Administration of Capital Access Companies

Chapter 2 of Division 3 of Title 4 of the Corporations Code deals with the administration of capital access companies in California.

Section 28100 requires the commissioner to administer and enforce the provisions of this division in a manner that facilitates the legislative purposes set forth in law, consistent with protection of investors.

Section 28101 states that, 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 to carry out the provisions and purposes of this division.

Section 28102 requires any application filed with the commissioner under this division or under any regulation or order issued under this division to be in a form, contain information, be signed in a manner, and be verified in a manner, that the commissioner may by regulation or order require.

Section 28103 provides that, in determining whether to approve any application filed under this division or under any regulation or order issued under this division, the commissioner may consider proposals made by the applicant, including proposals to appoint officers, sell securities, obtain financing, or purchase securities of small business firms.

Section 28104 provides that the commissioner is authorized to take two specified actions.

Section 28105 authorizes the commissioner to provide information relating to a licensee or any parent or subsidiary of the licensee to, or receive information relating to a licensee or any parent or subsidiary of the licensee from, any governmental agency.

Section 28106 states that, 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 licensee or to any director, officer, employee, or affiliate of the licensee, or if the commissioner provides the record, specified provisions of law continue to apply to the record to the extent that these provisions applied to the record prior to that action by the commissioner.

Section 28107 allows the commissioner to refer any evidence available concerning any violation of this division or of any regulation or order issued under this division that constitutes a crime to the district attorney of the county in which the violation occurred, who may, with or without that reference, institute appropriate criminal proceedings.

Section 28108 requires, before any applicant for a license is issued a license, the applicant and each parent and subsidiary of the applicant to file, not less than 30 days after becoming a parent or subsidiary of the licensee, with the commissioner an irrevocable consent appointing the commissioner to be the person’s attorney-in-fact to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the person.

Section 28109 provides that, 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 issued under this division, that conduct is considered equivalent to the person’s appointment of the commissioner to be the person’s attorney-in-fact to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the person.

Section 28111 specifies that, if a licensee becomes licensed as a small business investment company and is subject to regulation by the Small Business Administration, the commissioner may by rule or order provide that a licensee in compliance with those federal regulations is deemed to be in compliance with the regulatory requirements under this division except those provisions required to exempt licensees from regulation under specified federal laws.

A violation by a licensee of any regulation promulgated by the Small Business Administration that the commissioner has by rule or order deemed to be consistent with the regulatory requirements under this division constitutes a violation of this division. The commissioner has all of the powers granted in this division to enforce those federal regulations against a licensee.