State Codes and Statutes

Statutes > California > Fin > 3500-3548

FINANCIAL CODE
SECTION 3500-3548



3500.  As used in this article, unless the context otherwise
requires, "corporation" means a corporation organized under the laws
of this state for the purpose of transacting business pursuant to
this article.


3500.5.  The provisions of Chapter 1 (commencing with Section 99)
applicable to, or with respect to, banks shall apply to, or with
respect to, as the case may be, corporations.



3501.  When authorized by the previous written consent of the
commissioner as provided by Chapter 3 (commencing with Section 350)
one or more persons may organize a corporation.



3502.  The articles of a corporation shall provide that the purpose
of the corporation is to engage in the business of international and
foreign banking and other international and foreign financial
operations, the business of banking and other financial operations in
any dependency or insular possession of the United States, and any
other lawful activities which are not, by applicable laws or
regulations, prohibited to a corporation transacting business under
this article.


3503.  The articles of incorporation shall be submitted to the
commissioner for his or her approval before they are filed with the
Secretary of State pursuant to the Corporations Code. After the
articles have been filed with the Secretary of State the corporation
shall file with the commissioner a copy thereof, certified by the
Secretary of State, and, after the organization meeting of the
directors, a copy of its bylaws certified by its secretary.



3504.  Each corporation shall have power, under such rules and
regulations as the commissioner may prescribe:
   (a) To purchase, sell, discount, and negotiate, with or without
its endorsement or guaranty, notes, drafts, checks, bills of
exchange, acceptances, including bankers' acceptances, cable
transfers, and other evidences of indebtedness; to purchase and sell,
with or without its endorsement or guaranty, securities, including
the obligations of the United States or of any state thereof but not
including shares of stock in any corporation except as herein
provided; to accept bills or drafts drawn upon it subject to such
limitations and restrictions as the commissioner may impose; to issue
letters of credit; to purchase and sell coin, bullion, and exchange;
to borrow and to lend money; to issue debentures, bonds, and
promissory notes under such general conditions as to security and
such limitations as the commissioner may prescribe; to receive
deposits outside of the United States and to receive only such
deposits in this state or in any other state of the United States as
may be incidental to or for the purpose of carrying out transactions
in foreign countries or dependencies or insular possessions of the
United States.
   (b) Generally, to exercise such powers as are incidental to the
powers conferred by this article or as may be usual, in the
determination of the commissioner, in connection with the transaction
of the business of banking or other financial operations in the
countries, colonies, dependencies, or possessions in which it shall
transact business and not inconsistent with the power specifically
granted herein. Nothing contained in this article shall be construed
to prohibit the commissioner, under his or her power to prescribe
rules and regulations, from limiting the aggregate amount of
liabilities of any or all classes incurred by the corporation and
outstanding at any one time.
   (c) To establish and maintain for the transaction of its business
branches or agencies in foreign countries, their dependencies or
colonies, and in any state of the United States, and in the
dependencies or insular possessions of the United States, at such
places as may be approved by the commissioner and under such rules
and regulations as he or she may prescribe, including any state of
the United States, or countries or dependencies not specified in the
original organization certificate.
   (d) With the consent of the commissioner to purchase and hold
stock or other certificates of ownership in any other corporation
organized under the laws of this state for the purpose of transacting
business pursuant to this article, or under the laws of the United
States, or under the laws of any foreign country or a colony of
dependency thereof, or under the laws of any state, dependency or
insular possession of the United States but not engaged in the
general business of buying or selling goods, wares, merchandise, or
commodities in the United States, and not transacting any business in
the United States except such as in the judgment of the commissioner
may be incidental to its international or foreign business.



3505.  Except with the approval of the commissioner, no corporation
shall invest in any one corporation an amount in excess of 10 per
centum of its own shareholders' equity, except in a corporation
engaged in the business of banking, when 15 per centum of its
shareholders' equity may be so invested.



3506.  No corporation shall purchase, own, or hold stock or
certificates of ownership in any other corporation organized under
this article or under the laws of any state which is in substantial
competition therewith, or which holds stock or certificates of
ownership in corporations which are in substantial competition with
the purchasing corporation.



3507.  Nothing contained in this article shall prevent corporations
from purchasing and holding stock in any corporation where such
purchase shall be necessary to prevent a loss upon a debt previously
contracted in good faith; and stock so purchased or acquired in
corporations shall within six months from such purchase be sold or
disposed of at public or private sale unless the time to so dispose
of same is extended by the commissioner as provided by Section 762.



3508.  No corporation shall carry on any part of its business in the
United States except such as, in the judgment of the commissioner,
shall be incidental to its international or foreign business. Except
such as is incidental and preliminary to its organization no
corporation shall exercise any of the powers conferred by this
article until it has been duly authorized by the commissioner to
commence business under the provisions of this article.



3509.  No corporation shall engage in commerce or trade in
commodities except as specifically provided in this article, nor
shall it either directly or indirectly control or fix or attempt to
control or fix the price of any such commodities. The license of any
corporation violating this section shall be subject to forfeiture as
provided in this article.



3510.  It shall be unlawful for any director, officer, agent, or
employee of any corporation to use or to conspire to use the credit,
the funds, or the power of the corporation to fix or control the
price of any commodities, and any person violating this section shall
be punished by a fine of not less than two thousand dollars ($2,000)
nor more than ten thousand dollars ($10,000), imprisonment in a
county jail for not more than one year, imprisonment in the state
prison, or by both that fine and imprisonment, in the discretion of
the court.


3511.  No corporation shall be organized without adequate
shareholders' equity.



3512.  The provisions of Chapter 5 (commencing with Section 600)
(except the provisions of Section 621) applicable to, or with respect
to, banks shall apply to, or with respect to, as the case may be,
corporations.


3513.  Any bank may invest in the shares of any corporation
organized under the provisions of this article, but the aggregate
amount of stock held in all corporations engaged in business of the
kind described in this chapter shall not exceed 10 percent of the
subscribing bank's shareholders' equity.



3514.  (a) In this section, "foreign bank" means any company
organized under the laws of a foreign country, a territory of the
United States, Puerto Rico, Guam, American Samoa, or the Virgin
Islands, which engages in the business of banking, or any subsidiary
or affiliate, organized under such laws, of any such company.
"Foreign bank" includes, without limitation, foreign commercial
banks, foreign merchant banks, and other foreign institutions that
engage in banking activities usual in connection with the business of
banking in the countries where such foreign institutions are
organized or operating.
   (b) Except as otherwise provided in subdivision (c), a majority of
the shares of the capital stock of any corporation shall at all
times be held and owned by citizens of the United States, by
corporations the controlling interest in which is owned by citizens
of the United States, chartered under the laws of the United States
or of a state of the United States, or by firms or companies, the
controlling interest in which is owned by citizens of the United
States.
   (c) Notwithstanding the provisions of subdivision (b), one or more
foreign banks, institutions organized under the laws of foreign
countries which own or control foreign banks, or banks organized
under the laws of the United States, the states of the United States,
or the District of Columbia, the controlling interests in which are
owned by any such foreign banks or institutions, may, with the
approval of the commissioner and upon such terms and conditions and
subject to such rules and regulations as the commissioner may
prescribe, own and hold 50 percent or more of the shares of the
capital stock of any corporation.



3515.  Whenever it shall appear to the commissioner that any
corporation has violated the provisions of its articles of
incorporation or any law of this state, or is conducting its business
in an unsafe or unauthorized manner, or if the contributed capital
of any such corporation is impaired, or if the corporation shall
refuse to submit its books, papers and concerns to the inspection of
any examiner of the department or if any officer thereof shall refuse
to be examined upon oath touching the concerns of the corporation or
if the corporation shall suspend payment of its obligations, or if
from any examination or report provided for by this article the
commissioner shall have reason to conclude that the corporation is in
an unsound or unsafe condition to transact the business for which it
is organized, or that it is unsafe and inexpedient for it to
continue business, or if any corporation shall neglect or refuse to
observe any order of the commissioner specified in Section 662, 1912,
or 1913, the commissioner may forthwith take possession of the
property and business of such corporation and retain such possession
until such corporation shall resume business, or its affairs be
finally liquidated as provided by this code for the liquidation of
banks.


3516.  No corporation shall deposit any of its funds with any other
moneyed corporation unless the other corporation has been nominated
and designated as a depositary for the funds of the depositing
corporation by the vote of a majority of the directors of the
depositing corporation and has been approved by the commissioner as a
depositary. The commissioner may in his or her discretion revoke his
or her approval of any such depositary. This limitation shall not
apply to the deposit of funds by a corporation with another moneyed
corporation, that owns all or a majority of the capital stock of the
corporation.


3517.  No corporation shall be the holder of any shares of its own
capital stock unless such stock shall have been taken to prevent loss
upon a debt previously contracted in good faith, and stock so
acquired shall, within six months from the time of its acquisition,
be sold or disposed of at public or private sale.



3518.  No corporation shall, either directly or indirectly, make any
discount to any person for the purpose of enabling him to pay for or
hold shares of its stock either subscribed for or purchased by him.
Any corporation making any such discount shall forfeit to the people
of the State twice the amount of such discount.




3519.  No corporation shall by any system of accounting or any
device of bookkeeping, directly or indirectly enter any of its assets
upon its books in the name of any other person, or under any title
or designation that is not truly descriptive thereof.




3520.  Every corporation shall conform its methods of keeping its
books and records to such orders in respect thereto as have been made
and promulgated by the commissioner. Any corporation that refuses or
neglects to obey such order shall be subject to a penalty of one
hundred dollars ($100) for each day it so refuses or neglects.




3521.  Each official communication directed by the commissioner to a
corporation or to any officer thereof, relating to an examination or
investigation conducted by the department or containing suggestions
or recommendations as to the conduct of the business of such
corporation, shall be submitted, by the officer receiving it, to the
board at the next meeting of such board, and duly noted in the
minutes of the meetings of such board.



3522.  On or before the first day of February in each year, each
corporation and every foreign corporation licensed by the
commissioner to transact the business of such a corporation in this
state, shall make a written report to the commissioner which shall
contain a statement of its condition on the morning of the first day
of January in that year and shall be in the form and contain the
matters prescribed by the commissioner. The commissioner may,
however, in his or her discretion, accept from a corporation, which
has branches in a foreign country or countries, a report containing a
statement of its condition as of a date not later than the first day
of January and not earlier than the first day of November in the
preceding year. Every report shall be verified by the oaths of the
two principal officers in charge of the affairs of the corporation or
foreign corporation at the time of the verification, which shall
state that the report is true and correct in all respects to the best
of the knowledge and belief of the persons verifying it, and that
the usual business of the corporation or foreign corporation has been
transacted at the location required by this article and not
elsewhere.



3523.  Every corporation and foreign corporation shall also make
such other special reports to the commissioner as he or she may from
time to time require, which shall be in such form and filed at such
date as may be prescribed by the commissioner and shall, if required
by the commissioner, be verified in such manner as he or she may
prescribe.



3524.  If any corporation or foreign corporation shall fail to make
any report required by this article on or before the day designated
for the making thereof, or shall fail to include therein any matter
required by the commissioner, it shall forfeit to the people of the
state the sum of one hundred dollars ($100) for every day that such
report shall be delayed or withheld, and for every day that it shall
fail to report any such omitted matter, unless the time therefor
shall have been extended by the commissioner.



3525.  Every corporation shall hold a meeting of its stockholders
annually upon a date fixed in its bylaws at its main office, or if
its main office is to be located outside of this State, at its branch
or other office in this State.


3526.  Every corporation shall keep at its main office, or if its
main office is to be located outside of this state, at its branch or
other office in this state, books containing the names of all
stockholders thereof, and the names and addresses of the members of
its board of directors, together with copies of all reports made by
it to the commissioner.



3527.  Every corporation shall make reports to the commissioner at
such times and in such form as the commissioner may require and is
subject to examination by examiners appointed by the commissioner, to
the extent and whenever and as often as the commissioner shall deem
it advisable, but in no case less than once every two calendar years.
The cost of such examinations shall be fixed by the commissioner and
be paid by the corporation examined.



3529.  No officer, director, clerk or other employee of any
corporation, and no person in any way interested or concerned in the
management of its affairs, shall as individuals discount, or directly
or indirectly, make any loan upon any note or other evidence of
debt, which he shall know to have been offered for discount to such
corporation, and to have been refused. Every person violating the
provisions of this section, shall, for each offense, forfeit to the
people of the State twice the amount of the loan which he shall have
made.


3531.  Every officer, director, clerk, employee, or agent of any
corporation who embezzles, abstracts, or willfully misapplies any of
the moneys, funds, credits, securities, evidence of indebtedness or
assets of any character of such corporation, or who, without
authority from the directors, issues or puts forth any certificate of
deposit, draws any order or bill of exchange, makes any acceptance,
assigns any note, bond, debenture, draft, bill of exchange, mortgage,
judgment, or decree, or who makes any false entry in any book,
report, or statement of such corporation with intent, in either case,
to injure or defraud such corporation or any other company, body
politic or corporate, or any individual person, or to deceive any
officer of such corporation, the commissioner, or any agent or
examiner appointed to examine the affairs of any such corporation;
and every receiver of any corporation and every clerk or employee of
such receiver who shall embezzle, abstract, or willfully misapply or
wrongfully convert to his or her own use any moneys, funds, credits,
or assets of any character which may come into his or her possession
or under his or her control in the execution of his or her trust or
the performance of the duties of his or her employment; and every
such receiver or clerk or employee of such receiver who shall, with
intent to injure or defraud any person, body politic or corporate, or
to deceive or mislead the commissioner or any agent or examiner
appointed to examine the affairs of such receiver, shall make any
false entry in any book, report, or record of any matter connected
with the duties of such receiver; and every person who with like
intent aids or abets any officer, director, clerk, employee, or agent
of any corporation, or receiver or clerk or employee of such
receiver as aforesaid in any violation of this article shall upon
conviction thereof be imprisoned for two, three, or four years, and
may also be fined not more than five thousand dollars ($5,000), in
the discretion of the court.



3532.  Whoever being connected in any capacity with any corporation
represents in any way that the State of California is liable for the
payment of any bond or other obligation, or the interest thereon,
issued or incurred by any corporation, or that the State of
California incurs any liability in respect of any act or omission of
the corporation, shall be punished by a fine of not more than ten
thousand dollars ($10,000) and by imprisonment in the state prison.



3533.  No person shall act in this State as the representative of
any foreign corporation in transacting the business described in this
article as the business of a corporation unless such corporation
shall have complied with the provisions of this article relating to
such corporations.



3534.  Every foreign corporation before being licensed by the
commissioner to transact in this state the business of a corporation,
or any part thereof, shall subscribe and acknowledge and submit to
the commissioner at his or her office, an application certificate in
duplicate, which shall specifically state:
   (a) The name of such foreign corporation.
   (b) The place where its business is to be transacted in this
state.
   (c) The amount of its capital stock actually paid in cash and the
amount subscribed for and unpaid.
   (d) A complete and detailed statement of its financial condition
as of a date within 60 days prior to the date of such application
certificate.



3535.  At the time the application certificate is first submitted to
the commissioner, such corporation shall also submit a duly
authenticated copy of its charter, or articles, and its bylaws.



3536.  No foreign corporation shall transact in this state the
business defined in this article or any part thereof, unless such
corporation shall have:
   (a) Been authorized by its charter to carry on such business and
shall have complied with the laws of the state or country under which
it is incorporated.
   (b) Made the deposit with the State Treasurer required by this
article.
   (c) Designated the commissioner, by an instrument in writing duly
executed, its true and lawful attorney upon whom all process in any
action or proceeding by any resident of this state against it may be
served with the same effect as if it were a domestic corporation and
had been lawfully served with process within this state.
   (d) Received a license duly issued to it by the commissioner.



3537.  When the commissioner shall have issued a license to any
foreign corporation, it may engage in the business of a corporation
of the kind authorized by this article at the location specified in
the license.


3538.  Every foreign corporation, before receiving a license to
transact business in this state, shall deposit with the State
Treasurer of the State of California upon authorization of the
commissioner, in trust as security for the depositors with and
creditors of such corporation in this state, lawful money of the
United States or securities of the kind and character described in
Article 3 (commencing at Section 1540) of Chapter 12 of this
division, of the value of one hundred thousand dollars ($100,000).
Such foreign corporation so long as it shall continue solvent and
comply with the laws of this state, may be permitted by the
commissioner to collect the interest on the securities so deposited
and from time to time to exchange such securities for others, and
examine and compare such securities, as provided by said article.



3539.  The foreign corporation shall pay a license fee of five
hundred dollars ($500).



3540.  Every foreign corporation, duly licensed by the commissioner
to transact in this state the business defined and authorized in this
article, or any part thereof, shall within 30 days after the date of
such license, submit to the commissioner a statement verified by two
of its principal officers, which shall contain the full name and
business address of every individual, partnership or unincorporated
association, who is acting or whom it proposes to have act as its
agent or representative in this state. Whenever any such corporation
shall engage any person to act for it in this state and the name and
address of such person is not contained in such verified statement
submitted to the commissioner, such foreign corporation shall
forthwith submit to the commissioner an amended statement verified in
the same manner as the original. A violation of this provision shall
subject such foreign corporation to a forfeiture of one thousand
dollars ($1,000) for each offense.



3541.  Whenever the commissioner shall have revoked the license of
any such foreign corporation and shall have taken the action to make
such revocation effective, all the rights and privileges of the
foreign corporation to transact business in this state shall
forthwith cease and determine.



3542.  Nothing in this division restricts the right of a state
international or foreign banking or financing corporation to convert
into an international or foreign banking or financing corporation
organized under the laws of the United States upon compliance with
such laws.



3543.  An international or foreign banking or financing corporation
organized under the laws of the United States may convert into a
state international or foreign banking or financing corporation with
the approval of the commissioner which he or she shall not grant
unless he or she is satisfied that such international or foreign
banking or financing corporation organized under the laws of the
United States meets all of the requirements set forth in this article
for the establishment of a state international or foreign banking or
financing corporation.


3544.  Nothing in this division restricts the right of any one or
more state international or foreign banking or financing corporations
to merge into or consolidate with one or more international or
foreign banking or financing corporations organized under the laws of
the United States.



3545.  Nothing in this division restricts one or more international
or foreign banking or financing corporations organized under the laws
of the United States from merging into one or more state,
international or foreign banking or financing corporations. For the
purpose of effecting any such merger any such international or
foreign banking or financing corporation shall be deemed a "foreign
corporation" as that term is used in Section 1108 of the Corporations
Code and the laws of Congress shall be deemed the "laws of the state"
in which such international or foreign banking or financing
corporation is formed.


3546.  Whenever a state international or foreign banking or
financing corporation survives the merger of one or more
international or foreign banking or financing corporations and the
agreement for merger has been filed with the Secretary of State with
the approval of the commissioner endorsed thereon, a copy thereof,
certified by the Secretary of State, shall immediately be filed with
the commissioner and upon, but not until, such filing the merger
shall be and become effective for all purposes.



3547.  Whenever one or more state international or foreign banking
or financing corporations and one or more international or foreign
banking or financing corporations organized under the laws of the
United States have been merged or consolidated, the surviving or
resulting international or foreign banking or financing corporation
succeeds without other transfer to all the rights and property of
each constituent international or foreign banking or financing
corporation and is subject to all the debts and liabilities of each
such constituent corporation in the same manner as if the surviving
or resulting international or foreign banking or financing
corporation had incurred them.
   All rights of creditors of each constituent international or
foreign banking or financing corporation are preserved unimpaired,
limited in lien to the property affected by such liens immediately
prior to the time of the consolidation or merger.
   Any action or proceeding pending by or against any one of the
constituent international or foreign banking or financing
corporations may be prosecuted through judgment, which binds the
resulting or surviving international or foreign banking or financing
corporation; or such consolidated or surviving corporation may be
proceeded against or substituted in the place of any such constituent
corporation.


3548.  Whenever an international or foreign banking or financing
corporation organized under the laws of the United States converts
into a state international or foreign banking or financing
corporation, or whenever such state corporation converts into such
corporation organized under the laws of the United States, or if any
such state corporation merges or consolidates with any such
corporation organized under the laws of the United States, the
surviving or resulting corporation shall be deemed to be the same
corporate entity as the converting or constituent corporation and any
reference to the converting corporation or to any constituent
corporation, whether executed or taking effect before or after the
conversion, merger or consolidation, shall be deemed a reference to
the surviving or resulting corporation.


State Codes and Statutes

Statutes > California > Fin > 3500-3548

FINANCIAL CODE
SECTION 3500-3548



3500.  As used in this article, unless the context otherwise
requires, "corporation" means a corporation organized under the laws
of this state for the purpose of transacting business pursuant to
this article.


3500.5.  The provisions of Chapter 1 (commencing with Section 99)
applicable to, or with respect to, banks shall apply to, or with
respect to, as the case may be, corporations.



3501.  When authorized by the previous written consent of the
commissioner as provided by Chapter 3 (commencing with Section 350)
one or more persons may organize a corporation.



3502.  The articles of a corporation shall provide that the purpose
of the corporation is to engage in the business of international and
foreign banking and other international and foreign financial
operations, the business of banking and other financial operations in
any dependency or insular possession of the United States, and any
other lawful activities which are not, by applicable laws or
regulations, prohibited to a corporation transacting business under
this article.


3503.  The articles of incorporation shall be submitted to the
commissioner for his or her approval before they are filed with the
Secretary of State pursuant to the Corporations Code. After the
articles have been filed with the Secretary of State the corporation
shall file with the commissioner a copy thereof, certified by the
Secretary of State, and, after the organization meeting of the
directors, a copy of its bylaws certified by its secretary.



3504.  Each corporation shall have power, under such rules and
regulations as the commissioner may prescribe:
   (a) To purchase, sell, discount, and negotiate, with or without
its endorsement or guaranty, notes, drafts, checks, bills of
exchange, acceptances, including bankers' acceptances, cable
transfers, and other evidences of indebtedness; to purchase and sell,
with or without its endorsement or guaranty, securities, including
the obligations of the United States or of any state thereof but not
including shares of stock in any corporation except as herein
provided; to accept bills or drafts drawn upon it subject to such
limitations and restrictions as the commissioner may impose; to issue
letters of credit; to purchase and sell coin, bullion, and exchange;
to borrow and to lend money; to issue debentures, bonds, and
promissory notes under such general conditions as to security and
such limitations as the commissioner may prescribe; to receive
deposits outside of the United States and to receive only such
deposits in this state or in any other state of the United States as
may be incidental to or for the purpose of carrying out transactions
in foreign countries or dependencies or insular possessions of the
United States.
   (b) Generally, to exercise such powers as are incidental to the
powers conferred by this article or as may be usual, in the
determination of the commissioner, in connection with the transaction
of the business of banking or other financial operations in the
countries, colonies, dependencies, or possessions in which it shall
transact business and not inconsistent with the power specifically
granted herein. Nothing contained in this article shall be construed
to prohibit the commissioner, under his or her power to prescribe
rules and regulations, from limiting the aggregate amount of
liabilities of any or all classes incurred by the corporation and
outstanding at any one time.
   (c) To establish and maintain for the transaction of its business
branches or agencies in foreign countries, their dependencies or
colonies, and in any state of the United States, and in the
dependencies or insular possessions of the United States, at such
places as may be approved by the commissioner and under such rules
and regulations as he or she may prescribe, including any state of
the United States, or countries or dependencies not specified in the
original organization certificate.
   (d) With the consent of the commissioner to purchase and hold
stock or other certificates of ownership in any other corporation
organized under the laws of this state for the purpose of transacting
business pursuant to this article, or under the laws of the United
States, or under the laws of any foreign country or a colony of
dependency thereof, or under the laws of any state, dependency or
insular possession of the United States but not engaged in the
general business of buying or selling goods, wares, merchandise, or
commodities in the United States, and not transacting any business in
the United States except such as in the judgment of the commissioner
may be incidental to its international or foreign business.



3505.  Except with the approval of the commissioner, no corporation
shall invest in any one corporation an amount in excess of 10 per
centum of its own shareholders' equity, except in a corporation
engaged in the business of banking, when 15 per centum of its
shareholders' equity may be so invested.



3506.  No corporation shall purchase, own, or hold stock or
certificates of ownership in any other corporation organized under
this article or under the laws of any state which is in substantial
competition therewith, or which holds stock or certificates of
ownership in corporations which are in substantial competition with
the purchasing corporation.



3507.  Nothing contained in this article shall prevent corporations
from purchasing and holding stock in any corporation where such
purchase shall be necessary to prevent a loss upon a debt previously
contracted in good faith; and stock so purchased or acquired in
corporations shall within six months from such purchase be sold or
disposed of at public or private sale unless the time to so dispose
of same is extended by the commissioner as provided by Section 762.



3508.  No corporation shall carry on any part of its business in the
United States except such as, in the judgment of the commissioner,
shall be incidental to its international or foreign business. Except
such as is incidental and preliminary to its organization no
corporation shall exercise any of the powers conferred by this
article until it has been duly authorized by the commissioner to
commence business under the provisions of this article.



3509.  No corporation shall engage in commerce or trade in
commodities except as specifically provided in this article, nor
shall it either directly or indirectly control or fix or attempt to
control or fix the price of any such commodities. The license of any
corporation violating this section shall be subject to forfeiture as
provided in this article.



3510.  It shall be unlawful for any director, officer, agent, or
employee of any corporation to use or to conspire to use the credit,
the funds, or the power of the corporation to fix or control the
price of any commodities, and any person violating this section shall
be punished by a fine of not less than two thousand dollars ($2,000)
nor more than ten thousand dollars ($10,000), imprisonment in a
county jail for not more than one year, imprisonment in the state
prison, or by both that fine and imprisonment, in the discretion of
the court.


3511.  No corporation shall be organized without adequate
shareholders' equity.



3512.  The provisions of Chapter 5 (commencing with Section 600)
(except the provisions of Section 621) applicable to, or with respect
to, banks shall apply to, or with respect to, as the case may be,
corporations.


3513.  Any bank may invest in the shares of any corporation
organized under the provisions of this article, but the aggregate
amount of stock held in all corporations engaged in business of the
kind described in this chapter shall not exceed 10 percent of the
subscribing bank's shareholders' equity.



3514.  (a) In this section, "foreign bank" means any company
organized under the laws of a foreign country, a territory of the
United States, Puerto Rico, Guam, American Samoa, or the Virgin
Islands, which engages in the business of banking, or any subsidiary
or affiliate, organized under such laws, of any such company.
"Foreign bank" includes, without limitation, foreign commercial
banks, foreign merchant banks, and other foreign institutions that
engage in banking activities usual in connection with the business of
banking in the countries where such foreign institutions are
organized or operating.
   (b) Except as otherwise provided in subdivision (c), a majority of
the shares of the capital stock of any corporation shall at all
times be held and owned by citizens of the United States, by
corporations the controlling interest in which is owned by citizens
of the United States, chartered under the laws of the United States
or of a state of the United States, or by firms or companies, the
controlling interest in which is owned by citizens of the United
States.
   (c) Notwithstanding the provisions of subdivision (b), one or more
foreign banks, institutions organized under the laws of foreign
countries which own or control foreign banks, or banks organized
under the laws of the United States, the states of the United States,
or the District of Columbia, the controlling interests in which are
owned by any such foreign banks or institutions, may, with the
approval of the commissioner and upon such terms and conditions and
subject to such rules and regulations as the commissioner may
prescribe, own and hold 50 percent or more of the shares of the
capital stock of any corporation.



3515.  Whenever it shall appear to the commissioner that any
corporation has violated the provisions of its articles of
incorporation or any law of this state, or is conducting its business
in an unsafe or unauthorized manner, or if the contributed capital
of any such corporation is impaired, or if the corporation shall
refuse to submit its books, papers and concerns to the inspection of
any examiner of the department or if any officer thereof shall refuse
to be examined upon oath touching the concerns of the corporation or
if the corporation shall suspend payment of its obligations, or if
from any examination or report provided for by this article the
commissioner shall have reason to conclude that the corporation is in
an unsound or unsafe condition to transact the business for which it
is organized, or that it is unsafe and inexpedient for it to
continue business, or if any corporation shall neglect or refuse to
observe any order of the commissioner specified in Section 662, 1912,
or 1913, the commissioner may forthwith take possession of the
property and business of such corporation and retain such possession
until such corporation shall resume business, or its affairs be
finally liquidated as provided by this code for the liquidation of
banks.


3516.  No corporation shall deposit any of its funds with any other
moneyed corporation unless the other corporation has been nominated
and designated as a depositary for the funds of the depositing
corporation by the vote of a majority of the directors of the
depositing corporation and has been approved by the commissioner as a
depositary. The commissioner may in his or her discretion revoke his
or her approval of any such depositary. This limitation shall not
apply to the deposit of funds by a corporation with another moneyed
corporation, that owns all or a majority of the capital stock of the
corporation.


3517.  No corporation shall be the holder of any shares of its own
capital stock unless such stock shall have been taken to prevent loss
upon a debt previously contracted in good faith, and stock so
acquired shall, within six months from the time of its acquisition,
be sold or disposed of at public or private sale.



3518.  No corporation shall, either directly or indirectly, make any
discount to any person for the purpose of enabling him to pay for or
hold shares of its stock either subscribed for or purchased by him.
Any corporation making any such discount shall forfeit to the people
of the State twice the amount of such discount.




3519.  No corporation shall by any system of accounting or any
device of bookkeeping, directly or indirectly enter any of its assets
upon its books in the name of any other person, or under any title
or designation that is not truly descriptive thereof.




3520.  Every corporation shall conform its methods of keeping its
books and records to such orders in respect thereto as have been made
and promulgated by the commissioner. Any corporation that refuses or
neglects to obey such order shall be subject to a penalty of one
hundred dollars ($100) for each day it so refuses or neglects.




3521.  Each official communication directed by the commissioner to a
corporation or to any officer thereof, relating to an examination or
investigation conducted by the department or containing suggestions
or recommendations as to the conduct of the business of such
corporation, shall be submitted, by the officer receiving it, to the
board at the next meeting of such board, and duly noted in the
minutes of the meetings of such board.



3522.  On or before the first day of February in each year, each
corporation and every foreign corporation licensed by the
commissioner to transact the business of such a corporation in this
state, shall make a written report to the commissioner which shall
contain a statement of its condition on the morning of the first day
of January in that year and shall be in the form and contain the
matters prescribed by the commissioner. The commissioner may,
however, in his or her discretion, accept from a corporation, which
has branches in a foreign country or countries, a report containing a
statement of its condition as of a date not later than the first day
of January and not earlier than the first day of November in the
preceding year. Every report shall be verified by the oaths of the
two principal officers in charge of the affairs of the corporation or
foreign corporation at the time of the verification, which shall
state that the report is true and correct in all respects to the best
of the knowledge and belief of the persons verifying it, and that
the usual business of the corporation or foreign corporation has been
transacted at the location required by this article and not
elsewhere.



3523.  Every corporation and foreign corporation shall also make
such other special reports to the commissioner as he or she may from
time to time require, which shall be in such form and filed at such
date as may be prescribed by the commissioner and shall, if required
by the commissioner, be verified in such manner as he or she may
prescribe.



3524.  If any corporation or foreign corporation shall fail to make
any report required by this article on or before the day designated
for the making thereof, or shall fail to include therein any matter
required by the commissioner, it shall forfeit to the people of the
state the sum of one hundred dollars ($100) for every day that such
report shall be delayed or withheld, and for every day that it shall
fail to report any such omitted matter, unless the time therefor
shall have been extended by the commissioner.



3525.  Every corporation shall hold a meeting of its stockholders
annually upon a date fixed in its bylaws at its main office, or if
its main office is to be located outside of this State, at its branch
or other office in this State.


3526.  Every corporation shall keep at its main office, or if its
main office is to be located outside of this state, at its branch or
other office in this state, books containing the names of all
stockholders thereof, and the names and addresses of the members of
its board of directors, together with copies of all reports made by
it to the commissioner.



3527.  Every corporation shall make reports to the commissioner at
such times and in such form as the commissioner may require and is
subject to examination by examiners appointed by the commissioner, to
the extent and whenever and as often as the commissioner shall deem
it advisable, but in no case less than once every two calendar years.
The cost of such examinations shall be fixed by the commissioner and
be paid by the corporation examined.



3529.  No officer, director, clerk or other employee of any
corporation, and no person in any way interested or concerned in the
management of its affairs, shall as individuals discount, or directly
or indirectly, make any loan upon any note or other evidence of
debt, which he shall know to have been offered for discount to such
corporation, and to have been refused. Every person violating the
provisions of this section, shall, for each offense, forfeit to the
people of the State twice the amount of the loan which he shall have
made.


3531.  Every officer, director, clerk, employee, or agent of any
corporation who embezzles, abstracts, or willfully misapplies any of
the moneys, funds, credits, securities, evidence of indebtedness or
assets of any character of such corporation, or who, without
authority from the directors, issues or puts forth any certificate of
deposit, draws any order or bill of exchange, makes any acceptance,
assigns any note, bond, debenture, draft, bill of exchange, mortgage,
judgment, or decree, or who makes any false entry in any book,
report, or statement of such corporation with intent, in either case,
to injure or defraud such corporation or any other company, body
politic or corporate, or any individual person, or to deceive any
officer of such corporation, the commissioner, or any agent or
examiner appointed to examine the affairs of any such corporation;
and every receiver of any corporation and every clerk or employee of
such receiver who shall embezzle, abstract, or willfully misapply or
wrongfully convert to his or her own use any moneys, funds, credits,
or assets of any character which may come into his or her possession
or under his or her control in the execution of his or her trust or
the performance of the duties of his or her employment; and every
such receiver or clerk or employee of such receiver who shall, with
intent to injure or defraud any person, body politic or corporate, or
to deceive or mislead the commissioner or any agent or examiner
appointed to examine the affairs of such receiver, shall make any
false entry in any book, report, or record of any matter connected
with the duties of such receiver; and every person who with like
intent aids or abets any officer, director, clerk, employee, or agent
of any corporation, or receiver or clerk or employee of such
receiver as aforesaid in any violation of this article shall upon
conviction thereof be imprisoned for two, three, or four years, and
may also be fined not more than five thousand dollars ($5,000), in
the discretion of the court.



3532.  Whoever being connected in any capacity with any corporation
represents in any way that the State of California is liable for the
payment of any bond or other obligation, or the interest thereon,
issued or incurred by any corporation, or that the State of
California incurs any liability in respect of any act or omission of
the corporation, shall be punished by a fine of not more than ten
thousand dollars ($10,000) and by imprisonment in the state prison.



3533.  No person shall act in this State as the representative of
any foreign corporation in transacting the business described in this
article as the business of a corporation unless such corporation
shall have complied with the provisions of this article relating to
such corporations.



3534.  Every foreign corporation before being licensed by the
commissioner to transact in this state the business of a corporation,
or any part thereof, shall subscribe and acknowledge and submit to
the commissioner at his or her office, an application certificate in
duplicate, which shall specifically state:
   (a) The name of such foreign corporation.
   (b) The place where its business is to be transacted in this
state.
   (c) The amount of its capital stock actually paid in cash and the
amount subscribed for and unpaid.
   (d) A complete and detailed statement of its financial condition
as of a date within 60 days prior to the date of such application
certificate.



3535.  At the time the application certificate is first submitted to
the commissioner, such corporation shall also submit a duly
authenticated copy of its charter, or articles, and its bylaws.



3536.  No foreign corporation shall transact in this state the
business defined in this article or any part thereof, unless such
corporation shall have:
   (a) Been authorized by its charter to carry on such business and
shall have complied with the laws of the state or country under which
it is incorporated.
   (b) Made the deposit with the State Treasurer required by this
article.
   (c) Designated the commissioner, by an instrument in writing duly
executed, its true and lawful attorney upon whom all process in any
action or proceeding by any resident of this state against it may be
served with the same effect as if it were a domestic corporation and
had been lawfully served with process within this state.
   (d) Received a license duly issued to it by the commissioner.



3537.  When the commissioner shall have issued a license to any
foreign corporation, it may engage in the business of a corporation
of the kind authorized by this article at the location specified in
the license.


3538.  Every foreign corporation, before receiving a license to
transact business in this state, shall deposit with the State
Treasurer of the State of California upon authorization of the
commissioner, in trust as security for the depositors with and
creditors of such corporation in this state, lawful money of the
United States or securities of the kind and character described in
Article 3 (commencing at Section 1540) of Chapter 12 of this
division, of the value of one hundred thousand dollars ($100,000).
Such foreign corporation so long as it shall continue solvent and
comply with the laws of this state, may be permitted by the
commissioner to collect the interest on the securities so deposited
and from time to time to exchange such securities for others, and
examine and compare such securities, as provided by said article.



3539.  The foreign corporation shall pay a license fee of five
hundred dollars ($500).



3540.  Every foreign corporation, duly licensed by the commissioner
to transact in this state the business defined and authorized in this
article, or any part thereof, shall within 30 days after the date of
such license, submit to the commissioner a statement verified by two
of its principal officers, which shall contain the full name and
business address of every individual, partnership or unincorporated
association, who is acting or whom it proposes to have act as its
agent or representative in this state. Whenever any such corporation
shall engage any person to act for it in this state and the name and
address of such person is not contained in such verified statement
submitted to the commissioner, such foreign corporation shall
forthwith submit to the commissioner an amended statement verified in
the same manner as the original. A violation of this provision shall
subject such foreign corporation to a forfeiture of one thousand
dollars ($1,000) for each offense.



3541.  Whenever the commissioner shall have revoked the license of
any such foreign corporation and shall have taken the action to make
such revocation effective, all the rights and privileges of the
foreign corporation to transact business in this state shall
forthwith cease and determine.



3542.  Nothing in this division restricts the right of a state
international or foreign banking or financing corporation to convert
into an international or foreign banking or financing corporation
organized under the laws of the United States upon compliance with
such laws.



3543.  An international or foreign banking or financing corporation
organized under the laws of the United States may convert into a
state international or foreign banking or financing corporation with
the approval of the commissioner which he or she shall not grant
unless he or she is satisfied that such international or foreign
banking or financing corporation organized under the laws of the
United States meets all of the requirements set forth in this article
for the establishment of a state international or foreign banking or
financing corporation.


3544.  Nothing in this division restricts the right of any one or
more state international or foreign banking or financing corporations
to merge into or consolidate with one or more international or
foreign banking or financing corporations organized under the laws of
the United States.



3545.  Nothing in this division restricts one or more international
or foreign banking or financing corporations organized under the laws
of the United States from merging into one or more state,
international or foreign banking or financing corporations. For the
purpose of effecting any such merger any such international or
foreign banking or financing corporation shall be deemed a "foreign
corporation" as that term is used in Section 1108 of the Corporations
Code and the laws of Congress shall be deemed the "laws of the state"
in which such international or foreign banking or financing
corporation is formed.


3546.  Whenever a state international or foreign banking or
financing corporation survives the merger of one or more
international or foreign banking or financing corporations and the
agreement for merger has been filed with the Secretary of State with
the approval of the commissioner endorsed thereon, a copy thereof,
certified by the Secretary of State, shall immediately be filed with
the commissioner and upon, but not until, such filing the merger
shall be and become effective for all purposes.



3547.  Whenever one or more state international or foreign banking
or financing corporations and one or more international or foreign
banking or financing corporations organized under the laws of the
United States have been merged or consolidated, the surviving or
resulting international or foreign banking or financing corporation
succeeds without other transfer to all the rights and property of
each constituent international or foreign banking or financing
corporation and is subject to all the debts and liabilities of each
such constituent corporation in the same manner as if the surviving
or resulting international or foreign banking or financing
corporation had incurred them.
   All rights of creditors of each constituent international or
foreign banking or financing corporation are preserved unimpaired,
limited in lien to the property affected by such liens immediately
prior to the time of the consolidation or merger.
   Any action or proceeding pending by or against any one of the
constituent international or foreign banking or financing
corporations may be prosecuted through judgment, which binds the
resulting or surviving international or foreign banking or financing
corporation; or such consolidated or surviving corporation may be
proceeded against or substituted in the place of any such constituent
corporation.


3548.  Whenever an international or foreign banking or financing
corporation organized under the laws of the United States converts
into a state international or foreign banking or financing
corporation, or whenever such state corporation converts into such
corporation organized under the laws of the United States, or if any
such state corporation merges or consolidates with any such
corporation organized under the laws of the United States, the
surviving or resulting corporation shall be deemed to be the same
corporate entity as the converting or constituent corporation and any
reference to the converting corporation or to any constituent
corporation, whether executed or taking effect before or after the
conversion, merger or consolidation, shall be deemed a reference to
the surviving or resulting corporation.



State Codes and Statutes

State Codes and Statutes

Statutes > California > Fin > 3500-3548

FINANCIAL CODE
SECTION 3500-3548



3500.  As used in this article, unless the context otherwise
requires, "corporation" means a corporation organized under the laws
of this state for the purpose of transacting business pursuant to
this article.


3500.5.  The provisions of Chapter 1 (commencing with Section 99)
applicable to, or with respect to, banks shall apply to, or with
respect to, as the case may be, corporations.



3501.  When authorized by the previous written consent of the
commissioner as provided by Chapter 3 (commencing with Section 350)
one or more persons may organize a corporation.



3502.  The articles of a corporation shall provide that the purpose
of the corporation is to engage in the business of international and
foreign banking and other international and foreign financial
operations, the business of banking and other financial operations in
any dependency or insular possession of the United States, and any
other lawful activities which are not, by applicable laws or
regulations, prohibited to a corporation transacting business under
this article.


3503.  The articles of incorporation shall be submitted to the
commissioner for his or her approval before they are filed with the
Secretary of State pursuant to the Corporations Code. After the
articles have been filed with the Secretary of State the corporation
shall file with the commissioner a copy thereof, certified by the
Secretary of State, and, after the organization meeting of the
directors, a copy of its bylaws certified by its secretary.



3504.  Each corporation shall have power, under such rules and
regulations as the commissioner may prescribe:
   (a) To purchase, sell, discount, and negotiate, with or without
its endorsement or guaranty, notes, drafts, checks, bills of
exchange, acceptances, including bankers' acceptances, cable
transfers, and other evidences of indebtedness; to purchase and sell,
with or without its endorsement or guaranty, securities, including
the obligations of the United States or of any state thereof but not
including shares of stock in any corporation except as herein
provided; to accept bills or drafts drawn upon it subject to such
limitations and restrictions as the commissioner may impose; to issue
letters of credit; to purchase and sell coin, bullion, and exchange;
to borrow and to lend money; to issue debentures, bonds, and
promissory notes under such general conditions as to security and
such limitations as the commissioner may prescribe; to receive
deposits outside of the United States and to receive only such
deposits in this state or in any other state of the United States as
may be incidental to or for the purpose of carrying out transactions
in foreign countries or dependencies or insular possessions of the
United States.
   (b) Generally, to exercise such powers as are incidental to the
powers conferred by this article or as may be usual, in the
determination of the commissioner, in connection with the transaction
of the business of banking or other financial operations in the
countries, colonies, dependencies, or possessions in which it shall
transact business and not inconsistent with the power specifically
granted herein. Nothing contained in this article shall be construed
to prohibit the commissioner, under his or her power to prescribe
rules and regulations, from limiting the aggregate amount of
liabilities of any or all classes incurred by the corporation and
outstanding at any one time.
   (c) To establish and maintain for the transaction of its business
branches or agencies in foreign countries, their dependencies or
colonies, and in any state of the United States, and in the
dependencies or insular possessions of the United States, at such
places as may be approved by the commissioner and under such rules
and regulations as he or she may prescribe, including any state of
the United States, or countries or dependencies not specified in the
original organization certificate.
   (d) With the consent of the commissioner to purchase and hold
stock or other certificates of ownership in any other corporation
organized under the laws of this state for the purpose of transacting
business pursuant to this article, or under the laws of the United
States, or under the laws of any foreign country or a colony of
dependency thereof, or under the laws of any state, dependency or
insular possession of the United States but not engaged in the
general business of buying or selling goods, wares, merchandise, or
commodities in the United States, and not transacting any business in
the United States except such as in the judgment of the commissioner
may be incidental to its international or foreign business.



3505.  Except with the approval of the commissioner, no corporation
shall invest in any one corporation an amount in excess of 10 per
centum of its own shareholders' equity, except in a corporation
engaged in the business of banking, when 15 per centum of its
shareholders' equity may be so invested.



3506.  No corporation shall purchase, own, or hold stock or
certificates of ownership in any other corporation organized under
this article or under the laws of any state which is in substantial
competition therewith, or which holds stock or certificates of
ownership in corporations which are in substantial competition with
the purchasing corporation.



3507.  Nothing contained in this article shall prevent corporations
from purchasing and holding stock in any corporation where such
purchase shall be necessary to prevent a loss upon a debt previously
contracted in good faith; and stock so purchased or acquired in
corporations shall within six months from such purchase be sold or
disposed of at public or private sale unless the time to so dispose
of same is extended by the commissioner as provided by Section 762.



3508.  No corporation shall carry on any part of its business in the
United States except such as, in the judgment of the commissioner,
shall be incidental to its international or foreign business. Except
such as is incidental and preliminary to its organization no
corporation shall exercise any of the powers conferred by this
article until it has been duly authorized by the commissioner to
commence business under the provisions of this article.



3509.  No corporation shall engage in commerce or trade in
commodities except as specifically provided in this article, nor
shall it either directly or indirectly control or fix or attempt to
control or fix the price of any such commodities. The license of any
corporation violating this section shall be subject to forfeiture as
provided in this article.



3510.  It shall be unlawful for any director, officer, agent, or
employee of any corporation to use or to conspire to use the credit,
the funds, or the power of the corporation to fix or control the
price of any commodities, and any person violating this section shall
be punished by a fine of not less than two thousand dollars ($2,000)
nor more than ten thousand dollars ($10,000), imprisonment in a
county jail for not more than one year, imprisonment in the state
prison, or by both that fine and imprisonment, in the discretion of
the court.


3511.  No corporation shall be organized without adequate
shareholders' equity.



3512.  The provisions of Chapter 5 (commencing with Section 600)
(except the provisions of Section 621) applicable to, or with respect
to, banks shall apply to, or with respect to, as the case may be,
corporations.


3513.  Any bank may invest in the shares of any corporation
organized under the provisions of this article, but the aggregate
amount of stock held in all corporations engaged in business of the
kind described in this chapter shall not exceed 10 percent of the
subscribing bank's shareholders' equity.



3514.  (a) In this section, "foreign bank" means any company
organized under the laws of a foreign country, a territory of the
United States, Puerto Rico, Guam, American Samoa, or the Virgin
Islands, which engages in the business of banking, or any subsidiary
or affiliate, organized under such laws, of any such company.
"Foreign bank" includes, without limitation, foreign commercial
banks, foreign merchant banks, and other foreign institutions that
engage in banking activities usual in connection with the business of
banking in the countries where such foreign institutions are
organized or operating.
   (b) Except as otherwise provided in subdivision (c), a majority of
the shares of the capital stock of any corporation shall at all
times be held and owned by citizens of the United States, by
corporations the controlling interest in which is owned by citizens
of the United States, chartered under the laws of the United States
or of a state of the United States, or by firms or companies, the
controlling interest in which is owned by citizens of the United
States.
   (c) Notwithstanding the provisions of subdivision (b), one or more
foreign banks, institutions organized under the laws of foreign
countries which own or control foreign banks, or banks organized
under the laws of the United States, the states of the United States,
or the District of Columbia, the controlling interests in which are
owned by any such foreign banks or institutions, may, with the
approval of the commissioner and upon such terms and conditions and
subject to such rules and regulations as the commissioner may
prescribe, own and hold 50 percent or more of the shares of the
capital stock of any corporation.



3515.  Whenever it shall appear to the commissioner that any
corporation has violated the provisions of its articles of
incorporation or any law of this state, or is conducting its business
in an unsafe or unauthorized manner, or if the contributed capital
of any such corporation is impaired, or if the corporation shall
refuse to submit its books, papers and concerns to the inspection of
any examiner of the department or if any officer thereof shall refuse
to be examined upon oath touching the concerns of the corporation or
if the corporation shall suspend payment of its obligations, or if
from any examination or report provided for by this article the
commissioner shall have reason to conclude that the corporation is in
an unsound or unsafe condition to transact the business for which it
is organized, or that it is unsafe and inexpedient for it to
continue business, or if any corporation shall neglect or refuse to
observe any order of the commissioner specified in Section 662, 1912,
or 1913, the commissioner may forthwith take possession of the
property and business of such corporation and retain such possession
until such corporation shall resume business, or its affairs be
finally liquidated as provided by this code for the liquidation of
banks.


3516.  No corporation shall deposit any of its funds with any other
moneyed corporation unless the other corporation has been nominated
and designated as a depositary for the funds of the depositing
corporation by the vote of a majority of the directors of the
depositing corporation and has been approved by the commissioner as a
depositary. The commissioner may in his or her discretion revoke his
or her approval of any such depositary. This limitation shall not
apply to the deposit of funds by a corporation with another moneyed
corporation, that owns all or a majority of the capital stock of the
corporation.


3517.  No corporation shall be the holder of any shares of its own
capital stock unless such stock shall have been taken to prevent loss
upon a debt previously contracted in good faith, and stock so
acquired shall, within six months from the time of its acquisition,
be sold or disposed of at public or private sale.



3518.  No corporation shall, either directly or indirectly, make any
discount to any person for the purpose of enabling him to pay for or
hold shares of its stock either subscribed for or purchased by him.
Any corporation making any such discount shall forfeit to the people
of the State twice the amount of such discount.




3519.  No corporation shall by any system of accounting or any
device of bookkeeping, directly or indirectly enter any of its assets
upon its books in the name of any other person, or under any title
or designation that is not truly descriptive thereof.




3520.  Every corporation shall conform its methods of keeping its
books and records to such orders in respect thereto as have been made
and promulgated by the commissioner. Any corporation that refuses or
neglects to obey such order shall be subject to a penalty of one
hundred dollars ($100) for each day it so refuses or neglects.




3521.  Each official communication directed by the commissioner to a
corporation or to any officer thereof, relating to an examination or
investigation conducted by the department or containing suggestions
or recommendations as to the conduct of the business of such
corporation, shall be submitted, by the officer receiving it, to the
board at the next meeting of such board, and duly noted in the
minutes of the meetings of such board.



3522.  On or before the first day of February in each year, each
corporation and every foreign corporation licensed by the
commissioner to transact the business of such a corporation in this
state, shall make a written report to the commissioner which shall
contain a statement of its condition on the morning of the first day
of January in that year and shall be in the form and contain the
matters prescribed by the commissioner. The commissioner may,
however, in his or her discretion, accept from a corporation, which
has branches in a foreign country or countries, a report containing a
statement of its condition as of a date not later than the first day
of January and not earlier than the first day of November in the
preceding year. Every report shall be verified by the oaths of the
two principal officers in charge of the affairs of the corporation or
foreign corporation at the time of the verification, which shall
state that the report is true and correct in all respects to the best
of the knowledge and belief of the persons verifying it, and that
the usual business of the corporation or foreign corporation has been
transacted at the location required by this article and not
elsewhere.



3523.  Every corporation and foreign corporation shall also make
such other special reports to the commissioner as he or she may from
time to time require, which shall be in such form and filed at such
date as may be prescribed by the commissioner and shall, if required
by the commissioner, be verified in such manner as he or she may
prescribe.



3524.  If any corporation or foreign corporation shall fail to make
any report required by this article on or before the day designated
for the making thereof, or shall fail to include therein any matter
required by the commissioner, it shall forfeit to the people of the
state the sum of one hundred dollars ($100) for every day that such
report shall be delayed or withheld, and for every day that it shall
fail to report any such omitted matter, unless the time therefor
shall have been extended by the commissioner.



3525.  Every corporation shall hold a meeting of its stockholders
annually upon a date fixed in its bylaws at its main office, or if
its main office is to be located outside of this State, at its branch
or other office in this State.


3526.  Every corporation shall keep at its main office, or if its
main office is to be located outside of this state, at its branch or
other office in this state, books containing the names of all
stockholders thereof, and the names and addresses of the members of
its board of directors, together with copies of all reports made by
it to the commissioner.



3527.  Every corporation shall make reports to the commissioner at
such times and in such form as the commissioner may require and is
subject to examination by examiners appointed by the commissioner, to
the extent and whenever and as often as the commissioner shall deem
it advisable, but in no case less than once every two calendar years.
The cost of such examinations shall be fixed by the commissioner and
be paid by the corporation examined.



3529.  No officer, director, clerk or other employee of any
corporation, and no person in any way interested or concerned in the
management of its affairs, shall as individuals discount, or directly
or indirectly, make any loan upon any note or other evidence of
debt, which he shall know to have been offered for discount to such
corporation, and to have been refused. Every person violating the
provisions of this section, shall, for each offense, forfeit to the
people of the State twice the amount of the loan which he shall have
made.


3531.  Every officer, director, clerk, employee, or agent of any
corporation who embezzles, abstracts, or willfully misapplies any of
the moneys, funds, credits, securities, evidence of indebtedness or
assets of any character of such corporation, or who, without
authority from the directors, issues or puts forth any certificate of
deposit, draws any order or bill of exchange, makes any acceptance,
assigns any note, bond, debenture, draft, bill of exchange, mortgage,
judgment, or decree, or who makes any false entry in any book,
report, or statement of such corporation with intent, in either case,
to injure or defraud such corporation or any other company, body
politic or corporate, or any individual person, or to deceive any
officer of such corporation, the commissioner, or any agent or
examiner appointed to examine the affairs of any such corporation;
and every receiver of any corporation and every clerk or employee of
such receiver who shall embezzle, abstract, or willfully misapply or
wrongfully convert to his or her own use any moneys, funds, credits,
or assets of any character which may come into his or her possession
or under his or her control in the execution of his or her trust or
the performance of the duties of his or her employment; and every
such receiver or clerk or employee of such receiver who shall, with
intent to injure or defraud any person, body politic or corporate, or
to deceive or mislead the commissioner or any agent or examiner
appointed to examine the affairs of such receiver, shall make any
false entry in any book, report, or record of any matter connected
with the duties of such receiver; and every person who with like
intent aids or abets any officer, director, clerk, employee, or agent
of any corporation, or receiver or clerk or employee of such
receiver as aforesaid in any violation of this article shall upon
conviction thereof be imprisoned for two, three, or four years, and
may also be fined not more than five thousand dollars ($5,000), in
the discretion of the court.



3532.  Whoever being connected in any capacity with any corporation
represents in any way that the State of California is liable for the
payment of any bond or other obligation, or the interest thereon,
issued or incurred by any corporation, or that the State of
California incurs any liability in respect of any act or omission of
the corporation, shall be punished by a fine of not more than ten
thousand dollars ($10,000) and by imprisonment in the state prison.



3533.  No person shall act in this State as the representative of
any foreign corporation in transacting the business described in this
article as the business of a corporation unless such corporation
shall have complied with the provisions of this article relating to
such corporations.



3534.  Every foreign corporation before being licensed by the
commissioner to transact in this state the business of a corporation,
or any part thereof, shall subscribe and acknowledge and submit to
the commissioner at his or her office, an application certificate in
duplicate, which shall specifically state:
   (a) The name of such foreign corporation.
   (b) The place where its business is to be transacted in this
state.
   (c) The amount of its capital stock actually paid in cash and the
amount subscribed for and unpaid.
   (d) A complete and detailed statement of its financial condition
as of a date within 60 days prior to the date of such application
certificate.



3535.  At the time the application certificate is first submitted to
the commissioner, such corporation shall also submit a duly
authenticated copy of its charter, or articles, and its bylaws.



3536.  No foreign corporation shall transact in this state the
business defined in this article or any part thereof, unless such
corporation shall have:
   (a) Been authorized by its charter to carry on such business and
shall have complied with the laws of the state or country under which
it is incorporated.
   (b) Made the deposit with the State Treasurer required by this
article.
   (c) Designated the commissioner, by an instrument in writing duly
executed, its true and lawful attorney upon whom all process in any
action or proceeding by any resident of this state against it may be
served with the same effect as if it were a domestic corporation and
had been lawfully served with process within this state.
   (d) Received a license duly issued to it by the commissioner.



3537.  When the commissioner shall have issued a license to any
foreign corporation, it may engage in the business of a corporation
of the kind authorized by this article at the location specified in
the license.


3538.  Every foreign corporation, before receiving a license to
transact business in this state, shall deposit with the State
Treasurer of the State of California upon authorization of the
commissioner, in trust as security for the depositors with and
creditors of such corporation in this state, lawful money of the
United States or securities of the kind and character described in
Article 3 (commencing at Section 1540) of Chapter 12 of this
division, of the value of one hundred thousand dollars ($100,000).
Such foreign corporation so long as it shall continue solvent and
comply with the laws of this state, may be permitted by the
commissioner to collect the interest on the securities so deposited
and from time to time to exchange such securities for others, and
examine and compare such securities, as provided by said article.



3539.  The foreign corporation shall pay a license fee of five
hundred dollars ($500).



3540.  Every foreign corporation, duly licensed by the commissioner
to transact in this state the business defined and authorized in this
article, or any part thereof, shall within 30 days after the date of
such license, submit to the commissioner a statement verified by two
of its principal officers, which shall contain the full name and
business address of every individual, partnership or unincorporated
association, who is acting or whom it proposes to have act as its
agent or representative in this state. Whenever any such corporation
shall engage any person to act for it in this state and the name and
address of such person is not contained in such verified statement
submitted to the commissioner, such foreign corporation shall
forthwith submit to the commissioner an amended statement verified in
the same manner as the original. A violation of this provision shall
subject such foreign corporation to a forfeiture of one thousand
dollars ($1,000) for each offense.



3541.  Whenever the commissioner shall have revoked the license of
any such foreign corporation and shall have taken the action to make
such revocation effective, all the rights and privileges of the
foreign corporation to transact business in this state shall
forthwith cease and determine.



3542.  Nothing in this division restricts the right of a state
international or foreign banking or financing corporation to convert
into an international or foreign banking or financing corporation
organized under the laws of the United States upon compliance with
such laws.



3543.  An international or foreign banking or financing corporation
organized under the laws of the United States may convert into a
state international or foreign banking or financing corporation with
the approval of the commissioner which he or she shall not grant
unless he or she is satisfied that such international or foreign
banking or financing corporation organized under the laws of the
United States meets all of the requirements set forth in this article
for the establishment of a state international or foreign banking or
financing corporation.


3544.  Nothing in this division restricts the right of any one or
more state international or foreign banking or financing corporations
to merge into or consolidate with one or more international or
foreign banking or financing corporations organized under the laws of
the United States.



3545.  Nothing in this division restricts one or more international
or foreign banking or financing corporations organized under the laws
of the United States from merging into one or more state,
international or foreign banking or financing corporations. For the
purpose of effecting any such merger any such international or
foreign banking or financing corporation shall be deemed a "foreign
corporation" as that term is used in Section 1108 of the Corporations
Code and the laws of Congress shall be deemed the "laws of the state"
in which such international or foreign banking or financing
corporation is formed.


3546.  Whenever a state international or foreign banking or
financing corporation survives the merger of one or more
international or foreign banking or financing corporations and the
agreement for merger has been filed with the Secretary of State with
the approval of the commissioner endorsed thereon, a copy thereof,
certified by the Secretary of State, shall immediately be filed with
the commissioner and upon, but not until, such filing the merger
shall be and become effective for all purposes.



3547.  Whenever one or more state international or foreign banking
or financing corporations and one or more international or foreign
banking or financing corporations organized under the laws of the
United States have been merged or consolidated, the surviving or
resulting international or foreign banking or financing corporation
succeeds without other transfer to all the rights and property of
each constituent international or foreign banking or financing
corporation and is subject to all the debts and liabilities of each
such constituent corporation in the same manner as if the surviving
or resulting international or foreign banking or financing
corporation had incurred them.
   All rights of creditors of each constituent international or
foreign banking or financing corporation are preserved unimpaired,
limited in lien to the property affected by such liens immediately
prior to the time of the consolidation or merger.
   Any action or proceeding pending by or against any one of the
constituent international or foreign banking or financing
corporations may be prosecuted through judgment, which binds the
resulting or surviving international or foreign banking or financing
corporation; or such consolidated or surviving corporation may be
proceeded against or substituted in the place of any such constituent
corporation.


3548.  Whenever an international or foreign banking or financing
corporation organized under the laws of the United States converts
into a state international or foreign banking or financing
corporation, or whenever such state corporation converts into such
corporation organized under the laws of the United States, or if any
such state corporation merges or consolidates with any such
corporation organized under the laws of the United States, the
surviving or resulting corporation shall be deemed to be the same
corporate entity as the converting or constituent corporation and any
reference to the converting corporation or to any constituent
corporation, whether executed or taking effect before or after the
conversion, merger or consolidation, shall be deemed a reference to
the surviving or resulting corporation.


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