Qualification for Selling Securities

Corporations Code Title 4, Division 1, Part 2, Chapter 6 deals with general provisions regarding the qualification of and filing requirements for the sale of securities in California.

Section 25160 provides that every application for qualification is required to state two items of information. Verification of an application is to be in the manner provided in the Code of Civil Procedure for the verification of pleadings. All information required to be included in an application must be true and complete as of the time the qualification of the sale of securities becomes effective.

Section 25161 says that any document filed under this law may be incorporated by reference in a subsequent application or notice filing if it was filed within four years prior to the filing of the application or notice filing, or is otherwise available in the files of the commissioner, to the extent that the document is currently accurate.

Section 25162 provides that an amendment to an application filed after the effective date of the qualification of the sale of securities, if the amendment is approved by the commissioner, becomes effective on the date as the commissioner may determine.

Section 25163 specifies that in any proceeding under this law, the burden of proving an exemption or an exception from a definition is upon the person claiming it.

Section 25164 provides that neither the fact that an application for qualification under this law has been filed nor the fact that the qualification has become effective constitutes a finding by the commissioner that any document filed under this law is true, complete, or not misleading. Simply because a notice is filed or an exemption is available for a security or a transaction does not mean that the commissioner has passed in any way upon the merits or qualifications of, or recommended or given approval to, any person, security or transaction.

Section 25165 states that every applicant for qualification of the sale of securities under this law or every person filing an application or a notice or a request for or notice of an exemption from qualification is required to file with the commissioner an irrevocable consent appointing the commissioner to be the applicant’s or person’s attorney to receive service of any lawful process in any noncriminal suit, action or proceeding against the applicant or person or the successor, executor or administrator.

Section 25166 provides that it is unlawful for any person willfully to make any untrue statement of a material fact in any application, notice, or report filed with the commissioner, or willfully to omit to state in any application, notice, or report any material fact which is required to be stated.