LLC Contractor Bill Is Held At Desk
On September 3, 2010, I wrote that SB 392 (Florez) had made it to enrollment. This bill authorizes the State Contractors’ License Board to issue a contractor’s license to a limited liability company. Normally, a bill is sent to the Governor after enrollment. Cal. Const. Art. IV, § 10(a) (“Each bill passed by the Legislature shall be presented to the Governor.”) Read more...
The Dodd-Frank Act’s Impact on California’s Restrictions on Investment Adviser Performance Compensation
Prior to the enactment of the Dodd-Frank Act, Section 205 of the Investment Advisers Act of 1940 prohibited the receipt of performance compensation by an investment adviser unless the adviser was exempt from registration under Section 203(b) of the Advisers Act. Performance compensation is compensation based on the capital gains or capital appreciation in a client’s account. Performance compensation has been a common component of hedge fund Read more...
Legislature Passes Capital Access Company Bill
In July, I posted this item regarding California’s Capital Access Company law. My friend, Lee Petillon, was the mover behind the original legislation. He is also the author and lead cheerleader for SB 1155 (Dutton & Price). The Capital Access Company law has yet to be used and SB 1155 is intended to eliminate some of the perceived problems with the Read more...
LLC Contractor License Bill Moves One Step Forward
A lot of bills didn’t make it out of the legislature by the August 31 deadline. However, SB 392 (Florez) was one of the fortunate few to make it to enrollment. If signed into law by Governor Schwarzenegger, this bill will allow limited liability companies to render contractor services that are “professional services” otherwise prohibited by the Beverly-Killea Limited Liability Company Act.
Legislative Session Now Ended (Almost)
Yesterday was the end of the current legislative biennium. Under the California Constitution and legislative rules, this means that any bill not passed before today is now dead. Cal. Cons. Art. IV, § 10(c), Legislative Joint Rule No. 61(b)(17)). As with most things legal, there are exceptions. Article IV, Section 10(c) of the Constitution excepts the following types of bills: Read more...
Bills Making Last Dash to Enrollment
With the current legislative biennium ending next week, here are some key dates to keep in mind: August 31 – Last day for any bill (with certain exceptions) to be passed (Cal. Const. Art. IV, § 10(c), Joint Rule (J.R.) 61(b)(17)). Final Recess begins on adjournment (J.R. 51(b)(3)). September 30 - Last day for Governor to sign or veto bills passed by the Legislature Read more...
Dodd-Frank Act Preempts CSL Qualification of Certain Securities
Most securities lawyers are familiar with federal preemption of state qualification requirements pursuant to Section 18 of the Securities Act of 1933 (“Securities Act”). See, e.g., my post regarding preemption and Rule 506 offerings. I expect that fewer lawyers are familiar with preemption pursuant to Section 28(a) of the Securities Exchange Act of 1934 (“Exchange Act”). In 2000, Congress amended Section 28(a) Read more...
Rule 260.204.9 – “What is to be Done?”
As I mentioned in this earlier post, California has its own definition of “venture capital company” in Rule 260.204.9. This rule is an exemption from the investment adviser registration requirement in Corporations Code Section 25230 if a person meets the following conditions: Does not hold itself out generally to the public as an investment adviser; Has fewer than 15 clients; Is exempt from Read more...
Can California Handle Dodd-Frank?
In 1996, Congress apportioned regulation of investment advisers between the Securities and Exchange Commission and the states based on the amount of assets that an adviser had under management. At that time, Congress drew the line at $25 million in Section 203A of the Investment Advisers Act of 1940 (subsequent rulemaking by the SEC generally did not require SEC registration until the adviser had assets under management Read more...
What is a Venture Capital Fund? (Part II)
The Securities and Exchange Commission has established a procedure for commenting on rule proposals even before the proposals have been made. I’ve already taken advantage of this procedure to submit this comment on with respect to the definition of “venture capital fund”. This process didn’t go well for me as the SEC somehow lost my comment. However, I’m pleased to say that Read more...
