Section 260.140.111.2 - Net Worth Requirement of General Partner(a) The financial condition of the general partner(s) must be commensurate with any financial obligations assumed in the offering and in the operations of the program. At a minimum, the general partner(s) shall have an aggregate financial net worth of the lesser of (a) $1,000,000 or (b) the greater of either (1) $100,000 or (2) an amount at least equal to 5% of the gross amount of all offerings sold within the prior twelve months plus 5% of the gross amount of the current offering. The gross amount of offerings includes amounts to be received on account of mandatory deferred payments. Evaluation will be made of contingent liabilities and the use of promissory notes to determine the appropriateness of their inclusion in determining net worth. The Commissioner may require the general partner(s) to present evidence of ability to maintain this net worth for a period of 3 years after completion of the offering.(b) If promissory notes are used to satisfy the net worth requirements of this Section, the application shall include a copy of the note(s) and financial statements of the maker demonstrating the maker's ability to satisfy the terms of the note. Such financial statements shall comply with paragraphs (b), (c) and (d) of Section 260.140.118.4, provided that, if permitted by the Commissioner, the financial statements of the maker need not be included in the prospectus. The Commissioner may require the note(s) to contain such terms and conditions as may be necessary to assure that the note is an enforceable obligation of the maker, including requiring the maker to waive all defenses in any action to enforce the notes and requiring the note to be full recourse obligation of the maker.Cal. Code Regs. Tit. 10, § 260.140.111.2
1. Amendment filed 3-12-74; effective thirtieth day thereafter (Register 74, No. 11).
2. Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No. 4).
3. Amendment and new subsection (b) filed 5-18-92; operative 6-17-92 (Register 92, No. 22).
4. Editorial correction of subsection (b) (Register 95, No. 48). Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporations Code.
1. Amendment filed 3-12-74; effective thirtieth day thereafter (Register 74, No. 11).
2. Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No. 4).
3. Amendment and new subsection (b) filed 5-18-92; operative 6-17-92 (Register 92, No. 22).
4. Editorial correction of subsection (b) (Register 95, No. 48).