Transition Provisions - - CA Financial

Section § 250

This section explains some key definitions for understanding certain laws about corporations and banking. It distinguishes between laws that were in effect at different times: 'New General Corporation Law' is effective from 1977, 'Prior Banking Law' was in effect in 1978, 'Prior General Corporation Law' governed 1976, and 'Revised Banking Law' started in 1979 and was modified in 2012. 'Subject institution' refers to specific corporations, like those involved in commercial banking, trust, or other financial businesses in California, which must be authorized by the commissioner to operate.

In this chapter, unless the provision or context requires otherwise:

(a) “New General Corporation Law” means Division 1 (commencing with Section 100), Title 1 of the Corporations Code, as in effect on and after January 1, 1977.

(b) “Prior Banking Law” means this division, as in effect on December 31, 1978.

(c) “Prior General Corporation Law” means Division 1 (commencing with Section 100), Title 1 of the Corporations Code, as in effect on December 31, 1976.

(d) “Revised Banking Law” means this division, as in effect on and after January 1, 1979, and as repealed and readded as of January 1, 2012.

(e) “Subject institution” means:

(1) Any corporation incorporated under the laws of this state which is, with the approval of the commissioner, incorporated for the purpose of engaging in, or which is authorized by the commissioner to engage in, the commercial banking business under this division.

(2) Any corporation incorporated under the laws of this state which is, with the approval of the commissioner, incorporated for the purpose of engaging in, or which is authorized by the commissioner to engage in, the trust business under this division.

(3) Any corporation incorporated under the laws of this state which is, with the approval of the commissioner, incorporated for the purpose of engaging in, or which is authorized by the commissioner to engage in, business under Article 1 (commencing with Section 1850) of Chapter 21 of Division 1.1.

New General Corporation Law Prior Banking Law Prior General Corporation Law Revised Banking Law Subject institution commercial banking business trust business approval of the commissioner corporate incorporation financial operations corporate authorization California corporations Division 1 Title 1 Corporations Code

(Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)

Section § 251

This law section is about understanding certain terms in the context of the new General Corporation Law, especially for businesses that were around on January 1, 1979. It explains how to interpret the terms "new law", "prior law", and "effective date." Essentially, it's defining how old laws compare to new ones starting from the specified date.

For purposes of Chapter 23 (commencing with Section 2300) of the new General Corporation Law, in the case of any subject institution existing on January 1, 1979:

(a) The term “new law” shall mean the new General Corporation Law, subject, however, to the provisions of Section 101 of the revised Banking Law.

(b) The term “prior law” shall mean the prior General Corporation Law, subject, however, to the provisions of Section 101 of the prior Banking Law.

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(Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)

Section § 252

This law explains that for banks or financial institutions that existed as of January 1, 1979, certain banking regulations, specifically Sections 600 and 600.2, won't apply unless the institution updates its articles with the Secretary of State. If they do choose to update, the board can approve these changes without a full shareholder vote. Additionally, more detailed procedural rules from other laws won't obstruct these changes if the updates are specifically to align with the new banking rules.

(a) Sections 600 and 600.2 of the revised Banking Law shall not apply to any subject institution existing on January 1, 1979, unless and until an amendment of the articles of such subject institution is filed with the Secretary of State pursuant to Section 2302 of the new General Corporation Law.

(b) An amendment of the articles of a subject institution existing on January 1, 1979, which is filed with the Secretary of State pursuant to Section 2302 of the new General Corporation Law may be adopted by approval of the board alone in accordance with the second sentence of Section 2302 of the new General Corporation Law, notwithstanding the fact that such amendment changes such articles to conform to the provisions of Sections 600 and 600.2 of the revised Banking Law.

(c) Neither Article 6 (commencing with Section 690), Chapter 5 of the revised Banking Law nor Section 904 of the new General Corporation Law shall apply to an amendment of the articles of a subject institution existing on January 1, 1979, which is filed with the Secretary of State pursuant to Section 2302 of the new General Corporation Law on account of the fact that such amendment conforms such articles to the provisions of Section 600.2 of the revised Banking Law.

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(Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)

Section § 253

This law talks about assessments made on the common shares of a financial institution before January 1, 1979. If such an assessment became a lien on the shares by that date, it should be collected according to the old corporation laws. If the assessment wasn't a lien by then, it's considered canceled as of January 1, 1979.

In case the board of a subject institution has, prior to January 1, 1979, adopted a resolution levying an assessment on the common shares of such subject institution in accordance with an order issued by the commissioner pursuant to Section 661 of the prior Banking Law:

(a) If the assessment has, prior to January 1, 1979, become a lien on the common shares in accordance with Section 2704 of the prior General Corporation Law, the assessment shall be collected pursuant to the prior General Corporation Law:

(b) Otherwise, the resolution shall be deemed to be rescinded on January 1, 1979.

assessment lien common shares financial institution resolution rescinded shareholder assessment prior Banking Law Section 2704 commissioner order Board resolution lien collection old General Corporation Law assessment cancellation pre-1979 assessment subject institution commissioner authority

(Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)

Section § 254

This law covers how businesses can distribute shares to their shareholders if they were around before January 1, 1979. It applies to companies making distributions after that date. However, if a company signed a contract to buy back or redeem shares before January 1, 1979, it can still proceed with that plan if it follows either the new or old banking and corporation rules that were effective when the contract was signed.

Article 3 (commencing with Section 640), Chapter 5 of the revised Banking Law applies to any distribution to its shareholders made after January 1, 1979, by a subject institution existing on January 1, 1979, except that any such distribution effected pursuant to a contract for the purchase or redemption of shares entered into by such subject institution prior to January 1, 1979, may be made if permissible under the applicable provisions of the revised Banking Law and the new General Corporation Law or under the applicable provisions of the prior Banking Law and the prior General Corporation Law in effect at the time such contract was entered into.

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(Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)