Chapter 3Licensing

Section § 31150

Explanation

In California, if you're doing business but aren't licensed, you can't call yourself a 'business and industrial development corporation' or say you're a licensee. However, if your corporation is planning to apply for a license or has already applied, you can use that title but must add a term like 'proposed,' 'in organization,' or 'in formation' to clarify your status. This additional designation has to be as noticeable as the name itself. Before you get the license, you can only do what's necessary to apply for it and prepare to start business. You can't claim to be a full licensee until you actually are one.

(a)CA Financial Code § 31150(a) Except as otherwise provided in subdivision (b), no person transacting business in this state, other than a licensee, shall use any name or title which indicates that it is a business and industrial development corporation or otherwise represent that it is a business and industrial development corporation or that it is a licensee.
(b)CA Financial Code § 31150(b) Any California corporation which proposes to apply for a license or which has applied for a license, may, before being issued a license, use a name or title which indicates that it is a business and industrial development corporation if it meets all of the following requirements:
(1)CA Financial Code § 31150(b)(1) The corporation shall append to the name the designation “proposed,” “in organization,” or “in formation,” or any similar designation which the commissioner may approve. The designation shall be set forth at least as conspicuously as the name or title.
(2)CA Financial Code § 31150(b)(2) The corporation may perform only such acts as may be necessary (A) to apply for and obtain such license and (B) otherwise to prepare to commence transacting business as a licensee.
(3)CA Financial Code § 31150(b)(3) The corporation shall not represent that it is a licensee.
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(Amended by Stats. 1996, Ch. 1064, Sec. 644. Effective January 1, 1997. Operative July 1, 1997.)

Section § 31151

Explanation

Only California-based corporations are allowed to apply for or receive a license.

No person other than a California corporation may apply for or be issued a license.
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(Added by Stats. 1977, Ch. 1164.)

Section § 31152

Explanation

This law outlines the criteria for approving a license application for a business and industrial development corporation in California. The commissioner will approve the application if all conditions are met: the applicant must have at least $1.5 million in net worth and lendable funds, plus enough financial resources to cover three years of expenses. The applicant's leadership must be of good character and financially stable, skilled, and qualified to manage the business. The applicant must show promise of operating successfully, following all rules, and serving the public's interest. If these criteria aren't met after a hearing, the application will be denied.

If the commissioner finds all of the following with respect to an application for a license, the commissioner shall approve the application:
(a)CA Financial Code § 31152(a) That the applicant has net worth in an amount which is not less than one million five hundred thousand dollars ($1,500,000) and which is adequate for the applicant to transact business as a business and industrial development corporation.
(b)CA Financial Code § 31152(b) That the applicant has lendable funds in an amount which is not less than one million five hundred thousand dollars ($1,500,000) and which is adequate for the applicant to transact business as a business and industrial development corporation.
(c)CA Financial Code § 31152(c) That the applicant has, in addition to the requirements of subdivision (b), financial resources in an amount which is adequate for the applicant to pay its expenses in transacting business as a business and industrial development corporation for a period of not less than three years.
(d)CA Financial Code § 31152(d) That the directors, officers, and controlling persons of the applicant are each of good character and sound financial standing, that the directors and officers of the applicant are each competent to perform their functions with respect to the applicant, and that the directors and officers of the applicant are collectively adequate to manage the business of the applicant as a business and industrial development corporation. For purposes of this subdivision, the commissioner shall accord weight to the prior or current successful operation of a commercial enterprise.
(e)CA Financial Code § 31152(e) That it is reasonable to believe that the applicant, if licensed, will comply with all applicable provisions of this division and of any regulation or order issued under this division.
(f)CA Financial Code § 31152(f) That the applicant has reasonable promise of successful operation as a business and industrial development corporation.
(g)CA Financial Code § 31152(g) That the licensing of the applicant will promote the public convenience and advantage.
If, after notice and a hearing, the commissioner finds otherwise, he or she shall deny the application.
license application approval business and industrial development corporation net worth requirement lendable funds financial resources financial standing directors and officers competency public convenience and advantage license denial business operation promise character and soundness of leadership applicant compliance
(Amended by Stats. 1996, Ch. 1064, Sec. 645. Effective January 1, 1997. Operative July 1, 1997.)

Section § 31152.5

Explanation

This section allows the commissioner to determine if the leaders or influential people of a company applying for a license are unfit due to past criminal activity involving fraud or dishonesty. If any director, officer, or person with control has a criminal record for such crimes, they may be considered not of good character, and therefore unsuitable for a license.

Additionally, the commissioner might believe that the company won't follow legal requirements if they have these criminal backgrounds. However, these aren't the only reasons the commissioner can decide someone is unfit for good character or compliance issues.

(a)CA Financial Code § 31152.5(a) For purposes of Section 31152, the commissioner may find:
(1)CA Financial Code § 31152.5(a)(1) That a director, officer, or controlling person of an applicant is not of good character if the director, officer, or controlling person or any director or officer of the controlling person has been convicted of, or has pleaded nolo contendere to, a crime involving fraud or dishonesty.
(2)CA Financial Code § 31152.5(a)(2) That it is not reasonable to believe that an applicant, if licensed, will comply with all applicable provisions of this division and of any regulation or order issued under this division if the applicant has been convicted of, or has pleaded nolo contendere to, a crime involving fraud or dishonesty.
(b)CA Financial Code § 31152.5(b) Subdivision (a) shall not be deemed to be the only grounds upon which the commissioner may find, for purposes of Section 31152, that a director, officer, or controlling person of an applicant is not of good character or that it is not reasonable to believe that an applicant, if licensed, will comply with all applicable provisions of this division and of any regulation or order issued under this division.
good character licensing suitability corporate leadership director criminal record officer criminal activity fraud conviction dishonesty crimes nolo contendere compliance evaluation regulatory standards business licensing past convictions legal compliance company application crime convictions
(Amended by Stats. 1996, Ch. 1064, Sec. 646. Effective January 1, 1997. Operative July 1, 1997.)

Section § 31153

Explanation

Before granting a license, any parent or subsidiary of the applicant must file an agreement with the commissioner to follow all relevant laws and regulations. Similarly, any new parent or subsidiary of an existing license holder must file this agreement within 30 days of obtaining their status.

Before any applicant for a license is issued a license, each person which is a parent or subsidiary of such applicant shall file, and each person who becomes a parent or subsidiary of a licensee shall, not less than 30 days after becoming a parent or subsidiary of such licensee, file, with the commissioner, in such form as the commissioner may by regulation or order require, an agreement that such person shall comply with all applicable provisions of this division and of any regulation or order issued under this division.
license application parent company compliance subsidiary compliance agreement filing regulatory compliance commissioner filing 30-day filing requirement parent company obligations subsidiary obligations license holder parent license holder subsidiary regulation adherence order compliance licensee relationship compliance agreement
(Amended by Stats. 1996, Ch. 1064, Sec. 647. Effective January 1, 1997. Operative July 1, 1997.)

Section § 31154

Explanation

Once an application for a license is approved and all necessary requirements are met, the commissioner is required to grant the license to the applicant.

Whenever any application for a license has been approved and all conditions precedent to the issuance of such license have been fulfilled, the commissioner shall issue a license to the applicant.
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(Amended by Stats. 1996, Ch. 1064, Sec. 648. Effective January 1, 1997. Operative July 1, 1997.)

Section § 31155

Explanation

This law states that licenses cannot be transferred or given to someone else.

No license shall be transferable or assignable.
license transfer license assignability non-transferable license license ownership assignable licenses legal restrictions on licenses license transfer prohibition license rights transferable licenses assigned licenses assignment of license rights restrictions on license transfer
(Added by Stats. 1977, Ch. 1164.)

Section § 31156

Explanation

This law requires every holder of a license to display their license prominently at their main office location so it can be easily seen.

Each licensee shall post its license in a conspicuous place at its head office.
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(Added by Stats. 1977, Ch. 1164.)

Section § 31157

Explanation

This law says that if someone has a license, they can't claim that a government official, called the commissioner, sponsors, recommends, or approves of them. Licensees can say they are licensed, but they must be honest about what having a license means, without exaggerating or misrepresenting it.

No licensee shall represent that it is sponsored, recommended, or approved by, or that its abilities or qualifications have in any respect been passed upon by, the commissioner. Nothing in this section shall be deemed to prohibit a licensee from stating that it is licensed if the effect of such license is not misrepresented.
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(Amended by Stats. 1996, Ch. 1064, Sec. 649. Effective January 1, 1997. Operative July 1, 1997.)

Section § 31158

Explanation

This law says that a California corporation can apply for a license under different laws, including this one, without issues. However, if doing business under both licenses causes a conflict with this specific division or goes against its goals, then it can't happen.

(a)CA Financial Code § 31158(a) The fact that a California corporation is licensed under any law other than this division shall not preclude such corporation from applying for or being issued a license under this division unless the transaction of business by such corporation as a licensee under such other law would violate any provision of this division or of any regulation or order issued under this division or would be contrary to the purposes of this division.
(b)CA Financial Code § 31158(b) The fact that a California corporation is licensed under this division shall not preclude such corporation from applying for or being issued a license under any other law unless the transaction of business by such corporation as a licensee under such other law would violate any provision of this division or of any regulation or order issued under this division or would be contrary to the purposes of this division.
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(Amended by Stats. 1987, Ch. 867, Sec. 13.)