5. Organization Certificate-At the same time that the Articles of Association are executed, or AFTER that date, the bank's Organization Certificate (form furnished by the Comptroller) must be executed. One copy of the Organization Certificate is filed with the Comptroller; one copy is retained by the bank. (See page 31.) The bank will have succession for twenty years from the date upon which the Organization Certificate is executed, and NOT from the date of the certificate from the Comptroller authorizing the bank to begin business. (See "Corporate Existence," page 54.) CORPORATE POWERS UPON the date of the filing of its organization certificate, a national bank becomes a body corporate, and has the following powers: (a) To adopt and use a corporate seal. (b) To have succession for a period of twenty years from its organization, unless it is sooner dissolved according to the provisions of its Articles of Association, or by the act of its shareholders owning two-thirds of its stock, or unless its franchise becomes forfeited by some violation of law. (c) To make contracts. (d) To sue and be sued, complain and defend, in any court of law and equity, as fully as natural persons. (e) To elect or appoint directors, and by its board of directors to appoint a president, vice-president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure, and appoint others to fill their places. (f) To prescribe, by its board of directors, by-laws not inconsistent with law, regulating the manner in which its stock shall be transferred, its directors elected or appointed, its officers appointed, its property transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed. (g) To exercise by its board of directors, or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking; by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling ex change, coin, and bullion; by loaning money; and by obtaining, issuing, and circulating notes according to the provisions of this Title. But no association shall transact any business except such as is incidental and necessarily preliminary to its organization, until it has been authorized by the Comptroller of the Currency to commence the business of banking. 6. Directors-The number of directors is provided for in the Articles of Association, and cannot be less than five. The number may be rigidly fixed, or, on the other hand, a sliding scale may be adopted, in which case the provision applying to directors will read: "The board of directors shall consist of not fewer than nor more than shareholders," etc. If the directors are not designated in the Articles of Association, the shareholders should proceed to their election after the execution of the Organization Certificate. The qualifications for directors are: (a) Directors of a bank capitalized at $25,000 must own at least five shares of capital stock in their own rights; directors of a bank capitalized at more than $25,000 must own at least ten shares of capital stock in their own rights. Any director who ceases to own the required number of shares becomes disqualified, and the remaining directors elect his successor. (b) Every director must, during his term of office, be a citizen of the United States. (c) Not less than three-fourths of the directors must have resided in the state in which the bank is located for at least a year prior to their elections, and must be residents therein so long as they continue in office. Each director is required to take an oath of office after his election, but cannot take such oath before the execution of the bank's Organization Certificate. The oath must be sent to the Comptroller's office, where it is filed. 7. Officers-The directors elect the bank's president, vicepresidents, cashier, and such other officers as may be desired. The Comptroller must be furnished with the original signature of these officers, as well as notified of the date upon which they were elected. 8. Initial payment of capital-The law provides that 50% of the capital stock of a national bank must be paid in cash (not in assets of another corporation, notes, or other like evidence of debt), and permits payment of the remaining 50% in five equal monthly cash installments. When at least 50% of the stock has been paid, each shareholder having paid not less than one-half on each share subscribed, and when all other legal requirements have been complied with, the president, or cashier, and a majority of the directors, certify these facts under oath to the Comptroller. The Comptroller's office further requires a statement showing the total amount collected on stock subscriptions. The difference between this amount and organization expenditures should be deposited in a disinterested bank, the president or cashier of which is to certify to the Comptroller's office the amount on deposit to the credit of the organizing bank. 9. Beginning business-When the Comptroller is convinced that all preliminary conditions regarding the organization of the proposed bank have been satisfactorily complied with, he will issue a certificate of authority to commence business (generally known as the bank's charter). This certificate, upon its receipt, must be published in a local or county newspaper for a period of 60 days. The bank may begin its operations immediately after it has been officially notified that its certificate has been issued, and the Comptroller should be notified of the date upon which business is actually begun. 10. Federal Reserve System-Every national bank automatically becomes a member of the Federal Reserve System, and is required to subscribe to stock in the Federal Reserve Bank of its district to an amount equal to 6% of the paid-up capital stock and surplus of the national bank in question. Where a bank is just organizing, and where its capital is not all paid in, or its surplus is being added to, further payments of subscription to Federal Reserve Bank stock are called for quarterly-April 1, July 1, October 1, and January 1. Thus far the Federal Reserve Banks have called in subscription payments amounting to only 3% of the capital and surplus of member banks; the remaining 3% remains subject to future call. When a national bank is organized, it should promptly apply for stock in the Federal Reserve Bank of its district, but payment on account of the subscription may be deferred until receipt of advice of approval of the application by the Federal Reserve Agent and Federal Reserve Board. (See also "Reserve Requirements," page 75.) 11. Payment of balance of capital-Although the law makes it permissible for 50% of a national bank's capital stock to be paid in five monthly payments, it is by no means obligatory that payment shall be so long deferred. All of the capital stock, or a portion of it exceeding the first installment of 50%, may be paid in advance. Where the shareholders are granted the additional five months in which to complete payment, installments are due monthly from the date of the issuance of the bank's certificate to begin business. These deferred payments must be paid in money, as was the case with the first 50%, and each payment must be certified to the Comptroller by the president or cashier, under seal of the bank. The law makes special provision for proceedings where a shareholder defaults in his payments. TYPICAL ORGANIZATION CERTIFICATE [Executed in duplicate.] We, the undersigned, whose names are specified in article fourth of this certificate, having associated ourselves for the purpose of organizing an association for carrying on the business of banking, under the laws of the United States, do make and execute the following organization certificate: First. The title of the association shall be "The Second. The said association shall be located in the... ...., County of where its operations of discount and deposit are to be carried on. of dollars shares of one hundred Fourth. The name, financial worth-net, and the residence of each shareholder of this association, with the number of shares held, are as follows: NAME FINANCIAL WORTH -NET RESIDENCE NO. OF SHARES NOTE.-The names, etc., of all the shareholders must be given. Fifth. This certificate is made in order that we may avail ourselves of the advantages of the aforesaid laws of the United States. In witness whereof we have hereunto set our hands this of ... day (To be signed and acknowledged by those who have signed the articles of association.) (Acknowledgment must be made before judge of court or notary public and authenticated by the seal of such court or notary.) peared to me well known, who severally ac knowledged that they executed the foregoing certificate for the purposes therein mentioned. Witness my hand and seal of office this [OFFICIAL SEAL of officer] ... |