12 U.S.C. § 52 — Par value and incidents of stock; transfer of shares

submitted 99 years ago by Congress to r/title-12-BANKS-AND-BANKING · 410 words · no verdicts yet

in plain englishAI-generated · not legal advice

Each national bank's stock is divided into $100 shares, or smaller shares if its articles allow. Shares are personal property that can be transferred, and buyers take on the same rights and duties as the seller. Stock certificates issued after August 23, 1935 must show set information and can't be tied to ownership of any other company's stock, with narrow exceptions.

Each national banking association's capital stock is divided into shares of $100 each, or a smaller amount if the articles of association allow it. Shares count as personal property and can be transferred on the bank's books, following the bylaws or articles of association. Anyone who becomes a shareholder through a transfer takes on all the rights and duties of the previous holder, in proportion to their shares. The bank cannot change its articles of association in a way that hurts the rights, remedies, or security of its existing creditors. Stock certificates issued after August 23, 1935, must state: (1) the bank's name and location; (2) the name of the stockholder of record; (3) the number and class of shares represented; and (4) if the bank issues more than one class of stock, the rights, preferences, privileges, voting rights, powers, restrictions, and limitations of each class — either written out or summarized on the certificate, or referenced to the articles of association printed on the certificate's front. Every certificate must be signed by the bank's president and cashier (or other officers named in the bylaws) and carry the bank's seal. After August 23, 1935, no certificate can claim to represent stock of any other corporation, except a member bank or a corporation that, as of June 16, 1934, held the bank's premises. Also, buying, selling, or transferring the bank's own stock certificate cannot be conditioned on buying, selling, or transferring stock of any other corporation — with that same member-bank or premises-holding-company exception. However, this section does not stop the reverse: conditioning the sale of some other corporation's stock on also getting national bank stock is allowed.

the actual law source: uscode.house.gov ↗public domain

The capital stock of each association shall be divided into shares of $100 each, or into shares of such less amount as may be provided in the articles of association, and be deemed personal property, and transferable on the books of the association in such manner as may be prescribed in the by-laws or articles of association. Every person becoming a shareholder by such transfer shall, in proportion to his shares, succeed to all rights and liabilities of the prior holder of such shares; and no change shall be made in the articles of association by which the rights, remedies, or security of the existing creditors of the association shall be impaired.

Certificates issued after August 23, 1935, representing shares of stock of the association shall state (1) the name and location of the association, (2) the name of the holder of record of the stock represented thereby, (3) the number and class of shares which the certificate represents, and (4) if the association shall issue stock of more than one class, the respective rights, preferences, privileges, voting rights, powers, restrictions, limitations, and qualifications of each class of stock issued shall be stated in full or in summary upon the front or back of the certificates or shall be incorporated by a reference to the articles of association set forth on the front of the certificates. Every certificate shall be signed by the president and the cashier of the association, or by such other officers as the bylaws of the association shall provide, and shall be sealed with the seal of the association.

After August 23, 1935, no certificate evidencing the stock of any such association shall bear any statement purporting to represent the stock of any other corporation, except a member bank or a corporation engaged on June 16, 1934, in holding the bank premises of such association, nor shall the ownership, sale, or transfer of any certificate representing the stock of any such association be conditioned in any manner whatsoever upon the ownership, sale, or transfer of a certificate representing the stock of any other corporation, except a member bank or a corporation engaged on June 16, 1934 in holding the bank premises of such association: Provided, That this section shall not operate to prevent the ownership, sale, or transfer of stock of any other corporation being conditioned upon the ownership, sale, or transfer of a certificate representing stock of a national banking association.

Source credit: (R.S. § 5139; Feb. 25, 1927, ch. 191, § 16, 44 Stat. 1233; June 16, 1933, ch. 89, § 18, 48 Stat. 186; Aug. 23, 1935, ch. 614, title III, §§ 310(a), 335, 49 Stat. 710, 720.)

history & why it existsrecord from the source credit

1927Enacted · Act of Feb. 25, 1927, ch. 191 · 44 Stat. 1233
1933Amended · Act of June 16, 1933, ch. 89 · 48 Stat. 186
1935Amended · Act of Aug. 23, 1935, ch. 614 · 49 Stat. 710, 720

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