Chapter 371Development Finance Corporations
371.010. The purpose of this chapter is to assist and encourage the development and advancement of the business prosperity and economic welfare of the state, to assist and encourage the location of new industries in this state, and to provide for maximum opportunities for employment, and to these ends to establish a source of credit not otherwise available for the promotion, development and conduct of expanded business activities in the state.
Number of incorporators required.
(L. 1961 p. 157 § 1)
371.020. Any three or more qualified natural persons, all of whom shall be bona fide residents of this state, who desire to associate themselves for the purpose of establishing and operating a development finance corporation may subscribe, acknowledge and file with the director of finance for approval articles of incorporation as set out in section 371.080.
Director of finance to investigate and approve proposed articles.
(L. 1961 p. 157 § 2, A.L. 1963 p. 478)
371.030. As soon as practicable after the receipt of the proposed articles of incorporation, the director of finance shall, from the best sources of information available, ascertain the character and general fitness of the applicants, their standing in their respective communities and shall issue his certificate approving the articles of incorporation and authorizing the applicants to proceed with the organization of the development finance corporation if he is satisfied
(1) That all the applicants are bona fide residents of the state;
(2) That they have the confidence of their respective communities; and
(3) That the proposed articles of incorporation conform to the provisions of section 371.080.
Organization may be completed after approval.
(L. 1961 p. 157 § 3)
371.040. Upon receipt of the certificate of preliminary approval the applicants may proceed to complete the organization of the development finance corporation, to obtain subscriptions for and payment of its capital stock, and do all other things necessarily incidental and preliminary to its transacting business.
Certificate of organization to be filed--contents.
(L. 1961 p. 157 § 4)
371.050. 1. When the applicants have completed the organization of the proposed development finance corporation, they shall file with the director of finance a certificate of organization executed by its president and attested by its secretary and with its seal affixed thereto, certifying
(1) The names and addresses of all of its subscribers of stock, the number of shares subscribed and the number of shares fully paid for by each;
(2) The total number of shares subscribed but not fully paid for;
(3) The total number of shares paid in full;
(4) The name and address of any depositary holding on deposit any funds of the development finance corporation;
(5) The names and addresses of the officers, directors and members of the executive committee, if any, of the development finance corporation.
2. The certificate of organization of the applicant shall be accompanied by
(1) The certificate of any named depositary certifying the amount of funds on deposit to the credit of the development finance corporation;
(2) Any bylaws or resolutions which have been adopted by the directors of the corporation.
State banking and savings and loan board to direct issuance ofcertificate of incorporation, when.
(L. 1961 p. 157 § 5)
371.060. 1. Immediately upon the filing of the certificate of organization by the applicants, the director of finance shall submit to the state banking and savings and loan board the proposed articles of incorporation and the certificate of organization of the applicants and as soon as practicable thereafter the state banking and savings and loan board shall direct the director of finance to issue to the applicants a certificate of incorporation in such form as it may prescribe, if the board, from the best information available, determines that:
(1) Public convenience and necessity require the development finance corporation;
(2) The holders of the fully paid stock of the corporation are at least ten in number;
(3) That not less than two hundred fifty shares of no par value stock issued at one hundred dollars per share have been subscribed and fully paid for in cash;
(4) The bylaws and regulations submitted, if any, are in conformity with the articles of incorporation and the provisions of this chapter and not in conflict with any law of this state.
2. The director of finance shall return to the applicants one of the articles of incorporation submitted to him and shall endorse thereon the issuance by him of the certificate of incorporation.
Corporate existence begins, when--recording of articles.
(L. 1961 p. 157 § 6, A.L. 1963 p. 478, A.L. 2011 H.B. 464)
371.070. 1. Upon the issuance of the certificate of incorporation by the director of finance, the corporate existence of the development finance corporation begins. The certificate of incorporation is conclusive except as against the state, that all conditions precedent have been complied with and that the corporation has been incorporated under provisions of this chapter.
2. A copy of the articles of incorporation, endorsed by the director of finance, shall be filed for recordation in the office of the recorder of deeds in the county in which the principal office of the development finance corporation is located.
Articles of incorporation--contents.
(L. 1961 p. 157 § 7)
371.080. 1. The articles of incorporation for a development finance corporation organized under the provisions of this chapter shall state:
(1) The name of the corporation, which name shall include the words "Missouri development finance corporation" but shall have in addition a numerical or other designation so as to distinguish it from any development finance corporation which may be organized subsequently and the name shall be such as to distinguish it from any other corporation organized and existing under the laws of the state of Missouri;
(2) The purpose for which the corporation is formed;
(3) The period of duration of the corporation which may be perpetual or limited;
(4) The address of its principal office and the name of its agent on whom process may be served;
(5) The total number of shares of stock which the corporation is authorized to issue, which number shall not be less than two hundred fifty shares of no par value, which shall be issued for one hundred dollars per share in cash;
(6) The number of directors, not less than fifteen, to be elected at the annual meeting, their terms of office and any provisions desirable for staggering the terms of office of directors, except that the terms of office of directors and other matters pertaining to the directors may be provided in the bylaws of the corporation;
(7) The names and addresses of the incorporators, not less than three, who will manage the affairs of the corporation until the first meeting of stockholders and members;
(8) Any provisions, not inconsistent with law, which the incorporators may choose to insert for the regulation of the business and the conduct of the affairs of the corporation.
2. It is not necessary to set out in the articles of incorporation any of the corporate powers enumerated in this chapter.
Amendment of articles, procedure--when effective.
(L. 1961 p. 157 § 8, A.L. 1963 p. 478)
371.090. 1. The articles of incorporation may be amended by a majority vote of the stockholders at any regular meeting or at a special meeting called for that purpose.
2. Articles of amendment signed by the president or vice president and attested by the secretary certifying to the amendment and its lawful adoption shall be executed, acknowledged and filed with the director of finance and, when approved by the state banking and savings and loan board, recorded with a certificate of the director of finance approving the articles of amendment, in the same manner as the original articles of incorporation. As soon as the director of finance issues his certificate of amendment the amendment is in effect.
Stockholders' meetings--election of directors--voting rights.
(L. 1961 p. 157 § 13, A.L. 1963 p. 478, A.L. 2011 H.B. 464)
371.100. 1. The first annual meeting shall be held on a date fixed by the first board of directors and shall be held as soon as practicable after twenty-five thousand dollars of the capital stock of the corporation has been paid into its treasury. The first and subsequent annual meetings of stockholders shall be called as provided in the bylaws of the corporation.
2. At the first annual meeting, and at each annual meeting thereafter, the directors shall be elected by vote of the stockholders. At all meetings, annual or special, of stockholders for whatever purpose held, stockholders shall have one vote for each share of stock owned. Stockholders shall have the right to vote cumulatively in all elections of directors.
Board of directors to manage corporation--number, terms.
(L. 1961 p. 157 § 9, A.L. 1963 p. 478)
371.110. 1. The management of the affairs of the corporation shall be administered by a board of directors. In the first instance, the directors, not less than nine, shall be elected by the incorporators to serve until the first annual meeting. Thereafter, the board of directors shall be composed of not less than fifteen persons who shall be residents of this state. Each congressional district shall have at least one director and not more than two directors shall be residents of any one congressional district.
2. If a vacancy occurs in the board of directors through death, resignation or otherwise, the remaining directors may elect a qualified person to fill the vacancy until the next annual meeting of stockholders.
3. The directors shall hold office until their successors are elected and qualified.
Members of corporation to be financial institutions--loans bymembers, limits.
(L. 1961 p. 157 § 9, A.L. 1963 p. 478)
371.120. 1. The members of the corporation shall consist of such financial institutions as make application for membership in the corporation and membership becomes effective upon the acceptance of the application by the board of directors.
2. Financial institutions shall include but are not limited to national and state banks, trust companies, federal and state savings and loan associations or corporations, public or private pension or retirement funds, stock or mutual insurance and surety companies or related corporations, partnerships, foundations or any other entity engaged in lending or investing funds.
3. Each member shall lend funds to the corporation pursuant to the commitment of the member as and when called upon by the corporation to do so, but the total amount on loan by any members at any one time shall not exceed the following limit to be determined as of the time it became a member and shall be annually readjusted in the event of any change in the base of the loan limit of such member:
(1) National and state banks and trust companies, two percent of capital and surplus;
(2) Federal and state savings and loan associations or corporations, not in excess of limits fixed and prescribed by regulations established by the division of finance;
(3) Stock insurance companies, two percent of capital and surplus;
(4) Surety and casualty companies, two percent of capital and surplus;
(5) Mutual insurance companies, two percent of guaranty fund or of surplus whichever is applicable;
(6) For all other financial institutions such limits as may be approved by the board of directors of the corporation.
4. All loan limits shall be established at the thousand dollar nearest to the amount computed on an actual basis.
5. All cash for funds which members are committed to lend to the corporation shall be prorated among the members in the same proportion that the commitment of each bears to the aggregate commitment of all members.
6. Upon written notice given sixty days in advance, a member of the corporation may withdraw from membership in the corporation at the expiration date of such notice and after the expiration date shall be free of obligations hereunder except those accrued or committed by the corporation prior to the expiration date.
7. 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 bear interest at a rate of not less than one-fourth 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 in the city of St. Louis on unsecured commercial loans.
8. Notwithstanding the provisions of any other law, the capital stock, notes or other evidences of indebtedness of a corporation established by this chapter, issued in accordance with and by virtue of this chapter and the corporation's bylaws, shall be proper investments for the financial institutions which become members. However, no loan limit established in this section shall limit the extension of credit or investment by a financial institution made on a secured or unsecured basis pursuant to the legal loan limit of the financial institution but the membership limit shall be deducted from the legal loan limit of the financial institution when the limits are prescribed by law to determine the net available legal loan limit of the member financial institution.
9. Any financial institution in subsection 2 of this section may lend funds on a temporary basis to a corporation with which it has entered into a credit agreement but the aggregate amount which the corporation is authorized to borrow pursuant to the provisions of this subsection shall at no time exceed the sum of the balance at the time available to be borrowed by the corporation from all member financial institutions and the amount at the time available to be borrowed by the corporation from other sources, and each note evidencing the loan shall mature not more than one year from the date thereof.
10. Except on membership borrowings, nothing contained in this section shall preclude the corporation and any member thereof from entering into a separate contract for a rate of interest different than that provided in this section.
Powers of corporation.
(L. 1961 p. 157 § 10, A.L. 1963 p. 478, A.L. 1978 S.B. 657, A.L. 1994 H.B. 1165)
371.130. Each corporation organized under this chapter shall have power
(1) To sue and be sued, complain and defend, in its corporate name;
(2) To have perpetual succession, unless a limited period of duration is stated in its articles of incorporation;
(3) To adopt a corporate seal and to use it, or a facsimile thereof, as required by law;
(4) To borrow money and otherwise incur indebtedness for any of the purposes of the corporation; to issue its bonds, debentures, notes or other evidences of indebtedness, whether secured or unsecured, therefor; and to secure the same by mortgage, pledge, deed of trust or other lien on its property, franchises, rights and privileges of every kind and nature or any part thereof;
(5) To lend money to, and to guarantee, endorse, or act as surety on the bonds, notes, contracts or other obligations of, or otherwise assist financially any person, firm, corporation or association, and to establish and regulate the terms and conditions with respect to any such loans or financial assistance and the charges for interest and service connected therewith;
(6) To purchase, receive, hold, lease, or otherwise acquire, and to sell, convey, mortgage, lease, pledge, or otherwise dispose of, upon such terms and conditions as the board of directors may deem advisable, real and personal property, together with such rights and privileges as may be incidental and appurtenant thereto and the use thereof, including, but not restricted to, any real or personal property acquired by the corporation from time to time in the satisfaction of debts or enforcement of obligations;
(7) To acquire the goodwill, business, rights, real and personal property and other assets, or any part thereof, of such persons, firms, corporations, joint stock companies, associations or trusts as may be in furtherance of the corporate purposes provided herein, and to assume, undertake, guarantee or pay the obligations, debts and liabilities of any such person, firm, corporation, joint stock company, association or trust; to acquire improved or unimproved real estate for the purpose of constructing industrial plants or other business establishments thereon or for the purpose of disposing of such real estate to others for the construction of industrial plants or other business establishments, and, in furtherance of the corporate purposes provided herein, to acquire, construct or reconstruct, alter, repair, maintain, operate, sell, lease or otherwise dispose of industrial plants or business establishments;
(8) To acquire, subscribe for, own, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the stock, shares, bonds, debentures, notes or other securities and evidences of interest in, or indebtedness of, any person, firm, corporation, joint stock company, association or trust, and, while the owner or holder thereof, to exercise all the rights, powers and privileges of ownership, including the right to vote thereon;
(9) To cooperate with and avail itself of the facilities of the division of commerce and industrial development and similar governmental agencies; and to cooperate with and assist, and otherwise encourage, local organizations in the several communities of the state, the purpose of which shall be the promotion, assistance and development of the business prosperity and economic welfare of such communities and of this state;
(10) To make any and all contracts necessary or convenient for the exercise of the powers granted by this chapter;
(11) To elect or appoint officers, agents and employees of the corporation and to define their duties and fix their compensation;
(12) To conduct its business within or without the state;
(13) To accept gifts or grants of money, service or property, real or personal;
(14) To do and perform any and all acts and things and to have and exercise any and all powers as may be necessary or appropriate to effect the purpose for which the corporation is organized.
Development finance corporations subject to chapter 351 and havecorporate powers and rights.
(L. 1961 p. 157 § 11)
371.140. All development finance corporations shall possess all powers and privileges granted corporations by chapter 351 relating to general business corporations and are subject to all the provisions thereof except as herein otherwise provided.
Accumulation of earned surplus, requirements.
(L. 1961 p. 157 § 12)
371.150. The corporation shall set apart as an earned surplus seventy-five percent of its net earnings each year until such earned surplus equals the total of the paid-in capital and paid-in surplus then outstanding. The earned surplus shall be held in cash or invested in obligations of the United States government, and shall be kept and used to meet losses and contingencies of the corporation, and, whenever the amount of the earned surplus shall become impaired, it shall be built up again to the required amount in the manner provided for its original accumulation. Earned surplus not required to be accumulated shall be available for the payment of such dividends as the board of directors shall deem expedient.
Limit on obligations, exceptions.
(L. 1961 p. 157 § 14, A.L. 1963 p. 478)
371.160. At no time shall the total obligations of the corporation exceed ten times the amount of paid-in capital and surplus, not including therein the earned surplus. This limitation shall not apply with respect to that portion of the corporation's obligations incurred with respect to assets or investments to the extent that they are secured or covered by guaranties or by commitments or agreements to take over, or purchase, made by the United States of America, or by any department, bureau, agency, board, commission or establishment of the United States including any corporation, wholly owned, directly or indirectly, by the United States, pursuant to the authority of an act of Congress heretofore or hereafter adopted or amended or pursuant to the authority of any executive order of the President of the United States heretofore or hereafter made or amended under the authority of any act of Congress, heretofore or hereafter adopted or amended.
Deposits and loans of funds, regulation--not to receive deposits.
(L. 1961 p. 157 § 15, A.L. 1973 S.B. 90)
371.170. The corporation shall not deposit any of its funds in any banking institution unless such institution has been designated as a depositary by a vote of a majority of the directors, exclusive of any director who is an officer or director of the depositary so designated. The corporation shall not receive money on deposit. No loans shall be made directly or indirectly to any officer of the corporation or to any firm of which such officer is a member or officer.
Limitation on lending powers.
(L. 1961 p. 157 § 16)
371.180. A development finance corporation organized under the provisions of this chapter shall not lend money when credit is readily available elsewhere. Before granting a loan, the directors of the corporation shall endeavor so far as is reasonably possible to ascertain that the first opportunity to grant the loan has been given to the banks, insurance companies and to other lending institutions of the state.
Examination by director of finance--reports.
(L. 1961 p. 157 § 21)
371.190. The corporation shall be subject to the supervision and examination of the director of finance and the corporation shall pay the actual expenses of such examination as determined by the director. The corporation shall make such annual or other reports of its condition to the director as he may prescribe.
Stockholders not to have preemptive rights.
(L. 1961 p. 157 § 17)
371.200. The holders of capital stock as such shall have no preemptive or preferential right to purchase or subscribe for any part of the unissued capital stock of the corporation of any class or for any new issue of stock of any class, whether now or hereafter authorized or issued, or to purchase or subscribe for any bonds or other obligations, whether or not convertible into stock of any class of the corporation, now or hereafter authorized or issued.
Interest paid exempt from intangible and income taxes.
(L. 1961 p. 157 § 18)
371.210. Interest on bonds, notes or other obligations of a development finance corporation issued under and in accordance with the provisions of this chapter is* exempt from all intangible taxes imposed by this state and all state income taxes.
Corporate income exempt from income tax.
(L. 1961 p. 157 § 19)
*Word "are" appears in original rolls.
371.220. All income received by a development finance corporation is exempt from the taxes imposed on incomes by this state; but this exemption does not apply to income received by stockholders of the development finance corporation in the form of dividends or otherwise.
Compromise, arrangement or plan of reorganization, howadopted--effect.
(L. 1961 p. 157 § 20)
371.230. 1. Whenever a compromise or arrangement or any plan of reorganization of the corporation is proposed between the corporation and its creditors, members or shareholders, the circuit court of Cole County by virtue of its general equity powers may, on application of the corporation or of any creditor, member or shareholder thereof, or on the application of any receiver or receivers appointed for the corporation, order a meeting of such creditors, members or shareholders as the case may be, as may be affected by the proposed compromise or arrangement or plan of reorganization, which shall be called in such manner as the court directs.
2. If, at this meeting, the compromise or arrangement or plan of reorganization is agreed to by or on behalf of the creditors, if affected thereby, holding two-thirds in amount of the claims against the corporation, and by or on behalf of the shareholders, if affected thereby, holding the majority of each class of capital stock, and by or on behalf of the members, if affected thereby, holding two-thirds in amount of the outstanding notes or other interest-bearing obligations of the corporation provided for in section 371.120, and if such agreement shall be further evidenced by the written acceptance of the creditors, shareholders and members duly filed in the court, the compromise or arrangement or plan of reorganization shall, if approved by the court as just and equitable, be binding on all the creditors, shareholders or members, as the case may be, who are affected thereby, and also on this corporation. All persons who become creditors, shareholders or members of the corporation are deemed to have become creditors, shareholders or members subject in all respects to this section, and the same shall be absolutely binding upon them. For the purposes of this section only, members are not deemed creditors and shall act under this section as a separate class.
Dissolution, when authorized--procedure.
(L. 1961 p. 157 § 22)
371.240. 1. Any corporation organized under this chapter, after the payment in full and cancellation of all its bonds and other obligations issued under the provisions of this chapter, or after the deposit in trust with the respective trustees designated in any deeds of trust given to secure the payment of any such obligation of a sum of money sufficient for the purpose, may dissolve by the vote of a majority of the stockholders at any regular meeting or at a special meeting called for that purpose.
2. A certificate of dissolution shall be signed by the president or vice president and attested by the secretary, certifying to the dissolution and that they have been authorized by lawful action of the stockholders to execute and file such certificate. The certificate of dissolution shall be executed, acknowledged and filed with the director of finance and, when approved by the state banking and savings and loan board, shall be recorded in the same manner as the original articles of incorporation. When the director has endorsed the approval of the state banking and savings and loan board on the certificate of dissolution the corporation is deemed to be dissolved.
3. The corporation shall, however, continue for the purpose of paying, satisfying and discharging any other existing liabilities or obligations and for collecting or liquidating its assets, and doing all other acts required to adjust and wind up its business and affairs, and may sue and be sued in its corporate name.
4. Any assets remaining after all liabilities and obligations have been satisfied shall be distributed pro rata among the stockholders of the corporation.
Corporations and banks may own stock or securities of company,securities exempt.
(L. 1961 p. 157 § 23, A.L. 1963 p. 478, A.L. 2011 H.B. 464)
371.250. Notwithstanding any rule at common law or any provision of any law or any provision in their respective charters, agreements of association, articles of organization, certificates of incorporation, or trust indentures:
(1) All domestic corporations organized for the purpose of carrying on business within this state, including, without implied limitation, any railroad or transportation corporation, and all trusts, are authorized to 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 any corporation established by this chapter and, while owners of said stock, to exercise all the rights, powers and privileges of ownership, including the right to vote thereon, all without the approval of any regulatory authority of this state;
(2) All banking organizations are hereby authorized to become members of any corporation established by this chapter and to make loans to any such corporation as provided herein;
(3) A banking organization which does not become a member of a corporation established by this chapter shall not acquire any shares of the capital stock of such corporation;
(4) Each banking organization which becomes a member of a corporation established by this chapter is authorized to acquire, purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of any bonds, securities or other evidences of indebtedness issued by such corporation or the shares of its capital stock and while owners of said stock to exercise all the rights, powers and privileges of ownership, including the right to vote thereon, all without the approval of any regulatory authority of this state; except that the amount of capital stock of such corporation which may be acquired by any member pursuant to the authority granted herein shall not exceed ten percent of the loan limit of such member as provided by law. The amount of capital stock of such corporation which any member is authorized to acquire pursuant to the authority granted herein shall be in addition to the amount of capital stock in corporations which such member may otherwise be authorized to acquire;
(5) The bonds, securities or other evidences of indebtedness, and shares of capital stock of a corporation established pursuant to this chapter shall be exempt from the provisions of chapter 409 and all rules promulgated thereunder.
(L. 1961 p. 157 § 24, A.L. 1963 p. 478, A.L. 1978 S.B. 657)