How to File the California 25102(f) Limited Offering Exemption Notice

To claim California’s Section 25102(f) private placement exemption, the issuer must file a Limited Offering Exemption Notice with the Department of Financial Protection and Innovation within 15 calendar days of the first sale of securities in California. The California 25102(f) Limited Offering Exemption Notice is filed electronically through DFPI’s FRANSES portal at franses.dfpi.ca.gov, and the filing fee runs from $25 to $300 depending on the total value of the offering.¹

The form itself is short. The harder work happens before you open it: confirming your offering actually qualifies for the exemption, counting purchasers correctly, and gathering the corporate data the notice asks for.

What You Need Before You File

The notice is officially Form DFPI-260.102.14. Have the following ready before you log into FRANSES:²

Full legal name of the issuer as it appears in your formation documents (Item 1).
Principal place of business, mailing address if different, and phone number (Items 2–3).
Jurisdiction of organization, or domicile if the issuer is not formally organized under any jurisdiction (Item 4).
Name or title of each class of security being sold, such as common stock, preferred stock, convertible notes, or membership units (Item 5).
Total value of securities sold or proposed to be sold, split between money and non-cash consideration, with separate columns for California sales and the total offering (Item 6).
Federal filing status, including whether a registration statement was filed with the SEC or which federal exemption was used, such as Rule 506(b) (Item 7).
Consent to service of process. Non-California entities that don’t already have one on file must attach Form 260.165, which appoints the Commissioner as the issuer’s agent for receiving legal process (Item 9).
Signature of an authorized officer, director, general partner, trustee, or attorney, plus a contact person’s name and phone number (Item 10).
The issuer’s Federal Employer Identification Number. If a representative files on the company’s behalf, that person’s FEIN is required too.

The Four Conditions Your Offering Must Meet

The exemption is available only if the offering satisfies every one of four conditions. Miss one and the exemption fails, which can trigger rescission liability and enforcement action regardless of whether you filed the notice.³

No more than 35 purchasers of the securities, counting buyers outside California. Certain categories are excluded from this count.
Every purchaser must either have a preexisting personal or business relationship with the company or its officers, directors, partners, or controlling persons, or have enough business and financial experience (personally or through an independent professional adviser) to evaluate the investment.
Each purchaser must represent in writing that they are buying for their own account and not for resale or distribution.
The offering cannot be marketed through any form of advertisement. No social media posts, public seminars, online listings, or mass solicitation.

The relationship-or-sophistication requirement trips up more issuers than any other. A brief LinkedIn connection or a single meeting at a pitch event probably does not qualify as a preexisting relationship. DFPI expects meaningful prior contact that gave the purchaser genuine insight into the character and competence of the management team. If you rely on sophistication instead, the purchaser’s professional adviser must be independent; someone compensated by the issuer or its affiliates doesn’t count.³

Who Counts Toward the 35-Purchaser Cap

The 35-person limit is a head count of purchasers, not offerees. Several categories of buyer are excluded entirely:³

Institutional investors under subdivision (i): banks, savings and loan associations, insurance companies, registered investment companies, pension and profit-sharing trusts (other than the issuer’s own), and other institutional investors or governmental entities designated by the Commissioner.
Officers, directors, affiliates of the issuer, and managers of an LLC issuer.
Any additional category the Commissioner excludes by rule.

A married couple, including custodians or trustees for their minor children, counts as one person. A corporation, partnership, or LLC counts as one person as long as it was not formed specifically to participate in this offering. DFPI’s own FAQ characterizes the 35-person cap as applying to unaccredited investors, reflecting that institutional buyers and insiders are already excluded.¹ An individual accredited investor who is not an insider or institutional buyer still counts toward the 35.

Filing Fee

The fee is based on the total value of securities proposed to be sold in the offering, not just the California portion. The schedule has been in place since October 2004:⁴

$25,000 or less: $25
$25,001 to $100,000: $35
$100,001 to $500,000: $50
$500,001 to $1,000,000: $150
Over $1,000,000: $300

Fees are non-refundable and must be paid when you submit the notice. FRANSES calculates the amount automatically after you enter your offering details.⁵

How to File Through FRANSES

FRANSES (Franchise and Securities Electronic Submissions) replaced the older DOCQNET portal. Access it at franses.dfpi.ca.gov.⁵ The process:

Create an account or log in. New filers register first. Returning filers can manage and track prior submissions from the same account.
Select the 25102(f) exemption type and fill in the form fields above.
Upload attachments. If your company is organized outside California and does not already have a consent to service of process on file, attach Form 260.165.
Pay the fee. The portal accepts credit cards and ACH transfers. Once payment is approved, the filing is submitted.

Paper filing remains available as a hardship exception for filers unable to use the electronic system. If you go that route, the form packet includes a hardship section (Item 8) where you must describe why electronic filing isn’t feasible.² The regulation at Title 10 CCR Section 260.102.14 covers the paper process.⁶

The 15-Day Deadline and What Happens If You Miss It

The notice must be filed within 15 calendar days after the first sale of a security in California.¹ The first sale is generally the date the first investor becomes irrevocably committed to invest, typically when they sign the subscription agreement and the company accepts it, not when funds actually transfer.

Missing the 15-day window does not kill the exemption. The statute explicitly says that failure to file, or failure to file on time, does not affect the availability of the 25102(f) exemption itself.³ Your offering remains exempt as long as it met the four substantive conditions.

A late filing does carry a financial penalty. If you discover you missed the deadline, or if the Commissioner demands the filing, you have 15 business days to file the notice and pay a fee equal to what you would have owed had you gone through full qualification under Section 25110.³ That qualification fee is $200 plus one-fifth of one percent of the aggregate value of securities sold in California, up to a maximum of $2,500.⁷ The gap between that and the normal $25 to $300 notice fee is the reason to file on time.

Coordinating with Federal Form D

Filing the California notice does not satisfy your federal obligations. If your offering also relies on Regulation D (Rule 506(b) or 506(c)) under federal securities law, and most 25102(f) offerings do, you must separately file Form D with the SEC through EDGAR within 15 days of the first sale.⁸ The SEC does not charge a filing fee for Form D.

Federal law preempts California from requiring full qualification of a Rule 506 offering, but the state retains the authority to require notice filings and collect fees.⁹ The LOEN is that state notice. Plan to file federal Form D on EDGAR and the state LOEN on FRANSES within the same 15-day window after your first sale.

One incompatibility to watch: Rule 506(c) permits general solicitation, but 25102(f) always prohibits advertising. An issuer running a publicly marketed Rule 506(c) round cannot simultaneously rely on 25102(f) for the California notice.

Common Mistakes That Cause Problems

The advertising prohibition catches founders off guard. Posting about your fundraise on LinkedIn, tweeting that you’re raising a seed round, or sending a pitch deck to a cold email list all count as advertising under the statute. The prohibition applies to the offer, not just the sale, so soliciting interest from strangers before any money changes hands can blow the exemption.

Sloppy purchaser documentation is the next most common issue. Every buyer needs a signed representation that they are purchasing for investment and not for resale. That language typically lives in the subscription agreement. Closing a round without collecting signed subscription agreements from every investor leaves a gap in your compliance records that is hard to fix later.

Miscounting purchasers rounds out the list. The 35-person cap includes buyers outside California, and an entity formed specifically to invest in your offering counts as multiple persons, one for each beneficial owner. Spouses count as one person. Unmarried co-investors each count separately.

1
Department of Financial Protection and Innovation. Securities – Frequently Asked Questions and Answers
2
Department of Financial Protection and Innovation. DFPI-260.102.14(c) Packet
3
California Legislative Information. California Corporations Code 25102
4
Department of Financial Protection and Innovation. Filing Fees for the 25102(f) and Rule 260.103
5
Department of Financial Protection and Innovation. Information on DFPI’s Franchise and Securities Filing System – FRANSES
6
Department of Financial Protection and Innovation. 260.102.14 Limited Offering Exemption Notice of Transaction
7
California Legislative Information. California Corporations Code CORP 25608
8
U.S. Securities and Exchange Commission. Filing a Form D Notice
9
U.S. Securities and Exchange Commission. Private Placements – Rule 506(b)