Cal. Code Regs. tit. 10 § 260.102.13

Current through Register 2024 Notice Reg. No. 23, June 7, 2024

Section 260.102.13 - Limited Offering Exemption Excluded Purchasers

For the purposes of Section 25102(f) of the Code, the following purchasers are excluded from the count of purchasers for purposes of Subparagraph (1) of that subdivision, except as provided in Subsection (l) of Rule 260.102.12:

(a) The trustee of an issuer which is a trust and the general partner of an issuer which is a partnership, who exercise managerial functions with respect to such entities, and any officer, director or general partner of a general partner of an issuer which is a partnership.

(b) Any person who occupies a position with the issuer, or with a general partner of an issuer which is a partnership, with duties and authority substantially similar to those of an executive officer of a corporation.

(c)

(1) Any relative, spouse or relative of the spouse of a purchaser who has the same principal residence as the purchaser;

(2) any trust or estate in which a purchaser and any of the persons related to such purchaser as specified in Clause (1) or Clause (3) collectively have more than 50% of the beneficial interest (excluding contingent interests); and

(3) any corporation or other organization of which a purchaser and any of the persons related to such purchaser as specified in Clause (1) or Clause (2) collectively are beneficial owners of more than 50% of the equity securities (excluding director's qualifying shares) or equity interests. "Relative" means a person related by blood, marriage or adoption.

(d) Any individual who is a "promoter" of the issuer, as defined in Subsection (f) of Section 260.102.12.

(e) Any person who purchases $150,000 or more of the securities offered in the transaction, provided each such purchaser meets either one of the following, or who the issuer reasonably believes comes within either of the following:

(1) Such person, or such person's professional advisor, has the capacity to protect such person's own interests in connection with the transaction, as provided in Section 25102(f)(2).

(2) The investment (including mandatory assessments) does not exceed 10% of such person's net worth or joint net worth with that person's spouse.

(f) A small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Company Act of 1958, and a business development company as defined in Section 2(a)(48) of the Investment Company Act of 1940, and a private business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.

(g) A person who comes within one of the categories of an "accredited investor" in Rule 501(a) of Regulation D adopted by the Securities and Exchange Commission under the Securities Act of 1933 (17 CFR Sec. 230.501(a)).

(h) Any entity in which all of the equity owners are persons specified in Section 25102(i) of the Code; Rule 260.102.10; or subsections (a), (b), (c), (d), (f) and (g) of this rule; or who are "officers, directors or affiliates of the issuer" as that term is used in Section 25102(f) of the Code.

Cal. Code Regs. Tit. 10, § 260.102.13

1. New section filed 10-26-81 as an emergency; designated effective 11-1-81 (Register 81, No. 44). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 2-23-82.
2. Certificate of Compliance including amendment transmitted to OAL 2-22-82 and filed 3-24-82 (Register 82, No. 13).
3. Amendment filed 10-15-82; effective thirtieth day thereafter (Register 82, No. 42).
4. Amendment of subsections (e), (f) and (g) filed 9-21-84; effective thirtieth day thereafter (Register 84, No. 38).
5. Amendment of subsection (g) filed 6-25-87; operative 7-25-87 (Register 87, No. 26).
6. Change without regulatory affect amending subsection (g) filed 7-2-92 pursuant to section 100, title 1, California Code of Regulations (Register 92, No. 28).
7. Amendment of subsection (e), repealer of subsection (e)(2), subsection renumbering, and repealer and new subsection (g) filed 12-19-96; operative 1-18-97 (Register 96, No. 51).
8. Editorial correction of first paragraph (Register 96, No. 51).

Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25102, Corporations Code.