Every issuer qualifying securities for sale in California must at all times keep and maintain a complete set of books, records, and accounts of such sales and the disposition of the proceeds, and must thereafter, as required by the Commissioner of Corporations, make and file a report setting forth the securities sold by it under the qualification, the proceeds derived therefrom, and the disposition of those securities.

Additional detailed records may have to be maintained and reports filed by corporations that have registered the offer and sale of securities under the Securities Act of 1933, the Securities Exchange Act of 1934, or under other federal laws.

Information may be kept by the corporation in other than written form if it is capable of being converted into clearly legible tangible form. Hence, stock records could be recorded and stored on a magnetic or electronic recording device, if the information can be converted to written form.

Many corporations or their transfer agents also keep a ‘transfer book,’ in which all transfers of shares are recorded. The information in the transfer book normally includes that called for by the assignment on the back of the stock certificate. It is also normal to keep cancelled stock certificates and any attached or related instruments of assignment or transfer for a number of years. Such certificates may be the original evidence of transfer and, in the case of a question or dispute between a corporation and a present or former stockholder, may be the best or only evidence of genuineness of signatures. In addition, when the corporation requires the signature of a transferring shareholder to be guaranteed, the certificate itself or the instrument of transfer is likely to be the only embodiment or record of the guarantee.

Failing to maintain proper corporate records can bring severe penalties, both civil and criminal.

THE FOREGOING IS ONLY A GENERAL SUMMARY OF CALIFORNIA CORPORATIONS LAW OR A PORTION THEREOF, AND DOES NOT PURPORT TO BE AN ACCURATE OR COMPLETE STATEMENT OF THE LAW APPLICABLE TO CORPORATIONS IN CALIFORNIA. IT DOES NOT CONSTITUTE A LEGAL OPINION. INDIVIDUAL SITUATIONS MAY VARY. FOR AN ACCURATE LEGAL OPINION, ALWAYS CONSULT AN ATTORNEY.