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HomeFood and Agricultural CodeDiv. 20Ch. 1Art. 8§ 54203 Preferred Stock Exchange Rules

§ 54203 Preferred Stock Exchange Rules

Food and Agricultural Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 54203 Preferred Stock Exchange Rules

Key Takeaways

  • •A company can buy things (like property or stocks) from someone and pay them with special company stocks instead of cash.
  • •The company decides how much these special stocks are worth based on what they think the thing they're buying is worth.
  • •Giving the thing to the company is like getting paid in cash for the special stocks they give you.

Example

Imagine a company wants to buy a small bakery from its owner.

Instead of paying the bakery owner with money, the company can give the owner special company stocks. The company decides how much these stocks are worth based on what they think the bakery is worth. The bakery owner gets these stocks like they would get cash.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 54203 Preferred Stock Exchange Rules

If an association with preferred shares of stock purchases the stock or any property, or any interest in any property of any person, it may discharge the obligations which are so incurred, wholly or in part, by exchanging for the acquired interest, shares of its preferred stock to an amount which at par value would equal the fair market value of the stock or interest so purchased, as determined by the board of directors. In that case the transfer to the association of the stock or interest which is purchased is equivalent to payment in cash for the shares of stock which are issued. (Enacted by Stats. 1967, Ch. 15.)

Last verified: January 23, 2026

Key Terms

propertystockobligationdirectorassociation

Related Statutes

  • § 54122 Member Interest Buyback Rules
  • § 54081 Cooperative Association Formation Requirements
  • § 54144 District Director Election Rules
  • § 54238 Stock Buyback Authority
  • § 58999 Producer Approval Through Cooperatives

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Food and Agricultural Code. Section 54203.
View Official Source