§ 33-39-460 — Loans to corporation by members.

South Carolina § 33-39-460

• Jurisdiction: South Carolina
• Title 33: CORPORATIONS, PARTNERSHIPS AND ASSOCIATIONS
• Ch. 39: COUNTY BUSINESS DEVELOPMENT CORPORATIONS

Text

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 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 be made if immediately thereafter the total amount of the obligations of the corporation would exceed 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 member at any one time, when added to the amount of the investment in capital stock of the corporation then held by such member, shall not exceed (a) twenty per cent 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, or (b) the following limits, to be determined as of the time such member becomes a member on the basis of the audited balance sheet of such member at the close of its fiscal year immediately preceding its application for membership, or, in the case of an insurance company, its last annual statement to the director of the Department of Insurance or his designee: (i) two per cent of the capital and surplus of commercial banks and trust companies, (ii) one per cent of the total outstanding loans made by a building and loan association, provided, however, that any business development corporation created pursuant to this chapter may in its charter or by appropriate amendment thereto provide that the loan limit of a building and loan association member shall be only one half of one per cent of the total outstanding loans made by such building and loan association member, (iii) one per cent of the capital and unassigned surplus of stock insurance companies, except fire insurance companies, (iv) one per cent of the unassigned surplus of mutual insurance companies, except fire insurance companies, (v) one tenth of one per cent of the assets of fire insurance companies and (vi) such 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 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 be the amount of such member's loan limit, reduced by the balance of outstanding loans made by such 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 be evidenced by bonds, debentures, notes or other evidences of indebtedness of the corporation which shall be freely transferable at all times and which shall bear interest at a rate of not less than one quarter of one per cent 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 not be obligated to make any loans to the corporation pursuant to calls made subsequent to the withdrawal of the member.

Legislative History

HISTORY: 1962 Code SECTION 12-1246; 1960 (51) 1907; 1993 Act No. 181, SECTION 523. ARTICLE 7 Directors and Officers