1. (a) This subarticle sets forth the standards with respect to an application of a church for a permit to sell debt securities in a limited offering pursuant to Section 25113 of the Code. An offering of church debt securities to the general public, even if combined with an offering to the persons described in subdivision (d), will be subject to the standards generally applicable to public offerings of debt securities (including, but not limited to, Rules 260.140.4, 260.140.5 and 260.140.10) and to the special standards set forth in this subarticle, except for Rules 260.140.72.3 and 260.140.72.4.
2. (b) “Cash-flow,” as used in Rule 260.140.10 when applicable to offerings of debt securities by churches and for the purposes of this subarticle, and as used in Rule 260.140.72.2, means donations and other revenue which can be demonstrated to be of a continuing nature as distinguished from irregular fund raising campaigns.
3. (c) “Church,” for the purposes of this subarticle, includes a church, a synagogue, temple, mosque or other place of worship and related church property such as a school or youth camp. “Church” shall be a nonprofit organization that operates exclusively for religious purposes and is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
4. (d) “Limited offering,” for the purposes of this subarticle, means an offering only to a group of persons, each of whom is an individual who, prior to solicitation for the purchase of the security, was a member of, contributor to, or participant in the church or in any specified program, activity or organization which is a part of the church, or who is a family member of such individual. In addition, “limited offering” for purposes of this subarticle may include an offering to a bank, savings and loan association, trust company, insurance company, investment company registered under the Investment Company Act of 1940, or pension or profit-sharing trust (other than a pension or profit-sharing trust of the issuer), whether the purchaser is acting for itself or as trustee. As used in this subsection, “family member” means an ancestor or descendant, a brother, sister, aunt, uncle, niece, nephew or first cousin.

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

History

1. New section filed 2-8-89; operative 3-10-89 (Register 89, No. 8).

2. Amendment of subsection (c) filed 4-1-2005; operative 5-1-2005 (Register 2005, No. 13).