5400-5403
FINANCIAL CODE
SECTION 5400-5403
5400. (a) No funds from proposed stockholders, members, or organizers of any proposed association may be collected until a verified application for an organizing permit has been filed and a permit has been issued by the commissioner authorizing collection of funds, and then only in accordance with the terms of the permit. (b) As used in this chapter, the term "organizer" means a person who agrees to contribute funds to a proposed association to be used for its organization expenses. 5401. The application for an organizing permit shall be in writing and shall be filed in the office of the commissioner. The application shall be executed and verified by the chairman of the organizers, who shall be elected by a majority vote of the organizers, and shall include the following: (a) The names and addresses of the organizers of the proposed association and, to the extent known, its proposed directors and officers, together with the proposed amount of capital stock and savings accounts to be purchased and funds for organization expenses to be contributed by each. (b) The proposed location of its office. (c) A copy of any contract proposed to be used for the solicitation of subscriptions for stock and savings accounts and funds for its organization expenses. (d) A copy of any advertisement, circular, or other written matter proposed to be used for soliciting stock and savings accounts subscriptions and funds for organization expenses. (e) An itemized estimate of the organization expenses proposed to be incurred. (f) A copy of the certificate of reservation of name issued under Section 5403. The name selected shall conform with the requirements of Article 4 (commencing with Section 5650). (g) Any additional information that the commissioner may require by written instructions. 5402. (a) The commissioner may impose conditions in an organizing permit concerning the deposit in escrow of funds collected pursuant to the permit, the manner of expenditure of the funds, and any other conditions deemed reasonable and necessary or advisable for the protection of the public, the subscribers, and the organizers. (b) Contributions of organization expenses may be repaid to organizers on a pro rata basis by the association in amounts not to exceed its net income from operations after provision for statutory reserves. 5403. (a) Before filing an application for an organizing permit with the commissioner under Section 5400, an organizer shall file with the Secretary of State an application for a certificate of a reservation of the name for the proposed association in accordance with the provisions of Article 5 (commencing with Section 5650). (b) The application filed with the Secretary of State shall recite the fact of the application to be filed under Section 5400 and the Secretary of State shall issue a certificate of reservation of name upon payment of any required fee. (c) Notwithstanding the provisions of subdivision (c) of Section 201 of the Corporations Code, the name contained in the certificate of reservation of the name shall be reserved to the applicant until (1) the commissioner denies the petition for a certificate of authority, or (2) if a certificate of approval of articles of incorporation is issued, as long as it continues in effect, or (3) for a period of up to one year from the date when the certificate of reservation of the name is issued, whichever of these occurs first. (d) The Secretary of State may, upon the request of the applicant and the approval of the commissioner, extend the reservation of the name for an additional six months.