When forming a subsidiary corporation, many lawyers rely on the exemption contained in Corporations Code Section 25102(f) or upon federal preemption via Corporations Code Section 25102.1(d).  Both of these sections require the filing of a notice with the Commissioner of Corporations (although the failure to file a notice of exemption under Section 25102(f) does not affect the availability of the exemption).   The issuer also must pay a filing fee with either notice.  

In some cases, however, it is possible to avoid filing a notice and paying a fee.  Corporations Code Section 25102(i)(2) exempts the offer and sale of a security to any corporation with outstanding securities registered under Section 12 of the Securities Exchange Act of 1934 or any wholly owned subsidiary of the corporation that after the offer and sale will own directly or indirectly 100% of the outstanding capital stock of the issuer.  While this exemption does not require the filing of a notice or payment of a fee, the purchaser must represent that it is purchasing for its own account for investment and not with a view to or for sale in connection with any distribution of the security.