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§ 1203. Consideration for shares

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 7 P.S. Banks and Banking

Purdon's Pennsylvania Statutes and Consolidated Statutes
Title 7 P.S. Banks and Banking (Refs & Annos)
Banking Code of 1965 (Refs & Annos)
Chapter 12. Shares and Shareholders
7 P.S. § 1203
§ 1203. Consideration for shares
Currentness
(a) Minimum requirements--Except in the case of a distribution of shares of the institution authorized by section 13031 or shares issued upon exchanges or conversions, shares of an institution may be issued only for cash in an amount, or for assets with a value, which shall be at least:
(i) in the case of the issuance of common shares and other shares with par value either:
(A) the par value of the shares if the surplus of the institution will be at least equal to its capital after the issuance of the shares, or
(B) the par value of the shares and such additional amount up to fifty percent of the par value of the shares as may be required to provide surplus equal to capital after the issuance of the shares, or
(C) the par value of the shares and an additional amount equal to fifty percent of the par value of the shares if the surplus of the institution will not be at least equal to its capital after the issuance of the shares, and
in the case of a new institution, such additional amount as may be necessary to provide the expense fund required by section 1010(b)(i)2 of this act; and
(ii) in the case of the issuance of other shares without par value, the amount of value of the agreed consideration received for such shares which the board of directors shall, in the resolution authorizing the issue of such shares, allocate to capital or surplus by specifying in dollars the part of such consideration allocated to capital, which shall not be less than the preferential right of such shares in the assets of the institution in the event of involuntary liquidation, and the part of such consideration allocated to surplus.
(b) Treasury shares--Treasury shares may be sold for the amount fixed by the directors.
(c) Consideration for shares issued upon exchanges and conversions--The consideration for the issuance of shares in exchange for or on conversion of other shares of the institution or obligations of the institution shall be deemed to be the consideration originally received for the shares or obligations surrendered in exchange or converted, plus any additional consideration paid to the institution upon the issuance of such shares for the other shares or obligations surrendered in exchange or converted, plus, in the case of an exchange or conversion of shares, the amounts, if any, transferred to surplus upon the issuance of such shares for the other shares surrendered in exchange or converted. In any such case the consideration shall be not less than the minimum specified in subsection (a) of this section. Any amount by which capital may be reduced upon an exchange or conversion of shares shall be transferred to surplus.

Credits

1965, Nov. 30, P.L. 847, No. 356, § 1203. Amended 1970, July 23, P.L. 597, No. 199, § 6; 1986 Dec. 18, P.L. 1702, No. 205, § 8, effective in 60 days.

Footnotes

1
7 P.S. § 1303.
2
7 P.S. § 1010.
7 P.S. § 1203, PA ST 7 P.S. § 1203
Current through Act 10 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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