Merger And Purchase Or Sale Of Business - - CA Financial

Section § 31600

This section defines key terms used in the context of mergers and acquisitions within this legal chapter. An "acquiring licensee" is the company that remains after a merger, or the company that buys another in a sale. The terms "disappearing corporation" and "surviving corporation" are further explained in other sections of the Corporations Code, specifically Sections 165 and 190.

In this chapter:

(a) “Acquiring licensee” means:

(1) In the case of a merger, the licensee which is the surviving corporation;

(2) In the case of a purchase or sale, the licensee which is the purchaser.

(b) “Disappearing corporation” has the meaning set forth in Section 165 of the Corporations Code.

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(Added by Stats. 1977, Ch. 1164.)

Section § 31601

If a licensed corporation wants to merge with another corporation, specific conditions must be met. If the licensed corporation will continue to exist after the merger, it needs approval from the commissioner first. If the licensed corporation will no longer exist after merging, the new surviving corporation must also be a licensed corporation and the merger must be approved by the commissioner.

No licensee shall merge with any other corporation unless:

(a) In case such licensee is the surviving corporation, such merger shall have first been approved by the commissioner;

(b) In case such licensee is a disappearing corporation, the surviving corporation is a licensee and such merger shall have first been approved by the commissioner.

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(Amended by Stats. 1996, Ch. 1064, Sec. 673. Effective January 1, 1997. Operative July 1, 1997.)

Section § 31602

If someone has a license, they can't buy most or all of another person's business unless they get approval from the commissioner first.

No licensee shall purchase all or substantially all of the business of any other person unless such purchase shall have first been approved by the commissioner.

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(Amended by Stats. 1996, Ch. 1064, Sec. 674. Effective January 1, 1997. Operative July 1, 1997.)

Section § 31603

This law says that a business with a license can't sell most or all of its business to someone else unless that person also has a license and the sale is approved by the commissioner.

No licensee shall sell all or substantially all of its business to any other person unless such other person is a licensee and such sale shall have first been approved by the commissioner.

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(Amended by Stats. 1996, Ch. 1064, Sec. 675. Effective January 1, 1997. Operative July 1, 1997.)

Section § 31604

This section explains that when a company applies to merge, purchase, or sell, the commissioner must approve it if certain conditions are met. These conditions include ensuring the transaction is safe and sound for the acquiring company, believing the acquiring company will follow all laws and regulations, and checking that the transaction won’t harm public convenience and advantage. If it might be harmful, the transaction must still be necessary for the safety and soundness of any involved party. If these conditions aren't met after a notice and hearing, the application will be denied.

If the commissioner finds, with respect to an application for approval of a merger, purchase, or sale:

(a) That the merger, purchase, or sale will be safe and sound with respect to the acquiring licensee;

(b) That it is reasonable to believe that, upon consummation of the merger, purchase, or sale, the acquiring licensee will comply with all applicable provisions of this division and of any regulation or order issued under this division; and

(c) That the merger, purchase, or sale will not be detrimental to the public convenience and advantage, or, if the merger, purchase, or sale would be detrimental to the public convenience and advantage, that it is necessary in the interests of the safety and soundness of any of the parties to it;

The commissioner shall approve the application. If, after notice and a hearing, the commissioner finds otherwise, he or she shall deny the application.

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(Amended by Stats. 1996, Ch. 1064, Sec. 676. Effective January 1, 1997. Operative July 1, 1997.)

Section § 31605

This law allows the commissioner to excuse certain people or financial transactions from following the rules of this chapter, either permanently or temporarily. The exemption is allowed if the commissioner believes it benefits the public interest and that regulating those people or transactions isn't needed for the goals of this law.

The commissioner may, by such regulations or orders as he or she deems necessary and appropriate, either unconditionally or upon specified terms and conditions or for specified periods, exempt from the provisions of this chapter any person or transaction or class of persons or transactions, if he or she finds such action to be in the public interest and that the regulation of such persons or transactions is not necessary for the purposes of this division.

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(Amended by Stats. 1996, Ch. 1064, Sec. 677. Effective January 1, 1997. Operative July 1, 1997.)