Legal Question in Business Law in California

Re: Financial Services, Credit

In addition to Mr. Whipple's comments, I would suggest that, depending upon the exact nature of your proposed business, you may find that the Securities and Exchange Commission, as well as a number of other state regulators may become involved, and you may have to satisfy a whole host of other requirements before being allowed to start your business. If SEC involvement is required, your fees would be increased dramatically.

Re: Financial Services, Credit

Your Zip code indicates Reno, Nevada but it appears you may be looking for an answer with respect to California law, which this will be. I do not practice in Nevada, but my guess would be that Nevada's laws are similar.

First, (a) I do not know of any specific educational requirements to enter the business you describe. However, I believe the chartering of banks (see below) is discretionary with the banking authorities, and they will examine the experience, education, finances and moral background of the promoters and proposed officers and directors of applicants for banking charters.

As to (b), start-up capital, banks are required to have and maintain certain financial ratios of liquidity, etc. and it is unlikely that most jurisdictions would look favorably upon an application from a promoter not bringing at least a seven-figure cash investment to the table.

Finally, and most important, the answer to your question (c) is that the business of making loans and taking deposits is banking, and you would come under (in California) the requirments of the Financial Code, which starts out by saying that a banking business can only be conducted by a corporation incorporated under the provisions of that Code. See section 102.

An application fee of $5,000 is required in California, which is followed by a thorough investigation of the fitness of the applicant. An individual with no significant cash capital and no prior experience should not waste the $5,000 application fee; he has no chance of being approved.

Re: Financial Services, Credit

The idea of starting a "financial services" business brings into play many areas of law, depending on how you are going to structure your business. There are fewer laws implicated when you are using your own money to lend to others. The moment you start taking money from any one else, securieties laws, and maybe banking laws, come into play. Sorry, but to fully answer your questions it will require more discussion about what your goals and resources are.