21.20.705  <<  21.20.710 >>   21.20.715

Debenture companiesCapital requirements.

(1) Except as provided in subsection (2) of this section, a debenture company shall not offer for sale any security other than capital stock if such sale would result in the violation of the following capital requirements:
(a) For outstanding securities other than capital stock totaling from $1 to $1,000,000, a debenture company shall have a net worth of at least $200,000.
(b) In addition to the requirement set forth in (a) of this subsection:
(i) A debenture company with outstanding securities other than capital stock totaling in excess of $1,000,000 but not over $100,000,000 shall have additional net worth equal to at least ten percent of the outstanding securities in excess of $1,000,000 but not over $100,000,000; and
(ii) A debenture company with outstanding securities other than capital stock totaling in excess of $100,000,000 shall have additional net worth equal to at least five percent of the outstanding securities in excess of $100,000,000.
(c) Every debenture company shall hold at least one-half the amount of its required net worth in cash or comparable liquid assets as defined by rule, or shall demonstrate comparable liquidity to the satisfaction of the director.
(2) The director may for good cause in the interest of the existing investors, waive the requirements of subsection (1) of this section. If the director waives the minimum requirements set forth in subsection (1) of this section, the debenture company shall increase its net worth or liquidity in accordance with conditions imposed by the director until such time as the debenture company can meet the requirements of this section without waiver from the director.

NOTES:

SeverabilityEffective dateImplementationApplication1988 c 244: See notes following RCW 21.20.700.
Effective dateConstruction1973 1st ex.s. c 171: See RCW 21.20.805.
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