SECTIONS 28150-28155 - California Statutes

CORPORATIONS CODE

SECTION 28150-28155

28150. (a) Except as provided in subdivision (b), no person
proposing to transact or transacting business in this state, other
than a licensee, shall use any name or title that indicates that it
is a capital access company or otherwise represent that it is a
capital access company or that it is a licensee.
(b) Any company that proposes to apply for a license or that has
applied for a license, may, before being issued a license, use a name
or title that indicates that it is a capital access company if it
meets all of the following requirements:
(1) The company appends to the name the designation "proposed,"
"in organization," or "in formation," or any similar designation that
the commissioner may approve. The designation shall be set forth at
least as conspicuously as the name or title.
(2) The company performs only those acts that may be necessary to
(A) apply for and obtain the license and (B) prepare to commence
transacting business as a licensee.
(3) The company does not represent that it is a licensee.

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 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. (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. 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, 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.