S 800 Session 111 (1995-1996)
S 0800 General Bill, By Wilson
Similar(H 4015)
A Bill to amend Section 33-37-260, Code of Laws of South Carolina, 1976,
relating to amendments to charters for business development corporations, so
as to delete the provision prohibiting the creation of new classes of stock;
to amend Section 33-37-410, relating to members, stockholders, and bondholders
of the corporations, so as to clarify the authorized investors and investment
limits; to amend Section 33-37-450, relating to voting by stockholders and
members of the corporation, so as to revise the provisions to make them
consistent and compatible with having new classes of stock; to amend Section
33-37-460, as amended, relating to loans to the corporation, so as to revise
the provisions for loan limits and investment limits; to amend Section
33-37-630, relating to the election of the board of directors of corporations,
so as to clarify the requirements for election; and to amend the 1976 Code by
adding Section 33-37-470 so as to authorize the issuance of new classes of
stock and Article 9 to Chapter 37, Title 33 so as to provide for application
of the Business Corporations Act.
05/01/95 Senate Introduced and read first time SJ-16
05/01/95 Senate Referred to Committee on Judiciary SJ-16
05/23/95 Senate Recalled from Committee on Judiciary SJ-121
05/23/95 Senate Read second time SJ-121
05/23/95 Senate Ordered to third reading with notice of
amendments SJ-121
05/29/95 Senate Read third time and sent to House SJ-13
05/30/95 House Introduced and read first time HJ-7
05/30/95 House Referred to Committee on Labor, Commerce and
Industry HJ-8
Indicates Matter Stricken
Indicates New Matter
RECALLED
May 23, 1995
S. 800
Introduced by SENATOR Wilson
S. Printed 5/23/95--S.
Read the first time May 1, 1995.
A BILL
TO AMEND SECTION 33-37-260, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO AMENDMENTS TO
CHARTERS FOR BUSINESS DEVELOPMENT
CORPORATIONS, SO AS TO DELETE THE PROVISION
PROHIBITING THE CREATION OF NEW CLASSES OF
STOCK; TO AMEND SECTION 33-37-410, RELATING TO
MEMBERS, STOCKHOLDERS, AND BONDHOLDERS OF THE
CORPORATIONS, SO AS TO CLARIFY THE AUTHORIZED
INVESTORS AND INVESTMENT LIMITS; TO AMEND
SECTION 33-37-450, RELATING TO VOTING BY
STOCKHOLDERS AND MEMBERS OF THE CORPORATION,
SO AS TO REVISE THE PROVISIONS TO MAKE THEM
CONSISTENT AND COMPATIBLE WITH HAVING NEW
CLASSES OF STOCK; TO AMEND SECTION 33-37-460, AS
AMENDED, RELATING TO LOANS TO THE CORPORATION,
SO AS TO REVISE THE PROVISIONS FOR LOAN LIMITS
AND INVESTMENT LIMITS; TO AMEND SECTION 33-37-630,
RELATING TO THE ELECTION OF THE BOARD OF
DIRECTORS OF CORPORATIONS, SO AS TO CLARIFY THE
REQUIREMENTS FOR ELECTION; AND TO AMEND THE
1976 CODE BY ADDING SECTION 33-37-470 SO AS TO
AUTHORIZE THE ISSUANCE OF NEW CLASSES OF STOCK
AND ARTICLE 9 TO CHAPTER 37, TITLE 33 SO AS TO
PROVIDE FOR APPLICATION OF THE BUSINESS
CORPORATIONS ACT.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Section 33-37-260 of the 1976 Code is amended
to read:
"Section 33-37-260. The charter may be amended by the
votes of the stockholders and the members of the
corporation, voting separately by classes, and
such. The amendments shall require
approval by the affirmative vote of two-thirds of the votes
to which the stockholders shall be are entitled and
two-thirds of the votes to which the members shall
be are entitled; provided, that. No
amendment of the charter which is inconsistent with the general
purposes expressed in this chapter, which authorizes any
additional class of capital stock to be issued or which eliminates
or curtails the right of the Secretary of State to examine the
corporation or the obligation of the corporation to make reports as
provided by law shall may be made without
amendment of this chapter; and provided, further,
that. No amendment of the charter which increases
the obligation of a member to make loans to the corporation, makes
any a change in the principal amount, interest
rate, or maturity date or in the security or credit position of
any an outstanding loan of a member to the
corporation, affects a member's right to withdraw from membership
as provided in Section 33-37-430, or affects a member's
voting rights as provided in Sections 33-37-440 and 33-37-450
shall may be made without the consent of each
member affected by such the amendment."
SECTION 2. Section 33-37-410 of the 1976 Code is amended
to read:
"Section 33-37-410. In addition to other persons
and notwithstanding any provision of any general or special
law or any provision in their respective charters, agreements of
association, articles of organization, or trust
indentures,:
(a)(1) All domestic corporations organized for
the purpose of carrying on business within this State, including
without implied limitation any public utility companies and
insurance and casualty companies, foreign corporations licensed to
do business in the State, and all trusts, may
acquire, purchase, hold, sell, assign, transfer, mortgage,
pledge, or otherwise dispose of any bonds,
securities, or other evidences of indebtedness created by or
the shares of the capital stock of the corporation and while owners
of such the stock may exercise all the rights,
powers, and privileges of ownership, including the right to
vote thereon on it, all without the approval of
any a regulatory authority of the State;.
(b)(2) All financial institutions may become
members of the corporation and make loans to the corporation as
provided in this chapter;.
(c)(3) A financial institution which does not
become a member of the corporation shall may not
be permitted to acquire any shares of the capital stock of the
corporation; and.
(d)(4) Each financial institution which becomes
a member of the corporation may acquire, purchase, hold, sell,
assign, transfer, mortgage, pledge, or otherwise dispose of
any bonds, securities, or other evidences of
indebtedness created by or the shares of the capital stock of the
corporation and while owners of such the stock may
exercise all the rights, powers, and privileges of ownership,
including the right to vote thereon on it, all
without the approval of any a regulatory authority
of the State; provided, that. The amount of the
capital stock of the corporation which may be acquired by
any a member pursuant to the authority granted
herein shall in this section may not exceed
ten five percent of the loan limit capital
and surplus of such the member. The amount
of capital stock of the corporation which any a
member is authorized to may acquire pursuant to
the authority granted herein in this section is in
addition to the amount of capital stock in corporations which
such the member may otherwise be
is authorized to acquire."
SECTION 3. Section 33-37-450 of the 1976 Code is amended
to read:
"Section 33-37-450. (A) As to all matters requiring action
by the stockholders and the members and the
stockholders of the corporation, the stockholders and
the members and the holders of each class of stock, of
which there are then shares authorized and outstanding for which
votes are entitled to be cast, shall vote separately
thereon on the matters by classes, and,
except as otherwise provided in this chapter, such
these matters shall require the affirmative vote of a
majority of the votes to which the stockholders
members present or represented at the meeting shall
be are entitled and the affirmative vote of a majority of
the votes to which the members entitled to be cast with
respect to the shares of each class of stock of which there are
holders present or represented at the meeting shall be
entitled.
(B) Unless otherwise provided in the charter of the
corporation, each stockholder shall have has
one vote, in person or by proxy, for each share of capital stock held
by him, and each member shall have one vote, in person or by
proxy, except that any. However, a member having
a loan limit of more than one thousand dollars shall have
has one additional vote, in person or by proxy, for each
additional one thousand dollars which such the
member is authorized to have outstanding on loans to the
corporation at any one time as determined under item (3)(b)
of Section 33-37-460(3)(b)."
SECTION 4. Section 33-37-460 of the 1976 Code, as amended
by Section 522, Act 181 of 1993, is further amended to read:
"Section 33-37-460. Each member of the corporation shall
make loans to the corporation as and when called upon by it to do
so on such terms and other conditions as shall
be approved from time to time by the board of directors,
subject to the following conditions:
(1) All loan limits shall must be established at
the thousand dollar amount nearest to the amount computed in
accordance with the provisions of this section.
(2) No loan to the corporation shall may be
made if immediately thereafter after the loan the
total amount of the obligations of the corporation would
exceed exceeds ten times the amount then paid in on
the outstanding capital stock of the corporation.
(3) The total amount outstanding on loans to the corporation
made by any a member at any one time, when
added to the amount of the investment in capital stock of the
corporation then held by such the member,
shall may not exceed:
(a) twenty percent of the total amount then outstanding on
loans to the corporation by all members, including in the total
amount outstanding amounts validly called for loan but not yet
loaned, provided, that. However, the conditions
of this subitem (a) shall do not apply to short-term
loans to the corporation when the loan shall later be
is repaid:
(i) from a general loan call to the corporation to
be prorated among all members of the corporation as provided in
item (4) of this section,; or
(ii) through the sale of participations in loans
made by the corporation; or
(b) the following limits, to be determined initially
as of the time such the member becomes a member
on the basis of the audited balance sheet of such the
member at the close of its fiscal year immediately preceding its
application for membership, or in the case of for an
insurance company, its last annual statement to the Director
of the Department of Insurance or his designee and annually
after that time based upon the audited balance sheet of the member
at the close of its fiscal year immediately preceding the first day of
the fiscal year of the corporation for which the limit is to be
determined, or for an insurance company, the last annual statement
to the Director of the Department of Insurance, or his designee,
before the fiscal year of the corporation for which the limit is to be
determined:
(i) two five percent of the capital and
surplus of commercial banks and trust companies,;
(ii) one percent of the total outstanding loans made by a
building and loan association, provided,.
However, that any a business development
corporation created pursuant to this chapter may in its
charter or by appropriate amendment thereto to it
may provide that the loan limit of a building and loan
association member shall may be only one half of
one percent of the total outstanding loans made by such
the building and loan association member,;
(iii) one percent of the capital and unassigned surplus of
stock insurance companies, except fire insurance
companies,;
(iv) one percent of the unassigned surplus of mutual
insurance companies, except fire insurance
companies,;
(v) one tenth of one percent of the assets of fire insurance
companies and;
(vi) such the limits as may be
approved by the board of directors of the corporation for other
financial institutions.
(4) Subject to item (3)(a) of this section, each call
made by the corporation shall must be prorated
among the members of the corporation in substantially the same
proportion that the adjusted loan limit of each member bears to the
aggregate of the adjusted loan limits of all members. The adjusted
loan limit of a member shall must be the amount of
such the member's loan limit, reduced by the
balance of outstanding loans made by such the
member to the corporation and the investment in capital stock of
the corporation held by such member at the time of such call.
(5) All loans to the corporation by members shall
must be evidenced by bonds, debentures, notes, or
other evidences of indebtedness of the corporation which shall
be are freely transferable at all times and which
shall must bear interest at a rate of not less than one
quarter of one percent in excess of the rate of interest determined
by the board of directors to be the prime rate prevailing at the date
of issuance thereof on unsecured commercial loans.
(6) A member shall is not be obligated
to make any loans to the corporation pursuant to calls made
subsequent to the withdrawal of the member.
(7) If two or more members or a member and another
entity which is not a member but which is eligible to become a
member merge or consolidate, the organization merged or
consolidated shall elect that its total amount on loan to the
corporation must be equal to the combined loan limits of the
members or the loan limit of the member merging or consolidating
with the other entity, determined immediately before the merger or
consolidation."
SECTION 5. Section 33-37-630 of the 1976 Code is amended
to read:
"Section 33-37-630. The board of directors shall
must be elected in the first instance by the incorporators
and thereafter after that time at each annual meeting
of the corporation or, if no annual meeting shall be
is held in any year, at the time fixed by the
bylaws, at a special meeting held in lieu of the annual meeting. At
each annual meeting, or at each special meeting held in lieu of the
annual meeting, the members of the corporation shall elect two-thirds of the board of directors, and the stockholders shall elect
the remaining directors in the manner prescribed in the charter
of the corporation. The directors shall must
hold office until the next annual meeting of the corporation or
special meeting held in lieu of the annual meeting after their
election and until their successors are elected and qualified unless
sooner removed in accordance with the provisions of the bylaws.
Any A vacancy in the office of a director elected by
the members shall must be filled by the directors
elected by the members, and any a vacancy in the
office of a director elected by the stockholders shall
must be filled by the directors elected by the
stockholders."
SECTION 6. Article 5, Chapter 37, Title 33 of the 1976 Code
is amended by adding:
"Section 33-37-470. The board of directors have the power
to issue shares of capital stock of the corporation in the classes,
series, and denominations set forth in the charter of the corporation,
to the same extent and subject to the same restrictions as are
otherwise applicable to business corporations organized under the
laws of South Carolina under Chapters 1 through 20 of this title.
However, the corporation may not issue shares of any series or
class of stock with rights, restrictions, or other attributes which
would impair or limit the rights of members under this chapter or
impair or limit the rights given to stockholders generally under this
chapter."
SECTION 7. Chapter 37, Title 33 of the 1976 Code is amended
by adding:
"Article 9
Application of General Corporation Law
Section 33-37-910. Chapters 1 through 20 of this title apply to
every corporation organized pursuant to this chapter, except as
otherwise provided in Chapters 1 through 20 of this title or by this
chapter. If there is a conflict between the provisions of Chapters 1
through 20 of this title and Chapter 37 with respect to a corporation
organized under this chapter, this chapter controls."
SECTION 8. This act takes effect July 1, 1995.
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