QuestionsQuestions (Acts No. 1834)
Acts No. 1834 amends specific sections of the Corporation Law—on (1) the form of the treasurer’s oath in stock corporations, (2) the requirement for filing articles of incorporation for stock corporations, and (3) restrictions and penalties related to banking corporations’ use of banking-related terms and advertisement/holding out as engaged in banking business.
The treasurer must swear that he was duly elected by the subscribers, authorized to receive subscriptions, and that at least 20% of the entire capital stock has been subscribed and at least 25% of the subscription has been either (a) actually paid in cash to him for the corporation’s benefit and credit, or (b) property of fair valuation equal to 25% of the subscription has been transferred to him in trust and received for the corporation’s benefit.
The oath must include a description of the property transferred and a statement of its fair valuation, showing that the fair valuation equals at least 25% of the subscription.
It must state the date of the treasurer’s election, that he was elected by the subscribers named in the articles, and that he will act as treasurer until his successor is duly elected and qualified in accordance with the by-laws.
The statement must be executed by a treasurer “elected by the subscribers” for the purpose of showing the required subscription and payment/valuation thresholds.
At least 20% of the entire capital stock must be subscribed, and at least 25% of the subscription must be either (a) paid in actual cash to the treasurer for the corporation’s benefit and credit, or (b) represented by transferred property received by the treasurer in trust with fair valuation equal to 25% of the subscription.
It shall not file the articles of incorporation of any stock corporation unless the required sworn statement of the treasurer is attached showing compliance with the subscription and payment/valuation requirements.
Property may be used. The sworn statement may show that property has been transferred to the treasurer in trust and received, with fair valuation equal to 25% of the subscription, instead of actual cash.
It must state the specific amount of such capital stock that has actually been paid in cash in the advertisement.
They must not advertise or hold themselves out as engaged in a banking business, must not use words in their business title like “bank,” “banking,” “banker,” or “trust company,” or similar import, and must not solicit or receive deposits or transact any kind of banking business except as allowed by compliance requirements for savings and mortgage banks, banking corporations, or trust corporations under the Act.
They are prohibited from: (1) advertising/holding out as banking businesses, (2) using banking-related words in their titles, (3) soliciting or receiving deposits of money for deposit/disbursement/keeping or otherwise, and (4) transacting any kind of banking business without first complying with the Act’s relevant provisions.
The officers and directors are jointly and severally liable for any violation of the provisions of Sec. 130.
A fine of five hundred pesos for each day the violation continues; in default of payment, subsidiary imprisonment as prescribed by law.
It covers both advertising/holding out and conduct. It restricts advertising and use of banking terms in title, and also prohibits soliciting/receiving deposits and transacting banking business, unless the entity complies with the Act as it relates to the relevant classes of banking corporations.
It takes effect on its passage.