SECTIONS 56251-56255 - California Statutes

FOOD AND AGRICULTURAL CODE

SECTION 56251-56255

56251. A licensee that finances, lends money, or otherwise makes
advances of money or credits to another licensee may not deduct from
the proceeds of any farm product which is marketed, sold, or
otherwise handled by him on behalf of or for the account of the
licensee to whom such money, loans, advances or credits are made, an
amount which exceeds a reasonable commission or brokerage, together
with the usual and customary selling charges or costs of marketing,
or both. He may not otherwise divert to his own use or account or in
liquidation of such loans, advances, or credits the moneys, returns,
or proceeds accruing from the sale, handling, or marketing of any
farm product which is handled by him on behalf of or for the account
of the licensee to whom or for whom such loans, advances, or credits
are made.

56252.2. (a) If the director is not satisfied that an applicant or
licensee is financially responsible, the director may, in lieu of
denying, suspending, or revoking the license, accept an irrevocable
guarantee of the obligations of the licensee to all California farm
products creditors. The guarantee shall be for any periods and in any
amounts that the director may from time to time require. The
director may, as a condition of accepting and maintaining the
guarantee, require the guarantor to supply financial information to
the director at times and to the extent the director deems advisable.
(b) A guarantee placed with the director pursuant to subdivision
(a) shall support an action in a court of competent jurisdiction by a
farm products creditor for obligations of the licensee to the
creditor and by a state officer for the obligations of the licensee
to the state related to transactions subject to the guarantee.

56253. The secretary may require a licensee to file a balance sheet
or statement of financial position that presents fairly the
financial condition of such licensee. Such financial statement, if
not prepared by a public accountant or certified public accountant,
shall be on a form prescribed by the secretary and shall be submitted
under penalty of perjury. Any balance sheet submitted that does not
provide the information required by the secretary shall not meet the
requirements of this section. Failure of a licensee to file a
financial statement pursuant to this section shall be sufficient
grounds for license revocation.

56254. Any financial statement submitted to the director pursuant
to the provisions of this article is confidential and shall not be
divulged except if necessary for the proper determination of any
court proceedings or hearing before the director.

56255. (a) Every licensee shall prepare and preserve the accounts,
records, and memoranda required by this chapter which shall fully and
correctly disclose all transactions involved in his business.
Licensees shall keep records which are adapted to the particular
business that the licensee is conducting and in each case such
records shall fully disclose all transactions in the business in
sufficient detail as to be readily understood and audited. Minimum
records required under this chapter are:
1. A record of cash received.
2. A record of cash disbursed.
3. A general ledger or its equivalent.
4. A record of amounts due California producers.
5. A record of amounts due others.
(b) Every licensee shall prepare and preserve records and
memoranda required by this chapter which shall fully and correctly
disclose the true ownership and management of such business.
(c) All records required to be kept under this chapter shall be
kept for a period of four years.