Section 260.001 - General DefinitionsThe terms defined in Part 1 and Section 25600 of the Corporate Securities Law of 1968 when used in this Subchapter 2 shall have the meanings set forth in that part and that section. In addition, the following definitions shall apply in this Subchapter 2:
(a) "Charter Documents" means certificate of incorporation, articles of incorporation, articles of organization, certificate of determination of preferences, agreement of consolidation or merger, and bylaws of a corporation; a shareholders' agreement as defined in subsection (h); declaration of trust; agreement of partnership, certificate of limited partnership, or any other document or instrument adopted to establish or regulate any association, joint stock company, trust, limited liability company, or other entity; as such documents are currently in effect, and includes a certificate of correction such as that referred to in Section 109 of the Code, an opinion of counsel pursuant to Section 110 of the Code (or pursuant to a similar provision of the law of a foreign jurisdiction), and any of the foregoing which have been filed with the Secretary of State or similar authority subject to a request for delayed effectiveness.(b) "Close corporation" means a corporation which is a close corporation within the meaning of Section 158 of the Code, and includes a foreign corporation organized or operating pursuant to a similar provision of the laws of a foreign jurisdiction.(c) "Code" means the California Corporations Code.(d) "Default" or "Arrears" means default or arrears in payment of dividends, interest, sinking fund payment, or principal, on the date due.(e) "Limited Offering Qualification" means a qualification which authorizes the offer and sale of securities only to persons designated therein by name or class.(f) "Open Qualification" means a qualification which authorizes the offer and sale of securities to the public generally, without restriction as to persons or class of persons.(g) A "Seasoned Corporation" ordinarily means an issuer which has been conducting bona fide business operations, either directly or through a predecessor, for more than two years, and has operated at profit during at least one of the last three fiscal years.(h) Unless the context otherwise requires, "shareholders' agreement" means an agreement as defined by Section 186 of the Code, and includes substantially similar agreements pursuant to the laws of a foreign jurisdiction (See Sections 260.017.2, 260.017.3, 260.102.12 and 260.105.22).(i) The term "small business issuer" means any entity meeting all of the following: (1) has annual revenues of less than $12.5 million;(2) is either a California corporation or a foreign corporation, which foreign corporation at the time of filing an application for qualification: (A) is subject to Section 2115 of the Code, or(B) is not subject to Section 2115 of the Code, but by applying the three-factor test set forth in subdivision (a) of Section 2115 of the Code, has an average property factor, payroll factor and sales factor of not less than 25 percent during the latest full income year, provided that the payroll factor for the same period is at least 50 percent, and has a percentage of outstanding voting securities held of record, as of the last record date for a shareholder's meeting, by persons having addresses in this state of at least 25 percent;(3) is not an investment company subject to the Investment Company Act of 1940 or "blind pool" company (as that term is defined in Section 260.113.1); and,(4) if a majority-owned subsidiary, the parent is also a small business issuer.Cal. Code Regs. Tit. 10, § 260.001
1. Amendment of subsection (a) and new subsections (g) and (h) filed 5-15-78; effective thirtieth day thereafter (Register 78, No. 20).
2. Editorial correction of NOTE filed 3-9-83 (Register 83, No. 11).
3. Amendment filed 10-26-84; effective thirtieth day thereafter (Register 84, No. 43).
4. Amendment of subsection (a), new subsections (i)-(i)(4), and amendment of NOTE filed 12-19-95; operative 1-18-96 (Register 95, No. 51).
5. Editorial correction restoring inadvertently omitted subsection (c) (Register 96, No. 52).
6. Change without regulatory effect amending subsections (a), (h) and (i)(2)(A) filed 9-25-2002 pursuant to section 100, title 1, California Code of Regulations (Register 2002, No. 39). Note: Authority cited: Section 25610, Corporations Code. Reference: Sections 2115, 25113(b)(2), 25600 and 25610, Corporations Code.
1. Amendment of subsection (a) and new subsections (g) and (h) filed 5-15-78; effective thirtieth day thereafter (Register 78, No. 20).
2. Editorial correction of NOTE filed 3-9-83 (Register 83, No. 11).
3. Amendment filed 10-26-84; effective thirtieth day thereafter (Register 84, No. 43).
4. Amendment of subsection (a), new subsections (i)-(i)(4), and amendment of Note filed 12-19-95; operative 1-18-96 (Register 95, No. 51).
5. Editorial correction restoring inadvertently omitted subsection (c) (Register 96, No. 52).
6. Change without regulatory effect amending subsections (a), (h) and (i)(2)(A) filed 9-25-2002 pursuant to section 100, title 1, California Code of Regulations (Register 2002, No. 39).