Unseasoned corporations selling securities pursuant to an open qualification shall have a capital structure consisting of only common stock, or of common stock and preferred stock or debt which is convertible into common stock on a fair and equitable basis or is fully-participating and non-redeemable. A limited offering qualification may be approved for an unseasoned corporation to sell nonconvertible and nonparticipating senior securities if they are to be issued to the holders of the residual equity securities on a pro rata basis or if the circumstances otherwise justify.

Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporations Code.

History

1. Amendment filed 5-3-83; effective thirtieth day thereafter (Register 83, No. 19).