California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 2 - Corporate Securities
Article 4 - Standards for the Exercise of the Commissioner's Authority
Subarticle 10 - Real Estate Programs
Disclosure and Marketing Requirements
Section 260.140.117.5 - Opinions of Counsel
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
The application for qualification shall contain a favorable ruling from the Internal Revenue Service or an opinion of counsel to the effect that the issuer will be taxed as a "partnership" and not as an "association" for federal income tax purposes. An opinion of counsel shall be in form and substance satisfactory to the Commissioner and shall be unqualified except to the extent permitted by the Commissioner. However, an opinion of counsel may be based one reasonable assumptions, such as:
(1) facts or proposed operations as set forth in the offering circular or prospectus and organizational documents;
(2) the absence of future changes in applicable laws;
(3) the securities offered are paid for;
(4) compliance with certain procedures such as the execution and delivery of certain documents and the filing of a certificate of limited partnership or an amended certificate; and
(5) the continued maintenance of or compliance with certain financial, ownership, or other requirements by the issuer or general partner(s). The Commissioner may request from counsel as supplemental information such supporting legal memoranda and an analysis as he shall deem appropriate under the circumstances. To the extent the opinion of counsel or Internal Revenue Service ruling is based on the maintenance of or compliance with certain requirements or conditions by the issuer or general partner(s), the offering circular or prospectus shall contain representations that such requirements or conditions will be met and the partnership agreement shall, to the extent practicable, contain provisions requiring such compliance. There shall be included also an opinion of counsel to the effect that the securities being offered are duly authorized or created and validly issued interests in the issuer, and that the liability of the public investors will be limited to their respective total agreed upon investment in the issuer. The Commissioner may request an opinion of counsel concerning tax benefits flowing to the partnership when this appears necessary for the protection of investors.
1. Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No. 4).
Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporations Code.
