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CALIFORNIA CORPORATE & SECURITIES LAW

The DBO As Religious Regulator

In December last, the Department of Business Oversight published the 2016 Commissioner’s Report on the Offer or Sale of Securities by Permit under Corporations Code Section 25113.  This report, which is required by California Corporations Code Section 25113(d), provides data on the permits issued by the Commissioner under the Corporate Securities Law of 1968.  Qualification by…

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Five Gnostic Exemptions From The Qualification Requirements Of The Corporate Securities Law

When looking for exemptions from the qualification requirements of the California Corporate Securities Law of 1968, a good place to start is Chapter 1, Part 2, Division 1 of Title 4 of the Corporations Code.  Cal. Corp. Code § 25100 et seq.  If you don’t find an usable exemption there, another promising place to look is the rules of the Commissioner…

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Should Church Debt Be Exempt From Qualification?

The California Corporate Securities Law of 1968 currently exempts from qualification any security of an issuer (1) organized exclusively for educational, benevolent, fraternal, religious, charitable, social, or reformatory purposes and not for pecuniary profit, if no part of the net earnings of the issuer inures to the benefit of any private shareholder or individual, or (2)…

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Bill Threatens To Yank Qualification Upon Any Change In Management

Sometimes, I run across bills that seem to defy rational explanation.  AB 2610 (Holden) appeared to be one such bill. Under the California Corporate Securities Law of 1968, the offer and sale of securities must be qualified unless the transaction or security is exempt or not subject to qualification due to federal preemption.  Qualification, however,…

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Bill Targets Real Estate Industry And Borrowers

Last June, reporters Charles Piller and Robert Lewis wrote this story about “hard-money” lending abuses in Nevada County.  One might expect that they were writing about high interest rates and harsh loan terms.  It turns out that the victims in the story were not borrowers, but people who loaned money to hard-money lenders to fund the hard…

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The CSL And Membership Interests In LLCs

Two decades ago, Bob Rizzi and I wrote an article for the California Business Law Reporter asking whether limited liability company legislation would ever be enacted in California.  Only three years later, California enacted the Beverly-Killea Limited Liability Company Act, Corporations Code Section 17000 et seq.  Stats. 1994, c. 1200 (SB 469). As a member of…

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California’s Institutional Investor Exemption

California has an exemption from the issuer qualification requirement under the Corporate Securities Law of 1968 for any offer or sale to, among other listed entities, institutional investors or governmental agencies or instrumentalities that the Commissioner of Corporations may designate by rule.  Rule 260.102.10 designates certain entities as institutional investors, but that rule hasn’t been amended since…

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Stock Option Exercise – Sale or No Sale?

The Corporate Securities Law prohibits the offer and sale of a security in an issuer transaction “in this state” unless the sale is (a) qualified; (b) the security is exempt from qualification; (c) the transaction is exempt from qualification; or (d) not subject to qualification.  The term “sale” is defined in Corporations Code Section 25017(a) to include every…

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