TITLE 5

Banking

Banks and Trust Companies

CHAPTER 7. CORPORATION LAW FOR STATE BANKS AND TRUST COMPANIES

Subchapter II. Formation of Bank or Trust Company


Repealed by 70 Del. Laws, c. 6, § 2, eff. Feb. 10, 1995.;

Three or more persons, at least 2 of whom must be citizens and residents of this State, of lawful age who associate themselves by a written agreement, hereinafter called "articles of association," for the purpose of forming a bank or trust company may, upon compliance with this chapter, become a corporation, with the powers conferred by this chapter and subject to the regulations prescribed by this chapter and subject also to the regulations prescribed for banks and trust companies by any general statute of this State. Notwithstanding the foregoing, in the case of a trust company that is a limited liability company, 1 or more persons, whether individuals or nonnatural persons, each of whom will be an initial stockholder of the limited liability company and regardless of the citizenship, residency or domicile of such persons, who associate themselves by a written agreement, or in the case of 1 person, who executes a written agreement, in each case hereinafter called "articles of association," for the purpose of forming a trust company may, upon compliance with this chapter, form a limited liability company with the powers conferred by this chapter and subject to the regulations prescribed for trust companies by any general statute of this State.

38 Del. Laws, c. 94, § 4; Code 1935, § 2373; 5 Del. C. 1953, § 722; 63 Del. Laws, c. 3, § 1; 71 Del. Laws, c. 25, § 8; 76 Del. Laws, c. 383, § 5.;

(a) The articles of association shall set forth that the subscribers thereto associate themselves with the intention of forming a corporation, and shall specifically state:

(1) The name by which the corporation shall be known;

(2) The purpose for which it is formed;

(3) The city or town where its place of business will be located;

(4) The amount of its capital stock, and the number of shares into which it is to be divided;

(5) The number of its directors, which shall not be less than 5;

(6) Whether or not the corporation is to have perpetual existence, and if not the time when its existence is to cease;

(7) Whether the private property of the stockholders shall be subject to the payment of corporate debts, and if so, to what extent.

(b) The articles of association may also contain other provisions defining, limiting and regulating the powers of the corporation, the powers and duties of the directors, and the powers of the stockholders, if such provisions are consonant with the object, purpose and provisions of this chapter and are not in conflict with this Code or any other general statute of this State relating to banks and trust companies.

(c) Each incorporator shall subscribe to the articles his or her name, residence, post-office address and the number of shares of stock which he or she agrees to take, and shall acknowledge the same to be his or her act and deed before some officer authorized by the laws of this State to take acknowledgments of deeds.

(d) The articles of association may contain an article which provides that any article or provision thereof shall not be amended, modified, repealed or otherwise changed in any manner whatsoever. Such an article, when approved by the Commissioner under § 729 of this title, shall be valid, binding and enforceable against the corporation and its shareholders notwithstanding any other provision of this title.

38 Del. Laws, c. 94, § 5; Code 1935, § 2374; 5 Del. C. 1953, § 723; 64 Del. Laws, c. 386, § 1; 70 Del. Laws, c. 186, § 1.;

Notice of the intention of the incorporators to form a bank or trust company shall be given to the State Bank Commissioner, and a notice in such form as the Commissioner shall approve shall be published at least once a week, for 2 successive weeks, in 1 or more newspapers designated by the Commissioner, at least 1 of which newspapers shall be published in the county where it is proposed to establish the bank or trust company. The published notice shall specify the names of all the associates, the name of the proposed corporation, the city or town where it is to be located, and the amount of its capital stock.

38 Del. Laws, c. 94, § 6; Code 1935, § 2375; 5 Del. C. 1953, § 724; 57 Del. Laws, c. 740, § 19A; 71 Del. Laws, c. 254, § 6.;

Within 60 days after the second publication of the notice of intention to incorporate but not before the expiration of 20 days from the date of the second publication, the incorporators shall apply to the State Bank Commissioner for a certificate that public convenience and advantage will be promoted by the establishment of the bank or trust company.

38 Del. Laws, c. 94, § 6; Code 1935, § 2375; 5 Del. C. 1953, § 725; 57 Del. Laws, c. 740, § 19A; 71 Del. Laws, c. 254, § 7.;

Upon the application for a certificate that public convenience and advantage will be promoted by the establishment of the bank or trust company, the State Bank Commissioner shall consider and determine whether public convenience and advantage would be promoted by the establishment of the bank or trust company, and whether the terms and provisions of the articles of association are in compliance with this chapter and shall issue or refuse to issue a certificate in accordance with such determination. If the Commissioner refuses to issue a certificate, no further proceedings shall be had, but the application may be renewed after 1 year from the date of the refusal. If the Commissioner issues the certificate, the incorporators shall hold the first meeting and follow the procedure prescribed by § 727 of this title.

38 Del. Laws, c. 94, § 7; Code 1935, § 2376; 5 Del. C. 1953, § 726; 57 Del. Laws, c. 740, § 19A.;

(a) The first meeting of the incorporators shall be called by a notice signed either by the incorporator who is designated in the articles of association for the purpose, or by a majority of the incorporators. The notice shall state the time, place and purposes of the meeting. A copy of the notice shall, at least 7 days before the day appointed for the meeting, be given to each incorporator, or left at the incorporator's residence or usual place of business, or deposited in the post office, postage prepaid, and addressed to the incorporator at his or her residence or usual place of business, and another copy thereof and an affidavit of 1 of the incorporators that the notice has been duly served shall be filed and recorded with the records of the corporation. If all the incorporators shall in writing, endorsed upon the articles of association, waive such notice and fix the time and place of the meeting, no notice shall be required.

(b) At the first meeting, or at any adjournment thereof, the incorporators shall organize by the choice by ballot of a temporary secretary, by the adoption of bylaws and by the election in such manner as the bylaws may determine, of directors, a president, a secretary, and such other officers as the bylaws may prescribe. All the officers so elected shall be sworn to the faithful performance of their duties. The temporary secretary shall make and attest a record of the proceedings until the secretary has been chosen and sworn, including a record of such choice and qualification.

38 Del. Laws, c. 94, § 8; Code 1935, § 2377; 5 Del. C. 1953, § 727; 70 Del. Laws, c. 186, § 1.;

The president and a majority of the directors elected at the organization meeting of the incorporators shall make, sign and make oath to, a certificate (hereinafter called "articles of organization") setting forth:

(1) A true copy of the articles of association;

(2) The names of the subscribers thereto;

(3) The name, residence and post-office address of each of the officers of the corporation; and

(4) The date of the first meeting and the successive adjournments thereof, if any.

38 Del. Laws, c. 94, § 9; Code 1935, § 2378; 5 Del. C. 1953, § 728.;

The articles of organization, together with the records of the proposed corporation, shall be submitted to the State Bank Commissioner. The Commissioner shall examine the same, and may require such amendment thereof or such additional information as it may consider proper or necessary. If the Commissioner finds that the provisions of law have been complied with, the Commissioner shall endorse its approval upon the articles of organization.

38 Del. Laws, c. 94, § 9; Code 1935, § 2378; 5 Del. C. 1953, § 729; 57 Del. Laws, c. 740, § 19A.;

The articles of organization with the endorsement of the State Bank Commissioner shall, within 30 days after the date of the endorsement, be filed in the office of the Secretary of State.

38 Del. Laws, c. 94, § 9; Code 1935, § 2378; 5 Del. C. 1953, § 730; 57 Del. Laws, c. 740, § 19A.;

(a) Upon the filing of the articles of organization as required by § 730 of this title, the Secretary of State shall issue a certificate of incorporation in the following form:

STATE OF DELAWARE

Be it known that whereas (the names of the incorporators) have associated themselves with the intention of forming a corporation under the name of (the name of the corporation), for the purpose (the purpose declared in the articles of association), with a capital stock of (the amount fixed in the articles of association), and having its place of business in (the city or town where its place of business will be located) and have complied with the statutes of this State in such case made and provided, as appears from the articles of organization of the corporation, duly approved by the State Bank Commissioner and on file in this office; now, therefore, I (the name of the Secretary of State), Secretary of the State of Delaware, do hereby certify that (the names of the incorporators), their associates and successors, are legally organized and established as, and are hereby made, an existing corporation under the name of (name of the corporation), with the powers, rights and privileges, and subject to the limitations, duties and restrictions which by law appertain thereto.

Witness my official signature hereunto subscribed, and the great Seal of the State of Delaware hereunto affixed, this........... day of.......... in the year..... (the date of the filing of the articles of organization).

(b) Notwithstanding the foregoing, in the case of a trust company that is a limited liability company, upon the filing of the articles of organization as required by § 730 of this title, the Secretary of State shall issue a certificate of formation in the following form:

STATE OF DELAWARE

Be it known that whereas (the name(s) of the incorporator(s)) [has executed articles of association for the purpose][have associated themselves with the intention] of forming a limited liability company under the name of (the name of the limited liability company), for the purpose (the purpose declared in the articles of association), with a capital stock of (the amount fixed in the articles of association), and having its place of business in (the city or town where its place of business will be located) and [has][have] complied with the statutes of this State in such case made and provided, as appears from the articles of organization of the limited liability company, duly approved by the State Bank Commissioner and on file in this office; now, therefore, I (the name of the Secretary of State), Secretary of the State of Delaware, do hereby certify that (the name(s) of the incorporator(s)), [his][her][its][their] associates and successors, are legally formed and established as, and [is][are] hereby made, an existing limited liability company under the name of (name of the limited liability company), with the powers, rights and privileges, and subject to the limitations, duties and restrictions which by law appertain thereto.

Witness my official signature hereunto subscribed, and the great Seal of the State of Delaware hereunto affixed, this...........day of..........in the year.....(the date of the filing of the articles of organization).

(c) The Secretary of State shall sign the certificate of incorporation or certificate of formation, as applicable, and cause the Great Seal of the State to be thereto affixed and shall deliver the same to the corporation or the limited liability company, as applicable, together with a certified copy of the articles of organization and the endorsement of the State Bank Commissioner thereon, upon payment of the costs and charges therefor. A certified copy of the certificate shall be kept on file in the office of the Secretary of State with the articles of organization, and the certificate together with the articles of organization and the endorsement thereon of the State Bank Commissioner shall be recorded in the office of the recorder of deeds for the county in which the place of business of the corporation is to be located.

(d) The certificate or a copy thereof duly certified by the Secretary of State, together with a certified copy of the articles of organization and the endorsement thereon of the State Bank Commissioner, accompanied with the certificate of the recorder of deeds for the county wherein the same is recorded under his or her hand and the seal of his or her office, stating that the certificate and articles of organization have been recorded in the office of the recorder, or a copy of the record duly certified by the recorder, shall be evidence in all courts of this State.

38 Del. Laws, c. 94, § 9; Code 1935, § 2378; 5 Del. C. 1953, § 731; 57 Del. Laws, c. 740, § 19A; 70 Del. Laws, c. 186, § 1; 76 Del. Laws, c. 383, §§ 6, 7.;

Upon the issuance of the certificate of incorporation or certificate of formation by the Secretary of State and the recording of the certificate and articles of organization as provided in § 731 of this title, the corporation or limited liability company named in such certificate and articles of organization shall from the date of the certificate be and constitute a corporation or limited liability company, for the purposes and by the name set forth in the certificate, subject to dissolution, termination or the revocation or forfeiture of the franchise under this chapter or under this Code or any other statute of this State relating to the dissolution or termination of or to the revocation or forfeiture of the charter or franchise of banks or trust companies; but the corporation or limited liability company shall not have the right to do any business until it has secured from the State Bank Commissioner of this State the certificate provided for in § 733 of this title.

38 Del. Laws, c. 94, § 9; Code 1935, § 2378; 5 Del. C. 1953, § 732; 76 Del. Laws, c. 383, § 8.;

A certified copy of the certificate of incorporation and of the articles of organization and the endorsement of the approval of the State Bank Commissioner shall be filed with the State Bank Commissioner; and when the whole capital stock has been issued, a list of the stockholders, with the name, residence and post-office address of each, and the number of shares held by each, shall be filed with the State Bank Commissioner, which list shall be certified by the president and the cashier or treasurer of the corporation. Upon receipt of the list the Commissioner shall cause an examination to be made of the method of payment of the capital stock and if, after such examination, it appears that the whole capital stock has been paid in cash, and that all requirements of this Code and any other law have been complied with, the Commissioner shall issue a certificate authorizing the corporation to begin the transaction of business. No corporation shall begin the transaction of business until a certificate has been granted.

38 Del. Laws, c. 94, § 10; Code 1935, § 2379; 5 Del. C. 1953, § 733; 57 Del. Laws, c. 740, § 19A.;

Every corporation created under this chapter shall, after the expiration of a reasonable time from the date of its incorporation, as determined by the State Bank Commissioner, be actively engaged in the business for which it was created or its certificate of incorporation and corporate franchise shall be deemed and held to be revoked. The Commissioner shall by regulations prescribe the criteria to be applied in determining what constitutes a reasonable period of time.

38 Del. Laws, c. 94, § 33; Code 1935, § 2402; 5 Del. C. 1953, § 734; 63 Del. Laws, c. 3, § 2.;

The following fees shall be collected by and paid to the Secretary of State, for the use of the State:

(1) For making and issuing the certificate of incorporation, $11.50;

(2) For making the certified copy of the articles of association, $11.50;

(3) For making the certified copy of the certificate of incorporation to be kept on file in the office of the Secretary of State and for filing and indexing the same and the articles of association in said office, $5.75;

(4) For supplying any additional certified copy of the certificate of incorporation or articles of association requested by the corporation, $5.75.

Before issuing the certificate authorizing the corporation to begin the transaction of business, the State Bank Commissioner shall collect from the corporation, for the use of the State, the sum of $5,750. In addition the applicant shall pay an investigation fee of $1,150 which shall not be refundable and shall be submitted with the application.

38 Del. Laws, c. 94, § 34; Code 1935, § 2403; 5 Del. C. 1953, § 735; 60 Del. Laws, c. 268, §§ 2, 3; 67 Del. Laws, c. 260, § 1; 68 Del. Laws, c. 9, § 7.;