Code Section Group

Corporations Code - CORP

TITLE 4. SECURITIES [25000 - 31516]

  ( Title 4 added by Stats. 1949, Ch. 384. )


  ( Division 1 repealed and added by Stats. 1968, Ch. 88. )


  ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. )

CHAPTER 4. Nonissuer Transactions [25130 - 25134]
  ( Chapter 4 added by Stats. 1968, Ch. 88. )


It is unlawful for any person to offer or sell any security in this state in any nonissuer transaction unless it is qualified for such sale under this chapter or under Section 25111 or 25113 of Chapter 2 (commencing with Section 25110) of this part (and no order under Section 25140 or subdivision (a) of Section 25143 is in effect with respect to such qualification) or unless such security or transaction is exempted or not subject to qualification under Chapter 1 (commencing with Section 25100) of this part.

(Amended by Stats. 1997, Ch. 391, Sec. 12. Effective January 1, 1998.)


(a) The securities to be offered or sold in a nonissuer transaction, which are not eligible for qualification under Section 25111, shall be qualified by notification under this section; provided however that securities offered in a nonissuer transaction pursuant to an exemption under Regulation A under the Securities Act of 1933 shall be qualified under Section 25113.

(b) The application for qualification by notification under this section shall be signed and verified by the person on whose behalf the offering is being made or by the issuer or by any broker-dealer and shall contain such information and be accompanied by such documents as shall be required by rule of the commissioner, in addition to the information specified in Section 25160 and the consent to service of process required by Section 25165. For this purpose, the commissioner may classify issuers and types of securities.

(c) If no stop order or order under subdivision (a) of Section 25143 is in effect under this law, a qualification under this section automatically becomes effective (and the securities may be offered and sold in accordance with the terms of the application as amended) at 12 o’clock noon California time on the 10th business day after the filing of the application or the last amendment thereto or at such earlier time as the commissioner determines.

(d) Information may not be required under this section unless it is known to the person filing the application or to the persons on whose behalf the distribution is to be made, or can be furnished by them without unreasonable effort or expense.

(Amended by Stats. 1974, Ch. 1103.)


Every qualification under this chapter and every qualification of a nonissuer transaction under Section 25111 is effective for 12 months from its effective date, except during the time a stop order under Section 25140 or an order under subdivision (a) of Section 25143 is in effect. A qualification under this chapter may be withdrawn only in the discretion of the commissioner. The commissioner may by rule or order extend the effective period of any qualification under this chapter.

(Added by Stats. 1968, Ch. 88.)


It is unlawful for any person without the written consent of the commissioner to consummate the sale or transfer of any securities heretofore or hereafter placed in escrow pursuant to a condition ordered by the commissioner and that have not been released from escrow, or that are subject to a currently effective legend condition requiring such consent (except as permitted therein), or concerning which the commissioner has issued a written notice to the holders thereof pursuant to Section 25534 ordering the certificates evidencing the securities to be stamped or printed with a legend as provided in the section.

(Amended by Stats. 1996, Ch. 41, Sec. 5. Effective May 6, 1996.)


Every applicant seeking qualification for the sale of securities shall, upon request of the commissioner, furnish to the commissioner an authorization for examination of the applicant’s financial records of the sale of such securities pursuant to Section 7473 of the Government Code.

(Added by Stats. 1976, Ch. 1320.)

CORPCorporations Code - CORP