TITLE 4. SECURITIES [25000. - 31528.]

Title 4 added by Stats. 1949, Ch. 384.

§§ 25000–31528 · 503 sections

DIVISION 1. CORPORATE SECURITIES LAW OF 1968 §§ 25000–25707 · 201 sections
1. PART 1. DEFINITIONS §§ 25000–25023 · 31 sections
  - § 25000 This division may be known as the “Corporate Securities Law of 1968.” References herein to “this law” refer to the applicable provisions of this division.
  - § 25001 Unless the context otherwise requires, the definitions in this part apply throughout this division.
  - § 25002 “Advertisement” means any written or printed communication or any communication by means of recorded telephone messages or spoken on radio, television, or…
  - § 25003 (a) “Agent” means any individual, other than a broker-dealer or a partner of a licensed broker-dealer, who represents a broker-dealer or who for compensation…
  - § 25003.5 “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…
  - § 25004 (a) “Broker-dealer” means any person engaged in the business of effecting transactions in securities in this state for the account of others or for that…
  - § 25005 “Commissioner” means the Commissioner of Financial Protection and Innovation.
  - § 25005.1 “Entity conversion transaction” means a conversion pursuant to Section 1151, 1157, 15911.02, 15911.08, 16902, 16908, 17710.02, or 17710.08 or a conversion that…
  - § 25006 “Fraud,” “deceit,” and “defraud” are not limited to common law fraud or deceit.
  - § 25007 “Guaranteed” means guaranteed as to payment of principal, interest, dividends, or call premium.
  - § 25008 (a) An offer or sale of a security is made in this state when an offer to sell is made in this state, or an offer to buy is accepted in this state, or (if both…
  - § 25009 (a) “Investment adviser” means any person who, for compensation, engages in the business of advising others, either directly or through publications or…
  - § 25009.1 “Investment adviser” does not include persons excepted from the definition of “investment adviser” by Section 202(a)(11) of the Investment Advisers Act of 1940…
  - § 25009.5 (a) “Investment adviser representative” or “associated person of an investment adviser” means any partner, officer, director of (or a person occupying a…
  - § 25010 “Issuer” means any person who issues or proposes to issue any security, except that: (a) With respect to certificates of deposit, voting trust certificates or…
  - § 25011 “Nonissuer transaction” means any transaction not directly or indirectly for the benefit of the issuer. A transaction is indirectly for the benefit of the…
  - § 25012 “Owners’ association” means a nonprofit corporation or association created to own or lease the commonly owned lots, parcels or areas referred to in clause (a)…
  - § 25013 “Person” means an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint stock company, a trust, an…
  - § 25014 “Publish” means publicly to issue or circulate by newspaper, mail, radio or television, or otherwise to disseminate to the public.
  - § 25014.5 “Rollup participant” means a finite-life limited partnership. (a) Except as provided in subdivision (b) of Section 25014.6, a limited partnership has…
  - § 25014.6 “Rollup transaction” means any transaction or series of transactions that directly or indirectly through acquisition or otherwise involves the combination or…
  - § 25014.7 (a) “Eligible rollup transaction” means a rollup transaction in which the new securities issued are listed or approved for listing on a national securities…
  - § 25015 “Real estate development” means a development (a) which consists or will consist of separately owned lots, parcels or areas with either or both of the…
  - § 25016 “Rule” means any published regulation or standard of general application issued by the commissioner. “Order” means a consent, authorization, approval, permit,…
  - § 25017 (a) “Sale” or “sell” includes every contract of sale of, contract to sell, or disposition of, a security or interest in a security for value. “Sale” or “sell”…
  - § 25018 “Securities Act of 1933,” “Securities Exchange Act of 1934,” “Investment Advisers Act of 1940,” and “Investment Company Act of 1940” mean the federal statutes…
  - § 25019 “Security” means any note; stock; treasury stock; membership in an incorporated or unincorporated association; bond; debenture; evidence of indebtedness;…
  - § 25020 “State” means any state, territory, or possession of the United States, the District of Columbia and Puerto Rico.
  - § 25021 “Subdivided lands” and “subdivision” have the meanings prescribed in Sections 11000, 11004.5, and 11218 of the Business and Professions Code.
  - § 25022 “Underwriter” means a person who has agreed with an issuer or other person on whose behalf a distribution is to be made (a) to purchase securities for…
  - § 25023 (a) Except as provided in subdivision (b), “viatical settlement contract” means an agreement entered into between a person owning a life insurance policy upon…
2. PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES §§ 25100–25166 · 47 sections
  1. CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification §§ 25100–25105 · 11 sections
    § 25100 The following securities are exempted from Sections 25110, 25120, and 25130: (a) Any security (including a revenue obligation) issued or guaranteed by the…
    § 25100.1 The following securities are not subject to Sections 25110, 25120, and 25130: (a) A security defined as a “covered security” pursuant to Section 18(b)(1) of…
    § 25101 The following securities are exempt from the provisions of Section 25130: (a) Any security issued by a person that is the issuer of any security listed on a…
    § 25101.1 The following securities are not subject to Sections 25110, 25120, and 25130: (a) A security that is offered or sold in a transaction that is exempt from…
    § 25102 The following transactions are exempted from the provisions of Section 25110: (a) Any offer (but not a sale) not involving any public offering and the…
    § 25102.1 The following transactions are not subject to Sections 25110, 25120, and 25130: (a) Any offer or sale of a security to a “qualified purchaser” as that term is…
    § 25102.2 The commissioner shall require any issuer that is engaged in the business of purchasing, selling, financing, or brokering real estate, and that relies upon an…
    § 25102.5 There shall be exempted from Section 25110 a transaction that is the sale of a series of notes secured directly by an interest in the same real property, or…
    § 25103 The following transactions are exempted from the provisions of Section 25110 and Section 25120: (a) Any negotiations or agreements prior to general…
    § 25104 The following transactions are exempted from the provisions of Section 25130: (a) Any offer or sale of a security by the bona fide owner thereof for his or her…
    § 25105 There shall be exempted from the provisions of Section 25110, 25120 or 25130 any other transaction which the commissioner by rule exempts as not being…
  2. CHAPTER 2. Issuer Transactions §§ 25110–25118 · 9 sections
    § 25110 It is unlawful for any person to offer or sell in this state any security in an issuer transaction (other than in a transaction subject to Section 25120),…
    § 25111 (a) Any security for which a registration statement has been filed under the Securities Act of 1933 in connection with the same offering may be qualified by…
    § 25112 (a) Any security issued by a person which is the issuer of any security registered under Section 12 of the Securities Exchange Act of 1934 or issued, by an…
    § 25113 (a) All securities, whether or not eligible for qualification by coordination under Section 25111 or qualification by notification under Section 25112, may be…
    § 25114 Every qualification under this chapter is effective for 12 months from its effective date, unless the commissioner by order or rule specifies a different…
    § 25115 Every application for qualification of an issuer transaction under this chapter shall be signed and verified by the issuer; every application for qualification…
    § 25116 (a) An evidence of indebtedness issued pursuant to a qualification under this chapter or Chapter 3 (commencing with Section 25120), and the purchasers or…
    § 25117 (a) An evidence of indebtedness, and the purchasers or holders thereof, shall be exempt from the usury provisions of Section 1 of Article XV of the California…
    § 25118 (a) An evidence of indebtedness issued by an entity or guaranteed by an entity that is an affiliate (as defined in Section 150) of the borrower that, on the…
  3. CHAPTER 3. Recapitalizations and Reorganizations §§ 25120–25122 · 3 sections
    § 25120 (a) Except as provided in subdivision (b), it is unlawful for any person to offer or sell in this state any security in any of the following manners: (1) In an…
    § 25121 The securities qualified for sale under this chapter shall be qualified by permit under this section. The application for the permit shall be signed and…
    § 25122 Qualification of securities under this chapter becomes effective upon the commissioner issuing a permit authorizing the issuance of such securities.
  4. CHAPTER 4. Nonissuer Transactions §§ 25130–25134 · 5 sections
    § 25130 It is unlawful for any person to offer or sell any security in this state in any nonissuer transaction unless it is qualified for such sale under this chapter…
    § 25131 (a) The securities to be offered or sold in a nonissuer transaction, which are not eligible for qualification under Section 25111, shall be qualified by…
    § 25132 Every qualification under this chapter and every qualification of a nonissuer transaction under Section 25111 is effective for 12 months from its effective…
    § 25133 It is unlawful for any person without the written consent of the commissioner to consummate the sale or transfer of any securities heretofore or hereafter…
    § 25134 Every applicant seeking qualification for the sale of securities shall, upon request of the commissioner, furnish to the commissioner an authorization for…
  5. CHAPTER 5. Authority of the Commissioner §§ 25140–25151 · 12 sections
    § 25140 (a) (1) The commissioner may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, any qualification of an underwritten…
    § 25141 The commissioner may impose as a condition of qualification under Chapter 2 (commencing with Section 25110) or Chapter 3 (commencing with Section 25120) of…
    § 25142 When application is made for a permit to issue securities or to deliver other consideration (whether or not the security or transaction is exempt from…
    § 25143 (a) The commissioner may by order summarily postpone or suspend the effectiveness of any qualification pending final determination of any proceeding under this…
    § 25144 The commissioner may vacate or modify a stop order if he finds that the conditions which caused its entry have changed or that it is otherwise in the public…
    § 25145 Every issuer qualifying securities for sale in this state shall at all times keep and maintain a complete set of books, records, and accounts of such sales and…
    § 25146 For a period of 18 months after the qualification is effective, the commissioner may by rule or order require an issuer who has filed an application to file…
    § 25147 The commissioner may by rule or order require as a condition of qualification that any security qualified under Section 25113 be sold only on a specified form…
    § 25148 Except in cases where the delivery of a prospectus or proxy statement is required under the Securities Act of 1933 or the Securities Exchange Act of 1934, the…
    § 25149 The commissioner may act as escrow holder for securities required to be deposited in escrow by his order.
    § 25150 The commissioner may accept and act upon the opinions, appraisements and reports of any engineers, appraisers, or other experts which may be presented by an…
    § 25151 (a) Upon the filing of a written request for the consent to transfer securities referred to in Section 25133, accompanied by such information and documents as…
  6. CHAPTER 6. General Provisions §§ 25160–25166 · 7 sections
    § 25160 Every application for qualification shall state (1) the maximum amount of securities proposed to be offered in this state; and (2) any adverse order, judgment,…
    § 25161 Any document filed under this law or a predecessor statute may be incorporated by reference in a subsequent application or notice filing if it was filed within…
    § 25162 An amendment to an application filed after the effective date of the qualification of the sale of securities, if such amendment is approved by the…
    § 25163 In any proceeding under this law, the burden of proving an exemption or an exception from a definition is upon the person claiming it.
    § 25164 (a) Neither (1) the fact that an application for qualification under this law has been filed nor (2) the fact that such qualification has become effective…
    § 25165 Every applicant for qualification of the sale of securities under this law or every person filing an application or a notice under Sections 25100.1, 25101.1,…
    § 25166 It is unlawful for any person willfully to make any untrue statement of a material fact in any application, notice, or report filed with the commissioner under…
3. PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS §§ 25200–25256 · 55 sections
  1. CHAPTER 1. Exemptions §§ 25200–25209 · 9 sections
    § 25200 A broker-dealer registered under the Securities Exchange Act of 1934, who has not previously had any certificate denied or revoked under this law or any…
    § 25202 (a) An investment adviser shall not be subject to Section 25230 if (1) the investment adviser does not have a place of business in this state and (2) during…
    § 25203 A person whose only clients are insurance companies shall be exempted from the provisions of Section 25230.
    § 25204 The commissioner may by such rules as he deems necessary or appropriate in the public interest or for the protection of investors, either unconditionally or…
    § 25206 A broker licensed by the Real Estate Commissioner is exempt from the provisions of Section 25210 when engaged in transactions in any interest in any general or…
    § 25206.1 (a) For purposes of this section, a “finder” is a natural person who, for direct or indirect compensation, introduces or refers one or more accredited…
    § 25207 A financial institution that undertakes activities with respect to an investment company pursuant to the provisions of Section 1514, 6524, 14652.5, or 18022.5…
    § 25208 A person licensed as a capital access company under Division 3 (commencing with Section 28000) of Title 4 is exempt from the provisions of Section 25210 when…
    § 25209 Section 25210 shall not apply to an agent of an issuer when engaged in transactions exempted by subdivision (q) of Section 25102, provided that the agent is a…
  2. CHAPTER 2. Licensing of Agents and Broker-Dealers §§ 25210–25221 · 15 sections
    § 25210 (a) Unless exempted under the provisions of Chapter 1 (commencing with Section 25200) of this part, no broker-dealer shall effect any transaction in, or induce…
    § 25211 (a) The application for a certificate as a broker-dealer shall be accompanied by the consent to service of process specified in Section 25240 and, unless filed…
    § 25211.5 A broker-dealer acting pursuant to a certificate which is then in effect and which is issued pursuant to Section 25211, shall be exempt from the usury…
    § 25212 The commissioner may, after appropriate notice and opportunity for hearing, by order censure, deny a certificate to, suspend for a period not exceeding 12…
    § 25212.1 The commissioner may immediately revoke by order the certificate of any broker-dealer if the broker-dealer fails to comply with any currently effective order…
    § 25213 The commissioner may, after appropriate notice and opportunity for hearing, by order censure, or suspend for a period not exceeding 12 months, or deny or bar…
    § 25213.3 The commissioner shall, after appropriate notices and opportunity for hearing, by order suspend, for a period not exceeding 12 months, or bar from any position…
    § 25214 (a) It is unlawful for any person, as to whom an order suspending or barring employment or control is in effect pursuant to Section 25213 or 25213.3, willfully…
    § 25215 No order may be entered under Section 25212, 25213, 25213.3, or 25252 except after notice to any person affected thereby (and, in the case of an agent, to his…
    § 25216 (a) No broker-dealer or agent shall effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state by means of…
    § 25217 (a) A broker-dealer licensed under this chapter shall not effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in…
    § 25218 No broker-dealer licensed under this chapter shall effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this…
    § 25219 Notwithstanding any other provision of this division, if in his or her opinion the public interest and the protection of investors so require, the commissioner…
    § 25220 At any time after the issuance of an order under Section 25219, any interested person (including, but not limited to, the issuer of the security and any…
    § 25221 (a) Notwithstanding any other provision of law, a broker-dealer, or any affiliate thereof, licensed under this chapter, or any officer or employee thereof, may…
  3. CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers §§ 25230–25238 · 13 sections
    § 25230 (a) It is unlawful for any investment adviser to conduct business as an investment adviser in this state unless the investment adviser has first applied for…
    § 25230.1 (a) A person that is registered under Section 203 of the Investment Advisers Act of 1940 as an investment adviser is not subject to the requirement of…
    § 25231 (a) Any investment adviser, or any person who contemplates becoming an investment adviser, may apply for a certificate to act as an investment adviser by…
    § 25232 The commissioner may, after appropriate notice and opportunity for hearing, by order censure, deny a certificate to, or suspend for a period not exceeding 12…
    § 25232.1 The commissioner may, after appropriate notice and opportunity for hearing, by order censure, or suspend for a period not exceeding 12 months, or bar from any…
    § 25232.2 (a) It is unlawful for any person, as to whom an order suspending or revoking the person’s certificate as an investment adviser is in effect pursuant to…
    § 25232.3 The commissioner may immediately revoke the certificate of any investment adviser if the investment adviser fails to comply with any currently effective order…
    § 25233 No order may be entered under Section 25232, 25232.1, or 25252 except after notice to the person affected thereby of the intention of the commissioner to enter…
    § 25234 (a) No investment adviser licensed under this chapter shall in this state enter into, extend or renew any investment advisory contract, or in any way perform…
    § 25235 It is unlawful for any investment adviser, directly or indirectly, in this state: (a) To employ any device, scheme, or artifice to defraud any client or…
    § 25236 (a) No investment adviser licensed under this chapter shall conduct any business as such investment adviser in this state unless the investment adviser and all…
    § 25237 The commissioner shall prescribe rules with respect to investment advisers licensed under this chapter who have custody of their clients’ securities or funds…
    § 25238 No investment adviser licensed under this chapter and no natural person associated with the investment adviser shall engage in investment advisory activities,…
  4. CHAPTER 4. General Provisions §§ 25240–25256 · 18 sections
    § 25240 Every applicant for a certificate as a broker-dealer or an investment adviser (other than a California corporation), and every investment adviser subject to…
    § 25241 (a) Every broker-dealer and every investment adviser licensed under Section 25230 shall make and keep accounts, correspondence, memorandums, papers, books, and…
    § 25242 (a) Surrender of a certificate as a broker-dealer or investment adviser becomes effective 30 days after receipt of an application to surrender that certificate…
    § 25243 It is unlawful for any person holding a certificate as a broker-dealer or investment adviser under this part to represent or imply in any manner whatsoever…
    § 25243.5 (a) A broker-dealer or investment adviser, or an agent or representative thereof, shall not use a senior-specific certification, credential, or professional…
    § 25244 Any person whose certificate as a broker-dealer or investment adviser has been suspended or revoked shall immediately surrender such certificate to the…
    § 25245 It is unlawful for any person willfully to make any untrue statement of a material fact in any application, notice, or report filed with the commissioner under…
    § 25246 It is unlawful for any agent or broker-dealer to require, as a condition to the purchase or sale of securities for and in the name of a married person, that…
    § 25247 (a) Upon written or oral request, the commissioner shall make available to any person the information specified in Section 7929.005 of the Government Code and…
    § 25248 (a) If the commissioner finds, as a result of any examination or investigation or from any report made to the commissioner, that any person subject to this…
    § 25249 If, after examination or investigation, the commissioner has reasonable grounds to believe that any broker-dealer or investment adviser is violating or has…
    § 25250 If, after examination or investigation, the commissioner has reasonable grounds to believe that any broker-dealer or investment adviser, other than an…
    § 25251 (a) No order issued pursuant to Section 25249 or 25250 may become final except after notice to the affected broker-dealer or investment adviser of the…
    § 25252 The commissioner may, after appropriate notice and opportunity for hearing, by orders, levy administrative penalties as follows: (a) Any person subject to this…
    § 25253 (a) Whenever it appears to the commissioner that any of the conditions specified in subdivision (b) has occurred with respect to any broker-dealer or…
    § 25254 (a) If the commissioner determines it is in the public interest, the commissioner may include in any administrative action brought under this part a claim for…
    § 25255 The civil, criminal, and administrative remedies available to the commissioner pursuant to this division are not exclusive, and may be sought and employed in…
    § 25256 (a) For any broker-dealer or investment adviser, a disciplinary action taken by the State of California, another state, an agency of the federal government, or…
4. PART 4. ADVERTISING SECURITIES §§ 25300–25302 · 3 sections
  - § 25300 (a) No person shall publish any advertisement in this state concerning any security sold or offered for sale in this state unless a true copy of the…
  - § 25301 All advertisements published by any broker-dealer that are exempted from filing by paragraph (1) or paragraph (6) of subdivision (b) of Section 25300 shall be…
  - § 25302 (a) A person shall not publish any advertisement concerning any security in this state after the commissioner finds that the advertisement contains any…
5. PART 5. FRAUDULENT AND PROHIBITED PRACTICES §§ 25400–25404 · 5 sections
  - § 25400 It is unlawful for any person, directly or indirectly, in this state: (a) For the purpose of creating a false or misleading appearance of active trading in any…
  - § 25401 It is unlawful for any person to offer or sell a security in this state, or to buy or offer to buy a security in this state, by means of any written or oral…
  - § 25402 It is unlawful for an issuer or any person who is an officer, director or controlling person of an issuer or any other person whose relationship to the issuer…
  - § 25403 (a) Every person who with knowledge directly or indirectly controls and induces any person to violate any provision of this division or any rule or order…
  - § 25404 (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…
6. PART 6. ENFORCEMENT §§ 25500–25550 · 30 sections
  1. CHAPTER 1. Civil Liability §§ 25500–25510 · 17 sections
    § 25500 Any person who willfully participates in any act or transaction in violation of Section 25400 shall be liable to any other person who purchases or sells any…
    § 25501 Any person who violates Section 25401 shall be liable to the person who purchases a security from, or sells a security to, that person, who may sue either for…
    § 25501.5 (a) (1) A person who purchases a security from or sells a security to a broker-dealer that is required to be licensed and has not, at the time of the sale or…
    § 25502 Any person who violates Section 25402 shall be liable to the person who purchases a security from him or sells a security to him, for damages equal to the…
    § 25502.5 (a) Any person other than the issuer who violates Section 25402 shall be liable to the issuer of the security purchased or sold in violation of Section 25402…
    § 25503 Any person who violates Section 25110, 25130, or 25133, or a condition of qualification under Chapter 2 (commencing with Section 25110) of this part, imposed…
    § 25504 Every person who directly or indirectly controls a person liable under Section 25501 or 25503, every partner in a firm so liable, every principal executive…
    § 25504.1 Any person who materially assists in any violation of Section 25110, 25120, 25130, 25133, or 25401, or a condition of qualification under Chapter 2 (commencing…
    § 25504.2 (a) Any accountant, engineer, appraiser, or other person whose profession gives authority to a statement made by such person, who pursuant to rule of the…
    § 25505 A corporation which is liable under this chapter shall have a right of indemnification against any of its principal executive officers, directors, and…
    § 25506 (a) For proceedings commencing before January 1, 2005, no action shall be maintained to enforce any liability created under Section 25500, 25501, or 25502 (or…
    § 25506.1 No action shall be maintained to enforce any liability created under Section 25504.2 unless brought within one year after the discovery of the facts…
    § 25507 (a) No action shall be maintained to enforce any liability created under Section 25503 (or Section 25504 or Section 25504.1 insofar as they relate to that…
    § 25508 No action shall be maintained to enforce any right of indemnification or contribution created by Section 25505 unless brought before the expiration of one year…
    § 25508.5 In addition to any other rights provided for under this division, including, but not limited to, Sections 25501 and 25506, or otherwise, a person who purchases…
    § 25509 Every cause of action under this chapter survives the death of any person who might have been a plaintiff or defendant.
    § 25510 Except as explicitly provided in this chapter, no civil liability in favor of any private party shall arise against any person by implication from or as a…
  2. CHAPTER 2. Powers of the Commissioner §§ 25530–25536 · 9 sections
    § 25530 (a) Whenever it appears to the commissioner that any person has engaged, is engaging, or is about to engage in any act or practice constituting a violation of…
    § 25530.1 In any proceeding under Section 25530, the court may prohibit, conditionally or unconditionally, and permanently or for such period of time as it shall…
    § 25531 (a) The commissioner in his discretion (1) may make such public or private investigations within or outside of this state as he deems necessary to determine…
    § 25532 (a) If, in the opinion of the commissioner, (1) the sale of a security is subject to qualification under this law and it is being or has been offered or sold…
    § 25533 The commissioner may refer any evidence available concerning any violation of this law or of any rule or order hereunder to the Attorney General or the…
    § 25533.5 The commissioner shall send a copy of a desist and refrain order issued under this law to the Attorney General and the district attorney of the county in which…
    § 25534 Whenever any securities are issued which the commissioner determines were offered or sold in violation of Section 25110, 25120, or 25130, the commissioner may,…
    § 25535 (a) Any person who violates any provision of this law, or who violates any rule or order under this law, shall be liable for a civil penalty not to exceed…
    § 25536 (a) The commissioner may take such actions as are authorized by Section 6d of the federal Commodity Exchange Act (7 U.S.C. Sec. 1 et seq.) as amended before or…
  3. CHAPTER 3. Crimes §§ 25540–25542 · 3 sections
    § 25540 (a) Except as provided for in subdivision (b), any person who willfully violates any provision of this division, or who willfully violates any rule or order…
    § 25541 (a) Any person who willfully employs, directly or indirectly, any device, scheme, or artifice to defraud in connection with the offer, purchase, or sale of any…
    § 25542 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.
  4. CHAPTER 4. Service of Process § 25550 · 1 section
    § 25550 When any person, including any nonresident of this state, engages in conduct prohibited or made actionable by this law or any rule or order hereunder, whether…
7. PART 7. ADMINISTRATION §§ 25604–25620 · 22 sections
  - § 25604 The administration and enforcement of, and the education of the public relative to, the laws and programs of the Department of Financial Protection and…
  - § 25605 (a) The commissioner may publish any information filed with him or obtained by him, if, in the judgment of the commissioner, such action is in the public…
  - § 25606 (a) The Attorney General shall render to the commissioner opinions upon all questions of law, relating to the construction or interpretation of any law under…
  - § 25607 (a) Neither the commissioner nor any of the commissioner’s assistants, clerks, or deputies shall be interested as a director, officer, shareholder, member…
  - § 25608 (a) The commissioner shall charge and collect the fees fixed in this section and Section 25608.1. All fees charged and collected under this section and Section…
  - § 25608.1 (a) The fee for an investment company filing a notice pursuant to subdivision (b) of Section 25100.1 is two hundred dollars ($200) plus one-fifth of 1 percent…
  - § 25608.2 Commencing July 1, 2000, the fee provisions of subdivision (c) of Section 25608, as they apply to the fee for filing a notice pursuant to paragraph (4) of…
  - § 25608.3 (a) Notwithstanding Sections 25608 and 25608.1, the commissioner may set any fee under those sections at an amount below the maximum fee set forth in those…
  - § 25609 Every final order, decision, license, or other official act of the commissioner is subject to judicial review in accordance with law.
  - § 25610 The commissioner may from time to time make, amend and rescind such rules, forms, and orders as are necessary to carry out the provisions of this law,…
  - § 25611 The commissioner may prepare and make available to interested persons lists of persons whose securities are qualified for trading purposes in this state, are…
  - § 25612 No rule, form or order may be made, amended, or rescinded unless the commissioner finds that the action is necessary or appropriate in the public interest or…
  - § 25612.3 Unless otherwise provided by rule, the commissioner shall require the use of the following forms: (a) Form BD (Uniform Application for Broker-Dealer…
  - § 25612.5 (a) To encourage uniform interpretation and administration of this law and the Franchise Investment Law (Division 5 (commencing with Section 31000)) and…
  - § 25613 The commissioner may by rule or order prescribe (1) the form and content of financial statements required under this law, (2) the circumstances under which…
  - § 25614 All rules of the commissioner (other than those relating solely to the internal administration of the Department of Financial Protection and Innovation) shall…
  - § 25615 A document is filed when it is received by the commissioner; but no qualification of the sale of securities shall become effective until the appropriate fee…
  - § 25616 The commissioner shall keep an index of all qualifications which are or have ever been effective, all denial, suspension, or revocation orders which have been…
  - § 25617 Upon request and at such reasonable charges as he prescribes by rule, the commissioner shall furnish to any person photostatic or other copies (certified under…
  - § 25618 The commissioner in his discretion may honor requests from interested persons for interpretive opinions.
  - § 25619 (a) The commissioner may destroy any applications, notices, orders, permits, and revoked or surrendered certificates, together with the files and folders, as…
  - § 25620 (a) Notwithstanding any other law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic…
8. PART 8. GENERAL PROVISIONS §§ 25700–25707 · 8 sections
  - § 25700 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…
  - § 25701 Any condition, stipulation or provision purporting to bind any person acquiring any security to waive compliance with any provision of this law or any rule or…
  - § 25702 Whenever a person is entitled under this law to a hearing in accordance with the provisions of the Administrative Procedure Act, Chapter 5 (commencing with…
  - § 25703 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…
  - § 25704 (a) Except as expressly provided in this section, prior law exclusively governs all suits, actions, prosecutions or proceedings which are pending or may be…
  - § 25705 All references to “the Corporate Securities Law” in any code or statute of the State of California shall hereafter be deemed to be references to the Corporate…
  - § 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…
  - § 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,…
DIVISION 2. SECURITY OWNERS PROTECTION §§ 27000–27202 · 9 sections
1. CHAPTER 1. Definitions and General Provisions §§ 27000–27003 · 4 sections
  - § 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…
  - § 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…
  - § 27002 (a) As used in this division, “individual” includes every natural person, domestic or foreign private corporation, nonprofit corporation, unincorporated…
  - § 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…
2. CHAPTER 2. Unlawful and Fraudulent Conduct §§ 27100–27101 · 2 sections
  - § 27100 Any individual who, within this state, solicits, receives, collects, or solicits any subscription or contract to pay, any contributions, fees, funds, or…
  - § 27101 It is unlawful for any individual, directly or indirectly, in connection with the solicitation, receipt, or collection of, or solicitation of any subscription…
3. CHAPTER 3. Civil Liability and Crimes §§ 27200–27202 · 3 sections
  - § 27200 Every individual who solicits, receives, collects, or contracts for the payment of, any contributions, fees, funds, or compensation of any kind, in violation…
  - § 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…
  - § 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…
DIVISION 2.5. Fair Investment Practices by Venture Capital Companies §§ 27500–27506 · 7 sections
1. CHAPTER 1. Fair Investment Practices by Venture Capital Companies §§ 27500–27506 · 7 sections
  - § 27500 For purposes of this chapter, the following definitions apply: (a) “Commissioner” means the Commissioner of Financial Protection and Innovation. (b) “Covered…
  - § 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…
  - § 27502 (a) (1) The department shall make the reports received pursuant to subdivision (b) of Section 27501 readily accessible, easily searchable, and easily…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
DIVISION 3. CAPITAL ACCESS COMPANIES §§ 28000–28958 · 104 sections
1. CHAPTER 1. General Provisions §§ 28000–28049 · 26 sections
  1. ARTICLE 1. Short Title and Construction §§ 28000–28004 · 5 sections
    § 28000 This division shall be known and may be cited as the “Capital Access Company Law.”
    § 28001 This division shall be liberally construed to accomplish its purposes.
    § 28002 The provisions of the Corporate Securities Law of 1968 (Division 1 (commencing with Section 25000) of Title 4) shall apply to licensees.
    § 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…
    § 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…
  2. ARTICLE 2. Definitions §§ 28030–28049 · 21 sections
    § 28030 Subject to additional definitions contained in this division which are applicable to specific provisions of this division, and unless the context otherwise…
    § 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…
    § 28032 “Affiliate” means any person or persons controlling, controlled by, or under common control with, other specified persons.
    § 28033 “Commissioner” means the Commissioner of Financial Protection and Innovation or their designee with respect to a particular matter.
    § 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…
    § 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.
    § 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…
    § 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…
    § 28038 “License” means a license issued under this division authorizing a licensee to transact business as a capital access company.
    § 28039 “Licensee” means a company that is licensed under this division.
    § 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…
    § 28041 “Order” means any approval, consent, authorization, exemption, denial, prohibition, or requirement applicable to a specific case issued by the commissioner.…
    § 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…
    § 28043 “Person” means any natural person, proprietorship, joint venture, partnership, trust, business trust, syndicate, association, joint stock company, corporation,…
    § 28044 “Principal security holder,” means any person who owns, directly or indirectly, of record or beneficially, securities representing 10 percent or more of the…
    § 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…
    § 28046 “Security” has the meaning set forth in Section 25019.
    § 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…
    § 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…
    § 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…
    § 28049 “Voting power” has the meaning set forth in Section 194.5.
2. CHAPTER 2. Administration §§ 28100–28111 · 12 sections
  - § 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,…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
3. CHAPTER 3. Licensing §§ 28150–28155 · 6 sections
  - § 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…
  - § 28151 No person other than a person who meets the definition of a licensee may be issued a license under this division.
  - § 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…
  - § 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…
  - § 28154 Except pursuant to Section 28551, no license shall be transferable or assignable.
  - § 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,…
4. CHAPTER 4. Organizational Matters §§ 28200–28212 · 5 sections
  1. ARTICLE 1. Organization and Name §§ 28200–28201 · 2 sections
    § 28200 The organizational documents of the licensee shall include the following statement: (a) The activities of the licensee are limited to the promotion of…
    § 28201 No licensee shall, except by prior written notice to the commissioner, transact business under any name other than its corporate name.
  2. ARTICLE 2. Directors §§ 28210–28212 · 3 sections
    § 28210 Each licensee shall have a board of directors, executive committee, or other policy body, which shall consist of not less than three members.
    § 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.
    § 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…
5. CHAPTER 5. Offices § 28320 · 1 section
  1. ARTICLE 1. Establishing, Relocating, and Closing Offices § 28320 · 1 section
    § 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…
6. CHAPTER 6. Transaction of Business §§ 28400–28405 · 3 sections
  - § 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…
  - § 28404 No licensee shall provide financing assistance to any small business firm for the purpose of evading the requirements of this division.
  - § 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…
7. CHAPTER 7. Records, Reports, and Examinations §§ 28500–28505 · 6 sections
  - § 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.…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
8. CHAPTER 8. Acquisition of Control §§ 28550–28552 · 3 sections
  - § 28550 No person shall, except with the prior written approval of the commissioner, acquire control of a licensee.
  - § 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…
  - § 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…
9. CHAPTER 9. Merger and Purchase or Sale of Business §§ 28600–28604 · 5 sections
  - § 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.…
  - § 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…
  - § 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.
  - § 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…
  - § 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…
10. CHAPTER 10. Voluntary Surrender of License §§ 28650–28651 · 2 sections
  - § 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…
  - § 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…
11. CHAPTER 11. Enforcement §§ 28700–28716 · 17 sections
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 28712 Any person whose license is suspended or revoked shall immediately deliver the license to the commissioner.
  - § 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…
  - § 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…
  - § 28715 Sections 11041, 11042, and 11043 of the Government Code do not apply to the Commissioner of Financial Protection and Innovation.
  - § 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…
12. CHAPTER 12. Crimes and Criminal Penalties §§ 28800–28881 · 7 sections
  1. ARTICLE 1. General Provisions §§ 28800–28802 · 3 sections
    § 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…
    § 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,…
    § 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…
  2. ARTICLE 2. Conflicts of Interest §§ 28820–28821 · 2 sections
    § 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…
    § 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…
  3. ARTICLE 3. Criminal Penalties §§ 28880–28881 · 2 sections
    § 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)…
    § 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.
13. CHAPTER 13. Civil Penalties §§ 28900–28901 · 2 sections
  - § 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…
  - § 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…
14. CHAPTER 14. Miscellaneous Provisions §§ 28950–28958 · 9 sections
  - § 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…
  - § 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…
  - § 28952 The commissioner may honor requests from interested persons for interpretive opinions.
  - § 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.
  - § 28954 Every final order, decision, license, or other official act of the commissioner is subject to judicial review in accordance with law.
  - § 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…
  - § 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…
  - § 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…
  - § 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…
DIVISION 4. BUCKET SHOP LAW §§ 29000–29201 · 17 sections
1. CHAPTER 1. Definitions §§ 29000–29008 · 9 sections
  - § 29000 Unless the provision or the context otherwise requires, the definitions set forth in this chapter govern the construction of this division.
  - § 29001 “Person” means an individual, partnership, corporation, limited liability company, or association, either domestic or foreign, whether acting in his or her own…
  - § 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…
  - § 29003 “Contract” includes any agreement, trade, or transaction.
  - § 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…
  - § 29005 “Commodities” means anything movable that is bought and sold.
  - § 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.
  - § 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.
  - § 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…
2. CHAPTER 2. Prohibited Activities §§ 29100–29105 · 6 sections
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
3. CHAPTER 3. Required Records and Statements §§ 29200–29201 · 2 sections
  - § 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…
  - § 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…
DIVISION 4.5. COMMODITIES §§ 29500–29567 · 47 sections
1. CHAPTER 1. Definitions §§ 29500–29516 · 18 sections
  - § 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…
  - § 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…
  - § 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.
  - § 29503 “Commissioner” means the Commissioner of Financial Protection and Innovation.
  - § 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…
  - § 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…
  - § 29506 “Commodity Exchange Act” means the federal statute so named, as amended before or after January 1, 1991.
  - § 29507 “Commodity Futures Trading Commission” means the independent regulatory agency established by Congress to administer the Commodity Exchange Act.
  - § 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,…
  - § 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)…
  - § 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…
  - § 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…
  - § 29512 “Good funds” means the verified receipt of immediately available funds according to the applicable requirements of federal Regulation CC.
  - § 29513 “Offer” includes every offer to sell, offer to purchase, or offer to enter into a commodity contract or commodity option.
  - § 29514 “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, an unincorporated…
  - § 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…
  - § 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…
  - § 29516 “Sale” or “sell” includes every sale, contract of sale, contract to sell, or disposition, for value.
2. CHAPTER 2. Unlawful Commodity Transactions § 29520 · 1 section
  - § 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…
3. CHAPTER 3. Exemptions §§ 29530–29532 · 3 sections
  - § 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…
  - § 29531 The prohibitions in Section 29520 shall not apply to the following: (a) An account, agreement, or transaction within the exclusive regulatory jurisdiction of…
  - § 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…
4. CHAPTER 4. Unlawful Activities and Fraudulent Conduct §§ 29535–29538 · 4 sections
  - § 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…
  - § 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…
  - § 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.…
  - § 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…
5. CHAPTER 5. Powers of the Commissioner §§ 29540–29546 · 7 sections
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 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…
  - § 29546 The commissioner in his or her discretion may honor requests from interested parties for interpretive opinions.
6. CHAPTER 6. Crimes and Civil Liability §§ 29550–29555 · 6 sections
  - § 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…
  - § 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.
  - § 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…
  - § 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…
  - § 29554 Every cause of action under this law survives the death of any person who might have been a plaintiff or defendant.
  - § 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…
7. CHAPTER 7. Miscellaneous Provisions §§ 29560–29567 · 8 sections
  - § 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…
  - § 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,…
  - § 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.
  - § 29563 Every final order, decision, certificate, registration, or other official act of the commissioner is subject to judicial review in accordance with law.
  - § 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…
  - § 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…
  - § 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…
  - § 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…
DIVISION 5. FRANCHISE INVESTMENT LAW §§ 31000–31528 · 118 sections
1. PART 1. DEFINITIONS §§ 31000–31020 · 25 sections
  - § 31000 This division may be known as the “Franchise Investment Law.” References in this division to “this law” refer to the applicable provisions of this division.
  - § 31001 The Legislature hereby finds and declares that the widespread sale of franchises is a relatively new form of business which has created numerous problems both…
  - § 31001.1 (a) To enhance the uniform and efficient administration, and the effective enforcement, of this division, it is the intent of the Legislature that the…
  - § 31002 Unless the context otherwise requires, the definitions in this part apply throughout this division.
  - § 31003 “Advertisement” means any written or printed communication or any communication by means of recorded telephone messages or spoken on radio, television, or…
  - § 31003.5 “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.
  - § 31004 “Commissioner” means the Commissioner of Financial Protection and Innovation.
  - § 31005 (a) “Franchise” means a contract or agreement, either expressed or implied, whether oral or written, between two or more persons by which: (1) A franchisee is…
  - § 31005.5 For the purposes of this division and in respect only to a franchise as defined in subdivision (b) of Section 31005, the following terms shall have the…
  - § 31006 A “franchisee” is a person to whom a franchise is granted.
  - § 31007 A “franchisor” is a person who grants a franchise.
  - § 31008 “Area franchise” means any franchise between a franchisor and a franchisee whereby the franchisee is granted the right to operate more than one unit within a…
  - § 31008.5 “Subfranchise” means any contract or agreement between a franchisor and a subfranchisor whereby the subfranchisor is granted the right, for consideration given…
  - § 31009 A “subfranchisor” is a person to whom a subfranchise is granted.
  - § 31010 Where used in this law, unless specifically stated otherwise, “franchise” includes “area franchise” and “subfranchise.”
  - § 31011 “Franchise fee” means any fee or charge that a franchisee or subfranchisor is required to pay or agrees to pay for the right to enter into a business under a…
  - § 31012 “Fraud” and “deceit” are not limited to common law fraud or deceit.
  - § 31013 (a) An offer or sale of a franchise is made in this state when an offer to sell is made in this state, or an offer to buy is accepted in this state, or if the…
  - § 31014 “Order” means a consent, authorization, approval, prohibition or requirement applicable to a specific case issued by the commissioner.
  - § 31015 “Person” means an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint stock company, a trust or an…
  - § 31016 “Publish” means publicly to issue or circulate by newspaper, mail, radio or television, or otherwise to disseminate to the public.
  - § 31017 “Rule” means any published regulation or standard of general application issued by the commissioner.
  - § 31018 (a) “Sale” or “sell” includes every contract or agreement of sale of, a contract to sell, or disposition of, a franchise or interest in a franchise for value.…
  - § 31019 “State” means any state, territory, or possession of the United States, the District of Columbia and Puerto Rico.
  - § 31020 (a) “Franchise broker” means a person who directly or indirectly engages in the business of the offer or sale of a franchise, regardless of the title used by…
2. PART 2. REGULATION OF THE SALE OF FRANCHISES §§ 31100–31158 · 37 sections
  1. CHAPTER 1. Exemptions §§ 31100–31109.1 · 11 sections
    § 31100 There shall be exempted from any or all of the provisions of Chapter 2 (commencing with Section 31110) any other transaction which the commissioner by rule…
    § 31101 There shall be exempted from the provisions of Chapter 2 (commencing with Section 31110) of this part the offer and sale of a franchise if the franchisor…
    § 31102 The offer or sale of a franchise by a franchisee for his own account or the offer or sale of the entire area franchise owned by a subfranchisor for his own…
    § 31103 This division shall not be applicable to any transaction relating to a bank credit card plan. “Bank credit card plan” means a credit card plan in which the…
    § 31104 There shall be exempted from the provisions of Chapter 2 (commencing with Section 31110) of this part the offer and sale of a franchise if the franchisor: (a)…
    § 31105 Any offer, sale, or other transfer of a franchise, or any interest in a franchise, to a resident of another state or any territory or foreign country, shall be…
    § 31106 There shall be exempted from the provisions of Chapter 2 (commencing with Section 31110) of this part, any offer, sale, or other transfer of a franchise or any…
    § 31107 There shall be exempted from the provisions of Chapter 2 (commencing with Section 31110) of this part, any offer (but not the sale) by a franchisor of a…
    § 31108 There shall be exempted from the provisions of Chapter 2 (commencing with Section 31110), any offer or sale of a franchise if the franchise involves the adding…
    § 31109 Any offer or sale of a franchise that meets all of the following requirements shall be exempt from Chapter 2 (commencing with Section 31110): (a) Each and…
    § 31109.1 (a) There shall be exempted from the provisions of Chapter 2 (commencing with Section 31110) the offer and sale of a franchise registered under Section 31111,…
  2. CHAPTER 2. Disclosure §§ 31110–31126 · 17 sections
    § 31110 On and after April 15, 1971, it shall be unlawful for any person to offer or sell any franchise in this state unless the offer of the franchise has been…
    § 31111 (a) The application for registration of an offer shall be filed with the commissioner upon the Uniform Franchise Registration Application, as identified,…
    § 31112 Any application or amendment under this law shall be signed and verified by the franchisor or by the subfranchisor. Such verification shall be in the same…
    § 31113 If the commissioner finds that it is necessary and appropriate for the protection of prospective franchisees or subfranchisors because the applicant has failed…
    § 31114 The application for registration shall be accompanied by a proposed franchise disclosure document, which shall contain the material information set forth in…
    § 31115 The commissioner may summarily issue a stop order denying the effectiveness of or suspending or revoking effectiveness of any registration if the commissioner…
    § 31116 (a) Except as provided in subdivision (b), if no stop order under Section 31115 is in effect under this law, registration of the offer of franchises…
    § 31117 Upon the entry of a stop order under Section 31115 the commissioner shall promptly notify the applicant that it has been entered and of the reasons therefor…
    § 31118 The commissioner may vacate or modify a stop order if he or she finds that the conditions which caused its entry have changed or that it is otherwise in the…
    § 31119 (a) It is unlawful to sell any franchise in this state that is subject to registration under this law without first providing to the prospective franchisee, at…
    § 31120 A franchise offering shall be deemed duly registered for a period of one year from the effective date of the registration, unless the commissioner by order or…
    § 31121 (a) The registration may be renewed for additional periods of one year each, unless the commissioner by rule or order specifies a different period, by…
    § 31122 The registration renewal statement shall be in the form and content prescribed by the commissioner, and shall be accompanied by a proposed offering prospectus.…
    § 31123 A franchisor shall promptly notify the commissioner in writing, by an application to amend the registration, of any material change in the information…
    § 31124 An amendment to an application filed after the effective date of the registration of the sale of franchises, if such amendment is approved by the commissioner,…
    § 31125 (a) An application for registration of a material modification of an existing franchise or of existing franchises shall be in a form and contain information as…
    § 31126 (a) A prospective franchisee seeking to buy an existing franchise, all or substantially all of the assets of an existing franchise business, or an interest in…
  3. CHAPTER 3. General Provisions §§ 31150–31158 · 9 sections
    § 31150 Every franchisor or subfranchisor offering franchises for sale in this state shall at all times keep and maintain a complete set of books, records, and…
    § 31151 The commissioner may accept and act upon the opinions, appraisements and reports of any engineers, appraisers, or other experts which may be presented by an…
    § 31152 Any document filed under this law or under the Corporate Securities Law of 1968 or a predecessor statute thereto may be incorporated by reference in a…
    § 31153 In any proceeding under this law, the burden of proving an exemption or an exception from a definition is upon the person claiming it.
    § 31154 (a) Neither (1) the fact that an application for registration under this law has been filed, nor (2) the fact that such registration has become effective…
    § 31155 Every applicant for registration of an offer to sell franchises under this law, by other than a California corporation, California limited partnership, or…
    § 31156 No person shall publish in this state any advertisement offering a franchise subject to the registration requirements of this law unless a true copy of the…
    § 31157 No person shall publish any advertisement concerning any franchise in this state after the commissioner finds that the advertisement contains any statement…
    § 31158 (a) Notwithstanding any other law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic…
3. PART 3. FRAUDULENT AND PROHIBITED PRACTICES §§ 31200–31221 · 10 sections
  1. CHAPTER 1. Fraudulent Practices §§ 31200–31204 · 5 sections
    § 31200 It is unlawful for any person willfully to make any untrue statement of a material fact in any application, notice or report filed with the commissioner under…
    § 31201 It is unlawful for any person to offer or sell a franchise in this state by means of any written or oral communication not enumerated in Section 31200 which…
    § 31202 It is unlawful for any person willfully to make any untrue statement of a material fact in any statement required to be disclosed in writing pursuant to…
    § 31203 It is unlawful for any person to violate any order of the commissioner or condition to the effectiveness of the registration of the offer or sale of franchises.
    § 31204 (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…
  2. CHAPTER 2. Prohibited Practices §§ 31210–31212 · 3 sections
    § 31210 It is unlawful for any person to effect or attempt to effect a sale of a franchise in this state, except in transactions exempted under Chapter 1 (commencing…
    § 31211 If in the opinion of the commissioner any person is acting in violation of Section 31210, the commissioner may order such person to desist and refrain from…
    § 31212 No franchisor shall refuse to grant a franchise, or refuse to provide financial assistance, to a franchisee or prospective franchisee that has been granted or…
  3. CHAPTER 3. Unfair Practices §§ 31220–31221 · 2 sections
    § 31220 It shall be a violation of this division for any franchisor, directly or indirectly, through any officer, agent or employee, to restrict or inhibit the right…
    § 31221 It shall be a violation of this division for any franchisor, directly or indirectly, through any officer, agent, or employee, to violate the provisions of…
4. PART 4. ENFORCEMENT §§ 31300–31420 · 22 sections
  1. CHAPTER 1. Civil Liability §§ 31300–31306 · 8 sections
    § 31300 (a) Any person who offers or sells a franchise in violation of Section 31101, 31110, 31119, 31200, or 31202, or in violation of any provision of this division…
    § 31301 Any person who violates Section 31201 shall be liable to any person (not knowing or having cause to believe that such statement was false or misleading) who,…
    § 31302 Every person who directly or indirectly controls a person liable under Section 31300 or 31301, every partner in a firm so liable, every principal executive…
    § 31302.5 (a) Any person who violates Section 31220 may be sued in the superior court in the county in which the defendant resides or where a franchise affected by the…
    § 31303 No action shall be maintained to enforce any liability created under Section 31300 unless brought before the expiration of four years after the act or…
    § 31304 No action shall be maintained to enforce any liability created under Section 31301 unless brought before the expiration of two years after the violation upon…
    § 31305 Every cause of action under this chapter survives the death of any person who might have been a plaintiff or defendant.
    § 31306 Nothing in this chapter shall limit any liability which may exist by virtue of any other statute or under common law if this law were not in effect.
  2. CHAPTER 2. Powers of the Commissioner §§ 31400–31408 · 10 sections
    § 31400 (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…
    § 31400.1 In any proceeding under Section 31400, the court may prohibit, conditionally or unconditionally, and permanently or for such period of time as it shall…
    § 31401 (a) The commissioner may in his discretion (1) make such public or private investigations within or outside of this state as he deems necessary to determine…
    § 31402 If, in the opinion of the commissioner, the offer of any franchise is subject to registration under this law and it is being, or it has been, offered for sale…
    § 31403 If, in the opinion of the commissioner, the offer of any franchise exempt from registration under this law is being or has been offered for sale without…
    § 31404 The commissioner may refer evidence that is available concerning any violation of this law or of any rule or order hereunder to the district attorney of the…
    § 31405 (a) Any person who violates any provision of this law, or who violates any rule or order made under this law, shall be liable for a civil penalty not to exceed…
    § 31406 (a) If, upon inspection or investigation, based upon a complaint or otherwise, the commissioner has cause to believe that a person is violating or has violated…
    § 31407 (a) If, after examination or investigation, the commissioner has reasonable grounds to believe that any person is conducting or has conducted business in…
    § 31408 (a) If the commissioner determines it is in the public interest, the commissioner may include in any administrative action brought under this division,…
  3. CHAPTER 3. Crimes §§ 31410–31412 · 3 sections
    § 31410 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…
    § 31411 Any person who willfully employs, directly or indirectly, any device, scheme, or artifice to defraud in connection with the offer or sale of any franchise or…
    § 31412 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.
  4. CHAPTER 4. Service of Process § 31420 · 1 section
    § 31420 When any person, including any nonresident of this state, engages in conduct prohibited or made actionable by this law or any rule or order hereunder, whether…
5. PART 5. ADMINISTRATION §§ 31500–31506 · 7 sections
  - § 31500 (a) The commissioner shall charge and collect the fees fixed by this section. All fees and charges collected under this section shall be transmitted to the…
  - § 31501 Every final order, decision, license, or other official act of the commissioner is subject to judicial review in accordance with law.
  - § 31502 The commissioner may from time to time make, amend and rescind such rules, forms, and orders as are necessary to carry out the provisions of this law,…
  - § 31503 All rules of the commissioner, other than those relating solely to the internal administration of the Department of Financial Protection and Innovation, shall…
  - § 31504 (a) All applications, reports and other papers and documents filed with the commissioner under this law shall be open to public inspection, except that the…
  - § 31505 Upon request and at such reasonable charges as he prescribes by rule, the commissioner shall furnish to any person photostatic or other copies (certified under…
  - § 31506 (a) The commissioner may destroy any applications or orders, together with the files and folders, as useless or obsolete, four years after the date of filing…
6. PART 6. GENERAL PROVISIONS §§ 31510–31516 · 8 sections
  - § 31510 The commissioner in his discretion may honor requests from interested persons for interpretive opinions.
  - § 31511 No provision of this law imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form, order, or any written…
  - § 31512 Any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of this law or any rule or…
  - § 31512.1 Any provision of a franchise agreement, franchise disclosure document, acknowledgment, questionnaire, or other writing, including any exhibit thereto,…
  - § 31513 Whenever a person is entitled under this law to a hearing in accordance with the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division…
  - § 31514 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…
  - § 31515 Prior law exclusively governs all suits, actions, prosecutions or proceedings which are pending or may be initiated on the basis of facts or circumstances…
  - § 31516 Nothing in this law is intended to preclude the applicability of the Real Estate Law, Part 1 (commencing with Section 10000), Division 4 of the Business and…
7. PART 7. FRANCHISE BROKERS §§ 31520–31528 · 9 sections
  - § 31520 (a) A franchise broker shall register by filing online all of the following with the commissioner: (1) A completed Uniform Franchise Broker Disclosure…
  - § 31521 (a) A registered franchise broker shall promptly notify the commissioner in writing by an application to amend the registration of any material change in the…
  - § 31522 (a) The commissioner may summarily issue a stop order suspending or revoking any registration under this part if the commissioner finds that the franchise…
  - § 31523 A registered franchise broker offering a franchise for sale in this state shall keep and maintain a complete set of books, records, and accounts of that offer…
  - § 31524 A registered franchise broker is subject to, and shall comply with, all of the following: (a) Section 31154. (b) Section 31155. (c) Section 31156. (d) Section…
  - § 31525 (a) It is unlawful for a franchise broker to offer or sell a franchise in this state unless the franchise broker is registered pursuant to this part. (b) For…
  - § 31526 (a) It is unlawful for a franchise broker to communicate with a prospective franchisee about investing in a franchise opportunity that is subject to…
  - § 31527 For purposes of this part, the Uniform Franchise Broker Disclosure Document shall contain all of the following information: (a) A franchise broker cover page,…
  - § 31528 The implementation of this part is contingent upon an appropriation for its purposes by the Legislature in the annual Budget Act or other statute. This part…