Chapter 3 - Licensing

California Corporations Code — §§ 28150-28155

Sections (6)

Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.

(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.

§ 28151

Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.

No person other than a person who meets the definition of a licensee may be issued a license under this division.

§ 28152

Amended by Stats. 2010, Ch. 516, Sec. 6. (SB 1155) Effective January 1, 2011.

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.

§ 28153

Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.

(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.

§ 28154

Amended by Stats. 2010, Ch. 516, Sec. 7. (SB 1155) Effective January 1, 2011.

Except pursuant to Section 28551, no license shall be transferable or assignable.

§ 28155

Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.

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.