Civil Penalties [28900 - 28901] ( Chapter 13 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28900. If, after notice and a hearing, the commissioner finds that any person has violated any provision of this division or of any regulation or order issued under this division, the commissioner may order the person to pay to the commissioner a civil penalty in that amount as the commissioner may specify. However, the amount of the civil penalty shall not exceed two thousand five hundred dollars ($2,500) for each violation, or in the case of a continuing violation, two thousand five hundred dollars ($2,500) for each day for which the violation continues. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  124. 28901.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 13. Civil Penalties [28900 - 28901] ( Chapter 13 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    Section 28901 says Section 28900 is additive to other enforcement provisions, but a person finally convicted under Chapter 12 is not liable for a civil penalty under Section 28900 for that same violation.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 13. Civil Penalties [28900 - 28901] ( Chapter 13 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28901. The provisions of Section 28900 are additional to, and not alternative to, other provisions of this division which authorize the commissioner to issue orders or to take other action on account of a violation of any provision of this division or of any regulation or order issued under this division. However, no person who has been finally convicted under Chapter 12 (commencing with Section 28800) of this division on account of a violation of any provision of Chapter 12 (commencing with Section 28800) shall be liable to pay a civil penalty under Section 28900 on account of the violation. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  125. 28950.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    Liability under this division does not apply to acts or omissions done in good faith and in line with specified official rules, forms, permits, orders, or interpretive opinions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28950. No provision of this division imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form, permit, order, or written interpretive opinion of the commissioner, or any written interpretive opinion of the Attorney General, notwithstanding that the rule, form, permit, order, or written interpretive opinion may later be amended or rescinded or be determined by judicial or other authority to be invalid for any reason. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  126. 28951.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. )

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    The commissioner may issue, change, or cancel rules, forms, and orders for this law, define terms, classify persons, set different requirements for different classes, waive requirements when not needed in the public interest, and exempt persons or transactions by regulation or order.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28951. (a) The commissioner may from time to time make, amend, and rescind the rules, forms, and orders that are necessary to carry out this law, and define any terms, whether or not used in this law, insofar as the definitions are not inconsistent with this law. For the purpose of rules, the commissioner may, among other things, classify persons within the commissioner’s jurisdiction and may prescribe different requirements for different classes. The commissioner may, in the commissioner’s discretion, waive any requirement of any rule or form in situations where in his or her opinion the requirement is not necessary in the public interest. (b) The commissioner may, by regulation or order, either unconditionally or upon specified terms and conditions or for specified periods, exempt from the provisions of this division any person or transaction or class of persons or transactions, if the commissioner finds that action to be in the public interest and that the regulation of those persons or transactions is not necessary for the purposes of this division. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  127. 28952.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner may honor requests from interested persons for interpretive opinions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28952. The commissioner may honor requests from interested persons for interpretive opinions. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  128. 28953.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. )

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    In proceedings under this law, the person claiming an exemption or exception from a definition must prove it.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28953. In any proceeding under this law, the burden of proving an exemption or an exception from a definition is upon the person claiming it. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  129. 28954.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. )

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    The commissioner’s final orders, decisions, licenses, and other official acts may be reviewed by a court under applicable law.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28954. Every final order, decision, license, or other official act of the commissioner is subject to judicial review in accordance with law. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  130. 28955.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section says the chapter does not limit the commissioner’s authority or powers under the Corporate Securities Law of 1968.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28955. Nothing in this law, shall impair, derogate, or otherwise affect the authority or powers of the commissioner under the Corporate Securities Law of 1968 (Part 3 (commencing with Section 25000)) or the application of any provision thereof to any person or transaction subject thereto. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  131. 28956.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    If part of this division is held invalid, the rest remains effective if it can still operate without the invalid part.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28956. If any provision of this division , or the application thereof to any person or circumstance, is held invalid, the invalidity shall not affect other provisions or applications of this law that can be given effect without the invalid provision or application, and to this end the provisions of this division are declared to be severable. (Amended by Stats. 1999, Ch. 83, Sec. 27. Effective January 1, 2000.)
  132. 28957.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. )

    Verify source ↗

    The commissioner and the commissioner’s employees must not use nonpublic information they obtain for personal gain, and must not make securities trades based on that information before the market has had time to absorb it.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28957. Neither the commissioner nor any employee of the commissioner shall use any information which is filed with or obtained by the commissioner which is not public information for personal gain or benefit, nor shall the commissioner nor any employee of the commissioner engage in any securities transaction based on that information, even though public, if there has not been a sufficient period of time for the securities or commodity markets to assimilate that information. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  133. 28958.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. )

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    This section says the program must be funded with money appropriated by the Legislature from the State Corporations Fund.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 3. CAPITAL ACCESS COMPANIES [28000 - 28958] ( Division 3 added by Stats. 1998, Ch. 668, Sec. 3. ) ## CHAPTER 14. Miscellaneous Provisions [28950 - 28958] ( Chapter 14 added by Stats. 1998, Ch. 668, Sec. 3. ) ## 28958. (a) The program established by this division shall be supported from funds appropriated by the Legislature from the State Corporations Fund. (b) The funds appropriated from the State Corporations Fund and made available for expenditure under subdivision (a) of this section shall come from fees collected under Section 28110, penalties collected under Sections 28880 and 28900, and securities application filing fees collected under subdivisions (e), (f), (h), and (i) of Section 25608 and notice filing fees collected under subdivision (a) of Section 25608.1. (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  134. 2900.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 5. Shareholder Derivative Actions [2900- 2900.] ( Chapter 5 added by Stats. 2011, Ch. 740, Sec. 12. )

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    Shareholders of a social purpose corporation may bring a derivative lawsuit, but non-shareholders generally may not sue in the corporation’s right. In some cases the court can require a plaintiff bond of up to $50,000, and the action may be stayed while a bond motion is pending.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 5. Shareholder Derivative Actions [2900- 2900.] ( Chapter 5 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2900. (a) As used in this section: (1) “Social purpose corporation” includes an unincorporated association. (2) “Board” includes the managing body of an unincorporated association. (3) “Shareholder” includes a member of an unincorporated association. (4) “Shares” includes memberships in an unincorporated association. (b) Shareholders of a social purpose corporation may maintain a derivative lawsuit to enforce the requirements set forth in subdivision (c) of Section 2700. (c) No action may be instituted or maintained in right of any domestic or foreign social purpose corporation under this section by any party other than a shareholder of the social purpose corporation. (d) No action may be instituted or maintained in right of any domestic or foreign social purpose corporation by any holder of shares or of voting trust certificates of the social purpose corporation unless both of the following conditions exist: (1) The plaintiff alleges in the complaint that plaintiff was a shareholder, of record or beneficially, or the holder of voting trust certificates at the time of the transaction or any part thereof of which plaintiff complains or that plaintiff’s shares or voting trust certificates thereafter devolved upon plaintiff by operation of law from a holder who was a holder at the time of the transaction or any part thereof complained of. Any shareholder who does not meet these requirements may nevertheless be allowed, in the discretion of the court, to maintain the action on a preliminary showing to and determination by the court, by motion and after a hearing, at which the court shall consider the evidence by affidavit or testimony, as it deems material, of all of the following: (A) There is a strong prima facie case in favor of the claim asserted on behalf of the social purpose corporation. (B) No other similar action has been or is likely to be instituted. (C) The plaintiff acquired the shares before there was disclosure to the public or to the plaintiff of the wrongdoing of which plaintiff complains. (D) Unless the action can be maintained the defendant may retain a gain derived from defendant’s willful breach of a fiduciary duty. (E) The requested relief will not result in unjust enrichment of the social purpose corporation or any shareholder of the social purpose corporation. (2) The plaintiff alleges in the complaint with particularity plaintiff’s efforts to secure from the board the action as plaintiff desires, or the reasons for not making that effort, and alleges further that plaintiff has either informed the social purpose corporation or the board in writing of the ultimate facts of each cause of action against each defendant or delivered to the social purpose corporation or the board a true copy of the complaint which plaintiff proposes to file. (e) In any action referred to in subdivision (c), at any time within 30 days after service of summons upon the social purpose corporation or upon any defendant who is an officer or director of the social purpose corporation, or held that office at the time of the acts complained of, the social purpose corporation or the defendant may move the court for an order, upon notice and hearing, requiring the plaintiff to furnish a bond as hereinafter provided. The motion shall be based upon one or both of the following grounds: (1) There is no reasonable possibility that the prosecution of the cause of action alleged in the complaint against the moving party will benefit the social purpose corporation or its shareholders. (2) The moving party, if other than the social purpose corporation, did not participate in the transaction complained of in any capacity. The court on application of the social purpose corporation or any defendant may, for good cause shown, extend the 30-day period for an additional period or periods not exceeding 60 days. (f) At the hearing upon any motion pursuant to subdivision (d), the court shall consider the evidence, written or oral, by witnesses or affidavit, as may be material to the ground or grounds upon which the motion is based, or to a determination of the probable reasonable expenses, including attorney’s fees, of the social purpose corporation and the moving party that will be incurred in the defense of the action. If the court determines, after hearing the evidence adduced by the parties, that the moving party has established a probability in support of any of the grounds upon which the motion is based, the court shall fix the amount of the bond, not to exceed fifty thousand dollars ($50,000), to be furnished by the plaintiff for reasonable expenses, including attorney’s fees, which may be incurred by the moving party and the social purpose corporation in connection with the action, including expenses for which the social purpose corporation may become liable pursuant to Section 2702. A ruling by the court on the motion shall not be a determination of any issue in the action or of the merits thereof. If the court, upon the motion, makes a determination that a bond shall be furnished by the plaintiff as to any one or more defendants, the action shall be dismissed as to the defendant or defendants, unless the bond required by the court has been furnished within such reasonable time as may be fixed by the court. (g) If the plaintiff, either before or after a motion is made pursuant to subdivision (d), or any order or determination pursuant to the motion, furnishes a bond in the aggregate amount of fifty thousand dollars ($50,000) to secure the reasonable expenses of the parties entitled to make the motion, the plaintiff shall be deemed to have complied with the requirements of this section and with any order for a bond theretofore made, and any motion then pending shall be dismissed and no further or additional bond shall be required. (h) If a motion is filed pursuant to subdivision (d), no pleadings need be filed by the social purpose corporation or any other defendant and the prosecution of the action shall be stayed until 10 days after the motion has been disposed of. (Amended by Stats. 2014, Ch. 694, Sec. 46. (SB 1301) Effective January 1, 2015.)
  135. 29000.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    The chapter’s definitions apply to this division unless the provision or context requires otherwise.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. ) ## 29000. Unless the provision or the context otherwise requires, the definitions set forth in this chapter govern the construction of this division. (Added by Stats. 1949, Ch. 386.)
  136. 29001.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    This section defines “person” to include individuals, business entities, and associations, whether domestic or foreign, and whether acting for themselves or for another.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. ) ## 29001. “Person” means an individual, partnership, corporation, limited liability company, or association, either domestic or foreign, whether acting in his or her own right or as the officer, agent, servant, employee, correspondent, or representative of another or as trustee. (Amended by Stats. 1994, Ch. 1010, Sec. 93. Effective January 1, 1995.)
  137. 29002.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    This section defines “trustee” and “trust.”

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. ) ## 29002. (a) “Trustee” means a person executing a trust, as defined in this section. (b) “Trust” means any voluntary trust expressly created by or declared in an instrument in writing, other than a will or a judicial writ, order, decree, or judgment, to carry on any business or to secure the payment or repayment of money. (Amended by Stats. 1986, Ch. 820, Sec. 23. Operative July 1, 1987, by Sec. 43 of Ch. 820.)
  138. 29003.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    This section defines “contract” to include any agreement, trade, or transaction.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. ) ## 29003. “Contract” includes any agreement, trade, or transaction. (Added by Stats. 1949, Ch. 386.)
  139. 29004.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    This section defines “securities” to include shares, debt instruments, certain rights and similar property interests, and options to buy or sell them.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. ) ## 29004. “Securities” means all shares in any corporation or association or of trustees, bonds, coupons, scrip, rights, choses in action, and other evidences of debt or property and options for the purchase or sale thereof or of any right entitling the holder thereof to participate in profits or a division of assets. (Added by Stats. 1949, Ch. 386.)
  140. 29005.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    This section defines “commodities” as anything movable that is bought and sold.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. ) ## 29005. “Commodities” means anything movable that is bought and sold. (Added by Stats. 1949, Ch. 386.)
  141. 29006.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    “Bucket shop” is defined as a place where a bucketing or bucket shopping contract is made or offered.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. ) ## 29006. “Bucket shop” means any room, office, store, building, or other place where any bucketing or bucket shopping contract is made or offered to be made. (Added by Stats. 1949, Ch. 386.)
  142. 29007.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    “Keeper” means a person who owns, keeps, manages, operates, promotes, or helps promote a bucket shop.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. ) ## 29007. “Keeper” means any person owning, keeping, managing, operating, or promoting a bucket shop, or assisting to keep, manage, operate, or promote a bucket shop. (Added by Stats. 1949, Ch. 386.)
  143. 29008.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    This section defines “bucketing” or “bucket shopping” as certain securities or commodities contracts or sales tied to market quotations without a bona fide purchase, sale, receipt, or delivery, and includes a seller’s failure to credit proceeds immediately and provide a written report by the next business day.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 1. Definitions [29000 - 29008] ( Chapter 1 added by Stats. 1949, Ch. 386. ) ## 29008. “Bucketing” or “bucket shopping” means any of the following: (a) Making or offering to make any contract respecting the purchase or sale of any securities or commodities, wherein both parties intend, or the keeper intends, that the contract shall be, or may be, terminated, closed, or settled according to or upon the basis of the public market quotations of prices made on any board of trade or exchange upon which the securities or commodities are dealt in, without a bona fide purchase or sale of the securities or commodities. (b) Making or offering to make any contract respecting the purchase or sale of any securities or commodities, wherein both parties intend, or the keeper intends, that the contract shall be, or may be, deemed terminated, closed, or settled when the public market quotations of prices for the securities or commodities named in the contract reach a certain figure without a bona fide purchase or sale of the securities or commodities. (c) Making or offering to make any contract respecting the purchase or sale of any securities or commodities, wherein both parties do not intend, or such keeper does not intend, the actual or bona fide receipt or delivery of the securities or commodities, but do intend, or the keeper does intend, a settlement of the contract based upon the differences in the public market quotations of prices at which the securities or commodities are or are asserted to be bought and sold. (d) The sale by a keeper of any security or commodity purchased by him for the account of or upon the order of another when the proceeds of the sale are not immediately credited by the keeper to the account of the other person and when a report or statement in writing of the sale is not rendered to the other person by the keeper on the next business day following the sale. (Added by Stats. 1949, Ch. 386.)
  144. 29100.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 2. Prohibited Activities [29100 - 29105] ( Chapter 2 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    A person who makes or offers a bucketing contract, makes a bucketing sale, or keeps a bucket shop is guilty of a felony.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 2. Prohibited Activities [29100 - 29105] ( Chapter 2 added by Stats. 1949, Ch. 386. ) ## 29100. Any person who makes or offers to make any contract constituting bucketing under Section 29008, or who makes any sale constituting bucketing under Section 29008, or who is the keeper of any bucket shop, is guilty of a felony. (Added by Stats. 1949, Ch. 386.)
  145. 29101.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 2. Prohibited Activities [29100 - 29105] ( Chapter 2 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    A person may not communicate, receive, exhibit, or display quotations of prices for securities or commodities when doing so to make, offer to make, or help make a bucketing contract under Section 29008.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 2. Prohibited Activities [29100 - 29105] ( Chapter 2 added by Stats. 1949, Ch. 386. ) ## 29101. Any person who communicates, receives, exhibits, or displays in any manner any statement of quotations of prices of any securities or commodities, with an intent to make, or to offer to make, or to aid in making or offering to make, any contract constituting bucketing under Section 29008 is guilty of a felony. (Added by Stats. 1949, Ch. 386.)
  146. 29102.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 2. Prohibited Activities [29100 - 29105] ( Chapter 2 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    Felonies in this chapter are punishable, with different penalties depending on whether the offender is a corporation.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 2. Prohibited Activities [29100 - 29105] ( Chapter 2 added by Stats. 1949, Ch. 386. ) ## 29102. The felonies specified in this chapter are punishable, for each offense, if the offender is a corporation, by a fine of not less than one thousand dollars ($1,000) nor more than ten thousand dollars ($10,000) or, if the offender is not a corporation, by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or by a fine of not less than one thousand dollars ($1,000) nor more than ten thousand dollars ($10,000), or by both that imprisonment and fine. (Amended by Stats. 2011, Ch. 15, Sec. 51. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)
  147. 29103.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 2. Prohibited Activities [29100 - 29105] ( Chapter 2 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    A corporation’s prosecution, conviction, or punishment under this chapter is not treated as the prosecution, conviction, or punishment of its officers, directors, or shareholders.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 2. Prohibited Activities [29100 - 29105] ( Chapter 2 added by Stats. 1949, Ch. 386. ) ## 29103. The prosecution, conviction, and punishment of a corporation under any provision of this chapter shall not be deemed to be a prosecution, conviction, or punishment of any of its officers, directors, or shareholders. (Added by Stats. 1949, Ch. 386.)
  148. 29104.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 2. Prohibited Activities [29100 - 29105] ( Chapter 2 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    Contracts for share trades made without any real intention to deliver or receive the shares, and instead only betting on price differences, are void.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 2. Prohibited Activities [29100 - 29105] ( Chapter 2 added by Stats. 1949, Ch. 386. ) ## 29104. All contracts for the purchase or sale of shares of the capital stock of any corporation or association without any intention on the part of one party to deliver and of the other party to receive the shares, and contemplating merely the payment of differences between the contract and market prices on divers days, shall be void, and neither party to any such contract shall be entitled to recover any damages for failure to perform the same, or any money paid thereon, in any court of this state. (Added by Stats. 1966, 1st Ex. Sess., Ch. 161.)
  149. 29105.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 2. Prohibited Activities [29100 - 29105] ( Chapter 2 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    It is unlawful to tamper with records or objects, or to make an untrue statement to the commissioner, when done knowingly and with intent to obstruct or influence enforcement of this division.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 2. Prohibited Activities [29100 - 29105] ( Chapter 2 added by Stats. 1949, Ch. 386. ) ## 29105. (a) It is unlawful for any person to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the administration or enforcement of this division. (b) It is unlawful for any person to knowingly make an untrue statement to the commissioner during the course of licensing, investigation, or examination, with the intent to impede, obstruct, or influence the administration or enforcement of any provision of this division. (Added by Stats. 2007, Ch. 101, Sec. 9. Effective January 1, 2008.)
  150. 29200.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 3. Required Records and Statements [29200 - 29201] ( Chapter 3 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    Brokers and certain broker agents must keep permanent, correct transaction records at their office or business, and those records must be open to inspection by specified financial regulators.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 3. Required Records and Statements [29200 - 29201] ( Chapter 3 added by Stats. 1949, Ch. 386. ) ## 29200. Every person doing business as a broker or making contracts as a broker or agent for the purchase or sale of any securities or commodities on any board of trade or exchange shall keep or cause to be kept at their office or place of business correct and permanent records or books of account showing each of such transactions as a separate item. The failure so to keep or cause to be kept such records or books of account is prima facie evidence that any such contract was bucketing or bucketshopping. Such records or books of account shall at all times be open to inspection by the Commissioner of Financial Protection and Innovation or by any deputy, investigator, or auditor of the Department of Financial Protection and Innovation to whom the commissioner may delegate such authority in writing. (Amended by Stats. 2022, Ch. 452, Sec. 89. (SB 1498) Effective January 1, 2023.)
  151. 29201.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 3. Required Records and Statements [29200 - 29201] ( Chapter 3 added by Stats. 1949, Ch. 386. )

    Verify source ↗

    On written demand, a person who executed an order for a customer or principal must provide a written statement with the seller/buyer name, time, place, and price of the transaction.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4. BUCKET SHOP LAW [29000 - 29201] ( Division 4 added by Stats. 1949, Ch. 386. ) ## CHAPTER 3. Required Records and Statements [29200 - 29201] ( Chapter 3 added by Stats. 1949, Ch. 386. ) ## 29201. Every person shall, upon written demand therefor, furnish to any customer or principal for whom he has executed any order for the actual purchase or sale of any securities or commodities on any board of trade or exchange, either for immediate or future delivery, a written statement showing the name of the person from whom the property was bought or to whom it was sold, as the case may be, and the time when, place where, and the price at which it was either bought or sold. If any such person refuses or neglects to furnish such a statement within forty-eight hours after such demand, the refusal or neglect is prima facie evidence that the transaction was bucketing or bucket shopping within the terms of this division. (Added by Stats. 1949, Ch. 386.)
  152. 29500.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

    Verify source ↗

    This section names the division the California Commodity Law of 1990 and says references to “this law” mean the applicable provisions of the division unless context shows otherwise.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29500. This division shall be known and may be cited as the “California Commodity Law of 1990.” References herein to “this law” refer to the applicable provisions of this division unless the context otherwise requires. The definitions in this chapter govern the construction of this law. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  153. 29501.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

    Verify source ↗

    “Board of trade” is defined as a person or group of persons engaged in buying or selling a commodity, or receiving a commodity for sale on consignment, regardless of how the marketplace is described.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29501. “Board of trade” means any person or group of persons engaged in buying or selling any commodity or receiving the same for sale on consignment, whether the person or group of persons is characterized as a board of trade, exchange, or other form of marketplace. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  154. 29502.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    “Business days” means all days except Saturdays, Sundays, and holidays specified or provided for in the Government Code.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29502. “Business days” are all days other than every Saturday, every Sunday and such other days as are specified or provided for as holidays in the Government Code. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  155. 29503.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

    Verify source ↗

    This section defines “Commissioner” as the Commissioner of Financial Protection and Innovation.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29503. “Commissioner” means the Commissioner of Financial Protection and Innovation. (Amended by Stats. 2022, Ch. 452, Sec. 90. (SB 1498) Effective January 1, 2023.)
  156. 29504.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    This section defines “commodity” broadly, but excludes certain numismatic coins and certain works of art.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29504. “Commodity” means, except as otherwise specified by the commissioner by rule or order, any agricultural, grain, or livestock product or byproduct, any metal or mineral (including a precious metal set forth in Section 29515), any gem or gemstone (whether characterized as precious, semiprecious, or otherwise), any fuel (whether liquid, gaseous, or otherwise), any foreign currency, and all other goods, articles, products, or items of any kind. However, the term “commodity” shall not include (a) a numismatic coin whose fair market value is at least 15 percent higher than the value of the metal it contains, or (b) any work of art offered or sold by art dealers, at public auction, or through a private sale by the owner of the work of art. (Amended by Stats. 1991, Ch. 262, Sec. 1.)
  157. 29505.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    This section defines “commodity contract” and excludes certain physically delivered contracts completed within 28 calendar days after full payment in good funds.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29505. (a) “Commodity contract” means any account, agreement, or contract for the purchase or sale, primarily for speculation or investment purposes and not for use or consumption by the offeree or purchaser, of one or more commodities, whether for immediate or subsequent delivery or whether delivery is intended by the parties, and whether characterized as a cash contract, deferred shipment or deferred delivery contract, forward contract, futures contract, installment or margin contract, leverage contract, or otherwise. A “commodity contract” includes a commodity option as defined in Section 29510, unless otherwise specified. Any “commodity contract” offered or sold shall, in the absence of evidence to the contrary, be presumed to be offered or sold for speculation or investment purposes. (b) A “commodity contract” shall not include any contract or agreement which requires, and under which the purchaser personally receives, or at the request of the purchaser a family member or an individual (which individual is other than the seller or any affiliate of the seller, including any officer, director, or employee of the seller or any affiliate of the seller) with whom the purchaser has a preexisting close personal or preexisting business relationship personally receives, within 28 calendar days from the full payment in good funds of the purchase price, actual physical delivery of the quantity of each commodity purchased under the contract or agreement. In the case of a seller who requires a partial payment of the total purchase price before obligating itself to actually physically deliver the quantity of each commodity purchased under the contract or agreement described in this subdivision, both the amount remaining on the total purchase price shall be paid in good funds and actual physical delivery of the quantity of each commodity purchased under the contract or agreement shall be personally received (by the purchaser or above-described individual) within 28 calendar days from the date of the partial payment in good funds. Otherwise, for the purposes of this exclusion from the definition of a “commodity contract,” a partial payment of, or an installment payment on, the purchase price is not a full payment in good funds of the purchase price. (Amended by Stats. 1991, Ch. 262, Sec. 2.)
  158. 29506.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    This section defines “Commodity Exchange Act” as the federal statute of that name, including amendments made before or after January 1, 1991.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29506. “Commodity Exchange Act” means the federal statute so named, as amended before or after January 1, 1991. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  159. 29507.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    This section defines “Commodity Futures Trading Commission” as the independent regulatory agency established by Congress to administer the Commodity Exchange Act.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29507. “Commodity Futures Trading Commission” means the independent regulatory agency established by Congress to administer the Commodity Exchange Act. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  160. 29508.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    “CFTC Rule” means certain Commodity Futures Trading Commission rules, regulations, or orders, including later amendments, unless the commissioner disallows their application within 10 days.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29508. “CFTC Rule” means any rule, regulation, or order of the Commodity Futures Trading Commission in effect on January 1, 1991, and all subsequent amendments, additions, or other revisions thereto, unless the commissioner, within 10 days following the effective date of any amendment, addition, or revision, disallows the application thereof to this law or to any provision thereof by rule or order. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  161. 29509.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    This section defines “commodity merchant” to include several specified types of market participants and others required to register with the CFTC.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29509. “Commodity merchant” means any of the following, as defined or described in the Commodity Exchange Act or by CFTC Rule: (a) Futures commission merchant. (b) Commodity pool operator. (c) Commodity trading advisor. (d) Introducing broker. (e) Leverage transaction merchant. (f) An associated person of any person specified in subdivisions (a) to (d), inclusive. (g) Floor broker. (h) Any other person (other than a futures association) required to register with the Commodity Futures Trading Commission. (Amended by Stats. 1991, Ch. 262, Sec. 3.)
  162. 29510.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    This section defines “commodity option” and excludes options traded on a registered national securities exchange.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29510. “Commodity option” means any account, agreement, or contract giving a party thereto the right but not the obligation to purchase or sell one or more commodities or one or more commodity contracts, or both, whether characterized as an option, privilege, indemnity, bid, offer, put, call, advance guaranty, decline guaranty, or otherwise, but shall not include an option traded on a national securities exchange registered with the United States Securities and Exchange Commission. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  163. 29511.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    This section defines “financial institution” for this part of the code.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29511. “Financial institution” means (a) a national bank or a bank or trust company incorporated under the laws of this state, (b) a federal savings and loan association or federal savings bank, or (c) a federally insured bank chartered by a state of the United States when the commodity depository activities of the bank are supervised by the bank regulator of that state. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  164. 29512.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    “Good funds” means verified receipt of immediately available funds under federal Regulation CC.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29512. “Good funds” means the verified receipt of immediately available funds according to the applicable requirements of federal Regulation CC. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  165. 29513.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    “Offer” includes offers to sell, offers to purchase, and offers to enter into a commodity contract or commodity option.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29513. “Offer” includes every offer to sell, offer to purchase, or offer to enter into a commodity contract or commodity option. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  166. 29514.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    This section defines “person” to include several kinds of entities and governments.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29514. “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, an unincorporated organization, a government, or a political subdivision of a government. (Amended by Stats. 1994, Ch. 1010, Sec. 94. Effective January 1, 1995.)
  167. 29515.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    “Precious metal” includes silver, gold, platinum, palladium, and copper, and can also include other items the commissioner specifies by rule or order.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29515. “Precious metal” means the following in either coin, bullion, or other form: (a) Silver. (b) Gold. (c) Platinum. (d) Palladium. (e) Copper. (f) Other items that the commissioner may specify by rule or order. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  168. 29515.5.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    “Purchase price” means all money paid by or for a purchaser to a seller for a commodity contract or commodity option, including listed fees and charges tied to the sale.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29515.5. “Purchase price” means all funds paid by or on behalf of a purchaser to a seller of a commodity contract or a commodity option (or to another person at the request or direction of a seller), including, but not limited to, the sale price of a commodity, an administrative charge or fee, assessment, deposit, dues, handling charge or fee, holding charge or fee, membership charge or fee, reservation charge or fee, or any charge, fee, or other payment made or paid in connection with the sale of a commodity contract or a commodity option. (Added by Stats. 1991, Ch. 262, Sec. 4.)
  169. 29516.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. )

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    “Sale” or “sell” includes sales, contracts to sell, and other dispositions for value.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 1. Definitions [29500 - 29516] ( Chapter 1 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29516. “Sale” or “sell” includes every sale, contract of sale, contract to sell, or disposition, for value. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  170. 29520.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 2. Unlawful Commodity Transactions [29520- 29520.] ( Chapter 2 added by Stats. 1990, Ch. 969, Sec. 2. )

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    Except as provided in Sections 29530, 29531, and 29532, a person may not sell, buy, offer to sell or buy, or enter into commodity contracts or commodity options.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 2. Unlawful Commodity Transactions [29520- 29520.] ( Chapter 2 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29520. Except as otherwise provided in Section 29530, 29531, or 29532, no person shall sell or purchase or offer to sell or purchase any commodity under any commodity contract or under any commodity option, or offer to enter into, or enter into, as seller or purchaser any commodity contract or any commodity option. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  171. 29530.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 3. Exemptions [29530 - 29532] ( Chapter 3 added by Stats. 1990, Ch. 969, Sec. 2. )

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    Section 29530 exempts certain transactions from the Section 29520 prohibitions when specific listed persons are the buyer or seller, subject to stated conditions and limits.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 3. Exemptions [29530 - 29532] ( Chapter 3 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29530. (a) The prohibitions in Section 29520 shall not apply to any transaction offered by and in which any of the following persons (or any employee, officer, or director thereof acting solely in that capacity) is the purchaser or seller: (1) A person registered with the Commodity Futures Trading Commission as a futures commission merchant or as a leverage transaction merchant whose activities require registration. (2) A person affiliated with, and whose obligations and liabilities under the transaction are guaranteed by, a person referred to in subdivision (a). (3) A person who is a member of a contract market designated by the Commodity Futures Trading Commission (or any clearinghouse thereof) when the transaction at issue requires membership in and is subject to the regulatory jurisdiction of that contract market. (4) A financial institution. (5) A broker-dealer licensed under Section 25211, or exempt from licensure under Section 25200, when engaging in activities subject to the exclusive regulatory jurisdiction of the Commodity Futures Trading Commission. (6) A person licensed pursuant to Chapter 14 (commencing with Section 1800) of Division 1 of the Financial Code to receive money for transmittal to foreign countries if (A) the license has not expired or been surrendered, suspended, or revoked, (B) the licensed person has a tangible net worth of at least 3 million dollars ($3,000,000) according to its audited financial statements prepared by an independent certified public accountant for each of the immediately preceding three fiscal years, and (C) pursuant to the provisions of subdivision (b) of Section 29531, the licensed person issues and a purchaser receives a certificate, document of title, confirmation, or other instrument evidencing that the purchased quantity of precious metals or foreign currencies has been delivered to a depository which is a financial institution located in a state of the United States. (b) The exemption provided by subdivision (a) shall not apply to any transaction or activity which is prohibited by the Commodity Exchange Act or CFTC Rule. (Amended by Stats. 2000, Ch. 705, Sec. 7. Effective January 1, 2001.)
  172. 29531.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 3. Exemptions [29530 - 29532] ( Chapter 3 added by Stats. 1990, Ch. 969, Sec. 2. )

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    Section 29531 says the Section 29520 prohibitions do not apply to several listed commodity-contract situations.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 3. Exemptions [29530 - 29532] ( Chapter 3 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29531. The prohibitions in Section 29520 shall not apply to the following: (a) An account, agreement, or transaction within the exclusive regulatory jurisdiction of the Commodity Futures Trading Commission as granted under Section 2 of Title 42 of the United States Code (Section 2(a)(1)(A) of the Commodity Exchange Act). (b) A commodity contract for the purchase of one or more precious metals or foreign currencies which requires full payment in good funds of the purchase price and under which the purchaser receives, within 28 calendar days from the full payment in good funds of the purchase price, substitute delivery of the quantity of the precious metals or foreign currencies purchased, or a commodity contract for the purchase of one or more precious metals or foreign currencies which allows partial payment in good funds of the purchase price and under which the purchaser receives within 28 calendar days from the partial payment in good funds of the purchase price, substitute delivery of the quantity of precious metals or foreign currencies purchased by that payment; provided that, for purposes of this subdivision, substitute delivery shall be deemed to have occurred if, within the 28-day period, the quantity of precious metals or foreign currencies purchased by the full or partial payment is actually physically delivered (whether in specifically segregated or fungible bulk form) into the possession of a depository (other than the seller) which is either (1) a financial institution, (2) a depository, the warehouse receipts of which are recognized for delivery purposes for any commodity on a contract market designated by the Commodity Futures Trading Commission, (3) a storage facility licensed or regulated by the United States or any agency thereof, or (4) a facility for the storage of precious metals or foreign currencies located within a state of the United States and operated by an armored contract carrier defined under subdivision (e), or (5) a depository designated by the commissioner. The depository (or other person which itself qualifies as a depository) enumerated in this subdivision shall issue and the purchaser shall receive a certificate, document of title, confirmation or other instrument evidencing that the quantity of precious metals has been delivered to the depository and is being and will continue to be held by the depository on the purchaser’s behalf, free and clear of all liens and encumbrances, other than liens of the purchaser, tax liens, liens agreed to by the purchaser, or liens of the depository for fees and expenses, which have previously been disclosed to the purchaser. (c) A commodity contract solely between persons engaged in producing, processing, using commercially or handling as merchants, each commodity subject thereto, or any byproduct thereof. (d) A commodity contract under which the offeree or the purchaser is a person referred to in Section 29530, an insurance company, or an investment company as defined in Section 80a-3 of Title 15 of the United States Code (Section 3 of Title I of the federal Investment Company Act of 1940). (e) For the purposes of this section, “armored contract carrier” means a person who: (1) is operating as a carrier transporting coin, currency, precious metals, securities, or negotiable items pursuant to a currently effective permit as a highway contract carrier and a city carrier issued by the Public Utilities Commission of this state and is also operating a facility for the storage of precious metals or foreign currencies pursuant to a commodity contract; (2) has purchased and maintains sufficient amounts of insurance coverage for all risks associated with the operation of a facility for the storage of precious metals or foreign currencies from an insurance company admitted in this state; (3) has continuously operated as a carrier under its permit and has continuously operated a facility for the storage of precious metals or foreign currencies for at least five years; (4) has a tangible net worth of at least five million dollars ($5,000,000) for each of the immediately preceding five fiscal years according to its financial statements prepared on an individual company basis, or on a combining or consolidating basis with any affiliates, which financial statements have been audited by an independent certified public accountant; and (5) provides the following disclosure to a purchaser in 10-point boldface type with the certificate, document of title, confirmation, or other instrument evidencing that the purchased quantity of precious metals or foreign currencies has been delivered to or is on deposit with the storage facility: “(Name of carrier) is not licensed, regulated, or supervised as a depository or storage facility by the United States Government or the State of California.” (Amended by Stats. 1991, Ch. 262, Sec. 5.)
  173. 29532.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 3. Exemptions [29530 - 29532] ( Chapter 3 added by Stats. 1990, Ch. 969, Sec. 2. )

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    The commissioner may set terms and conditions for covered transactions and contracts, and may exempt any person or transaction from this law.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 3. Exemptions [29530 - 29532] ( Chapter 3 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29532. The commissioner may by rule or order prescribe the terms and conditions of all transactions and contracts covered by this law and exempt any person or transaction from this law conditionally or unconditionally. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  174. 29535.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 4. Unlawful Activities and Fraudulent Conduct [29535 - 29538] ( Chapter 4 added by Stats. 1990, Ch. 969, Sec. 2. )

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    A person may not act as a commodity merchant unless registered, temporarily licensed, or exempt; a board of trade may not trade or host trading of certain commodity contracts unless properly designated.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 4. Unlawful Activities and Fraudulent Conduct [29535 - 29538] ( Chapter 4 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29535. (a) No person shall engage in a trade or business or otherwise act as a commodity merchant unless the person (1) is registered or temporarily licensed with the Commodity Futures Trading Commission for each activity constituting that person as a commodity merchant and the registration or temporary license shall not have expired, been suspended, or revoked; or (2) is exempt from the registration by virtue of the Commodity Exchange Act (7 U.S.C. Sec. 1 et seq.) or of a CFTC rule. (b) No board of trade shall trade, or provide a place for the trading of, any commodity contract required to be traded on or subject to the rules of a contract market designated by the Commodity Futures Trading Commission, unless the board of trade has been so designated for the commodity contract and that designation shall not have been vacated, suspended, or revoked. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  175. 29536.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 4. Unlawful Activities and Fraudulent Conduct [29535 - 29538] ( Chapter 4 added by Stats. 1990, Ch. 969, Sec. 2. )

    Verify source ↗

    Any person may not use fraud, false statements, deceit, or misappropriation in commodity-related purchases, sales, offers, or entries.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 4. Unlawful Activities and Fraudulent Conduct [29535 - 29538] ( Chapter 4 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29536. It is unlawful for any person, directly or indirectly, in connection with the purchase or sale of, the offer to sell, the offer to purchase, the offer to enter into, or the entry into, a commodity, commodity contract, or commodity option to do any of the following: (a) To willfully employ any device, scheme, or artifice to defraud. (b) To willfully make any false report, enter any false record, make any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. (c) To willfully engage in any transaction, act, practice, or course of business which operates or would operate as a fraud or deceit upon any persons. (d) To willfully misappropriate or convert the funds, security, or property of any other person. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  176. 29537.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 4. Unlawful Activities and Fraudulent Conduct [29535 - 29538] ( Chapter 4 added by Stats. 1990, Ch. 969, Sec. 2. )

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    This section says when certain securities provisions apply based on where an offer is made or accepted, and defines when an offer is treated as made or accepted in this state.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 4. Unlawful Activities and Fraudulent Conduct [29535 - 29538] ( Chapter 4 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29537. (a) Sections 29520, 29535, and 29536 apply to persons who sell or offer to sell when either of the following occur: (1) An offer to sell is made in this state. (2) An offer to buy is made and accepted in this state. (b) Sections 29520, 29535, and 29536 apply to persons who buy or offer to buy when either of the following occur: (1) An offer to buy is made in this state. (2) An offer to sell is made and accepted in this state. (c) For the purpose of this section, an offer to sell or to buy is made in this state, whether or not either party is then present in this state, when the offer: (1) Originates from this state. (2) Is directed by the offeror to this state and received at the place to which it is directed (or at any post office in this state in the case of a mailed offer). (d) For the purpose of this section, an offer to buy or to sell is accepted in this state when acceptance: (1) Is communicated to the offeror in this state. (2) Has not previously been communicated to the offeror, orally or in writing, outside this state. Acceptance is communicated to the offeror in this state, whether or not either party is then present in this state, when the offeree directs it to the offeror in this state, reasonably believing the offeror to be in this state and it is received at the place to which it is directed (or at any post office in this state in the case of a mailed acceptance). (e) An offer to sell or to buy is not made in this state when either of the following occur: (1) The publisher circulates or there is circulated on his or her behalf in this state any bona fide newspaper or other publication of general, regular, and paid circulation which is not published in this state, or which is published in this state but has had more than two-thirds of its circulation outside this state during the past 12 months. (2) A radio or television program originating outside this state is received in this state. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  177. 29538.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 4. Unlawful Activities and Fraudulent Conduct [29535 - 29538] ( Chapter 4 added by Stats. 1990, Ch. 969, Sec. 2. )

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    It is unlawful for any person to knowingly tamper with records or make false entries, or to knowingly make an untrue statement to the commissioner, when done to impede enforcement of this division.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 4. Unlawful Activities and Fraudulent Conduct [29535 - 29538] ( Chapter 4 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29538. (a) It is unlawful for any person to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the administration or enforcement of this division. (b) It is unlawful for any person to knowingly make an untrue statement to the commissioner during the course of licensing, investigation, or examination, with the intent to impede, obstruct, or influence the administration or enforcement of any provision of this division. (Added by Stats. 2007, Ch. 101, Sec. 10. Effective January 1, 2008.)
  178. 29540.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. )

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    The commissioner may sue to stop violations or force compliance, and the court may grant injunction-type relief and appoint court fiduciaries.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29540. (a) Whenever it appears to the commissioner that any person has engaged, or is about to engage, in any act or practice constituting a violation of any provision of this law or any rule or order under this law, the commissioner may in his or her discretion bring an action in the name of the people of the State of California in the superior court to enjoin the acts or practices or to enforce compliance with this law or any rule or order under this law. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted and a monitor, receiver, conservator, or other designated fiduciary or officer of the court may be appointed for the defendant or the defendant’s assets, or other ancillary relief may be granted as appropriate. A receiver, monitor, conservator, or other designated fiduciary or officer of the court appointed by the superior court pursuant to this section may, with the approval of the court, exercise all of the powers of the defendant’s officers, directors, partners, trustees, or persons who exercise similar powers and perform similar duties, including the filing of a petition for bankruptcy. No action at law or in equity may be maintained by any party against the commissioner, or a receiver, monitor, conservator, or other designated fiduciary or officer of the court by reason of their exercising these powers or performing these duties pursuant to the order of, or with the approval of, the superior court. (b) If the commissioner determines it is in the public interest, the commissioner may include in any action authorized by subdivision (a) a claim for ancillary relief, including, but not limited to, a claim for restitution, disgorgement, or damages on behalf of the person injured by the act or practice constituting the subject matter of the action, and the court shall have jurisdiction to award additional relief. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  179. 29541.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. )

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    The commissioner may investigate, publish violations, and compel evidence; courts may enforce subpoenas and contempt, while compelled testimony does not excuse self-incrimination-based refusal, though some immunity is provided.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29541. (a) The commissioner in his or her discretion (1) may make public or private investigations within or outside of this state that the commissioner deems necessary to determine whether any person has violated or is about to violate any provision of this law or any rule or order hereunder, or to aid the enforcement of this law or in the prescribing of rules and forms under this law, and (2) may publish information concerning any violation of this law or a rule or order hereunder. (b) For the purpose of any investigation or proceeding under this law, the commissioner or any officer designated by the commissioner may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the commissioner deems relevant or material to the inquiry. (c) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the superior court, upon application by the commissioner, may issue to the person an order requiring him or her to appear before the commissioner or the officer designated by the commissioner, to produce documentary evidence, if so ordered, or to give evidence touching the matter under investigation or in question. Failure to obey the order of the court may be punished by the court as a contempt. (d) No person is excused from attending and testifying or from producing any document or record before the commissioner, or in obedience to the subpoena of the commissioner or any officer designated by the commissioner or in any proceeding instituted by the commissioner, on the ground that the testimony or evidence (documentary or otherwise) required of him or her may tend to incriminate him or her or subject him or her to a penalty or forfeiture. However, no individual may be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he or she is compelled, after validly claiming his or her privilege against self-incrimination, to testify or produce evidence (documentary or otherwise), except that the individual testifying is not exempt from prosecution and punishment for perjury or contempt committed in testifying. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  180. 29542.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. )

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    The commissioner may order a person to stop violating the law or related rules. If the person asks for a hearing in writing within 30 days, a hearing must be held, and the commissioner gets the powers available under the Administrative Procedure Act.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29542. (a) If, in the opinion of the commissioner, any person is engaging or has engaged in any activity in violation of any provision of this law, or rule or order under this law, the commissioner may order the person to desist and refrain from the activity unless and until the activity will not be in violation of any provision of this law or any rule or order under this law. (b) If after an order has been made under subdivision (a), a request for hearing is filed in writing within 30 days of the date of service of the order by the person to whom the order was directed, a hearing shall be held in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the commissioner shall have all of the powers granted under the Administrative Procedure Act. Unless the hearing is commenced within 15 business days after the request is filed (or the person affected consents to a later date), the order is rescinded. If that person fails to file a written request for a hearing within 30 days from the date of service of the order, the order shall be deemed a final order of the commissioner and shall not be subject to review by any court or agency, notwithstanding Section 29563. (Amended by Stats. 2022, Ch. 188, Sec. 4. (AB 2433) Effective January 1, 2023.)
  181. 29543.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. )

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    The commissioner may refer evidence of a violation to the Attorney General or county district attorney, and those prosecutors may start criminal proceedings with or without that referral.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29543. The commissioner may refer the evidence that is available concerning any violation of this law, or of any rule or order under this law, to the Attorney General or the district attorney of the county in which the violation occurred, who may, with or without such a reference, institute appropriate criminal proceedings under this law. The commissioner and the commissioner’s counsel, deputies, or assistants may, upon request of the Attorney General or the district attorney, assist the prosecutor in presenting the law or facts at the trial. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  182. 29544.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. )

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    A person who willfully violates this law or a rule or order under it can face a civil penalty of up to $25,000 per violation.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29544. (a) Any person who willfully violates any provision of this law, or who willfully violates any rule or order under this law, shall be liable for a civil penalty not to exceed twenty-five thousand dollars ($25,000) for each violation, which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the commissioner in any court of competent jurisdiction. The penalty collected shall be paid to the State Corporations Fund to be used for the support of this division. (b) As applied to the penalties for acts in violation of this division, the remedies provided by this section and by other sections of this division are not exclusive, and may be sought and employed in any combination to enforce this division. (c) No action shall be maintained to enforce any liability created under subdivision (a) unless brought before the expiration of four years after the act or transaction constituting the violation. (Amended by Stats. 2003, Ch. 876, Sec. 3. Effective January 1, 2004.)
  183. 29545.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. )

    Verify source ↗

    The commissioner may take actions authorized by the referenced federal law, and this section does not limit the commissioner’s other powers.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29545. (a) The commissioner may take actions that are authorized by Section 13a-2 of Title 7 of the United States Code (Section 6d of the federal Commodity Exchange Act) as amended before or after the effective date of this section. (b) Nothing in this section shall be construed as a limitation on the powers of the commissioner under this act or any other law administered by the commissioner. (Amended by Stats. 2013, Ch. 335, Sec. 12. (SB 538) Effective January 1, 2014.)
  184. 29546.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. )

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    The commissioner may, at discretion, honor requests from interested parties for interpretive opinions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 5. Powers of the Commissioner [29540 - 29546] ( Chapter 5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29546. The commissioner in his or her discretion may honor requests from interested parties for interpretive opinions. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  185. 29550.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 6. Crimes and Civil Liability [29550 - 29555] ( Chapter 6 added by Stats. 1990, Ch. 969, Sec. 2. )

    Verify source ↗

    A person who willfully violates this law, its rules, or its orders can be fined or jailed; for Section 29536, the jail term can be two, three, or four years.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 6. Crimes and Civil Liability [29550 - 29555] ( Chapter 6 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29550. (a) Except as provided in subdivision (b), any person who willfully violates any provision of this law, or who willfully violates any rule or order under this law, shall upon conviction be fined not more than two hundred fifty thousand dollars ($250,000) or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail for not more than one year, or be punished by both a fine and imprisonment; but no person may be imprisoned for the violation of any rule or order if that person proves that he or she had no knowledge of the rule or order. (b) Any person who willfully violates Section 29536 shall upon conviction be fined not more than two hundred fifty thousand dollars ($250,000), or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code for two, three, or four years, or be punished by both that fine and imprisonment. (c) One-half of the fines collected under this section shall be paid to the State Corporations Fund to be used for the support of this division. The remainder of the fines collected under this section shall be paid to the state or local agency which brought the criminal prosecution. (Amended by Stats. 2011, Ch. 15, Sec. 52. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)
  186. 29551.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 6. Crimes and Civil Liability [29550 - 29555] ( Chapter 6 added by Stats. 1990, Ch. 969, Sec. 2. )

    Verify source ↗

    This section says the state’s power to punish conduct under other statutes is not limited by this law.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 6. Crimes and Civil Liability [29550 - 29555] ( Chapter 6 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29551. Nothing in this law limits the power of the state to punish any person for any conduct which constitutes a crime under any other statute. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  187. 29552.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 6. Crimes and Civil Liability [29550 - 29555] ( Chapter 6 added by Stats. 1990, Ch. 969, Sec. 2. )

    Verify source ↗

    A person who materially assists in a violation of this law, or a commissioner rule or order under it, is jointly and severally liable for that violation.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 6. Crimes and Civil Liability [29550 - 29555] ( Chapter 6 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29552. Any person who materially assists in any violation of this law, or any rule or order of the commissioner under this law, is jointly and severally liable with any other person liable under this law for the violation. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  188. 29553.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 6. Crimes and Civil Liability [29550 - 29555] ( Chapter 6 added by Stats. 1990, Ch. 969, Sec. 2. )

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    A lawsuit to enforce liability under Section 29552 must be filed within the stated time limit.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 6. Crimes and Civil Liability [29550 - 29555] ( Chapter 6 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29553. No action shall be maintained to enforce any liability under Section 29552 unless brought before the expiration of four years after the act or transaction constituting the violation or within one year after the discovery by the plaintiff of the facts constituting the violation, whichever occurs last. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  189. 29554.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 6. Crimes and Civil Liability [29550 - 29555] ( Chapter 6 added by Stats. 1990, Ch. 969, Sec. 2. )

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    A cause of action under this law continues after a person's death.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 6. Crimes and Civil Liability [29550 - 29555] ( Chapter 6 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29554. Every cause of action under this law survives the death of any person who might have been a plaintiff or defendant. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  190. 29555.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 6. Crimes and Civil Liability [29550 - 29555] ( Chapter 6 added by Stats. 1990, Ch. 969, Sec. 2. )

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    This section says private parties generally cannot get civil liability from violations of this law or its rules/orders by implication, unless the law explicitly says otherwise.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 6. Crimes and Civil Liability [29550 - 29555] ( Chapter 6 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29555. Except as explicitly provided in this law, no civil liability in favor of any private party shall arise against any person by implication from, or as a result of, the violation of any provision of this law or any rule or order under this law. Nothing in this law shall limit any liability which may exist by virtue of any other statute or under common law if this law were not in effect. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  191. 29560.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. )

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    Liability under this law does not apply to acts or omissions done in good faith and in line with certain commissioner or Attorney General guidance.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29560. No provision of this law imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form, permit, order, or written interpretive opinion of the commissioner, or any written interpretive opinion of the Attorney General, notwithstanding that the rule, form, permit, order, or written interpretive opinion may later be amended or rescinded or be determined by judicial or other authority to be invalid for any reason. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  192. 29561.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. )

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    The commissioner may issue, change, or cancel rules, forms, and orders to carry out this law, define terms, classify covered commodities and persons, set different requirements for different classes, and waive requirements when not needed in the public interest.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29561. The commissioner may from time to time make, amend, and rescind the rules, forms, and orders that are necessary to carry out this law, and define any terms, whether or not used in this law, insofar as the definitions are not inconsistent with this law. For the purpose of rules, the commissioner may classify commodities, commodity contracts, commodity options, and persons within the commissioner’s jurisdiction and may prescribe different requirements for different classes. The commissioner may, in the commissioner’s discretion, waive any requirement of any rule or form in situations where in his or her opinion the requirement is not necessary in the public interest. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  193. 29562.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. )

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    A person claiming an exemption or exception from a definition must prove it in any proceeding under this law.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29562. In any proceeding under this law, the burden of proving an exemption or an exception from a definition is upon the person claiming it. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  194. 29563.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. )

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    The commissioner’s final orders, decisions, certificates, registrations, and other official acts are subject to judicial review under law.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29563. Every final order, decision, certificate, registration, or other official act of the commissioner is subject to judicial review in accordance with law. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  195. 29564.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. )

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    This section says the chapter does not reduce or change the commissioner’s authority or powers under the Corporate Securities Law of 1968.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29564. Nothing in this law, shall impair, derogate, or otherwise affect the authority or powers of the commissioner under the Corporate Securities Law of 1968 (Part 3 (commencing with Section 25000)) or the application of any provision thereof to any person or transaction subject thereto. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  196. 29565.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. )

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    If part of this law is invalid, the rest still applies when it can work without the invalid part.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29565. If any provision of this law or the application thereof to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of this law which can be given effect without the invalid provision or application, and to this end this law is declared to be severable. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  197. 29566.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. )

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    The commissioner and the commissioner’s employees must not use nonpublic information for personal gain or trade securities or commodities based on it before the market has had time to absorb the information.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29566. Neither the commissioner nor any employee of the commissioner shall use any information which is filed with or obtained by the commissioner which is not public information for personal gain or benefit, nor shall the commissioner nor any employee of the commissioner engage in any securities or commodity transaction based on that information, even though public, if there has not been a sufficient period of time for the securities or commodity markets to assimilate that information. (Added by Stats. 1990, Ch. 969, Sec. 2.)
  198. 29567.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. )

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    The program under this division is to be funded through legislative appropriations from the State Corporations Fund.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 4.5. COMMODITIES [29500 - 29567] ( Division 4.5 added by Stats. 1990, Ch. 969, Sec. 2. ) ## CHAPTER 7. Miscellaneous Provisions [29560 - 29567] ( Chapter 7 added by Stats. 1990, Ch. 969, Sec. 2. ) ## 29567. (a) The program established by this division shall be supported from funds appropriated by the Legislature from the State Corporations Fund. (b) The funds appropriated from the State Corporations Fund and made available for expenditure under subdivision (a) of this section shall come from securities application filing fees collected under subdivisions (e), (f), (h), and (i) of Section 25608 of the Corporations Code. (Added by Stats. 1996, Ch. 466, Sec. 3. Effective January 1, 1997.)
  199. 3.

    ## Corporations Code - CORP ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1947, Ch. 1038. )

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    People already holding office under repealed acts keep those offices if this code continues them, and they keep the same tenure they had before.

    ## Corporations Code - CORP ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1947, Ch. 1038. ) ## 3. All persons who, at the time this code goes into effect, hold office under any of the acts repealed by this code, which offices are continued by this code, continue to hold them according to their former tenure. (Enacted by Stats. 1947, Ch. 1038.)
  200. 300.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1. GENERAL CORPORATION LAW [100 - 2319] ( Division 1 repealed and added by Stats. 1975, Ch. 682. ) ## CHAPTER 3. Directors and Management [300 - 318] ( Chapter 3 added by Stats. 1975, Ch. 682. )

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    The board manages the corporation’s business and affairs and may delegate day-to-day operations, but the board keeps ultimate direction.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1. GENERAL CORPORATION LAW [100 - 2319] ( Division 1 repealed and added by Stats. 1975, Ch. 682. ) ## CHAPTER 3. Directors and Management [300 - 318] ( Chapter 3 added by Stats. 1975, Ch. 682. ) ## 300. (a) Subject to the provisions of this division and any limitations in the articles relating to action required to be approved by the shareholders (Section 153) or by the outstanding shares (Section 152), or by a less than majority vote of a class or series of preferred shares (Section 402.5), the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the board. The board may delegate the management of the day-to-day operation of the business of the corporation to a management company or other person provided that the business and affairs of the corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the board. (b) Notwithstanding subdivision (a) or any other provision of this division, but subject to subdivision (c), no shareholders’ agreement, which relates to any phase of the affairs of a close corporation, including but not limited to management of its business, division of its profits or distribution of its assets on liquidation, shall be invalid as between the parties thereto on the ground that it so relates to the conduct of the affairs of the corporation as to interfere with the discretion of the board or that it is an attempt to treat the corporation as if it were a partnership or to arrange their relationships in a manner that would be appropriate only between partners. A transferee of shares covered by such an agreement which is filed with the secretary of the corporation for inspection by any prospective purchaser of shares, who has actual knowledge thereof or notice thereof by a notation on the certificate pursuant to Section 418, is bound by its provisions and is a party thereto for the purposes of subdivision (d). Original issuance of shares by the corporation to a new shareholder who does not become a party to the agreement terminates the agreement, except that if the agreement so provides it shall continue to the extent it is enforceable apart from this subdivision. The agreement may not be modified, extended or revoked without the consent of such a transferee, subject to any provision of the agreement permitting modification, extension or revocation by less than unanimous agreement of the parties. A transferor of shares covered by such an agreement ceases to be a party thereto upon ceasing to be a shareholder of the corporation unless the transferor is a party thereto other than as a shareholder. An agreement made pursuant to this subdivision shall terminate when the corporation ceases to be a close corporation, except that if the agreement so provides it shall continue to the extent it is enforceable apart from this subdivision. This subdivision does not apply to an agreement authorized by subdivision (a) of Section 706. (c) No agreement entered into pursuant to subdivision (b) may alter or waive any of the provisions of Sections 158, 417, 418, 500, 501, and 1111, subdivision (e) of Section 1201, Sections 2009, 2010, and 2011, or of Chapters 15 (commencing with Section 1500), 16 (commencing with Section 1600), 18 (commencing with Section 1800), and 22 (commencing with Section 2200). All other provisions of this division may be altered or waived as between the parties thereto in a shareholders’ agreement, except the required filing of any document with the Secretary of State. (d) An agreement of the type referred to in subdivision (b) shall, to the extent and so long as the discretion or powers of the board in its management of corporate affairs is controlled by such agreement, impose upon each shareholder who is a party thereto liability for managerial acts performed or omitted by such person pursuant thereto that is otherwise imposed by this division upon directors, and the directors shall be relieved to that extent from such liability. (e) The failure of a close corporation to observe corporate formalities relating to meetings of directors or shareholders in connection with the management of its affairs, pursuant to an agreement authorized by subdivision (b), shall not be considered a factor tending to establish that the shareholders have personal liability for corporate obligations. (Amended by Stats. 1983, Ch. 1223, Sec. 3.)

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