State Codes and Statutes
Statutes > Texas > Agriculture-code > Title-4-agricultural-organizations > Chapter-54-mutual-loan-corporations
AGRICULTURE CODE
TITLE 4. AGRICULTURAL ORGANIZATIONS
CHAPTER 54. MUTUAL LOAN CORPORATIONS
Sec. 54.001. PURPOSE. A corporation may be formed under this
chapter to aid shareholders of its common stock in:
(1) producing, or producing and marketing, staple agricultural
products; or
(2) acquiring, raising, breeding, fattening, or marketing
livestock.
Acts 1981, 67th Leg., p. 1119, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.002. POWERS. (a) A corporation formed under this
chapter may make loans to shareholders of its common stock for:
(1) the production, or production and marketing, of staple
agricultural products;
(2) the acquisition, raising, breeding, fattening, or marketing
of livestock; or
(3) the purchase of capital stock of the corporation.
(b) To obtain money for loans, the corporation may purchase,
sell, endorse, or discount notes of the shareholders of its
common stock if the notes are secured by:
(1) warehouse receipts or shipping documents for the
shareholder's agricultural products;
(2) chattel mortgages on the livestock or crops of the
shareholder; or
(3) other acceptable security.
(c) By endorsing a note under Subsection (b) of this section, a
corporation becomes liable as a principal maker of the note.
Acts 1981, 67th Leg., p. 1119, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.003. INCORPORATORS. Ten or more persons, five of whom
are citizens of this state, may form a corporation under this
chapter.
Acts 1981, 67th Leg., p. 1119, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.004. CAPITAL STOCK REQUIREMENT FOR INCORPORATION. At
the time of filing the articles of incorporation, a corporation
formed under this chapter must have fully paid-up capital stock
of $10,000 or more.
Acts 1981, 67th Leg., p. 1119, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.005. CAPITAL STOCK. (a) The incorporators or the board
of directors of a corporation formed under this chapter may
divide the corporation's capital stock into preferred and common
stock.
(b) If preferred stock is to be issued, the articles of
incorporation must state:
(1) the amount of preferred stock that the corporation may
issue;
(2) the conditions and procedure for the payment of dividends on
preferred stock;
(3) the rate at which preferred stock dividends are paid; and
(4) the conditions and procedure for the retirement of preferred
and common stock.
(c) A corporation may not pay dividends on its common stock
until it has fully paid dividends on its preferred stock at the
rate provided by its articles of incorporation.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.006. INVESTMENT BY OTHER CORPORATIONS. After obtaining
the approval of the banking commissioner, any corporation
organized under the laws of this state other than a savings bank
may invest any part of its money in the preferred stock of a
corporation formed under this chapter.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.007. INVESTMENT OF CAPITAL. At all times, a corporation
formed under this chapter shall have $10,000 or more of its
capital invested in securities approved by law for investment by
savings banks.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.008. RATIO OF CAPITAL TO LOANS. (a) A corporation
formed under this chapter shall automatically increase its
capital stock at the rate of five percent of the amount of loans
made by the corporation to shareholders of its common stock.
(b) The corporation's articles of incorporation and bylaws must
state the requirement of Subsection (a) of this section.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.009. LOANS AND DISCOUNTS. (a) Except as provided by
this subsection, each applicant for a loan or discount by a
corporation formed under this chapter shall become a subscriber
of the corporation's common stock in an amount equal to or
greater than five percent of the amount of the loan or discount
for which the person has applied. The board of directors may
waive this requirement if the applicant owns a sufficient amount
of stock at the time of application.
(b) An applicant shall pay for the stock required to be
purchased under Subsection (a) of this section at or before the
time that the loan is closed or the discount is granted.
(c) The requirements of Subsections (a) and (b) of this section
must be stated in the articles of incorporation of a corporation
formed under this chapter.
(d) A corporation formed under this chapter may not make loans
in excess of an amount equal to 20 times its unimpaired capital
stock represented by the part of its capital stock that is
increased in accordance with Section 54.008 of this code.
(e) A corporation formed under this chapter may not charge a
shareholder of its common stock interest on a loan at a rate that
is greater than the rate of discount set by the Farm Credit
Administration for discounts made by the federal intermediate
credit banks plus three percent a year.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.010. LIABILITY OF SHAREHOLDER. (a) Except for debts
contracted between a corporation formed under this chapter and a
shareholder, a shareholder of common or preferred stock is not
liable for the debts, contracts, or engagements of the
corporation in an amount greater than the par value of the stock
owned by the shareholder.
(b) Both common and preferred stock are nonassessable.
Acts 1981, 67th Leg., p. 1121, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.011. REPURCHASE OF STOCK. (a) A corporation formed
under this chapter may purchase, out of its available funds, any
of its outstanding stock.
(b) The corporation shall pay book value for stock purchased
under this section, as conclusively determined by the
corporation's directors.
(c) A corporation formed under this chapter shall state the
provisions of Subsections (a) and (b) of this section in its
articles of incorporation.
Acts 1981, 67th Leg., p. 1121, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.012. REPORTS. Before January 11 and July 11 of each
year, a corporation formed under this chapter shall file with the
secretary of state a report showing:
(1) its financial condition on January 1 and July 1,
respectively; and
(2) the amount of outstanding preferred and common stock.
Acts 1981, 67th Leg., p. 1121, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.013. EXEMPTION FROM FRANCHISE TAX. Corporations formed
under this chapter are not required to pay franchise taxes.
Acts 1981, 67th Leg., p. 1121, ch. 388, Sec. 1, eff. Sept. 1,
1981.
State Codes and Statutes
Statutes > Texas > Agriculture-code > Title-4-agricultural-organizations > Chapter-54-mutual-loan-corporations
AGRICULTURE CODE
TITLE 4. AGRICULTURAL ORGANIZATIONS
CHAPTER 54. MUTUAL LOAN CORPORATIONS
Sec. 54.001. PURPOSE. A corporation may be formed under this
chapter to aid shareholders of its common stock in:
(1) producing, or producing and marketing, staple agricultural
products; or
(2) acquiring, raising, breeding, fattening, or marketing
livestock.
Acts 1981, 67th Leg., p. 1119, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.002. POWERS. (a) A corporation formed under this
chapter may make loans to shareholders of its common stock for:
(1) the production, or production and marketing, of staple
agricultural products;
(2) the acquisition, raising, breeding, fattening, or marketing
of livestock; or
(3) the purchase of capital stock of the corporation.
(b) To obtain money for loans, the corporation may purchase,
sell, endorse, or discount notes of the shareholders of its
common stock if the notes are secured by:
(1) warehouse receipts or shipping documents for the
shareholder's agricultural products;
(2) chattel mortgages on the livestock or crops of the
shareholder; or
(3) other acceptable security.
(c) By endorsing a note under Subsection (b) of this section, a
corporation becomes liable as a principal maker of the note.
Acts 1981, 67th Leg., p. 1119, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.003. INCORPORATORS. Ten or more persons, five of whom
are citizens of this state, may form a corporation under this
chapter.
Acts 1981, 67th Leg., p. 1119, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.004. CAPITAL STOCK REQUIREMENT FOR INCORPORATION. At
the time of filing the articles of incorporation, a corporation
formed under this chapter must have fully paid-up capital stock
of $10,000 or more.
Acts 1981, 67th Leg., p. 1119, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.005. CAPITAL STOCK. (a) The incorporators or the board
of directors of a corporation formed under this chapter may
divide the corporation's capital stock into preferred and common
stock.
(b) If preferred stock is to be issued, the articles of
incorporation must state:
(1) the amount of preferred stock that the corporation may
issue;
(2) the conditions and procedure for the payment of dividends on
preferred stock;
(3) the rate at which preferred stock dividends are paid; and
(4) the conditions and procedure for the retirement of preferred
and common stock.
(c) A corporation may not pay dividends on its common stock
until it has fully paid dividends on its preferred stock at the
rate provided by its articles of incorporation.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.006. INVESTMENT BY OTHER CORPORATIONS. After obtaining
the approval of the banking commissioner, any corporation
organized under the laws of this state other than a savings bank
may invest any part of its money in the preferred stock of a
corporation formed under this chapter.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.007. INVESTMENT OF CAPITAL. At all times, a corporation
formed under this chapter shall have $10,000 or more of its
capital invested in securities approved by law for investment by
savings banks.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.008. RATIO OF CAPITAL TO LOANS. (a) A corporation
formed under this chapter shall automatically increase its
capital stock at the rate of five percent of the amount of loans
made by the corporation to shareholders of its common stock.
(b) The corporation's articles of incorporation and bylaws must
state the requirement of Subsection (a) of this section.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.009. LOANS AND DISCOUNTS. (a) Except as provided by
this subsection, each applicant for a loan or discount by a
corporation formed under this chapter shall become a subscriber
of the corporation's common stock in an amount equal to or
greater than five percent of the amount of the loan or discount
for which the person has applied. The board of directors may
waive this requirement if the applicant owns a sufficient amount
of stock at the time of application.
(b) An applicant shall pay for the stock required to be
purchased under Subsection (a) of this section at or before the
time that the loan is closed or the discount is granted.
(c) The requirements of Subsections (a) and (b) of this section
must be stated in the articles of incorporation of a corporation
formed under this chapter.
(d) A corporation formed under this chapter may not make loans
in excess of an amount equal to 20 times its unimpaired capital
stock represented by the part of its capital stock that is
increased in accordance with Section 54.008 of this code.
(e) A corporation formed under this chapter may not charge a
shareholder of its common stock interest on a loan at a rate that
is greater than the rate of discount set by the Farm Credit
Administration for discounts made by the federal intermediate
credit banks plus three percent a year.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.010. LIABILITY OF SHAREHOLDER. (a) Except for debts
contracted between a corporation formed under this chapter and a
shareholder, a shareholder of common or preferred stock is not
liable for the debts, contracts, or engagements of the
corporation in an amount greater than the par value of the stock
owned by the shareholder.
(b) Both common and preferred stock are nonassessable.
Acts 1981, 67th Leg., p. 1121, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.011. REPURCHASE OF STOCK. (a) A corporation formed
under this chapter may purchase, out of its available funds, any
of its outstanding stock.
(b) The corporation shall pay book value for stock purchased
under this section, as conclusively determined by the
corporation's directors.
(c) A corporation formed under this chapter shall state the
provisions of Subsections (a) and (b) of this section in its
articles of incorporation.
Acts 1981, 67th Leg., p. 1121, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.012. REPORTS. Before January 11 and July 11 of each
year, a corporation formed under this chapter shall file with the
secretary of state a report showing:
(1) its financial condition on January 1 and July 1,
respectively; and
(2) the amount of outstanding preferred and common stock.
Acts 1981, 67th Leg., p. 1121, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.013. EXEMPTION FROM FRANCHISE TAX. Corporations formed
under this chapter are not required to pay franchise taxes.
Acts 1981, 67th Leg., p. 1121, ch. 388, Sec. 1, eff. Sept. 1,
1981.
State Codes and Statutes
Statutes >
Texas >
Agriculture-code >
Title-4-agricultural-organizations >
Chapter-54-mutual-loan-corporations AGRICULTURE CODE
TITLE 4. AGRICULTURAL ORGANIZATIONS
CHAPTER 54. MUTUAL LOAN CORPORATIONS
Sec. 54.001. PURPOSE. A corporation may be formed under this
chapter to aid shareholders of its common stock in:
(1) producing, or producing and marketing, staple agricultural
products; or
(2) acquiring, raising, breeding, fattening, or marketing
livestock.
Acts 1981, 67th Leg., p. 1119, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.002. POWERS. (a) A corporation formed under this
chapter may make loans to shareholders of its common stock for:
(1) the production, or production and marketing, of staple
agricultural products;
(2) the acquisition, raising, breeding, fattening, or marketing
of livestock; or
(3) the purchase of capital stock of the corporation.
(b) To obtain money for loans, the corporation may purchase,
sell, endorse, or discount notes of the shareholders of its
common stock if the notes are secured by:
(1) warehouse receipts or shipping documents for the
shareholder's agricultural products;
(2) chattel mortgages on the livestock or crops of the
shareholder; or
(3) other acceptable security.
(c) By endorsing a note under Subsection (b) of this section, a
corporation becomes liable as a principal maker of the note.
Acts 1981, 67th Leg., p. 1119, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.003. INCORPORATORS. Ten or more persons, five of whom
are citizens of this state, may form a corporation under this
chapter.
Acts 1981, 67th Leg., p. 1119, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.004. CAPITAL STOCK REQUIREMENT FOR INCORPORATION. At
the time of filing the articles of incorporation, a corporation
formed under this chapter must have fully paid-up capital stock
of $10,000 or more.
Acts 1981, 67th Leg., p. 1119, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.005. CAPITAL STOCK. (a) The incorporators or the board
of directors of a corporation formed under this chapter may
divide the corporation's capital stock into preferred and common
stock.
(b) If preferred stock is to be issued, the articles of
incorporation must state:
(1) the amount of preferred stock that the corporation may
issue;
(2) the conditions and procedure for the payment of dividends on
preferred stock;
(3) the rate at which preferred stock dividends are paid; and
(4) the conditions and procedure for the retirement of preferred
and common stock.
(c) A corporation may not pay dividends on its common stock
until it has fully paid dividends on its preferred stock at the
rate provided by its articles of incorporation.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.006. INVESTMENT BY OTHER CORPORATIONS. After obtaining
the approval of the banking commissioner, any corporation
organized under the laws of this state other than a savings bank
may invest any part of its money in the preferred stock of a
corporation formed under this chapter.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.007. INVESTMENT OF CAPITAL. At all times, a corporation
formed under this chapter shall have $10,000 or more of its
capital invested in securities approved by law for investment by
savings banks.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.008. RATIO OF CAPITAL TO LOANS. (a) A corporation
formed under this chapter shall automatically increase its
capital stock at the rate of five percent of the amount of loans
made by the corporation to shareholders of its common stock.
(b) The corporation's articles of incorporation and bylaws must
state the requirement of Subsection (a) of this section.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.009. LOANS AND DISCOUNTS. (a) Except as provided by
this subsection, each applicant for a loan or discount by a
corporation formed under this chapter shall become a subscriber
of the corporation's common stock in an amount equal to or
greater than five percent of the amount of the loan or discount
for which the person has applied. The board of directors may
waive this requirement if the applicant owns a sufficient amount
of stock at the time of application.
(b) An applicant shall pay for the stock required to be
purchased under Subsection (a) of this section at or before the
time that the loan is closed or the discount is granted.
(c) The requirements of Subsections (a) and (b) of this section
must be stated in the articles of incorporation of a corporation
formed under this chapter.
(d) A corporation formed under this chapter may not make loans
in excess of an amount equal to 20 times its unimpaired capital
stock represented by the part of its capital stock that is
increased in accordance with Section 54.008 of this code.
(e) A corporation formed under this chapter may not charge a
shareholder of its common stock interest on a loan at a rate that
is greater than the rate of discount set by the Farm Credit
Administration for discounts made by the federal intermediate
credit banks plus three percent a year.
Acts 1981, 67th Leg., p. 1120, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.010. LIABILITY OF SHAREHOLDER. (a) Except for debts
contracted between a corporation formed under this chapter and a
shareholder, a shareholder of common or preferred stock is not
liable for the debts, contracts, or engagements of the
corporation in an amount greater than the par value of the stock
owned by the shareholder.
(b) Both common and preferred stock are nonassessable.
Acts 1981, 67th Leg., p. 1121, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.011. REPURCHASE OF STOCK. (a) A corporation formed
under this chapter may purchase, out of its available funds, any
of its outstanding stock.
(b) The corporation shall pay book value for stock purchased
under this section, as conclusively determined by the
corporation's directors.
(c) A corporation formed under this chapter shall state the
provisions of Subsections (a) and (b) of this section in its
articles of incorporation.
Acts 1981, 67th Leg., p. 1121, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.012. REPORTS. Before January 11 and July 11 of each
year, a corporation formed under this chapter shall file with the
secretary of state a report showing:
(1) its financial condition on January 1 and July 1,
respectively; and
(2) the amount of outstanding preferred and common stock.
Acts 1981, 67th Leg., p. 1121, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 54.013. EXEMPTION FROM FRANCHISE TAX. Corporations formed
under this chapter are not required to pay franchise taxes.
Acts 1981, 67th Leg., p. 1121, ch. 388, Sec. 1, eff. Sept. 1,
1981.
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