An association is not subject in any manner to the terms of the Corporate Securities Law (Division 1 (commencing with Section 25000) of Title 4 of the Corporations Code), and any association may issue its membership certificates or stock or other securities as provided in this chapter without the necessity of any qualification under that law.
Cannabis Cooperative AssociationsFinancial Provisions
Section § 26228
This law states that certain associations are exempt from needing to comply with the Corporate Securities Law when issuing membership certificates, stock, or other securities. They can do so according to their specific rules without obtaining qualification under that law.
association exemption Corporate Securities Law membership certificates
Section § 26228.1
This law states that if a business association, like a company or corporation, decides to issue shares without a specified value (nonpar value stock), it must follow the rules and laws that apply to all similar businesses that issue this kind of stock in California.
If an association issues nonpar value stock, the issuance of the stock shall be governed by the terms of all general laws that cover the issuance of nonpar value stock in domestic corporations.
nonpar value stock domestic corporations stock issuance regulations
Section § 26228.2
This law allows a company with preferred shares to buy someone's stock or property by giving them the company's preferred shares instead of money. The value of these shares should match the fair market value of what they're buying, which the company's board of directors will decide. Giving these shares is treated as if the company paid cash for what they are acquiring.
If an association with preferred shares of stock purchases the stock or any property, or any interest in any property of any person, it may discharge the obligations that are so incurred, wholly or in part, by exchanging for the acquired interest, shares of its preferred stock to an amount that at par value would equal the fair market value of the stock or interest so purchased, as determined by the board of directors. In that case, the transfer to the association of the stock or interest that is purchased is equivalent to payment in cash for the shares of stock that are issued.
preferred shares stock exchange property purchase
Section § 26228.3
The board of directors of every association must send members an annual report on the association's operations within 120 days after the fiscal or calendar year ends, unless the bylaws say otherwise. If the bylaws demand it, reports for three-month, six-month, or nine-month periods of the current year should also be given to members. These reports need to include a balance sheet and should be prepared based on the association's financial records, following sound accounting practices or approved by a certified accountant.
The board of directors of every association shall cause to be sent to the members of the association not later than 120 days after the close of the fiscal or calendar year an annual report of the operations of the association, unless the report is expressly dispensed with in the bylaws. If required by the bylaws, interim reports of the operations of the association for the three-month, six-month, or nine-month periods of the current fiscal year of the association shall be furnished to the members of the association. Such annual report and any such interim reports shall include a balance sheet as of such closing date. Such financial statement shall be prepared from, and be in accordance with, the books. It shall be prepared in a form that is sanctioned by sound accounting practice for the association or approved by a duly
certified public accountant or a public accountant.
board of directors association members annual report
