California Codes

Cal. Corporations Code § 25507 (2026)

✓ current as of May 2026

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(a)No action shall be maintained to enforce any liability created under Section 25503 (or Section 25504 or Section 25504.1 insofar as they relate to that section) unless brought before the expiration of two years after the violation upon which it is based or the expiration of one year after the discovery by the plaintiff of the facts constituting such violation, whichever shall first expire.

(b)No buyer may commence an action under Section 25503 (or Section 25504 or Section 25504.1 insofar as they relate to that section) if, before suit is commenced, such buyer shall have received a written offer approved as to form by the commissioner (1) stating the respect in which liability under such section may have arisen, (2) offering to repurchase the security for a cash price payable upon delivery of the security or offering to pay the buyer an amount in cash equal in either case to the amount recoverable by the buyer in accordance with Section 25503, or, offering to rescind the transaction by putting the parties back in the same position as before the transaction, (3) providing that such offer may be accepted by the buyer at any time within a specified period of not less than 30 days after the date of receipt thereof unless rejected earlier during such period by the buyer, (4) setting forth the provisions of this subdivision (b), and (5)containing such other information as the commissioner may require by rule or order, and such buyer shall have failed to accept such offer in writing within the specified period after receipt thereof.

(c)The commissioner may by rule or order impose as a condition to approval of an offer under subdivision (b) of this section, if the commissioner finds such action is necessary and appropriate for the protection of investors, conditions requiring:

(1)That equivalent and concurrent offers be made to all investors as to whom liability may have arisen and still exists under Section 25503 (or Section 25504 or Section 25504.1 insofar as they relate to that section) in connection with the distribution or transaction;

(2)That the offer be made subject to a condition voiding such offer if the issuer, by reason of acceptances, is disabled from commencing or continuing business;

(3)That the offer be made within a specified period after approval thereof by the commissioner;

(4)If the consideration paid by the offeree was other than monetary or if the offer is of rescission, and if the offer is rejected by the offeree on the ground that it does not accord him the damages payable under Section 25503 or that the rescission offered does not place the parties back in the same position as before the transaction, that an offer so rejected shall not bar the commencement of an action by the offeree under Section 25503 (or Section 25504 or Section 25504.1 insofar as they relate to that section); or

(5)That the offeror file a report or reports with the commissioner containing such information as he may require concerning the making of the offer, its acceptance or rejection, and compliance with its terms and conditions or with conditions imposed under this subdivision.

(d)Each person who files a repurchase offer with the commissioner pursuant to subdivision (b) shall file with the commissioner, in such form as the commissioner by rule prescribes, an irrevocable consent appointing the commissioner or the commissioner’s successor in office to be such person’s attorney to receive service of any lawful process in any noncriminal suit, action or proceeding against such person or such person’s successor, executor or administrator, which arises under this law or any rule or order hereunder after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. A person who has filed such a consent in connection with a qualification under this law (or application for a permit under any prior law if the application under this law states that such consent is still effective) need not file another. Service may be made by leaving a copy of the process in the office of the commissioner but it is not effective unless (1) the plaintiff, who may be the commissioner in a suit, action or proceeding instituted by him, forthwith sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at such person’s last address on file with the commissioner, and (2) the plaintiff’s affidavit of compliance with this section is filed in the case on or before the return day of the process, if any, or within such further time as the court allows.

Notes of Decisions

Cited in 12 cases (1 in the last 5 years), 1971–2021 · leading case: Bowden v. Robinson, 67 Cal. App. 3d 705 (Cal. Ct. App. 1977).

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Bowden v. Robinson, 67 Cal. App. 3d 705 (Cal. Ct. App. 1977). · cites it 2× “” (Corp. Code, § 25507, subd. (a).) This limitation is imposed to prevent purchasers from employing the remedies for violation of the qualification provisions to shift the risk of a bad investment to the seller.”

Deveny v. Entropin, Inc., 2006 Cal. Daily Op. Serv. 3891 (Cal. Ct. App. 2006). “” (Corp. Code, § 25507, subd. (a).) One California court has held that the statute of limitations under section 25507 does not begin to run until the plaintiff has actual knowledge of the facts that are the bases for the suit, and mere inquiry notice is not enough.”

Quattrone v. Superior Court, 44 Cal. App. 3d 296 (Cal. Ct. App. 1975). · cites it 2× “(Corp. Code, §§ 25507, 25510.) Any permit issued was required to specify the amounts of securities, the considérations, and the terms and conditions of issuance.”

Koehler v. Pulvers, 606 F. Supp. 164 (S.D. Cal. 1985). · cites it 3× “This court previously held the two year limitations provision of California Corporations Code section 25507 to be absolute, and not subject to tolling by proof of fraudulent concealment.”

In Re Rexplore, Inc. Sec. Litig., 685 F. Supp. 1132 (N.D. Cal. 1988). “California Corporations Code § 25507 provides that no action shall be maintained to enforce liability created under Section 25503 unless brought within two years after the violation, or one year after discovery.”

Lubin v. Sybedon Corp., 688 F. Supp. 1425 (S.D. Cal. 1988). “Cal.Corp.Code § 25507 (West 1988). Addressing the statutes in reverse order, Lubin’s section 25503 claim must be dismissed as time-barred.”

Malik v. Universal Resources Corp., 425 F. Supp. 350 (S.D. Cal. 1976). “47 Notwithstanding defendants’ manifest violations of § 25110, plaintiffs are foreclosed from recovery in connection with the 1969 transactions indicated above by the two year absolute statute of limitations embodied in California Corporations Code § 25507. 48 On the other hand,…”

Hofer v. Gen. Disc. Corp., 192 N.W.2d 718 (S.D. 1971). “59(6) (a) provides that a purchaser may not bring an action against the seller of an unregistered security if the purchaser has received a written offer from the seller to repurchase the security “for cash payable on delivery of the security equal to the consideration paid,…”

Schumacher v. Superior Court of Santa Clara Cnty., 94 Cal. App. 3d 187 (Cal. Ct. App. 1979). · cites it 2× “1 California Corporations Code section 25507, subdivision (a), provides as follows: “(a) No action shall be maintained to enforce any liability created under Section 25503 (or Section 25504 or Section 25504.”

Baxter v. Calif. State Teachers' Ret. Sys. (Cal. Ct. App. 2017). “)12 The court in Deveny concluded, following several federal decisions which held that under the language of former Corporations Code section 25506 (“discovery by the plaintiff of the facts constituting the violation”), inquiry notice was sufficient to trigger the statute of…”

Smith v. Swaffer (N.D. Ohio 2021). “43(B) (two-year statute of limitation, five-year statute of repose); Cal. Corp. Code § 25507 (a) (requiring lawsuits be brought no later than “two years after the violation” or within “one year after the discovery of” the violation); Ind.”

Hernandez v. Vasquez CA2/8 (Cal. Ct. App. 2013). “The court concluded theses causes of action were time-barred under Corporations Code section 25507 and Code of Civil Procedure section 338, and 3 The bankruptcy stipulation is exhibit A to the complaint.”

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