1. (a) All actual and necessary expenses incurred by the program directly may be paid by the sponsor out of capital contributions and out of program revenues.
2. (b) A sponsor may be reimbursed out of capital contributions and program revenues for all actual and necessary direct expenses paid or incurred by it in connection with its operation of a program, and for an allocable portion of its general and administrative expenses, computed on a cost basis determined by an independent public accountant or certified public accountant in accordance with generally accepted accounting principles. Administrative and similar services must be fully supportable as to the necessity thereof and the reasonableness of the amounts proposed to be charged. The prospectus or offering circular shall disclose in tabular form an estimate of all such expenses to be charged to the program showing separately direct expenses, general and administrative expenses (including a separate breakdown for salaries to officers, directors and other principals of the sponsor and any affiliate of the sponsor).
3. (c) Except as may be permitted by Section 260.140.127.1 of these rules, the sponsor may not be reimbursed for any expenses incurred prior to commencement of operations of the program or any indirect, general or administrative expenses relating to the sale of program units.

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

History

1. Editorial correction adding Note filed 11-8-82 (Register 82, No. 46).