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§18-1.248. Statutes, acts, and parts thereof specifically repealed.
The following statutes, acts, and parts thereof are hereby
specifically repealed: Sections 121 to 126, inclusive, Title 12,
Oklahoma Statutes 1941; Sections 891 to 896, inclusive, Title 12,
Oklahoma Statutes 1941; Sections 1 to 186, inclusive, Title 18,
Oklahoma Statutes 1941; and, Sections 451 to 459, inclusive, Title
18, Oklahoma Statutes 1941; Sections 501 to 508, inclusive of Title
18, O.S. 1941; Section 1 of Chapter 1, Title 18, Session Laws of
1945; and Section 1 to 25, inclusive, of Chapter 2, Title 18, Session
Laws of 1945.
Added by Laws 1947, p. 188, § 248.
§18-381.1. Short title.
Sections 381.1 through 381.78 of this title and Sections 6, 7, 8,
25, 26, 27, 32, 37, 38, 39, 46, 50, 51, and 80 through 87 of this act
4(#$0&($"!$"+$ -
shall be known and may be cited as the "Oklahoma Savings and Loan
Code".
Added by Laws 1970, c. 101, § 1, eff. June 1, 1970. Amended by Laws
1987, c. 61, § 1, emerg. eff. May 4, 1987; Laws 1988, c. 65, § 1,
emerg. eff. March 25, 1988; Laws 2000, c. 81, § 1, eff. Nov. 1, 2000.
§18-381.2. Definitions.
As used in the Oklahoma Savings and Loan Code:
1. "Act" or "this act" means the Oklahoma Savings and Loan Code;
2. "Association" means a savings and loan association or savings
bank, including any association previously referred to as a building
and loan association, incorporated and now existing under the laws of
this state or hereafter incorporated under this act or which is
otherwise authorized to transact savings and loan association or
savings bank business under this act;
3. "Branch" means any place of business separated from the main
office of an association at which deposits are received, checks paid,
or money lent;
4. "Capital accounts" means permanent capital stock, undivided
profits, surplus or reserves;
5. "Certificate of Authority" means a certificate issued by the
Commissioner authorizing an association to transact association
business;
6. "Commissioner" means the State Banking Commissioner, or the
State Deputy Banking Commissioner when acting on behalf of the
Commissioner pursuant to subsections C or E of Section 201 of Title 6
of the Oklahoma Statutes;
7. "Consumer banking electronic facility" means any electronic
device owned, operated, leased by or on behalf of a bank, savings
association, or credit union other than a telephone or modem operated
by a customer of a depository institution, to which a person may
initiate an electronic fund transfer. The term includes, without
limitations, a point-of-sale terminal, automatic teller machine,
automated loan machines, video banking centers, or any other similar
electronic devices;
8. "Department" means the Oklahoma State Banking Department;
9. "Deposit account" means any form of deposit, share or other
account maintained by a depositor at an association, including demand
deposit accounts, whether evidenced by a passbook, certificate, or
otherwise, and which does not represent permanent capital stock;
10. "Deposit association" means an association which is
qualified to accept deposit accounts or which becomes so qualified
pursuant to this act;
11. "Earnings" means the money payable or to be credited to
holders of deposit accounts by an association as payment for the use
of the funds which constitute such accounts. Earnings on deposit
4(#$0&($"!$"+$ -;
accounts in a deposit association may be designated as interest, and
earnings on other deposit accounts may be designated as dividends;
12. "Existing mutual association" means a mutual association
which was authorized to do business in Oklahoma on the effective date
of this act;
13. "Federal association" means a savings and loan association
or savings bank organized and existing under the laws of the United
States;
14. "Foreign association" means any firm, company, association,
partnership or corporation, by whatever name called, actually engaged
in the savings association business, which is not organized under the
laws of this state or of the United States;
15. "Insured association" means an association the deposit
accounts of which are insured by the Federal Deposit Insurance
Corporation to the extent provided by federal law;
16. "Main office" means the office location which has been
designated by the Commissioner or the Office of Thrift Supervision as
the main office of an association;
17. "Member" means the holder of a deposit account of a mutual
association, and also includes the owner of real estate upon which
the mutual association holds a mortgage or deed of trust;
18. "Mutual association" means an association which derives its
principal capital from the deposit accounts of its members and whose
members have the right to participate in the management of the
association. The term includes any association organized or existing
under prior laws of this state. A mutual association is not a
deposit association unless and until it becomes qualified as such;
19. "Net worth" of a stock association shall mean the aggregate
of the permanent capital stock account, paid-in surplus, earned
surplus, legal and federal insurance reserves and undivided profits;
20. "Permanent capital stock" means that part of the capital or
liabilities of an association representing ownership of the
association and which is not subject to being withdrawn or the value
paid to the holder thereof unless and until all other liabilities of
the association have been fully liquidated and paid;
21. "Shares" or "share accounts" means any deposit account
issued by a mutual association in the form of installment shares,
optional installment shares, full paid shares, prepaid shares,
savings shares, or other shares by whatever name called, evidenced by
passbook, certificate, or other evidence or holding;
22. "Stock association" means an association which issues
permanent capital stock and which limits the right to participate in
the management of the association to the holders of such permanent
capital stock. Stock associations are also deposit associations;
23. "Stockholder" means the holder of permanent capital stock;
24. "Withdrawable account" means a deposit account of an
association which does not represent permanent capital stock; and
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25. "Withdrawal value" means the amount paid to an association
on a deposit account plus earnings credited thereto, less lawful
deductions therefrom.
Added by Laws 1970, c. 101, § 2, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 1, eff. July 1, 1979; Laws 1986, c. 219, § 4, emerg.
eff. June 9, 1986; Laws 1988, c. 65, § 2, emerg. eff. March 25, 1988;
Laws 1990, c. 118, § 1, emerg. eff. April 23, 1990; Laws 1993, c.
183, § 29, eff. July 1, 1993; Laws 2000, c. 81, § 2, eff. Nov. 1,
2000.
§18-381.2a. Successor agency to Federal Savings and Loan Insurance
Corporation - Construction of terms.
Wherever the terms "Federal Savings and Loan Insurance
Corporation" or "FSLIC" appear in the Oklahoma Statutes, such terms
shall be deemed to refer to the successor agency to the Federal
Savings and Loan Insurance Corporation established pursuant to
federal law.
Added by Laws 1993, c. 183, § 30, eff. July 1, 1993.
§18-381.3. Conformity of existing associations.
The certificate of incorporation and certificate of authority to
transact business as an association, of every association heretofore
organized under the laws of this state and existing as of January 1,
2000, shall continue in full force and effect, and the same shall be
deemed as modified to conform with this act without the adoption of a
new certificate of incorporation or issuance of a new certificate of
authority. The contracts, obligations and liabilities of every such
association, and the contracts, notes, mortgages, investments and
other assets and rights of every kind and nature held by it, as well
as its bylaws and resolutions, shall continue in full force and
effect. Every such association and every association hereafter
incorporated shall have perpetual existence, subject to merger,
conversion or liquidation pursuant to the provisions of this act.
Added by Laws 1970, c. 101, § 3, eff. June 1, 1970. Amended by Laws
1988, c. 65, § 3, emerg. eff. March 25, 1988; Laws 2000, c. 81, § 3,
eff. Nov. 1, 2000.
§18-381.4. Existing capital accounts.
The shares of capital, savings share accounts or other capital
accounts of every existing association, and the certificates and
passbooks evidencing the same, in whatever form issued, shall
continue in full force and effect with full deposit account holders'
rights, including the right to withdraw, to vote and to share in
distribution of assets upon liquidation of the association.
Added by Laws 1970, c. 101, § 4, eff. June 1, 1970. Amended by Laws
2000, c. 81, § 4, eff. Nov. 1, 2000.
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§18-381.5. Abolition of Oklahoma Savings and Loan Board - Transfer
of power, duties and responsibilities to State Banking Commissioner.
A. The Oklahoma Savings and Loan Board is abolished. The power,
duties and responsibilities exercised by the Oklahoma Savings and
Loan Board shall be transferred to the State Banking Commissioner.
All unexpended funds, property, records, personnel and outstanding
financial obligations and encumbrances of the Oklahoma Savings and
Loan Board are hereby transferred to the Oklahoma State Banking
Department.
B. Any reference to the Oklahoma Savings and Loan Board in the
Oklahoma Statutes or in rules promulgated pursuant to the Oklahoma
Statutes shall mean the State Banking Commissioner.
C. The rules promulgated by the Oklahoma Savings and Loan Board
shall continue in effect until such rules are amended or repealed by
rule of the Commissioner promulgated pursuant to the provisions of
Article I of the Administrative Procedures Act, Section 250.3 et seq.
of Title 75 of the Oklahoma Statutes.
Added by Laws 1970, c. 101, § 5, eff. June 1, 1970. Amended by Laws
1988, c. 65, § 4, emerg. eff. March 25, 1988; Laws 1993, c. 183, §
31, eff. July 1, 1993; Laws 2000, c. 81, § 5, eff. Nov. 1, 2000.
§18-381.5a. Repealed by Laws 2013, c. 227, § 4, eff. Nov. 1, 2013.
§18-381.6. Repealed by Laws 1993, c. 183, § 73, eff. July 1, 1993.
§18-381.6a. Records - Confidentiality.
A. The following records in the Oklahoma State Banking
Department are designated as public records:
1. All applications for association charters and branches and
supporting information with the exception of personal financial
records of individual applicants;
2. All records introduced at public hearings on association
charter and branch applications;
3. Information disclosing the failure of an association, a
foreign association and their branches in this state and the reasons
therefor;
4. Reports of completed investigations which uncover a shortage
of funds in an association or an out-of-state association and
branches of either, after the reporting of the shortage to proper
authorities by the State Banking Commissioner;
5. Names of all stockholders and officers of associations,
foreign associations, holding companies, and branches of foreign
associations located in this state filed in the office of the
Secretary of State; and
6. Regular financial call reports of associations.
B. All other records in the Department shall be confidential and
not subject to public inspection. However, the Commissioner may, in
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the sole discretion of the Commissioner, divulge such confidential
information after receipt of a written request which shall:
1. Specify the record or records to which access is requested;
and
2. Give the reasons for the request.
Such records may also be produced pursuant to a valid judicial
subpoena or other legal process requiring production, if the
Commissioner determines that the records are relevant to the hearing
or proceeding and that production is in the best interests of
justice. The records may be disclosed only after a determination by
the Commissioner that good cause exists for the disclosure. Either
prior to or at the time of any disclosure, the Commissioner shall
impose such terms and conditions as the Commissioner deems necessary
to protect the confidential nature of the record, the financial
integrity of any institution to which the record relates, and the
legitimate privacy of any individual named in such records.
Added by Laws 2000, c. 81, § 6, eff. Nov. 1, 2000.
§18-381.7a. Examinations – Reports by associations - Penalty.
A. 1. The State Banking Commissioner shall, at least every
eighteen (18) months or as often as the Commissioner deems advisable,
examine every association, and for the purpose of making such
examinations and special examinations, shall have full access to all
books, papers, securities, records and other sources of information
under the control of the association. The Commissioner shall make
and file in the office of the Commissioner a report in detail
disclosing the results of such examination. The Commissioner shall
mail a copy of the report to the association examined. However, the
Commissioner may accept, in lieu of any three consecutive association
examinations, an examination of the association by the Office of
Thrift Supervision, if conducted within a reasonable period of time,
and if a copy of the examination is furnished to the Commissioner.
2. The Commissioner may also accept any other report relative to
the condition of an association, which shall include joint or
concurrent examinations that may be obtained by the authorities
within a reasonable period, in lieu of such report authorized by the
laws of this state to be required of such association by the Oklahoma
State Banking Department, provided a copy of such report is furnished
to the Commissioner.
3. The Commissioner may enter into cooperative, coordinating and
information-sharing agreements with the Federal Deposit Insurance
Corporation, the Federal Home Loan Bank Board, or the Office of
Thrift Supervision with respect to the periodic examination or other
supervision of any association.
4. When requested in writing upon authority of the board of
directors or stockholders owning a majority of the capital stock of
any association, the Commissioner shall, if in the opinion of the
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Commissioner such examination is desirable, make or cause to be made
an examination into the affairs and conditions of such association.
For such examination, the association shall pay the same fees as
provided for in subsection D of Section 381.15 of this title.
B. Every association shall make two reports each year.
Associations may be required to make more reports if called upon by
the Commissioner. All reports shall be according to the form which
may be prescribed by the Commissioner. The reports shall be verified
by the oath or affirmation of the president, cashier or secretary of
such association and attested by the signatures of at least two of
the directors. Each report shall exhibit, in detail and under
appropriate headings, the resources and liabilities of the
association at the close of business on any last day specified by the
Commissioner, shall be transmitted to the Commissioner within thirty
(30) calendar days after the call date, and may, at the option of the
association, be published at the expense of the association in the
same form in which it is presented to the Commissioner. The
Commissioner shall also have the power to request special reports
from any association whenever, in the judgment of the Commissioner,
such reports are necessary in order to gain a full and complete
knowledge of its condition. However, the reports authorized and
required by this section, to be requested by the Commissioner, shall
relate to a date prior to the date of such request and such prior
date shall be specified in the request. Additionally, the
Commissioner may accept, in lieu of the reports referred to in this
section, reports made by associations that are members of the Federal
Home Loan Bank System on forms provided by the Federal Home Loan Bank
System.
C. Every association which fails to make and transmit any report
required pursuant to this section shall be subject to a penalty, at
the discretion of the Commissioner, not to exceed Fifty Dollars
($50.00) for each day, after the specified period, that the
association delays to make and transmit its report. Whenever any
association delays or refuses to pay the penalty herein imposed for a
failure to make and transmit a report, the Commissioner is hereby
authorized to maintain an action in the name of the state against the
delinquent association for the recovery of such penalty, and all sums
collected by such action shall be paid into the State Treasury to be
credited to the General Revenue Fund.
D. The Commissioner may provide a form for the examinations and
reports set forth in this section. All examinations and reports
received by the Commissioner shall be preserved in the office of the
Commissioner for a period of not less than five (5) years. The
preservation may be in an electronic format, and paper copies or
originals need not be retained. Such examination, reports and all
other records of operating associations in the Department are to be
kept confidential, except as permitted by this act.
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Added by Laws 2000, c. 81, § 7, eff. Nov. 1, 2000.
§18-381.8. Repealed by Laws 1993, c. 183, § 73, eff. July 1, 1993.
§18-381.8a. Preservation of documents – Electronically stored or
imaged documents or reproductions.
All documents which the Oklahoma State Banking Department is
required, by any provision of this act or by any other statute or
rule of this state, to retain or preserve in its possession may be
retained and preserved, in lieu of retention of the original records
or copies, in an electronic format and stored by electronic imaging
or otherwise so that the documents may be reproduced later. Any such
electronically stored or imaged document or reproduction shall have
the same force and effect as the original document and be admitted in
evidence as if such document was the original.
Added by Laws 2000, c. 81, § 8, eff. Nov. 1, 2000.
§18-381.9. Repealed by Laws 2000, c. 81, § 88, eff. Nov. 1, 2000.
§18-381.10. Certificate of authority.
No association or foreign association shall transact business or
operate in this state without a certificate of authority issued by
the State Banking Commissioner.
Laws 1970, c. 101, § 10, eff. June 1, 1970; Laws 1993, c. 183, § 34,
eff. July 1, 1993.
§18-381.11. Supervision by State Banking Commissioner – Additional
powers – Orders – Notice and hearing – Temporary orders – Cooperative
agreements - Opinions.
A. The State Banking Commissioner shall have general supervision
of associations, in addition to the authority set forth in other
sections of this act. In addition to other powers conferred by this
act, the Commissioner shall have the power to order an association, a
holding company of an association, shareholder, officer, director, or
employee to:
1. Maintain an accounting system in accordance with such rules
as may be prescribed by the Commissioner; provided, the accounting
system required shall have due regard to the size of the association;
2. Observe methods and standards which the Commissioner may
prescribe for determining the value of various types of assets;
3. Charge off the whole or part of an asset which at the time of
the Commissioner's action could not lawfully be acquired;
4. Write down an asset to its market value;
5. Record liens and other interests in property;
6. Obtain a financial statement from a borrower to the extent
the association can do so;
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7. Obtain insurance against damage to real estate taken as
security;
8. Search, or obtain insurance for, the title to real estate
taken as security;
9. Maintain adequate insurance against such other risks as the
Commissioner may determine to be necessary and appropriate for the
protection of depositors and the public; and
10. Cease and desist from engaging in any act or transaction, or
doing any act in furtherance thereof, which would constitute a
violation of the provisions of this act, applicable federal laws, the
applicable laws of another state, or a lawful regulation issued
thereunder, or to cease and desist from engaging in any unsafe or
unsound practice.
B. Before issuing an order provided for in subsection A of this
section, the Commissioner shall give reasonable notice and
opportunity for a hearing. However, if the Commissioner makes
written findings of fact that the protection of depositors will be
harmed by delay in issuing an order provided for in subsection A of
this section, the Commissioner may issue a temporary order pending
the hearing on the order provided for in subsection A of this
section. The temporary order shall remain in effect until three (3)
business days after the hearing on the order provided for in
subsection A of this section and shall become final if the
association subject to the order fails within fifteen (15) days after
the receipt of the order to request a hearing to determine whether
the temporary order should be modified, vacated, or become final. If
a hearing on the temporary order is not held upon written request,
the temporary order shall dissolve, and the order provided for in
subsection A of this section shall not be issued except upon
reasonable notice and opportunity for hearing.
C. The Commissioner may enter into cooperative, coordinating,
and information-sharing agreements with any other supervisory
agencies or any organization affiliated with or representing one or
more supervisory agencies with respect to the periodic examination or
other supervision of any association, bank holding company, or branch
in this state or an out-of-state association, or any branch of an
Oklahoma-chartered association in any other state, and the
Commissioner may accept such reports of examination and reports of
investigation in lieu of conducting the Commissioner's own
examinations or investigations.
D. The Commissioner may enter into cooperative agreements with
other regulatory agencies to facilitate the regulation of
associations and holding companies doing business in this state. The
Commissioner may accept reports of examinations and other records
from such other agencies in lieu of the Oklahoma State Banking
Department conducting the examinations of associations controlled by
out-of-state holding companies. The Commissioner may take any action
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jointly with other regulatory agencies having concurrent jurisdiction
over associations and holding companies or may take such actions
independently in order to carry out the Commissioner's
responsibilities.
E. 1. The Commissioner may issue interpretive statements
containing matters of general policy for the guidance of associations
subject to this act. The Commissioner may amend or repeal an
interpretative statement by issuing an amended statement or notice of
repeal of a statement and shall provide notice thereof and make it
available upon request to all associations chartered under this act.
2. The Commissioner may issue opinions in response to specific
requests from members of the public or the association industry
directly or through the Deputy State Banking Commissioner or the
attorneys of the Department. The Commissioner may amend or repeal an
opinion by issuing an amended statement or notice of repeal of an
opinion and shall provide notice thereof and make it available upon
request to all associations chartered under this act. However, the
requesting party may rely on the original opinion if:
a. all material facts were originally disclosed to the
Commissioner,
b. considerations of safety and soundness of the affected
association are not implicated with respect to further
and prospective reliance on the original opinion, and
c. the text and interpretation of relevant governing
provisions of this act have not been changed by
legislative or judicial action.
3. An interpretive statement or opinion issued under this
section does not have the force of law and is not a rule.
F. Upon failure of such association to comply with the order or
requirements of the Commissioner, the Commissioner may suspend the
certificate of authority to transact business of such association, or
the Commissioner may place the association in receivership in the
manner provided by this act.
Added by Laws 1970, c. 101, § 11, eff. June 1, 1970. Amended by Laws
1993, c. 183, § 35, eff. July 1, 1993; Laws 2000, c. 81, § 9, eff.
Nov. 1, 2000.
§18-381.12. Repealed by Laws 1993, c. 183, § 73, eff. July 1, 1993.
§18-381.13. Savings and loan administrator.
The State Banking Commissioner may appoint a savings and loan
administrator with special duties and authority of conducting and
supervising examinations of associations in addition to such other
duties as the Commissioner may assign to the savings and loan
administrator.
The bond of the savings and loan administrator shall be the same
as that set for the Deputy State Banking Commissioner.
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Added by Laws 1970, c. 101, § 13, eff. June 1, 1970. Amended by Laws
1979, c. 173, § 10; Laws 1988, c. 65, § 7, emerg. eff. March 25,
1988; Laws 2000, c. 81, § 10, eff. Nov. 1, 2000.
§18-381.14. Limitation of liability.
The State Banking Commissioner, or any member of his staff
including any member of the Savings and Loan Advisory Council, shall
not be liable in any civil action for damages for any act done or
omitted in good faith in performing the functions of his office.
Laws 1970, c. 101, § 14, eff. June 1, 1970; Laws 1993, c. 183, § 36,
eff. July 1, 1993.
§18-381.15. Examination and audit reports from Director of the
Office of Thrift Supervision – Assessments and fees – Special
examinations.
A. In the case of any insured association which is examined
periodically by the Director of the Office of Thrift Supervision, and
whose financial records are audited periodically in accordance with
regulations of the Director of the Office of Thrift Supervision, the
State Banking Commissioner may accept such examination and audit
reports, and rely upon accuracy thereof, in lieu of examinations by
the savings and loan administrator. It shall be the responsibility
of each insured association to provide such reports to the
Commissioner within ten (10) days of such time as such reports are
received from the agency, person or firm preparing them. The
Commissioner may require a special examination of any association to
be made at any time when in the judgment of the Commissioner an
examination may be necessary.
B. The Commissioner shall charge and collect assessments from
each association chartered pursuant to this act on each One Thousand
Dollars ($1,000.00) of assets, or major fraction thereof, at a rate
established by the Commissioner. The Commissioner may charge and
collect assessments on an annual basis and may, in addition to any
annual assessment, charge and collect a special assessment from each
association, at rates established by the Commissioner. Assessments
shall be deposited in the Oklahoma State Banking Department revolving
fund pursuant to Section 211.1 of Title 6 of the Oklahoma Statutes.
Effective January 1, 2005, and each year thereafter, twenty percent
(20%) of all assessments collected pursuant to this subsection shall
be deposited to the General Revenue Fund of the State Treasury. The
annual assessments shall be paid to the Oklahoma State Banking
Department no later than the fifth day of February in each year.
C. The Commissioner shall charge and collect from each
association under the supervision of the Commissioner an annual fee,
in addition to the assessment set forth in subsection B of this
section, of not more than Five Hundred Dollars ($500.00), which shall
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be deposited in the Oklahoma State Banking Department revolving fund
as set forth in Section 211.1 of Title 6 of the Oklahoma Statutes.
D. Whenever it is deemed advisable by the Commissioner, a
special examination of an association may be conducted. The expense
of the Department necessarily incurred in the special examination
shall be chargeable to the association at a rate not in excess of
Fifty Dollars ($50.00) per examiner per hour plus travel expenses as
provided by Section 201.1 of Title 6 of the Oklahoma Statutes for
each examining person while engaged at such association.
E. Each foreign association doing business in this state under a
certificate of authority shall furnish to the Commissioner, with each
annual examination report, a statement showing the total amount of
Oklahoma real estate loans and other loans made to Oklahoma
residents. The annual supervisory fee of every such foreign
association shall be computed and paid on the aggregate amount of
such loans at the rate of twelve cents ($0.12) per One Thousand
Dollars ($1,000.00) of such loans.
F. Except as otherwise provided by law, all fees set by the
Commissioner or otherwise provided for in rules promulgated by the
Commissioner shall be deposited in the Department revolving fund
pursuant to Section 211.1 of Title 6 of the Oklahoma Statutes.
Added by Laws 1970, c. 101, § 15, eff. June 1, 1970. Amended by Laws
1975, c. 236, § 2, emerg. eff. May 30, 1975; Laws 1979, c. 173, § 11;
Laws 1988, c. 65, § 8, emerg. eff. March 25, 1988; Laws 1990, c. 118,
§ 2, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 37, eff. July
1, 1993; Laws 2000, c. 81, § 11, eff. Nov. 1, 2000; Laws 2003, c.
356, § 8, emerg. eff. June 3, 2003.
§18-381.16. Filing requirements for new mutual and stock
associations.
At any time hereafter when ten or more individuals, residents of
this state, desire to form a mutual association, or one or more
individuals, residents of this state, desire to form a stock
association under the provisions of this act, such persons,
hereinafter referred to as the incorporators, shall file with the
State Banking Commissioner the following:
1. Four copies of the proposed certificate of incorporation,
signed and acknowledged by all of the incorporators and addressed to
the Secretary of State;
2. An original and three copies of an application for a
certificate of authority to transact business as an association,
addressed to the Commissioner;
3. Four copies of the proposed bylaws for the proposed
association;
4. A remittance of Two Hundred Dollars ($200.00) payable to the
Secretary of State of Oklahoma, as the incorporation fee in lieu of
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the fees prescribed by paragraph 9 of subsection A of Section 1142 of
this title, which shall not be applicable to an association; and
5. A deposit of Two Thousand Dollars ($2,000.00) payable to the
Commissioner to be used for the purpose of defraying expenses of an
investigation and report of the feasibility of the proposed
association and other expenses incidental to the consideration of the
application.
Added by Laws 1970, c. 101, § 16, eff. June 1, 1970. Amended by Laws
1975, c. 236, § 3, emerg. eff. May 30, 1975; Laws 1984, c. 229, § 7,
operative July 1, 1984; Laws 1988, c. 65, § 9, emerg. eff. March 25,
1988; Laws 1990, c. 118, § 3, emerg. eff. April 23, 1990; Laws 1993,
c. 183, § 38, eff. July 1, 1993; Laws 2000, c. 81, § 12, eff. Nov. 1,
2000.
§18-381.17. Contents of certificate of incorporation.
The certificate of incorporation shall set forth:
1. The name of the association;
2. That its term of existence is perpetual;
3. That the purpose for which it is formed is to engage in the
business of an association pursuant to the Oklahoma Savings and Loan
Code and the rules promulgated thereunder;
4. The place where it is to maintain the main office for the
transaction of business;
5. The names and addresses of the incorporators, and the amounts
of the deposit accounts or number of shares of stock subscribed by
each of them;
6. If the association will be a stock association, the number of
shares of stock of each class to be authorized and issued and the par
value per share; and
7. Such other proper provisions to govern the business and
affairs of the association as may be desired by the incorporators.
Added by Laws 1970, c. 101, § 17, eff. June 1, 1970. Amended by Laws
1988, c. 65, § 10, emerg. eff. March 25, 1988; Laws 1993, c. 183, §
39, eff. July 1, 1993; Laws 2000, c. 81, § 13, eff. Nov. 1, 2000.
§18-381.18. Application and supporting data.
The application for a certificate of authority to transact
business as an association shall be accompanied by data concerning
the community in which the proposed association is to be located, the
occupations of the incorporators, and a plan for payment of expenses
of the proposed association until it is incorporated and is granted a
certificate of authority, in the case of a stock association, or
until it becomes self-sustaining from its own operating income in the
case of a mutual association.
Added by Laws 1970, c. 101, § 18, eff. June 1, 1970. Amended by Laws
1988, c. 65, § 11, emerg. eff. March 25, 1988; Laws 2000, c. 81, §
14, eff. Nov. 1, 2000.
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§18-381.19. Order – Certificate of authority.
The State Banking Commissioner shall act upon and issue an order
granting or denying each application for a certificate of authority.
If the Commissioner finds that the application should be granted, the
Commissioner shall designate the amount of deposit accounts required
and fix a reasonable time within which the funds subscribed may be
placed in escrow in a bank or trust company approved by the
Commissioner, to be delivered to the association after incorporation
or returned to the subscribers if incorporation is not completed.
The Commissioner may also require the incorporators to advance funds
necessary to pay organizational expenses and other expenses for
starting business, such advances to be repaid by the association
after its incorporation and the granting of its certificate of
authority, in the case of a stock association, or after its income is
sufficient to meet reserve requirements, in the case of a mutual
association, and further, in the case of a mutual association, to pay
reasonable earnings on the deposit accounts of the association. If
and when all requirements are met, a certificate of authority shall
be issued by the Commissioner. The Secretary of State shall file the
approved certificate of incorporation upon receipt of the
incorporation fee. If the deposit accounts of the association are to
be insured, approval shall be contingent upon the making, by the
proposed association, of a bona fide application for insurance of
accounts and deposits by the Federal Deposit Insurance Corporation
and upon approval of such application by the Federal Deposit
Insurance Corporation.
Added by Laws 1970, c. 101, § 19, eff. June 1, 1970. Amended by Laws
1975, c. 236, § 4, emerg. eff. May 30, 1975; Laws 1988, c. 65, § 12,
emerg. eff. March 25, 1988; Laws 1990, c. 118, § 4, emerg. eff. April
23, 1990; Laws 1993, c. 183, § 40, eff. July 1, 1993; Laws 2000, c.
81, § 15, eff. Nov. 1, 2000.
§18-381.20. Payment into escrow account - Required savings capital.
A. Before a certificate of authority is issued for a new mutual
association, there shall be paid into the escrow fund as
subscriptions to deposit accounts of the proposed association such
aggregate amount as the State Banking Commissioner shall deem
adequate, but, if insured, not less than an amount necessary to meet
the requirements of the Federal Deposit Insurance Corporation. If
the organizers intend to organize and operate the association without
federal insurance on its deposit accounts, the amount paid into the
escrow fund as subscriptions to deposit accounts of the proposed
association shall be at the sole discretion of the Commissioner.
B. No permanent capital stock association may be organized
hereafter unless, prior to the filing of its certificate of
incorporation, such amounts of its permanent capital stock as the
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Commissioner shall deem adequate, but, if insured, not less than an
amount necessary to meet the requirements of the Federal Deposit
Insurance Corporation shall have been subscribed for and paid for in
lawful money of the United States. If the organizers intend to
organize and operate the association without federal insurance on its
deposit accounts, the amount of permanent capital stock required
shall be at the sole discretion of the Commissioner.
Added by Laws 1970, c. 101, § 20, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 2, eff. July 1, 1979; Laws 1987, c. 61, § 3, emerg.
eff. May 4, 1987; Laws 1988, c. 65, § 13, emerg. eff. March 25, 1988;
Laws 1990, c. 118, § 5, emerg. eff. April 23, 1990; Laws 1993, c.
183, § 41, eff. July 1, 1993; Laws 2000, c. 81, § 16, eff. Nov. 1,
2000.
§18-381.21. Corporate existence - Organizational meeting.
The corporate existence of an association shall begin on the date
of filing of the certificate of incorporation with the Secretary of
State and within thirty (30) days thereafter an organizational
meeting shall be held by the deposit account holders or permanent
capital stock subscribers pursuant to notice mailed to each of them
not less than seven (7) days before the date of the meeting. At such
meeting, bylaws of the association shall be adopted and directors
shall be elected.
Added by Laws 1970, c. 101, § 21, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 3, eff. July 1, 1979; Laws 1988, c. 65, § 14, emerg.
eff. March 25, 1988; Laws 2000, c. 81, § 17, eff. Nov. 1, 2000.
§18-381.22. Corporate name.
The name of every association hereafter incorporated pursuant to
this act, and of any existing association which hereafter changes its
name, shall be approved by the State Banking Commissioner. The name
shall not so nearly resemble the name of another association or
federal association as to be likely to deceive the public.
Associations may operate under trade names as approved by the
Commissioner.
Added by Laws 1970, c. 101, § 22, eff. June 1, 1970. Amended by Laws
1987, c. 61, § 4, emerg. eff. May 4, 1987; Laws 1990, c. 118, § 6,
emerg. eff. April 23, 1990; Laws 1993, c. 183, § 42, eff. July 1,
1993; Laws 2000, c. 81, § 18, eff. Nov. 1, 2000.
§18-381.23. Exclusiveness of name.
No person, firm, company, partnership or corporation, either
domestic or foreign, unless lawfully authorized to do business in
this state under the provisions of this act, shall do business in
this state under any name or title which contains the terms "savings
and loan", "building and loan", "savings association", "savings bank"
or combination of such terms in any manner which indicates or
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reasonably implies that its business is of the character or kind
carried on or transacted by an association, or that is likely to lead
any person to believe that such business is that of an association.
Upon application by the Commissioner, or any association, a court of
competent jurisdiction may issue an injunction to restrain any such
entity from violating or continuing to violate the provisions of this
section.
Added by Laws 1970, c. 101, § 23, eff. June 1, 1970. Amended by Laws
1988, c. 65, § 15, emerg. eff. March 25, 1988; Laws 2000, c. 81, §
19, eff. Nov. 1, 2000.
§18-381.24. Change of office location - Change of name.
No association shall move its main office or branch office, or
change its name except with permission granted by order of the State
Banking Commissioner. In the event permission is granted to move the
main office to a town or city other than that named in the
certificate of incorporation of the association, or to change the
name, an amended certificate of incorporation shall be filed.
Added by Laws 1970, c. 101, § 24, eff. June 1, 1970. Amended by Laws
1988, c. 65, § 16, emerg. eff. March 25, 1988; Laws 1990, c. 173, §
19, emerg. eff. May 3, 1990; Laws 1993, c. 183, § 43, eff. July 1,
1993; Laws 2000, c. 81, § 20, eff. Nov. 1, 2000.
§18-381.24a. Branch banking - Deposit limitation – Certificate -
Penalty.
A. Beginning on the effective date of this act, upon approval of
the State Banking Commissioner, any association shall be authorized
to establish and operate in this state, on real property owned or
leased by the association, an unlimited number of branches by
acquisition, de novo, or otherwise. Such branches may be fixed or
mobile, and any permissible function, business, power, or activity of
any kind of the association may be performed or engaged in at such
location. However, branches established by acquisition shall be
subject to the limitations as set forth in subsection B of this
section.
B. 1. It shall be unlawful for any association to acquire any
other association, federal association or bank in this state or any
portion of its assets if such acquisition would result in the
association having direct or indirect ownership or control of more
than fifteen percent (15%) of the aggregate deposits of all financial
institutions located in this state which have deposits insured by the
Federal Deposit Insurance Corporation as determined by the
Commissioner on the basis of the most recent reports of such
institutions to their supervisory authorities which are available at
the time of the proposed acquisition.
2. The deposit limitation provided for in this subsection shall
not apply to disallow an acquisition of a bank, association or
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federal association if control results only by reason of ownership or
control of shares of such financial institution acquired directly or
indirectly:
a. in a good faith fiduciary capacity, except when such
shares are held for the benefit of the acquiring
association's shareholders, or
b. by an association in the regular course of securing or
collecting a debt previously contracted in good faith,
or
c. at the request of or in connection with the exercise of
regulatory authority for the purpose of preventing
imminent failure of the bank, association or federal
association or to protect the depositors thereof as
determined by the principal supervisory agency in its
sole discretion.
Provided, however, at the end of a period of five (5) years from the
date of acquisition, for the circumstances set forth in subparagraphs
b and c of this paragraph, the deposits of the acquired bank or
association or federal association shall be included in computing the
deposit limitation and if deposits are in excess, appropriate
reductions and disposition shall be made within six (6) months to
meet such limitations. Further, in the circumstances set forth in
subparagraph c of this paragraph, the Commissioner and the Federal
Deposit Insurance Corporation shall give priority in authorizing any
such acquisition to any acquiring association whose total deposits do
not exceed the deposit limitation.
C. 1. No association shall be permitted to establish or operate
a branch except upon certificate issued by the Commissioner or Office
of Thrift Supervision.
2. The application for a certificate to establish, operate, or
relocate a branch of an association shall comply with the regulations
of the Commissioner.
D. The provisions of this section shall not be construed in
derogation or denial of the right to operate and maintain facilities
as provided for in Sections 381.24b, 381.24c and 381.24d of this
title.
E. A violation of any portion of this section, upon conviction,
shall be a misdemeanor punishable by a fine not exceeding Five
Hundred Dollars ($500.00). Each day's violation shall constitute a
separate offense.
F. Nothing contained in this section shall be construed to limit
the authority of federal savings associations to branch in accordance
with federal law and regulations.
Added by Laws 1990, c. 173, § 20, emerg. eff. May 3, 1990. Amended
by Laws 1992, c. 295, § 29, eff. July 1, 1992; Laws 1993, c. 183, §
44, eff. July 1, 1993; Laws 1994, c. 17, § 1, emerg. eff. April 4,
1994; Laws 1996, c. 48, § 1, emerg. eff. April 8, 1996; Laws 2000, c.
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81, § 21, eff. Nov. 1, 2000; Laws 2000, c. 205, § 37, emerg. eff. May
17, 2000.
§18-381.24b. Detached facilities - Certificate - Making of loans
prohibited - Penalty.
A. 1. Any association may maintain and operate, subject to the
approval of the State Banking Commissioner as evidenced by the
certificate of the Commissioner, outside attached facilities and
detached facilities on real property owned or leased by the
association having one or more tellers' windows for drive-in or walk-
up service or both.
2. Any branch may maintain and operate outside attached
facilities having one or more tellers' windows for drive-in or walk-
up service or both on property owned or leased by the association.
B. 1. No association shall be permitted to maintain and operate
such additional outside facilities except upon certificate issued by
the Commissioner. The issuance of the certificates shall rest solely
in the discretion of the Commissioner.
2. The application for a certificate to maintain and operate a
detached facility shall comply with the rules of the Commissioner.
An application fee shall be payable to the Oklahoma State Banking
Department in an amount set by rule of the Commissioner.
3. Any association function may be performed at the facilities
except that of making loans. Upon the recommendation of the
Commissioner, the Attorney General shall bring an appropriate action
to enjoin an association from conducting the making of loans at such
facilities.
4. Any association validly operating a detached facility prior
to May 3, 1990, shall be granted a certificate to continue its
operation at such facility.
5. The provisions of this section shall not be construed in
derogation or denial of the right to operate and maintain facilities
as provided for in Sections 381.24c and 381.24d of this title.
C. A violation of any portion of this section shall be and
constitute a misdemeanor punishable upon conviction by a fine not
exceeding Five Hundred Dollars ($500.00). Each day's violation shall
constitute a separate offense.
D. Nothing contained in this section shall be construed to limit
the authority of federal savings associations to maintain and operate
outside or detached facilities in accordance with federal law and
regulations.
Added by Laws 1990, c. 173, § 21, emerg. eff. May 3, 1990. Amended
by Laws 1993, c. 183, § 45, eff. July 1, 1993; Laws 2000, c. 81, §
22, eff. Nov. 1, 2000.
§18-381.24c. Military savings facilities - Certificate - Application
- Functions permitted - Penalty.
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A. Any association may, subject to the approval of the State
Banking Commissioner as evidenced by its certificates, and subject to
the approval of the military installation commander as evidenced by a
letter of approval, maintain and operate a military savings facility
on any military installation located in this state.
B. As used in this section, the term "military savings facility"
shall mean a detached facility or branch maintained by an association
upon a military installation within this state, provided such
military savings facility must be within the confines of a military
reservation and located upon property owned or leased by the United
States government.
C. 1. No association shall be permitted to maintain and operate
such military savings facility, except on certificate issued by the
Commissioner. The issuance of such certificate shall rest solely in
the discretion of the Commissioner.
2. The application for a certificate to maintain and operate a
military savings facility shall comply with the regulations of the
Commissioner. An application fee shall be payable to the Oklahoma
State Banking Department in an amount set by rule of the
Commissioner.
3. No association function shall be performed at the facility
save that of accepting deposits, cashing checks, making change,
selling drafts, cashier's checks, money orders, traveler's checks,
etc., accepting payment for personal utility bills, redeeming and
selling United States Savings Bonds, and such other services as the
installation commander may request, in writing, of the association.
Upon the recommendation of the Commissioner, the Attorney General
shall bring an appropriate action to enjoin an association from
conducting association functions at such facility other than those
herein granted.
D. A violation of any portion of this section shall be and
constitute a misdemeanor punishable upon conviction by a fine not
exceeding Five Hundred Dollars ($500.00). Each day's violation shall
constitute a separate offense.
Added by Laws 1990, c. 173, § 22, emerg. eff. May 3, 1990. Amended
by Laws 1993, c. 183, § 46, eff. July 1, 1993; Laws 2000, c. 81, §
23, eff. Nov. 1, 2000.
§18-381.24d. Consumer banking electronic facilities - Assistance in
operation of facility - Access - Authority of federal savings
associations.
A. Any association may install, operate or utilize consumer
banking electronic facilities, provided written notice is given to
the State Banking Commissioner prior to the commencement of
operations of each facility. Such notice shall contain any
reasonable descriptive information pertaining to the facility as
shall be required by the rules or regulations of the Commissioner.
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B. A consumer banking electronic facility, when located other
than at an association's main office or detached facility, may be
operated exclusively by association customers or transactions may be
performed through the assistance of any person provided that person
is not employed, either directly or indirectly, by any association,
association holding company or subsidiary thereof. Such assistance
shall not be deemed to be engaging in association business. Persons
assisting association customers at the site of a consumer banking
electronic facility may be trained by association employees and
nothing in this section shall be construed to prohibit periodic
servicing of a consumer banking electronic facility by an association
employee. Under no circumstances may an employee of an association,
association holding company, affiliate or subsidiary thereof perform
transactions for others at the consumer banking electronic facility.
However, a consumer banking electronic facility located on the
business premises of a person engaged in the sale of goods or
services may be used to perform internal nonbanking functions for
such persons.
C. Consumer banking electronic facility transactions shall be
considered as the conduct of association transactions at the main
office of the association for which the data is transmitted.
D. 1. An association or combination of associations or business
entity or organization offering such services to an association which
establishes or maintains a manned or unmanned consumer banking
electronic facility or facilities shall make the use thereof
available to associations located in this state on a fair and
equitable basis of nondiscriminatory access and rates. Provided,
that if a retailer does accept any credit or debit card or other
system, nothing herein shall be construed to deprive such retailer of
the right to accept or reject any other credit or debit card or other
system offered by any other association or business entity.
2. An association or combination of associations which
establishes and maintains a manned consumer banking electronic
facility or facilities may make the use thereof available on a
reciprocal basis to banks and credit unions located in this state on
a fair and equitable basis of nondiscriminatory access and rates.
3. In the event of a dispute, the Commissioner shall have the
jurisdiction to determine, after a hearing conducted upon notice and
pursuant to regulations adopted by the Commissioner, what constitutes
a fair and equitable basis of nondiscriminatory access and rates,
based upon cost of installation and proportionate usage of the
facility. A principal factor in any equitable formula of shared
costs of installation and/or operation shall give weight to the
number of transactions of each participating association.
4. Proceedings under this section shall be subject to Article II
of the Administrative Procedures Act, Section 309 et seq. of Title 75
of the Oklahoma Statutes.
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E. Nothing contained in this section shall be construed to limit
the authority of federal savings associations to install, operate or
utilize consumer banking electronic facilities in accordance with
federal law and regulations.
Added by Laws 1990, c. 173, § 23, emerg. eff. May 3, 1990. Amended
by Laws 1993, c. 183, § 47, eff. July 1, 1993; Laws 2000, c. 81, §
24, eff. Nov. 1, 2000.
§18-381.24e. Operations centers.
Upon written notice to the State Banking Commissioner, any
association may establish one or more operations centers on property
owned or leased by the association. For purposes of this section,
"operations center" means an association facility separated from the
main office of the association at which only the following
association operations are conducted: computer processing,
information systems, electronic communications, loan payment
processing, bookkeeping, item processing, currency and coin
processing and storage, data processing, and all support functions
related thereto.
Added by Laws 2000, c. 81, § 25, eff. Nov. 1, 2000.
§18-381.24f. Origination of loans and deposit accounts at locations
other than main or branch office.
Subject to rules as may be promulgated by the State Banking
Commissioner, an association may utilize employees of the association
to originate loans or originate deposit accounts, or both, at
locations other than the main office or a branch office of such
association, provided that the loan decision is made and the loan is
funded at the main office or a branch office of the association and
provided that no deposits shall be accepted or received at the
deposit origination office.
Added by Laws 2000, c. 81, § 26, eff. Nov. 1, 2000.
§18-381.24g. Association subsidiary as agent of holding company.
A. Any association subsidiary of an association holding company
may receive deposits, renew time deposits, close loans, service
loans, and receive payments on loans and other obligations as an
agent for any other bank or association owned or controlled by the
same holding company.
B. Despite any other provision of law, an association as an
agent in accordance with subsection A of this section for an
affiliate shall not be considered a branch of the affiliate.
C. An agency relationship between subsidiary institutions
pursuant to subsection A of this section shall be on terms that are
consistent with safe and sound practices and all applicable
regulations of any appropriate regulatory agency.
Added by Laws 2000, c. 81, § 27, eff. Nov. 1, 2000.
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§18-381.25. Amendment of certificate of incorporation.
An amended certificate of incorporation must be signed and
acknowledged by all of the directors of the association, and shall
conform with the requirements for the original certificate of
incorporation except that the names and addresses of the directors
shall be stated in lieu of names of the incorporators. An amended
certificate of incorporation shall be submitted to the State Banking
Commissioner for approval and shall be filed with the Secretary of
State upon payment by the association of the statutory filing fees
for filing an amended certificate of incorporation.
Added by Laws 1970, c. 101, § 25, eff. June 1, 1970. Amended by Laws
1987, c. 61, § 5, emerg. eff. May 4, 1987; Laws 1988, c. 65, § 17,
emerg. eff. March 25, 1988; Laws 2000, c. 81, § 28, eff. Nov. 1,
2000.
§18-381.26. Bylaws - Resolutions of savings and loan associations -
Limiting director's liability.
A. The bylaws of every association shall prescribe the notice
and the time and place of the annual meeting of members or
stockholders; the requirements for holding special meetings of
members or stockholders; and the manner of determining the number and
terms of office of the directors.
B. 1. Provisions with respect to directors' meetings, the
selection and duties of officers, making of loans, issuance of
various classes of deposit accounts or permanent capital stock,
distribution of earnings, amendments of the bylaws, rights and
obligations of members or stockholders, and any other matters
concerning operations of the association not in conflict with this
act or rules of the State Banking Commissioner and not otherwise
inconsistent with law or the certificate of incorporation of the
association may be included in the bylaws.
2. The bylaws or a resolution of an association as adopted or
amended by the members or stockholders may include a provision
eliminating or limiting the personal liability of a director to the
association or its holding company, or to the shareholders of either
for any negligence in the performance of his duties but not for:
a. any breach of the director's duty of loyalty to the
association or its holding company, or to the
shareholders of either,
b. acts or omissions not in good faith or which involve
intentional misconduct or a violation of law, or
c. any transaction from which the director derived an
improper personal benefit.
C. All bylaws and amendments hereafter adopted shall be promptly
submitted to the Commissioner for approval. Any decision of the
Commissioner disapproving proposed amendments may be appealed
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pursuant to the provisions of Section 207 of Title 6 of the Oklahoma
Statutes.
D. The bylaws of each association shall constitute laws of the
association, subordinate to this act, to the rules of the
Commissioner, and to applicable federal regulations.
E. The provisions of the Oklahoma General Corporation Act shall,
insofar as the Oklahoma General Corporation Act is not inconsistent
with this act, govern associations operating pursuant to the
provisions of this act.
Added by Laws 1970, c. 101, § 26, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 4, eff. July 1, 1979; Laws 1987, c. 61, § 6, emerg.
eff. May 4, 1987; Laws 1988, c. 65, § 18, emerg. eff. March 25, 1988;
Laws 1990, c. 118, § 7, emerg. eff. April 23, 1990; Laws 1993, c.
183, § 48, eff. July 1, 1993; Laws 2000, c. 81, § 29, eff. Nov. 1,
2000.
§18-381.27. Membership and voting rights.
Every holder of a deposit account of a mutual association and
every borrower on the security of a mortgage or acquiring ownership
of property upon which a mortgage is held by the association shall be
deemed a member of such association. In a mutual association, a
holder of a deposit account shall be entitled to one vote for each
One Hundred Dollars ($100.00) of the deposit account of the holder,
and a mortgagor or owner of property on which the association holds a
mortgage shall be entitled to one vote at all meetings of the
members. Holders of the capital stock in a stock association shall
have exclusive voting rights.
Added by Laws 1970, c. 101, § 27, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 5, eff. July 1, 1979; Laws 2000, c. 81, § 30, eff.
Nov. 1, 2000.
§18-381.28. Members meetings.
An annual meeting of the members or stockholders of each
association shall be held to elect directors, and special meetings of
the members or stockholders may be called and held pursuant to such
notice as may be provided by the bylaws.
Amended by Laws 1988, c. 65, § 19, emerg. eff. March 25, 1988.
§18-381.29. Voting by proxy.
At any meeting of the members or stockholders of an association
or federal association voting may be in person or by proxy appointing
a person or group to cast the votes of the member or stockholder,
provided that no proxy shall be eligible to be voted at any meeting
unless such proxy shall have been filed with the association at least
five (5) days prior to the date of the meeting. Unless otherwise
specified in the proxy, every proxy shall continue in force from year
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to year until revoked by a writing duly delivered to the secretary or
until superseded by a subsequent proxy.
Laws 1970, c. 101, § 29, eff. June 1, 1970; Laws 1978, c. 168, § 7,
eff. July 1, 1979.
§18-381.30. Quorum.
At an annual meeting or at any special meeting of the members any
number of members present in person or by proxy eligible to be voted
constitutes a quorum. At an annual meeting or at any special meeting
of a stock association, stockholders of a majority of the stock held
shall be present in person or by proxy eligible to be voted to
constitute a quorum. A majority of all votes cast at any meeting of
members shall determine any questions unless this act specifically
provides otherwise.
Laws 1970, c. 101, § 30, eff. June 1, 1970; Laws 1978, c. 168, § 8,
eff. July 1, 1979.
§18-381.31. Directors.
A. The operating and business policies of each association shall
be directed by a board of directors of not less than five nor more
than fifteen persons elected by a majority of the votes of the
members or stockholders present in person or by proxy at the annual
meeting. Directors need not be members or stockholders unless so
required by the association's certificate of incorporation or bylaws.
A majority of the directors shall be bona fide residents of this
state. Directors may be elected for a longer term than one (1) year
if the bylaws so provide, but no director may be elected for a term
longer than three (3) years, and the terms of at least two directors
shall expire each year.
B. If a vacancy occurs with respect to the board of directors,
the remaining directors, though less than a quorum, may fill such
vacancy by electing a director or directors to serve the remainder of
the unexpired term for the class of directors in which such vacancies
exist.
C. The board of directors shall meet each year, following the
annual members' or stockholders' meeting, and shall elect the
officers at such meeting. Such additional meetings of the board of
directors shall or may be held as the bylaws shall require or permit.
A majority of the directors, if present at any meeting, shall
constitute a quorum unless the bylaws otherwise provide.
Added by Laws 1970, c. 101, § 31, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 9, eff. July 1, 1979; Laws 1986, c. 219, § 5, emerg.
eff. June 9, 1986; Laws 1987, c. 61, § 7, emerg. eff. May 4, 1987;
Laws 1988, c. 65, § 20, emerg. eff. March 25, 1988; Laws 2000, c. 81,
§ 31, eff. Nov. 1, 2000.
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§18-381.31a. Examination of association affairs by board of
directors.
The board of directors of every association shall examine, at
least once in each calendar year at intervals of not more than
fifteen (15) months, all the affairs of the association including the
character and value of investments and loans, the efficiency of
operating procedures, and such other matters as the Commissioner
prescribes. A report of the examination shall be submitted promptly
to the Commissioner and shall embody such information as the
Commissioner requires. The board of directors may provide that such
examination shall be conducted by a committee of not less than three
directors, by certified public accountants, or by independent
auditors responsible only to the board of directors. Such
examination shall be made when practicable without the assistance of
the executive officers of the bank or trust company. Such report of
examination shall be reviewed by the directors at the next meeting of
the board of directors.
Added by Laws 2000, c. 81, § 32, eff. Nov. 1, 2000.
§18-381.32. Officers.
The officers of an association shall consist of a president to be
chosen from among the directors, one or more vice-presidents, a
secretary, a treasurer, and any other officers authorized by the
bylaws or by the directors. Any number of offices may be held by the
same person unless the certificate of incorporation or bylaws provide
otherwise.
Amended by Laws 1988, c. 65, § 21, emerg. eff. March 25, 1988.
§18-381.33. Indemnification - Directors, officers, employees and
agents.
Any association shall have power to indemnify any person who is
or was an officer, director, employee or agent of the association, or
who is or was serving at the request of the association as an
officer, director, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise unless such
person has violated paragraph 2 of subsection B of Section 381.26 of
this title, in accordance with Section 1031 of this title.
Amended by Laws 1987, c. 61, § 8, emerg. eff. May 4, 1987.
§18-381.34. Fidelity bonds - Waiver.
Every association must protect itself against loss of money or
property by or through any fraud, dishonesty, forgery or alteration,
larceny, theft, embezzlement, or other criminal act of any director,
officer, employee or agent, by a blanket bond covering all personnel
and agents or by individual fidelity bonds, issued by a corporate
surety. The amount and form of each such bond and sufficiency of the
surety thereon shall be subject to review and disapproval by the
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State Banking Commissioner. The Commissioner may waive the bond
requirement, in whole or in part, upon a showing by the association
that such bonding is either unavailable, economically infeasible, or
an imprudent business decision. Such waiver shall be for a period of
time, to be stated in the Commissioner's order, not exceeding one (1)
year, subject to extension upon further application. The order of
the Commissioner waiving the bond requirement shall be conditioned on
the association continuing to seek an available, economically
feasible bond.
Added by Laws 1970, c. 101, § 34, eff. June 1, 1970. Amended by Laws
1987, c. 61, § 9, emerg. eff. May 4, 1987; Laws 2000, c. 81, § 33,
eff. Nov. 1, 2000.
§18-381.35. Repealed by Laws 2000, c. 81, § 88, eff. Nov. 1, 2000.
§18-381.36. Reserves and liquidity.
Every association shall set up and maintain reserves for the
purpose of absorbing losses and shall maintain such portion of its
assets in cash and other liquid assets as shall be required by
regulations of the State Banking Commissioner and by other applicable
federal regulations.
Added by Laws 1970, c. 101, § 36, eff. June 1, 1970. Amended by Laws
1988, c. 65, § 22, emerg. eff. March 25, 1988; Laws 1990, c. 118, §
8, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 49, eff. July 1,
1993; Laws 2000, c. 81, § 34, eff. Nov. 1, 2000.
§18-381.37. Capital - Deposit accounts - Liability.
A. A mutual association may raise capital in the form of deposit
accounts or shares for such fixed, minimum or indefinite periods of
time as are authorized by its bylaws or by regulations of the State
Banking Commissioner. Such deposit accounts shall all have equal
priority upon liquidation. A mutual association may issue such
passbooks, certificates, and other evidence of deposit accounts as
are now or hereafter so authorized. With the exception of forms now
in use by existing associations, all such forms evidencing deposit
accounts shall be promptly submitted to the Commissioner, or to the
Director of the Office of Thrift Supervision, and the issuance of any
such form shall be immediately discontinued in the event of
disapproval. Unless otherwise provided by its bylaws, the total
amount of deposit account liability of a mutual association is
unlimited.
B. A stock association may incur liabilities in the form of
deposit accounts for such fixed, minimum or indefinite periods of
time as are authorized by its bylaws or by regulations of the
Commissioner. Such deposits shall all have equal priority upon
liquidation. A stock association may issue such passbooks,
certificates and other evidence of deposits as are now or may
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hereafter be authorized for deposit associations. New or proposed
forms evidencing deposit accounts shall be promptly submitted to the
Commissioner and to the Director of the Office of Thrift Supervision,
and the issuance of any such form shall be immediately discontinued
in the event of disapproval. In stock associations, holders of
deposit accounts shall participate first in all assets upon
liquidation, but only to the extent of their deposit accounts.
Unless otherwise provided by its bylaws, the total amount of deposit
account liability of a stock association is unlimited.
Added by Laws 1970, c. 101, § 37, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 11, eff. July 1, 1979; Laws 1988, c. 65, § 23, emerg.
eff. March 25, 1988; Laws 1990, c. 118, § 9, emerg. eff. April 23,
1990; Laws 1993, c. 183, § 50, eff. July 1, 1993; Laws 2000, c. 81, §
35, eff. Nov. 1, 2000.
§18-381.38. Classification of deposit accounts.
Any association may classify its deposit accounts according to
the character, amount or duration thereof, or regularity of additions
thereto, and may pay additional or higher rates of earnings on
accounts based on such classifications than is paid on regular
deposit accounts, provided that any such higher rate, or bonus, to be
paid on any class of accounts shall not exceed the limitations
prescribed by the State Banking Commissioner or by applicable federal
regulations. A mutual association may also classify its accounts
according to type of account, such as full paid, single payment,
installment, optional installment, bonus or other types of accounts
designated by the bylaws and permitted by the Commissioner.
Added by Laws 1970, c. 101, § 38, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 12, eff. July 1, 1979; Laws 1990, c. 118, § 10,
emerg. eff. April 23, 1990; Laws 1993, c. 183, § 51, eff. July 1,
1993; Laws 2000, c. 81, § 36, eff. Nov. 1, 2000.
§18-381.39. Repealed by Laws 2000, c. 81, § 88, eff. Nov. 1, 2000.
§18-381.39a. Joint accounts – P.O.D. accounts – Designation of
beneficiaries - Payment.
A. When a deposit has been made or shall hereafter be made in
any association in the names of two or more persons, payable to any
of them or payable to any of them or their survivor, such deposit, or
any part thereof, or any interest thereon, may be paid to either of
the persons, whether one of such persons shall be a minor or not, and
whether the other be living or not. The receipt or acquittance of
the person so paid shall be valid and sufficient release and
discharge to the association for any payment so made.
B. 1. When a deposit has been made or shall hereafter be made
in any association using the terms "Payable on Death" or "P.O.D.",
such deposits shall be payable on the designated person's death to a
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trust designated in the deposit account agreement as the P.O.D.
beneficiary, or to an individual or individuals named beneficiary, if
living, and if not, to the named beneficiary's estate,
notwithstanding any provision to the contrary contained in Sections
41 through 57 of Title 84 of the Oklahoma Statutes. Such deposit
shall constitute a contract between the depositor and the association
that upon the death of the named owner of the account the association
will hold the funds for or pay them to the named beneficiary or the
estate of the named beneficiary.
2. In order to designate multiple payable-on-death beneficiaries
for a deposit account, the account should be styled as follows:
"(Name of Account Owner), payable on death (or P.O.D.) to (Name of
Beneficiary), (Name of Beneficiary), and (Name of Beneficiary), in
equal shares".
3. Adjustments may be made in the styling, depending upon the
number of beneficiaries. It is to be understood that each
beneficiary is entitled to a proportionate share of the account
proceeds upon the owner's death. In the event of the death of a
beneficiary prior to the death of the owner, the beneficiary's share
shall go to the beneficiary's estate. It is not permissible for an
account to designate unequal shares for different payable-on-death
beneficiaries.
4. An association may require the owner of an account to provide
an address for any payable-on-death beneficiary. If the P.O.D.
account is an interest-bearing account and the funds are not claimed
by the payable-on-death beneficiary or beneficiaries within sixty
(60) days after the death of the account holder, or after the
association has notice of the account holder's death, whichever is
later, the association has the right to convert the account to a
noninterest-bearing account.
5. No change in the designation of a named beneficiary shall be
valid unless executed by the owner of the fund and in the form and
manner prescribed by the association; however, this section shall be
subject to the provisions of Section 178 of Title 15 of the Oklahoma
Statutes.
6. The receipt or acquittance of the named beneficiary so paid
or the legal representative of such named beneficiary's estate, if
deceased, shall be valid and sufficient release and discharge to the
association for any payment so made, unless, prior to such payment,
the association receives notice in the form and manner required in
Section 905 of Title 6 of the Oklahoma Statutes.
C. The provisions of this section shall apply to all forms of
deposit accounts, including, but not limited to, transaction
accounts, savings accounts, certificates of deposits, negotiable
order of withdrawal (N.O.W.) accounts, and money market deposit
accounts (M.M.D.A.).
Added by Laws 2000, c. 81, § 37, eff. Nov. 1, 2000.
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§18-381.40. Repealed by Laws 2000, c. 81, § 88, eff. Nov. 1, 2000.
§18-381.40a. Totten Trusts – Express trusts - Payment.
A. Whenever any deposit shall be made in an association by any
person which is in the form of a trust for another, and no other or
further notice of the existence and terms of a legal and valid trust
shall have been given in writing to the association, in the event of
the death of the trustee, the same, or any part thereof, together
with the interest thereon, may be paid to the person or persons for
whom the deposit was made. A deposit held in this form shall be
deemed to constitute a Totten Trust. A revocation of such trust may
only be made in writing to the association, and the association shall
not suffer any liability for payment of funds pursuant to the trust
unless and until it receives written notice of revocation.
B. 1. If a deposit account is opened with an association by one
or more persons expressly as a trustee for one or more other named
persons and further notice of the existence and terms of a legal and
valid trust is not given in writing to the association, the
association may accept and administer the account as set forth in
subsection A of this section.
2. If a deposit account is opened with an association by one or
more persons expressly as a trustee for one or more other named
persons pursuant to or purporting to be pursuant to a written trust
agreement, the trustee may provide the association with a certificate
of trust to evidence the trust relationship. The certificate shall
be an affidavit of the trustee and must include the effective date of
the trust, the name of the trustee, the name or method for choosing
successor trustees, the name and address of each beneficiary, the
authority granted to the trustee, the disposition of the account on
the death of the trustee or the survivor of two or more trustees,
other information required by the association, and an indemnification
of the association. The association may accept and administer the
account, subject to the provisions of Title 58 of the Oklahoma
Statutes, in accordance with the certificate of trust without
requiring a copy of the trust agreement. The association is not
liable for administering the account as provided by the certificate
of trust, even if the certificate of trust is contrary to the terms
of the trust agreement, unless the association has actual knowledge
of the terms of the trust agreement.
3. On the death of the trustee or the survivor of two or more
trustees, the association may pay all or part of the withdrawal value
of the account with interest as provided by the certificate of trust.
If the trustee did not deliver a certificate of trust, the
association's right to treat the account as owned by a trustee ceases
on the death of the trustee. On the death of the trustee or the
survivor of two or more trustees, the association shall, unless the
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certificate of trust provides otherwise, pay the withdrawal value of
the account, with interest, in equal shares to the persons who
survived the trustee, are named as beneficiaries in the certificate
of trust, and can be located by the association from its own records.
If there is not a certificate of trust, payment of the withdrawal
value and interest shall be made as provided by Title 58 of the
Oklahoma Statutes. Any payment made under this section for all or
part of the withdrawal value and interest discharges any liability of
the association to the extent of the payment. The association may
pay all or part of the withdrawal value and interest in the manner
provided by this section, regardless of whether it has knowledge of a
competing claim, unless the association receives actual knowledge
that payment has been restrained by order of a court of competent
jurisdiction.
4. This section does not obligate an association to accept a
deposit account from a trustee who does not furnish a copy of the
trust agreement or to search beyond its own records for the location
of a named beneficiary.
5. This section does not affect a contractual provision to the
contrary that otherwise complies with the laws of this state.
Added by Laws 2000, c. 81, § 38, eff. Nov. 1, 2000.
§18-381.41. Repealed by Laws 2000, c. 81, § 88, eff. Nov. 1, 2000.
§18-381.41a. Deposit accounts with minors – Authority to control –
Loans to minors prohibited.
A. Except as otherwise provided by this section, an association
lawfully doing business in this state may enter into a deposit
account with a minor as the sole and absolute owner of the account
and may pay checks and withdrawals and otherwise act with respect to
the account on the order of the minor. A payment or delivery of
rights to a minor who holds a deposit account evidenced by a receipt
or acquittance signed by the minor discharges the association to the
extent of the payment made or rights delivered.
B. If the minor is the sole and absolute owner of the deposit
account, the disabilities of minority are removed for the limited
purposes of enabling:
1. The minor to enter into a depository contract with the
association; and
2. The association to enforce the contract against the minor,
including collection of overdrafts and account fees and submission of
account history to account reporting agencies and credit reporting
bureaus.
C. A parent or legal guardian of a minor may deny the minor's
authority to control, transfer, draft on, or make withdrawals from
the minor's deposit account by notifying the association in writing.
On receipt of the notice by the association, the minor may not
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control, transfer, draft on, or make withdrawals from the account
during minority except with the joinder of a parent or legal guardian
of the minor.
D. If a minor with a deposit account dies, the receipt or
acquittance of the minor's parent or legal guardian discharges the
liability of the association to the extent of the receipt of
acquittance, except that the aggregate discharges under this
subsection may not exceed Three Thousand Dollars ($3,000.00).
E. Subsection A of this section does not authorize a loan to the
minor by the bank, whether on pledge of the savings account of the
minor or otherwise, or bind the minor to repay a loan made except as
provided by subsection B of this section or other law, unless the
depository institution has obtained the express consent and joinder
of a parent or legal guardian of the minor. This subsection does not
apply to an inadvertent extension of credit because of an overdraft
from insufficient funds, returned checks or deposits, or other
shortages in a depository account resulting from normal banking
operations.
Added by Laws 2000, c. 81, § 39, eff. Nov. 1, 2000.
§18-381.42. Deposit accounts of incompetents.
When a deposit account is held in any association or federal
association by a person who becomes incompetent and an adjudication
of incompetency has been made by a court of competent jurisdiction,
such an association may pay or deliver the withdrawal value of such
deposit account and any earnings that may have accrued thereon to the
guardian or conservator for such person upon proof of the appointment
and qualification of such guardian or conservator. However, if such
association has received no written notice and is not on actual
notice that such deposit account holder has been adjudicated
incompetent, it may pay such funds to such holder or transfer the
deposit account on the order of the deposit account holder, and such
payment or transfer shall be a valid and sufficient release and
discharge of the association for the payment or transfer so made.
Added by Laws 1970, c. 101, § 42, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 16, eff. July 1, 1979; Laws 2000, c. 81, § 40, eff.
Nov. 1, 2000.
§18-381.43. Deposit accounts of administrators, executors,
conservators, guardians, trustees or other fiduciaries.
Any association or federal association may accept deposit
accounts in the name of any administrator, executor, conservator,
guardian, trustee, or other fiduciary for a named beneficiary or
beneficiaries. Any such fiduciary shall have power to vote as a
member of a mutual association as if the membership were held
absolutely, to open and to make additions to, and to withdraw such
deposit account in whole or in part. The withdrawal value of any
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such deposit account, and earnings thereon, or other rights relating
thereto may be paid or delivered, in whole or in part, to such
fiduciary without regard to any notice to the contrary as long as
such fiduciary is living. The payment or delivery to any such
fiduciary or a receipt or acquittance signed by any such fiduciary to
whom any such payment or any such delivery of rights is made shall be
a valid and sufficient release and discharge of an association for
the payment or delivery so made. Whenever a deposit account shall be
opened by any person who designates himself or herself or another as
trustee by written declaration of trust, which provides that the
trust shall terminate upon the death of such person, then, in the
event of the death of the person so described as trustee, the
withdrawal value of such deposit account or any part thereof,
together with the earnings thereon, may be paid to the person for
whom the deposit account was thus described to have been opened. The
payment or delivery to any such beneficiary, beneficiaries or
designated person for any such payment or delivery shall be a valid
and sufficient release and discharge of an association for the
payment or delivery so made.
Added by Laws 1970, c. 101, § 43, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 17, eff. July 1, 1979; Laws 1988, c. 65, § 24, emerg.
eff. March 25, 1988; Laws 2000, c. 81, § 41, eff. Nov. 1, 2000.
§18-381.44. Payment to administrator or executor of deceased
nonresident.
When a deposit account is held in any association or federal
association by a person residing in another state or country, the
deposit account, together with additions thereto and earnings
thereon, or any part thereof, may be paid to the administrator or
executor appointed in the state or country where the account or
deposit holder resided at the time of death. Such payment shall be a
valid and sufficient release and discharge of the association for the
payment so made unless the association has received written notice
and is on actual notice of the appointment of an executor or
administrator by an Oklahoma court of probate jurisdiction.
Added by Laws 1970, c. 101, § 44, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 18, eff. July 1, 1979; Laws 2000, c. 81, § 42, eff.
Nov. 1, 2000.
§18-381.45. Power of attorney - Revocation.
Any association or federal association may continue to recognize
the authority of an attorney-in-fact authorized in writing to manage
or to make withdrawals either in whole or in part from a deposit
account, whether of a minor or adult, until it receives written
notice or is on actual notice of the revocation of such authority.
For the purposes of this section, written notice of the death or
adjudication of incompetency of such deposit account holder shall
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constitute written notice of revocation of the authority of the
attorney.
Added by Laws 1970, c. 101, § 45, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 19, eff. July 1, 1979; Laws 2000, c. 81, § 43, eff.
Nov. 1, 2000.
§18-381.46. Right to withdraw.
The holder of a deposit account in an association shall have the
right to withdraw all or any part of the deposit account, subject to
the right of the association and authority of the State Banking
Commissioner or the Director of the Office of Thrift Supervision, to
impose limitations upon the right of withdrawal from a deposit
account for a fixed or minimum term with respect to which deposit
account the applicable fixed or minimum term has not expired. With
respect to deposit accounts which consist solely of funds in which
the entire beneficial interest is held by one or more individuals or
by an organization which is operated primarily for religious,
philanthropic, charitable, educational, political, or other similar
purposes and which is not operated for profit, and with respect to
deposits of public funds by an officer, employee or agent of the
United States, any state, county, municipality, or political
subdivision thereof, the District of Columbia, the Commonwealth of
Puerto Rico, American Samoa, Guam, any territory or possession of the
United States, or any political subdivision thereof, such deposit
accounts may be subject to check or to transfer or withdrawal on
negotiable order or authorization to the association, and deposit
account holders may make withdrawals or transfers from such accounts
upon nontransferable order or authorization. An association may
offer money market deposit accounts, as defined by federal
regulations, and may permit withdrawals or transfers from such
accounts to the same extent permitted by federal regulations, but
subject to all of the limitations contained therein.
Added by Laws 1970, c. 101, § 46, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 20, eff. July 1, 1979; Laws 1981, c. 114, § 1, emerg.
eff. April 28, 1981; Laws 1990, c. 118, § 11, emerg. eff. April 23,
1990; Laws 2000, c. 81, § 44, eff. Nov. 1, 2000.
§18-381.47. Notice and payment of withdrawals.
With respect to deposit accounts, an association may require such
minimum advance notice of withdrawal as is specified by federal
regulations or such longer advance notice period of not more than
thirty (30) days as its bylaws may provide. The payment of
withdrawals from deposit accounts, in the event an association does
not have funds available to pay all withdrawals when due, shall be
subject to such rules and procedures as may be prescribed by the
State Banking Commissioner, but any association which, except as
authorized in writing by the Commissioner, fails to make full payment
4(#$0&($"!$"+$ -27
of any withdrawal when due shall be deemed to be in an unsafe or
unsound condition to transact business within the meaning of Section
381.74 of this title.
Added by Laws 1970, c. 101, § 47, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 21, eff. July 1, 1979; Laws 1990, c. 118, § 12,
emerg. eff. April 23, 1990; Laws 1993, c. 183, § 52, eff. July 1,
1993; Laws 2000, c. 81, § 45, eff. Nov. 1, 2000.
§18-381.48a. Sole owner accounts without payable-on-death
beneficiary – Transfer of deposits to known heirs - Affidavit.
A. When a deposit has been made in an association in the name of
a sole individual without designation of a payable-on-death
beneficiary, upon the death of the sole owner of the deposit account,
if the amount of the aggregate deposits held in single ownership
accounts in the name of the deceased individual is Five Thousand
Dollars ($5,000.00) or less, the association may transfer the funds
to the known heirs of the deceased upon receipt of an affidavit sworn
to by the known heirs of the deceased which establishes jurisdiction
and relationship and states that the owner of the deposit account
left no will. The affidavit shall be sworn to and signed by the
known heirs of the deceased and same shall swear that the facts set
forth in the affidavit establishing jurisdiction, heirship and
intestacy are true and correct.
B. Receipt by the association of the affidavit described in
subsection A of this section shall be a valid and sufficient release
and discharge to the association for any transfer of deposits made
pursuant thereto and shall set to discharge the association from
liability as to any other party, including any heir, legatee,
devisee, creditor or other person having rights or claims to funds or
property of the decedent, and include a discharge of the association
from liability for any estate, inheritance or other taxes which may
be due the state from the estate or as a result of the transfer.
C. Any person who knowingly submits and signs a false affidavit
as provided in this section shall be fined not more than Three
Thousand Dollars ($3,000.00) or imprisoned for not more than six (6)
months, or both. Restitution of the amount fraudulently attained
shall be made to the rightful beneficiary by the guilty person.
Added by Laws 2000, c. 81, § 46, eff. Nov. 1, 2000.
§18-381.49. Earnings on deposit accounts.
With the exception of interest at a rate fixed, or negotiated on
an individual basis, by a deposit association prior to the acceptance
of the deposit, an association shall determine the rates of earnings
to be paid on all classes of deposit accounts, the times and manner
of crediting, distributing and paying of such earnings, and the
qualifications and limitations applicable to each class of deposit
accounts for which a rate higher than regular rate is provided.
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Added by Laws 1970, c. 101, § 49, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 22, eff. July 1, 1979; Laws 2000, c. 81, § 47, eff.
Nov. 1, 2000.
§18-381.50. Requirements to become deposit-type association or stock
association.
A. Any mutual association may become a deposit-type association
and any mutual association may become a stock association by adoption
of a resolution by a majority of the votes cast in person or by proxy
specially executed for that meeting within ninety (90) days prior to
the meeting at an annual meeting or at any special meeting of its
members, and by adoption of an appropriate amended certificate of
incorporation and bylaw provisions consistent with this act, and in
the case of conversions from mutual to stock form, upon approval of
the conversion by the State Banking Commissioner, and if applicable,
the Director of the Office of Thrift Supervision. Copies of the
resolution to become a deposit association and/or stock association
pursuant to this act and of the amended certificate of incorporation
and bylaw amendments, certified by the secretary or president of the
association, shall be filed with the Commissioner. Upon approval by
the Commissioner, the Commissioner shall file a copy of such approved
resolution with the Secretary of State, and the association shall be
qualified to accept deposit accounts and issue permanent capital
stock in accordance with this act from and after the effective date
stated in the resolution. In no case of conversion of a mutual to a
stock association shall any reserves existing at the time of such
conversion ever inure to the benefit of the permanent capital stock,
but shall be maintained as reserves in accordance with directions of
the Commissioner.
B. At the meeting at which conversion to a stock association is
voted upon, the members of the mutual association shall also vote
upon the directors who shall be the directors of the stock
association after conversion takes effect. The directors shall
execute and file with the Commissioner an amended certificate of
incorporation as provided for in Section 381.17 of this title,
together with an application for conversion, a fee to be set by the
Commissioner, and if the association intends to be an insured
association, a firm commitment for, or evidence of, insurance of its
deposit accounts by the Federal Deposit Insurance Corporation. The
Commissioner may refuse to approve the application and decline to
issue a charter and file the amended certificate of incorporation if
there is reason to believe that the plan of conversion is not fair
and equitable to all the members and that sufficient provision is not
made to protect the interests of the depositors of the prospective
capital stock association. Upon the approval by the Commissioner of
the application for conversion and the amended certificate of
incorporation and the issuance of a charter, the association shall
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cease to be a mutual association. Upon the conversion of a mutual
association, the legal existence of the association shall not
terminate but the stock association shall be a continuation of the
entity of the mutual association and all property of the mutual
association, including its rights, titles and interests in and to all
property of whatever kind, whether real, personal or mixed, and
things in action, and every right, privilege, interest and asset of
every conceivable value or benefit then existing or pertaining to it,
or which would inure to it, immediately by act of law and without any
conveyance or transfer and without any further act or deed shall
remain and vest in the stock association into which the mutual
association has converted itself. The stock association shall have,
hold and enjoy the same in its own right as fully and to the same
extent as the same was possessed, held and enjoyed by the mutual
association. The stock association as of the time and the taking
effect of the conversion shall continue to have and succeed to all
the rights, obligations and relations of the mutual association. All
pending actions and other judicial proceedings to which the mutual
association is a party shall not be abated or discontinued by reason
of the conversion but may be prosecuted to final judgment, order or
decree in the same manner as if the conversion had not been made and
the stock association resulting from the conversion may continue the
actions in its corporate name. Any judgment, order or decree may be
rendered for or against it which might have been rendered for or
against the mutual association theretofore involved in the judicial
proceedings.
C. If the association will be an insured association, approval
by the Commissioner shall be contingent upon the converting
association either having insurance of its deposit accounts by the
Federal Deposit Insurance Corporation, or by the association making a
bona fide application for insurance of deposit accounts, and upon
acceptance and approval of such application by the corporation.
D. The conversion of a state mutual association into a stock
association shall be effected in accordance with a plan of conversion
adopted by the members as provided in this section and consistent
with the other provisions of this title. The plan shall provide
that:
1. Each deposit account holder in the mutual association shall
receive a withdrawable account in the stock association equal in
amount to the withdrawable account of the deposit account holder in
the mutual association;
2. A record date for determining deposit account holders
entitled to purchase stock shall be established which is not less
than ninety (90) days prior to the date of adoption of the plan of
conversion by the board of directors of the association;
3. Officers, directors and employees of the association and
their associates shall forego any participation in the initial
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distribution of permanent capital stock to the extent that any such
person increased the account of such person by more than Twenty
Thousand Dollars ($20,000.00) during the six (6) months preceding the
record date established pursuant to this section. The term
"associate" of a person shall mean parents, spouse, sisters,
brothers, children or anyone married to one of the foregoing persons,
any corporation of which the person is an officer, director or owner
of more than ten percent (10%) of the outstanding voting securities,
any trust of which such person is a trustee or substantial
beneficiary, and any partnership of which such person is a general or
limited partner;
4. The amount of stock to which a member is entitled shall be
determined on the basis of the ratio of deposits of such member with
the association on the record date to the total deposits of the
association on the record date, as applied to the initial issuance of
permanent capital stock. Each deposit account holder as of the
record date may receive warrants authorizing the purchase of shares
of permanent capital stock at a price determined by the board of
directors of the institution and approved by the Commissioner and by
the Director of the Office of Thrift Supervision, and scrip denoting
fractional stock interests of less than one share, provided, however,
that no deposit account holder shall be entitled to scrip
representing fractional interests of less than one-fifth share of
stock; and
5. In connection with a conversion, deposit account holders
shall have a preemptive right to purchase such permanent capital
stock for a period of not less than fourteen (14) days from the date
the offer to sell permanent capital stock is made.
E. If the association is an insured association, the reserves of
a stock association resulting from the conversion of a mutual
association shall be not less than the amount necessary to meet the
requirements of the Federal Deposit Insurance Corporation.
Added by Laws 1970, c. 101, § 50, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 23, eff. July 1, 1979; Laws 1980, c. 103, § 1, eff.
Oct. 1, 1980; Laws 1988, c. 65, § 25, emerg. eff. March 25, 1988;
Laws 1990, c. 118, § 13, emerg. eff. April 23, 1990; Laws 1993, c.
183, § 53, eff. July 1, 1993; Laws 2000, c. 81, § 48, eff. Nov. 1,
2000.
§18-381.51. Deposits authorized.
An association may accept deposits for fixed, minimum or
indefinite periods of time, including accounts bearing a fixed rate
of interest, as may be authorized by its directors, subject to the
provisions of its bylaws and the authority of the State Banking
Commissioner and, if applicable, the Director of the Office of Thrift
Supervision to disapprove of such a rate.
4(#$0&($"!$"+$ -2
Added by Laws 1970, c. 101, § 51, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 24, eff. July 1, 1979; Laws 1990, c. 118, § 14,
emerg. eff. April 23, 1990; Laws 2000, c. 81, § 49, eff. Nov. 1,
2000.
§18-381.52a. Additional association powers and authorities – Special
or fiduciary duties or obligations.
In addition to other provisions of the Oklahoma Savings and Loan
Code relating to deposit accounts, an association may exercise the
powers and authorities applicable under the provisions of Article IX
of the Oklahoma Banking Code, Sections 901 through 907 of Title 6 of
the Oklahoma Statutes, as amended from time to time. An association
may also exercise the powers and authorities applicable under the
provisions of Article XIII of the Oklahoma Banking Code, Section 1301
et seq. of Title 6 of the Oklahoma Statutes, as amended from time to
time. Further, unless an association shall have expressly agreed in
writing to assume special or fiduciary duties or obligations, no such
duties or obligations will be imposed on the association with respect
to a depositor of the association or a borrower, guarantor or surety,
and no special or fiduciary relationship shall be deemed to exist.
Added by Laws 2000, c. 81, § 50, eff. Nov. 1, 2000. Amended by Laws
2016, c. 69, § 1, eff. Nov. 1, 2016.
§18-381.52b. Deposit accounts that may be provided.
An association may provide all types of deposit accounts unless
otherwise provided by rule of the State Banking Commissioner or
applicable federal law.
Added by Laws 2000, c. 81, § 51, eff. Nov. 1, 2000.
§18-381.53. Repealed by Laws 2000, c. 81, § 88, eff. Nov. 1, 2000.
§18-381.53a. Permanent capital stock - Treasury stock - Redemption -
Paid-in surplus - Dividends - Minimum capital requirements.
A. Permanent capital stock shall consist of common stock, which
shall have full voting rights, and may also include preferred stock.
Such stock shall have a par value of not less than one cent ($0.01)
per share, and the proceeds thereof, to the extent of such par value,
shall be set apart and be nonwithdrawable, and shall be a reserve to
absorb losses after all surplus, undivided profits, and other
reserves available for losses have been depleted.
B. 1. With the approval of the State Banking Commissioner and
subject to the conditions as the Commissioner may prescribe, a bank
may purchase its own stock as treasury stock.
2. Preferred stock shall not be issued for a limited term, nor
shall it be redeemable at the option of the holders. An association
shall not bind itself by contract to redeem its preferred stock upon
the happening of certain events, other than dissolution. However,
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preferred stock shall be subject to redemption at any time at the
option of the association, with the prior approval of the
Commissioner and only if, subsequent to the redemption, the
association would meet its minimum capital requirements as imposed by
applicable federal law.
C. Any paid-in surplus with respect to common stock may be made
available for payment of organization and initial operating expenses
or may be credited to surplus, or the contingent reserve, or the
federal insurance reserve, or be transferred to common or preferred
stock as a stock dividend, prorated to the holders of common stock.
An association shall not issue permanent capital stock for a
consideration other than cash or for a price less than par value
thereof, except that, with the approval of the Commissioner, stock
may be issued for a consideration other than cash in connection with
mergers, consolidations or transfers and, when fully paid, the stock
shall be kept unimpaired to the extent of its par value.
D. A stock association may declare and distribute cash dividends
from net earnings, surplus or undivided profits. With the prior
consent of the Commissioner, the stock of an association may be
reduced by resolution of the board of directors approved by vote or
written consent of the holders of a majority of the outstanding stock
of such association to such amount as the Commissioner shall approve,
and any such reduction shall be credited to the contingent reserve
account and shall not be available for dividends to common
stockholders; provided, any reduction in the amount of permanent
capital stock is subject to the provisions of this section and
Section 381.20 of this title, fixing minimum permanent capital stock
requirements.
E. No cash dividends shall be declared on common stock unless,
subsequent to the dividends, the association would continue to meet
its minimum capital requirements as imposed by the Commissioner or
the Director of the Office of Thrift Supervision. Subject to the
provisions of this act, permanent capital stock shall be entitled to
such rate of dividends, if earned, as declared by the board of
directors.
Added by Laws 1978, c. 168, § 31, eff. July 1, 1979. Amended by Laws
1987, c. 61, § 10, emerg. eff. May 4, 1987; Laws 1990, c. 118, § 15,
emerg. eff. April 23, 1990; Laws 1993, c. 183, § 55, eff. July 1,
1993; Laws 2000, c. 81, § 52, eff. Nov. 1, 2000.
§18-381.53b. Impairment of permanent capital stock - Notice -
Appraisals - Assessments.
A. If the State Banking Commissioner, as a result of any
examination or from any report made to the Commissioner, finds that
the permanent capital stock of any association is impaired, the
Commissioner shall notify the association that such impairment exists
and require the association to immediately make good such impairment.
4(#$0&($"!$"+$ -2:
After such notice has been given to an association and until the
impairment has been made good, that association may not issue or
renew any time instrument if that instrument, when aggregated with
any other funds of the same depositor in the same capacity, would
equal or exceed One Hundred Thousand Dollars ($100,000.00) unless
such time instrument earns an annual rate of interest less than four
percent (4%). In the event the amount of the impairment as
determined by the Commissioner is questioned by the association, then
upon application, which shall be filed within ten (10) days, the
value of the assets in question shall be determined by appraisals
made by independent appraisers acceptable to the Commissioner and the
association.
B. The directors of the association, upon which such notice has
been made, shall levy a pro rata assessment upon the permanent
capital stock thereof to make good such impairment and shall cause
notice of such request of the Commissioner and such levy to be given
in writing to each stockholder of such association and the amount of
assessment which the stockholder must pay for the purpose of making
such assessment.
Added by Laws 1978, c. 168, § 32, eff. July 1, 1979. Amended by Laws
1988, c. 65, § 26, emerg. eff. March 25, 1988; Laws 2000, c. 81, §
53, eff. Nov. 1, 2000.
§18-381.53c. Refusal or neglect to pay assessment - Sale of stock -
Payment of assessment.
A. If any stockholder shall refuse or neglect to pay the
assessment specified in such notice within sixty (60) days from the
date of mailing, the directors of such association shall have the
right to sell to the highest bidder at public auction any part or all
of the stock necessary to pay the assessment of such stockholder,
after giving the notice of such sale for ten (10) days in a newspaper
of general circulation published in the county where the main office
of such association in this state is located, and a copy of such
notice of sale shall also be served on such stockholder by mailing a
copy of such notice to his last-known address ten (10) days before
the day fixed for such sale, or such stock may be sold at a private
sale and without public notice. However, before making such private
sale thereof, an offer in writing shall first be obtained and a copy
thereof served upon the owner of record of the stock to be sold, by
mailing a copy of such offer to the last-known address of such owner,
and if after service of such offer such owner shall still refuse or
neglect to pay such assessment within thirty (30) days from the time
of the service of such offer, the directors may accept such offer and
sell such stock to the person making such offer, or to any other
person or persons making a larger offer than the amount named in the
offer submitted to the stockholder, but such stock, in no event,
4(#$0&($"!$"+$ -28
shall be sold for less than the amount of such assessment so called
for and the expense of the sale.
B. Out of the proceeds of the stock so sold, the directors shall
pay the amount of assessment levied thereon and the necessary cost of
sale, and the balance, if any, shall be paid to the person or persons
whose stock has thus been sold. A sale of stock as herein provided
shall effect an absolute cancellation of the outstanding certificate
or certificates evidencing the stock so sold, and shall make the same
null and void and a new certificate shall be issued by the
association to the purchaser thereof.
Added by Laws 1978, c. 168, § 33, eff. July 1, 1979. Amended by Laws
2000, c. 81, § 54, eff. Nov. 1, 2000.
§18-381.53d. Proceeds from assessment - Disposition.
The proceeds from any assessment, less the cost of any sales and
any forfeiture of delinquent stock, shall be credited to the
contingent reserve account.
Laws 1978, c. 168, § 34, eff. July 1, 1979.
§18-381.53e. Permits to sell stock - Application - Issue of permit -
Conditions - Amendment, alteration or revocation.
No association shall sell, offer for sale, negotiate for the sale
of or take subscriptions for, or issue any of its permanent capital
stock until it shall have first applied for and secured from the
State Banking Commissioner a permit authorizing it to do so. Such
application shall be in writing, be verified and be filed with the
Commissioner. In such application the association shall set forth
the names and addresses of its officers, the location of its main
office and branch offices, an itemized account of its financial
condition, the amount and character of its stock and shares, a copy
of any prospectus or advertisement or other description of its stock
to be distributed or published, a copy of all minutes of any
proceedings of its directors, members or stockholders relating to or
affecting the issue of such stock and such additional information
concerning the association, its condition and affairs as the
Commissioner may require. Upon the filing of such application it
shall be the duty of the Commissioner to examine it and the other
papers and documents filed therewith. If the Commissioner finds that
the proposed issue is such as will not mislead the public as to the
nature of the investment or will not work a fraud upon the purchaser
thereof, the Commissioner shall issue to the association a permit
authorizing it to issue and dispose of its stock in such amounts as
the Commissioner may in such permit provide. Otherwise, the
Commissioner shall deny the application and notify the association in
writing of the decision. Every permit shall recite in bold type that
the issuance thereof is permissive only and does not constitute a
recommendation or endorsement of the stock permitted to be issued.
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The Commissioner may impose conditions requiring the impoundment of
the proceeds from the sale of such stock, limiting the expense in
connection with the sale thereof, and such other conditions as the
Commissioner may deem reasonable and necessary or advisable to insure
the disposition of the proceeds from the sale of such stock in the
manner and for the purposes provided in such permit. The
Commissioner may, from time to time, amend, alter or revoke any
permit issued by the Commissioner or temporarily suspend the rights
of such association under such permit. The Commissioner shall have
the power to establish such rules as may be reasonable or necessary
to carry out the purposes and provisions of this section.
Added by Laws 1978, c. 168, § 35, eff. July 1, 1979. Amended by Laws
2000, c. 81, § 55, eff. Nov. 1, 2000.
§18-381.53f. Insurance.
All insured associations shall keep in force, at all times,
insurance covering their deposit accounts to the extent provided by
federal law.
Added by Laws 1978, c. 168, § 36, eff. July 1, 1979. Amended by Laws
1990, c. 118, § 16, emerg. eff. April 23, 1990; Laws 2000, c. 81, §
56, eff. Nov. 1, 2000.
§18-381.54. General powers.
Associations shall have the powers enumerated, authorized and
permitted by this act and such other rights and powers as may be
incidental to or reasonably necessary or appropriate for the
accomplishment of the objects and purposes of the association. Among
others, and except as otherwise limited herein, every association
shall have the following general powers:
1. To have perpetual existence; to adopt and use a corporate
seal; to adopt, amend and repeal bylaws; and to sue and be sued,
complain and defend in any court having jurisdiction;
2. To own or rent such equipment, fixtures, furnishings and
other personal property as may be deemed expedient for the
transaction of the business of the association; and to acquire
personal property in satisfaction of indebtedness owed to the
association;
3. To sell, exchange and dispose of and convey real and personal
property acquired pursuant to this act, and to mortgage, pledge,
lease or otherwise contract with respect to such property;
4. If and when an association is not a member of a Federal Home
Loan Bank, to borrow not more than an aggregate amount equal to one-
fourth (1/4) of its savings or deposits liability on the date of
borrowing and such additional sums as the State Banking Commissioner
may approve. If and when an association is a member of a Federal
Home Loan Bank, to secure advances of not more than an aggregate
amount equal to one-half (1/2) of its savings or deposits liability;
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within such amount equal to one-half (1/2) of its savings or deposits
liability, the association may borrow from sources, individual or
corporate, other than such Federal Home Loan Bank, an aggregate
amount not in excess of the amount permitted by the Federal Home Loan
Bank Board. A subsequent reduction of savings or deposits liability
shall not affect in any way outstanding obligations for borrowed
money. All such loans and advances may be secured by property of the
association. Insured associations may also issue and market such
bonds, debentures, obligations and like securities as the
Commissioner and the Director of the Office of Thrift Supervision may
authorize;
5. To sell and assign without recourse any loan, including any
participating interests therein held by an association; provided that
the Commissioner may by regulation limit the total dollar volume of
loans sold in any calendar year to a designated percentage of total
loans held by the association;
6. To qualify as and become a member of a Federal Home Loan
Bank;
7. To obtain and maintain insurance of the deposit accounts of
its members by the Federal Deposit Insurance Corporation;
8. To appoint and compensate such officers, agents and employees
as its business shall require; to provide for reasonable life, health
and medical insurance for its personnel; to adopt and operate
reasonable bonus plans and retirement benefits for its officers and
employees; to pay reasonable fees to its directors for their
services; and to provide for indemnification of its officers,
employees and directors as permitted by this act whether by insurance
or otherwise;
9. To become a member of and make reasonable payments or
contributions to any organization to the extent that such
organization assists in furthering or facilitating the association's
purposes or its community responsibilities;
10. If and when an association is a member of a Federal Home
Loan Bank, to act as fiscal agent of the United States and, when so
designated by the Secretary of the Treasury, to perform all
reasonable duties as fiscal agent of the United States as the
Secretary of the Treasury may require; and to act as agent for any
instrumentality of the United States and as agent of this state or
any instrumentality thereof;
11. To act as agent for others in servicing loans and making
collections thereon; and to act as agent for others in any
transaction incidental to the operation of its business;
12. To act as trustee of any trust created or organized in the
United States and forming part of a stock bonus, pension, or profit-
sharing plan qualifying for specific tax treatment under Section
401(d) of the Internal Revenue Code of 1986; as trustee or custodian
of an individual retirement account within the meaning of Section
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408(a) of the Internal Revenue Code of 1986; or as trustee with no
active fiduciary duties, provided, that the association shall invest
the funds of the trust or account only in the association's own
accounts, deposits, obligations, or securities or, upon the condition
that the association does not exercise any investment discretion or
directly or indirectly provide any investment advice with respect to
the trust or account assets, in such other assets as the customer may
direct. The association shall observe principles of sound trust
administration, including those relating to recordkeeping and
segregation of assets, and may receive reasonable compensation for
acting in any trust capacity authorized by this paragraph;
13. To acquire savings of the public and pay earnings thereon,
and to lend and invest its funds as provided in this act;
14. To conduct a safe deposit business in compliance with the
requirements of applicable federal law and Sections 1301 through 1313
of Title 6 of the Oklahoma Statutes;
15. To organize a finance subsidiary;
16. To own capital stock of an operating subsidiary; and
17. To have and to exercise all such incidental powers as shall
be necessary to carry on the association business including, but not
limited to, all such powers as may now or hereafter be conferred upon
federal associations by federal laws and the regulations and policies
of the Office of Thrift Supervision, unless otherwise prohibited or
limited by the Commissioner.
Added by Laws 1970, c. 101, § 54, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 27, eff. July 1, 1979; Laws 1987, c. 61, § 11, emerg.
eff. May 4, 1987; Laws 1988, c. 65, § 27, emerg. eff. March 25, 1988;
Laws 1990, c. 118, § 17, emerg. eff. April 23, 1990; Laws 2000, c.
81, § 57, eff. Nov. 1, 2000.
§18-381.55. Investment in real property.
In addition to any powers of investment permitted pursuant to
paragraph 17 of Section 381.54 of this title, every association shall
have power to invest in real property as follows:
1. Such real property or interests therein as the directors may
deem necessary or convenient for the conduct of the business of the
association, which for the purposes of this act shall be deemed to
include the ownership of stock of a wholly owned subsidiary
corporation having as its exclusive activity the ownership and
management of such property or interests, but the amount so invested
shall not exceed the sum of the reserves and undivided profits of the
association, unless the State Banking Commissioner authorizes a
greater amount to be so invested;
2. An amount not exceeding the lesser of:
a. the sum of its reserves and undivided profits, or
b. ten percent (10%) of its assets as reported in its most
recent quarterly thrift financial report or other
4(#$0&($"!$"+$ -:
statement of condition submitted to the Oklahoma State
Banking Department, in the purchase of real estate for
the purpose of producing income or for inventory or
sale or for development and improvement, including the
erection of buildings thereon, for sale or rental
purposes;
3. Such real property as may be acquired in satisfaction or
partial satisfaction of indebtedness owed to the association, by
deed, sheriff's deed, trustee's deed or otherwise.
Added by Laws 1970, c. 101, § 55, eff. June 1, 1970. Amended by Laws
1988, c. 65, § 28, emerg. eff. March 25, 1988; Laws 1993, c. 183, §
56, eff. July 1, 1993; Laws 2000, c. 81, § 58, eff. Nov. 1, 2000.
§18-381.56. Investment in securities.
In addition to any powers of investment permitted pursuant to
paragraph 17 of Section 381.54 of this title, associations shall have
power to invest in securities as follows:
1. In obligations of, or obligations which are fully guaranteed
as to principal and interest by, the United States or this state; in
stock or obligations of any Federal Home Loan Bank or Banks; in stock
or obligations of the Federal Deposit Insurance Corporation; and in
stock or obligations of the Federal National Mortgage Association or
any successor or successors thereto;
2. In time deposits, certificates, accounts, or other
obligations of banks or other financial institutions, the accounts of
which are insured by the Federal Deposit Insurance Corporation or the
National Credit Union Administration;
3. Not in excess of five percent (5%) of its assets, as reported
in its most recent quarterly thrift financial report or other
statement of condition submitted to the Oklahoma State Banking
Department, in bonds, notes or other evidences of indebtedness which
are a general obligation of, or guaranteed as to principal and
interest by, any agency or instrumentality of the United States not
specified in paragraph 1 of this section, or of any city, county or
school district in this state; and
4. Not in excess of ten percent (10%) of its assets in the
capital stock, obligations or other securities of service
organizations substantially all of the activities of which consist of
originating, purchasing, selling and servicing loans upon real estate
and participating interests therein, or clerical, bookkeeping,
accounting, statistical or similar functions performed primarily for
financial institutions plus such other activities as the State
Banking Commissioner may approve.
Added by Laws 1970, c. 101, § 56, eff. June 1, 1970. Amended by Laws
1983, c. 26, § 1, emerg. eff. April 18, 1983; Laws 1987, c. 61, § 12,
emerg. eff. May 4, 1987; Laws 1990, c. 118, § 18, emerg. eff. April
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23, 1990; Laws 1993, c. 183, § 57, eff. July 1, 1993; Laws 2000, c.
81, § 59, eff. Nov. 1, 2000.
§18-381.57. Loans.
Associations shall have power to invest, sell, or otherwise deal
in loans or other investments to the same extent permitted for
federal associations, except as otherwise provided by the rules of
the State Banking Commissioner.
Added by Laws 1970, c. 101, § 57, eff. June 1, 1970. Amended by Laws
1975, c. 236, § 5, emerg. eff. May 30, 1975; Laws 1978, c. 168, § 28,
eff. July 1, 1979; Laws 1981, c. 135, § 1, emerg. eff. May 5, 1981;
Laws 1988, c. 65, § 29, emerg. eff. March 25, 1988; Laws 1990, c.
118, § 19, emerg. eff. April 23, 1990; Laws 2000, c. 81, § 60, eff.
Nov. 1, 2000.
NOTE: Laws 1981, c. 118, § 1 repealed by Laws 1988, c. 65, § 36,
emerg. eff. March 25, 1988.
§18-381.58. Loan rates of interest.
All contracts of an association for the loan of money shall be
subject to the laws of this state with respect to maximum interest
rates which may be charged and to the penalties for violation
thereof.
Added by Laws 1970, c. 101, § 58, eff. June 1, 1970. Amended by Laws
2000, c. 81, § 61, eff. Nov. 1, 2000.
§18-381.59. Conversion into federal association.
At an annual meeting or at any special meeting of the members or
stockholders called to consider such action, any association may
convert itself into a federal association pursuant to the laws of the
United States, as now or hereafter amended, upon a majority vote of
the outstanding stock entitled to vote thereon or upon a majority
vote of the total number of votes of the members present in person or
by proxy. There shall be filed with the State Banking Commissioner a
copy of the charter issued to such federal association by the
Director of the Office of Thrift Supervision or a certificate showing
the organization of such association as a federal association,
certified by the Director of the Office of Thrift Supervision. Upon
the grant to any association of a charter by the Director of the
Office of Thrift Supervision, the association receiving such charter
shall cease to be an association incorporated by this state. Upon
conversion of any association into a federal association, such
federal association shall be deemed to be a continuation of the
entity of the association so converted and all property of the
converted association, including its rights, titles, and interests in
and to all property of whatever kind, whether real, personal, or
mixed, and things in action, and every right, privilege, interest,
and asset of any conceivable value or benefit then existing or
4(#$0&($"!$"+$ -:*
pertaining to it, or which would inure to it, shall immediately by
operation of law and without any conveyance or transfer and without
any further act or deed remain and be vested in and continue and be
the property of such federal association into which the state
association has converted itself, and such federal association shall
have, hold and enjoy the same in its own right as fully and to the
same extent as the same was possessed, held, and enjoyed by the
converting association, and such federal association as of the time
of the taking effect of such conversion shall continue to have and
succeed to all the rights, obligations and relations of the
converting association. All pending actions and other judicial
proceedings to which the converting state association is a party
shall not be deemed to have abated or to have discontinued by reason
of such conversion, but may be prosecuted to final judgment, order,
or decree in the same manner as if such conversion into such federal
association had not been made and such federal association resulting
from such conversion may continue such action in its corporate name
as a federal association, and any judgment, order or decree may be
rendered for or against it which might have been rendered for or
against the converting state association theretofore involved in such
judicial proceedings.
Added by Laws 1970, c. 101, § 59, eff. June 1, 1970. Amended by Laws
1987, c. 61, § 13, emerg. eff. May 4, 1987; Laws 1990, c. 118, § 20,
emerg. eff. April 23, 1990; Laws 2000, c. 81, § 62, eff. Nov. 1,
2000.
§18-381.60. Conversion into state-chartered association.
At an annual meeting or at any special meeting of the members or
stockholders called to consider such action, any federal association
may convert itself into an association under this act upon a majority
vote of the outstanding stock entitled to vote thereon or upon a
majority vote of the total number of votes of the members of such
federal association eligible to be cast. Copies of the minutes of
the proceedings of such meetings of members or stockholders, verified
by the affidavit of the secretary or an assistant secretary, and
verified copies of the plan of conversion shall be filed for approval
with the State Banking Commissioner. At the meeting at which
conversion is voted upon, the members or stockholders shall also vote
upon the directors who shall be the directors of the state-chartered
association after conversion takes effect. Such directors then shall
execute and file a certificate of incorporation and proposed bylaws,
and the Commissioner shall file a certificate of authority upon
approval by the Commissioner, all as provided in this act. The
association shall include in the certificate of incorporation, the
following: "This association is incorporated by conversion from a
federal association." All of the directors who are chosen for the
association shall sign and acknowledge the certificate of
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incorporation as the subscribers. The Commissioner may provide, by
regulation, for any additional procedure to be followed, and
application fee to be paid, by any such federal association
converting into an association under this act. All the provisions
regarding property and other rights and liabilities contained in
Section 381.59 of this title shall apply, in reverse order, to the
conversion of a federal association into an association incorporated
under this act, so that the state-chartered association shall be a
continuation of the corporate entity of the converting federal
association.
Added by Laws 1970, c. 101, § 60, eff. June 1, 1970. Amended by Laws
1987, c. 61, § 14, emerg. eff. May 4, 1987; Laws 1988, c. 65, § 30,
emerg. eff. March 25, 1988; Laws 1993, c. 183, § 58, eff. July 1,
1993; Laws 2000, c. 81, § 63, eff. Nov. 1, 2000.
§18-381.61. Merger or consolidation.
Pursuant to a plan agreed upon by at least two-thirds of the
members of the board of directors as being equitable to the members
or stockholders of the association and as not impairing other
associations, foreign associations, and federal associations, an
association may merge or consolidate with another association,
foreign association, or federal association, provided that the plan
of such merger or consolidation shall be approved at an annual
meeting or at any special meeting of the members or stockholders
called to consider such action by a majority vote of the outstanding
stock entitled to vote thereon or upon a majority vote of the total
number of votes of the members present in person or by proxy. An
application to merge or consolidate shall be filed with the State
Banking Commissioner and the same shall be the subject of an
individual proceeding pursuant to Article II of the Administrative
Procedures Act, Section 309 et seq. of Title 75 of the Oklahoma
Statutes. If the merger or consolidation is approved by the
Commissioner, a copy of the order of approval shall be filed with the
Secretary of State who shall then issue a certificate of merger. In
all cases of merger or consolidation, the corporate continuity of the
resulting corporation shall have the same incidents, rights and
liabilities as that of an association which has converted pursuant to
this act. The Commissioner may provide, by rule, for any additional
procedure to be followed, and application fee to be paid, by any
associations merging or consolidating pursuant to this act.
Added by Laws 1970, c. 101, § 61, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 29, eff. July 1, 1979; Laws 1987, c. 61, § 15, emerg.
eff. May 4, 1987; Laws 1993, c. 183, § 59, eff. July 1, 1993; Laws
2000, c. 81, § 64, eff. Nov. 1, 2000.
§18-381.62. Voluntary liquidation.
4(#$0&($"!$"+$ -:2
A. With the approval of the State Banking Commissioner, an
association may liquidate and dissolve. The Commissioner may grant
such approval upon an application by an association after the
proposal to liquidate and dissolve has been approved by a vote of a
majority of the outstanding voting stock, in the case of a stock
association, or by a majority vote of the total number of votes of
the members present in person or by proxy, in the case of a mutual
association, at a meeting called for that purpose, and that after
giving effect to any proposed purchase of the assets of the
association and assumption of its liabilities as provided for in
Section 381.63a of this title the association will be solvent and
will have sufficient liquid assets to pay off any remaining
depositors and creditors immediately.
B. 1. Upon approval by the Commissioner, the association shall
immediately cease to do business, shall have only the powers
necessary to effect an orderly liquidation and shall proceed to pay
its depositors and creditors and to wind up its affairs.
2. Within thirty (30) days of the approval, the association
shall send a notice of liquidation by mail to each depositor,
creditor, person interested in funds held as a fiduciary, lessee of a
safe deposit box and a bailor of property at the address of such
person as shown on the books of the association. However, in the
case of all depositors, creditors, loan customers or lessees of safe
deposit boxes whose deposits, accounts or other contractual
arrangements with the association have been purchased or assumed as
provided for in Section 381.63a of this title, a notice of purchase
and assumption shall be sent by the purchaser in lieu of a notice of
liquidation by the liquidating association. The notice prepared by
the association shall be posted conspicuously on the premises of the
association and shall be given such publication as the Commissioner
may require. The purchaser or the liquidating association, as
applicable, shall send with each notice a statement of the amount
shown on the books to be the claim or liability of the depositor,
creditor or other customer. Each such notice shall demand that
claims of depositors and creditors, or corrected statements of
amounts owed by the customer, if the amount claimed or owed differs
from that stated in the notice, be filed with the notifying
institution before a specified date not earlier than sixty (60) days
thereafter in accordance with the procedure prescribed in the notice.
The notice prepared by the liquidating association shall also demand
that property held by the association as bailee or in a safe deposit
box not taken over by a purchaser be withdrawn by the person entitled
thereto.
3. As soon after approval as may be practicable the association
shall resign all fiduciary positions and take such action as may be
necessary to settle its fiduciary accounts, and the manner of
succession of trust powers and successor trustees shall follow the
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same procedure as set out in Section 1018 of Title 6 of the Oklahoma
Statutes.
4. Any safe deposit boxes which have not been taken over by a
purchaser, and the contents of which have not been removed within
thirty (30) days after demand, shall be opened. Sealed packages
containing the contents of such box, with a certificate of inventory
of contents, together with any other unclaimed property held by the
association as bailee and certified inventories thereof, shall be
transferred to the Commissioner who shall administer the property in
accordance with the provisions of the Uniform Unclaimed Property Act.
5. The approval of an application for liquidation shall not
impair the right of a depositor or creditor whose account has not
been unconditionally assumed by a purchaser to be paid in full by the
liquidating association, and all lawful claims of remaining creditors
and depositors of the liquidating association shall promptly be paid.
The unearned portion of the rental of a safe deposit box not taken
over by a purchaser shall be returned to the lessee.
6. Any assets remaining after the discharge of or adequate
provision for all obligations shall be distributed to the
stockholders or members in accordance with a plan of voluntary
liquidation filed with and approved by the Commissioner. No such
distribution shall be made before all claims of depositors and
creditors have been:
a. assumed as provided for in Section 381.63a of this
title,
b. provided for by the establishment of a reserve fund in
an amount approved by the Commissioner,
c. paid by the liquidating association, or
d. in the case of any disputed claim, provided for by
transmittal to the Commissioner of a sum adequate to
meet any liability that may be judicially determined.
C. Any unclaimed distribution to a stockholder, member or
depositor shall be held until ninety (90) days after the final
distribution and then transmitted to the Commissioner. Such
unclaimed funds shall be held by the Commissioner and administered in
accordance with the provisions of the Uniform Unclaimed Property Act.
D. If the Commissioner finds that assets will be insufficient
for the full discharge of all obligations or that completion of the
liquidation has been unduly delayed, the Commissioner may take
possession and complete the liquidation in the manner provided in
this act for involuntary liquidations.
E. The Commissioner may require reports of the progress of
liquidation. Whenever the Commissioner is satisfied that the
liquidation has been properly completed the Commissioner shall enter
an order of dissolution and recommend to the Secretary of State that
the association's certificate of incorporation be canceled, upon
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receipt of which the Secretary of State shall cancel such
certificate.
Added by Laws 1970, c. 101, § 62, eff. June 1, 1970. Amended by Laws
1978, c. 168, § 30, eff. July 1, 1979; Laws 1988, c. 65, § 31, emerg.
eff. March 25, 1988; Laws 1991, c. 331, § 49, eff. Sept. 1, 1991;
Laws 1993, c. 183, § 60, eff. July 1, 1993; Laws 2000, c. 81, § 65,
eff. Nov. 1, 2000.
§18-381.63a. Purchase and sale of assets and business of association
- Authorization and approval - Assumption of certificates of deposit
- Transfer of fiduciary positions.
A. Any association may sell to any other association, federal
association, national banking association or Oklahoma-chartered bank
all, or substantially all, of the selling association's assets and
business, or all, or substantially all, of the assets and business of
any department or branch of the selling association.
B. Any association, upon assuming the liabilities relating
thereto, may purchase all, or substantially all, of the assets and
business of another association, federal association, national
banking association or Oklahoma-chartered bank, or all, or
substantially all, of the assets and business of any department or
branch of the selling institution.
C. The agreement of purchase and sale shall be authorized and
approved by the boards of directors of the purchasing and selling
institutions, and authorized and approved by the vote of a majority
of the stockholders of the purchasing and selling institutions, or by
a majority vote of the total number of votes of the members present
in person or by proxy, in the case of mutual associations or mutual
federal associations, at meetings called for the purpose and shall be
filed with the State Banking Commissioner accompanied by evidence of
such stockholders' or members' approval in like manner as plans of
merger are filed. Copies of the agreement of purchase and sale shall
be filed with and subject to the approval of the Commissioner,
together with a fee for review of the transaction as required by rule
of the Commissioner, and shall be accompanied by evidence of approval
of such stockholders or members thereof in like manner as agreements
of merger are filed. After such approval is given by the
stockholders or members, a notice of such sale shall be published
once a week for two (2) successive weeks in a newspaper of general
circulation in the county in which the selling institution has its
main office. Proof of such publication shall be filed with the
Commissioner. The Commissioner may permit the requirement for
publication of notice to be satisfied after the purchase and sale
becomes effective if the Commissioner determines that:
1. The selling institution is solvent, but either is close to
insolvency or is experiencing a run on deposits;
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2. The terms of the agreement of purchase and sale are
essentially fair to the selling institution; and
3. The selling institution will remain solvent after the
purchase and sale.
D. Any deposit account which is unconditionally assumed by the
purchasing association pursuant to an agreement approved by the
Commissioner, and which, after a depositor's preexisting accounts at
the purchasing institution are added to the accounts assumed from the
selling institution, is fully covered by the Federal Deposit
Insurance Corporation insurance limits at the purchasing institution,
shall cease to be an obligation of the selling institution after the
purchase and sale becomes effective. Notwithstanding any term of the
purchase and sale agreement or of the contract of deposit, a deposit
account or other creditor's account shall be deemed to be only
conditionally assumed by the purchasing institution if:
1. The amount of preexisting deposit accounts of a depositor at
the purchasing institution, together with accounts of that depositor
which are assumed from the selling institution, would exceed the
Federal Deposit Insurance Corporation insurance limits of such
purchasing institution; or
2. Claims of a depositor or other creditor against a selling
institution and loans of a depositor from the selling institution are
not simultaneously assumed by the purchasing institution so as to
preserve a right of set-off. Any depositor or creditor of the
selling institution whose business is conditionally sold has the
right, after such sale:
a. upon payment of any indebtedness owing by the depositor
to the selling institution, to withdraw the deposit in
full from the selling institution on demand, unless by
dealing with the purchasing institution with knowledge
of the purchase the depositor ratifies the transfer, or
b. to exercise the right to set-off of the depositor,
unless by dealing with the purchasing institution with
knowledge of the purchase the depositor ratifies the
transfer.
E. The agreement of sale may provide for the transfer to the
purchasing institution of all fiduciary positions held by the selling
institution subject to the right of the district court of the county
in which the selling institution is situated, on petition of any
interested party, to appoint another or succeeding fiduciary to the
positions so transferred. However, the provisions of the instrument
creating the fiduciary position shall control such succession, if it
so provides therein. Until such court appoints another or succeeding
fiduciary, the purchasing institution shall, if it has qualified,
exercise any fiduciary function vested in the selling institution and
the manner of succession of trust powers and successor trustees shall
4(#$0&($"!$"+$ -:;
follow the same procedure as set out in subsection F of Section 1109
of Title 6 of the Oklahoma Statutes.
F. Except as provided for in subsection D of this section, no
right against or obligation of the selling institution in respect of
the assets or business sold shall be released or impaired by the sale
until one (1) year from the last date of publication of the notice
pursuant to subsection C of this section, but after the expiration of
such year no action can be brought against the selling institution on
account of any deposit, obligation, trust or asset transferred to or
liability assumed by the purchasing association.
Added by Laws 1988, c. 65, § 32, emerg. eff. March 25, 1988. Amended
by Laws 1990, c. 173, § 28, emerg. eff. May 3, 1990; Laws 2000, c.
81, § 66, eff. Nov. 1, 2000.
NOTE: Laws 1990, c. 118, § 21 repealed by Laws 1990, c. 337, § 26.
§18-381.64. Authorized foreign associations.
Except as this act otherwise provides, no foreign association
shall be granted permission by the State Banking Commissioner or the
Secretary of State to do business within this state and each foreign
association now holding a certificate of authority issued by the
Commissioner may continue to do business through its duly appointed
agent but only in the county where it is now operating. Each such
foreign association shall remain subject to supervision, and to
examination as deemed necessary, by the Commissioner and to the rules
of the Commissioner and shall make no loans in this state and accept
no deposit accounts in this state other than loans and deposit
accounts of a class which are authorized for Oklahoma chartered
associations. In the event an authorized foreign association fails
to comply with the provisions of this act or with the requirements of
the Commissioner, or to keep on file with the Commissioner and the
Secretary of State a written appointment of its resident agent upon
whom service of summons and all other legal process may be had, or to
pay the supervisory fees provided by this act, the Commissioner may
revoke the certificate of authority of such association and invoke
other remedies as provided by law. In the event of such revocation,
the Secretary of State shall revoke and cancel the certificate of
domestication of such association.
Added by Laws 1970, c. 101, § 64, eff. June 1, 1970. Amended by Laws
1986, c. 219, § 6, emerg. eff. June 9, 1986; Laws 1987, c. 61, § 16,
emerg. eff. May 4, 1987; Laws 1993, c. 183, § 61, eff. July 1, 1993;
Laws 2000, c. 81, § 67, eff. Nov. 1, 2000.
§18-381.65. Limited certificate of authority - Activities of
unauthorized associations.
A. A federal association not having its main office or any
branches in this state or any foreign association may apply to the
State Banking Commissioner for a limited certificate of authority to
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transact business in this state. The application shall explicitly
limit the purposes which the federal association not having its main
office or any branches in this state or foreign association may
pursue in this state. Such entity may apply to engage in any
activity reasonably necessary or desirable in order to deal with
loans originated by it in interstate commerce or acquired by it by
assignment from an originating lender qualified or otherwise
permitted to do business in this state, or any collateral securing
such loans, as well as any property, real or personal, acquired by it
by foreclosure or otherwise in satisfaction of debt held by it.
Without limitation, a limited certificate of authority shall:
1. Permit a federal association not having its main office or
any branches in this state or a foreign association to have full
access to the courts of this state;
2. Allow it to refinance, renew, extend or work out loans which
it has originated in interstate commerce or which it has acquired by
assignment;
3. Allow it to take all steps reasonably necessary to monitor
collateral and the credit quality of its debtors; and
4. Allow it to manage, rent, sell or finance any property
acquired by it by foreclosure or otherwise in satisfaction of debt
held by it.
The Commissioner shall have authority to approve under a limited
certificate of authority other specific purposes that such entity
applies to engage in, provided that those purposes are incidental to
or reasonably necessary in connection with the purposes more
specifically permitted by this subsection. A federal association not
having its main office or any branches in this state, or a foreign
association, as part of its application for a limited certificate of
authority shall commit that it will not originate loans or solicit or
accept applications for loans at any place within this state, nor
shall it, directly or indirectly, receive applications for or
payments or deposits to deposit accounts or investment securities of
any kind at any place within this state. Such entity shall commit in
its application that when doing business in this state it shall use a
specified fictitious name not containing any of the terms forbidden
by Section 381.23 of this title and, without limitation, it shall not
use such terms on any office, advertising, telephone listing or other
medium of holding itself out to the public within this state.
However, in executing any legal documents or participating in court
proceedings, the federal association not having its main office or
any branches in this state or foreign association shall use its
actual name. The Commissioner shall establish a list of items of
information required to be contained in or submitted with an
application for a limited certificate of authority, and shall fix a
reasonable filing fee to defray the cost of processing such
applications. The Commissioner shall act upon and issue an order
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granting or denying each application for a limited certificate of
authority. If and when all requirements of the Commissioner are met,
a limited certificate of authority shall be issued and the applying
entity shall comply with all steps necessary in order to qualify to
do business in this state in accordance with the provisions of
Section 1130 of this title. The Secretary of State shall not allow
such entity to qualify to do business until it furnishes proof that
it holds a limited certificate of authority issued by the
Commissioner.
B. A federal association not having its main office or any
branches in this state or a foreign association shall not be
determined to be transacting or engaging in business in this state,
either for the purposes of this act or for the purposes of Sections
1130 and 1131 of this title, solely by reason of the activities of
its majority-owned subsidiary which is incorporated or qualified to
do business within this state. The provisions of this subsection
shall have no application to the question of whether the majority-
owned subsidiary's parent company is:
1. Subject to service of process and suit in this state pursuant
to the laws of this state; or
2. Subject to the taxation laws of this state.
C. A foreign association which does not have a certificate of
authority or limited certificate of authority from the Commissioner,
or a federal association which does not have permission from the
Director of the Office of Thrift Supervision to operate its main
office or any branches in this state, shall not be deemed to be
transacting or engaging in business in this state, for the purposes
of this act, by reason of the purchase or acquisition, holding or
sale of loans secured by mortgages on Oklahoma real estate, or
participating interests therein, or the foreclosure thereof and
acquiring of title to such mortgaged real estate in satisfaction of
the mortgage indebtedness.
D. If a certificate of authority or limited certificate of
authority to transact business has not been issued by the
Commissioner to a federal association not having permission from the
Director of the Office of Thrift Supervision to operate its main
office or any branches in this state, or to a foreign association,
then such unauthorized entity shall not maintain any office in this
state and shall not directly or indirectly through brokers, agents or
others:
1. Receive applications for or payments or deposits to deposit
accounts or investment securities of any kind at any place within
this state;
2. Assert or imply directly or by means of the mail, radio,
television, newspapers, magazines or other media originating from any
place within this state that it has agents or representatives in this
4(#$0&($"!$"+$ -8
state with whom its deposit accounts and investments may be
discussed;
3. Distribute any of its advertising material from any place
within this state;
4. Display its name by signs or other wording on windows, doors
or placards, or otherwise represent that it does business within this
state or is represented for transaction of business at any location
in this state; or
5. Hold assets in this state other than those permitted by
subsection C of this section.
E. The Commissioner may obtain an injunction or take any other
action necessary to prevent any federal association not having its
main office or any branches in this state or any foreign association
from violating any provision of this act or the rules of the
Commissioner. Any such entity which violates any provision of this
act and any agent or representative who transacts or solicits
business for such entity which is acting in violation of this act
shall forfeit and pay to the State of Oklahoma, to be recovered in a
civil action in the name of the State of Oklahoma, the sum of Five
Thousand Dollars ($5,000.00).
Added by Laws 1970, c. 101, § 65, eff. June 1, 1970. Amended by Laws
1988, c. 65, § 33, emerg. eff. March 25, 1988; Laws 1990, c. 118, §
22, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 62, eff. July 1,
1993; Laws 2000, c. 81, § 68, eff. Nov. 1, 2000.
§18-381.66. Federal associations.
Federal associations are not deemed to be foreign associations.
Unless federal laws or regulations provide otherwise, federal
associations, which have their main office in this state, and members
thereof shall possess all of the rights, powers, privileges,
benefits, immunities and exemptions which are provided by this act or
which are now or may be hereafter provided by laws of this state for
associations organized under the laws of this state and for the
members thereof. This provision is additional and supplemental to
any section of this act or other law, which by specific reference is
applicable to federal associations and the members thereof.
Added by Laws 1970, c. 101, § 66, eff. June 1, 1970. Amended by Laws
2000, c. 81, § 69, eff. Nov. 1, 2000.
§18-381.66a. Conversion into national banking association or
Oklahoma-chartered bank - Vesting of property rights - Pending
actions - Conversion of mutual associations - Disposition of
preexisting reserves.
A. At an annual meeting or at any special meeting of the members
or stockholders called to consider such action, any association may
convert itself into a national banking association pursuant to
federal laws, or may convert itself into an Oklahoma-chartered bank
4(#$0&($"!$"+$ -8*
pursuant to the Oklahoma Banking Code, upon a majority vote of the
outstanding stock entitled to vote thereon or upon a majority of the
total number of votes of the members present in person or by proxy.
An association converting to a state-chartered bank shall file with
the State Banking Commissioner an application which shall be the
application prescribed in Section 305 of Title 6 of the Oklahoma
Statutes. However, the applicant shall not be required to provide
evidence of need of granting authority to convert. The applicant
association shall follow the publication requirements of Section
306.1 of Title 6 of the Oklahoma Statutes. Issuance of a state bank
charter to the converting association by the Oklahoma Banking Board
shall follow the prescribed procedure of the Oklahoma Banking Code.
There shall be filed with the Commissioner a copy of the charter
issued to such national banking association by the Office of the
Comptroller of the Currency or of the certificate of authority issued
to such Oklahoma-chartered bank by the Oklahoma Banking Board. Upon
the grant to any association of a charter by the Office of the
Comptroller of the Currency or of a certificate of authority by the
Oklahoma Banking Board, the association receiving such charter or
certificate of authority shall cease to be an association
incorporated by this state. Upon conversion of any association into
a national banking association or Oklahoma-chartered bank, such
national banking association or Oklahoma-chartered bank shall be
deemed to be a continuation of the entity of the association so
converted. All property of the converted association, including its
rights, titles and interests in and to all property of whatever kind,
whether real, personal or mixed, and things in action, and every
right, privilege, interest and asset of any conceivable value or
benefit then existing or pertaining to it, or which would inure to
it, shall immediately by operation of law and without any conveyance
or transfer and without any further act or deed remain and be vested
in and continue and be the property of such national banking
association or Oklahoma-chartered bank into which the association has
converted itself. Such national banking association or Oklahoma-
chartered bank shall have, hold and enjoy the same in its own right
as fully and to the same extent as the same was possessed, held and
enjoyed by the converting association, and such national banking
association or Oklahoma-chartered bank as of the time of the taking
effect of such conversion shall continue to have and succeed to all
the rights, obligations and relations of the converting association.
All pending actions and other judicial proceedings to which the
converting association is a party shall not be deemed to have abated
or to have discontinued by reason of such conversion. Such pending
actions and other judicial proceedings may be prosecuted to final
judgment, order or decree in the same manner as if such conversion
into such national banking association or Oklahoma-chartered bank had
not been made. The national banking association or Oklahoma-
4(#$0&($"!$"+$ -8
chartered bank resulting from such conversion may continue such
action in its corporate name as a national banking association or
Oklahoma-chartered bank, and any judgment, order or decree may be
rendered for or against it which might have been rendered for or
against the converting association theretofore involved in such
judicial proceedings.
B. In the case of a conversion of a mutual association to a
national banking association or Oklahoma-chartered bank, the members
of the mutual association, at the meeting at which conversion to a
national banking association or Oklahoma-chartered bank is voted
upon, shall also vote upon the directors who shall be the directors
of the national banking association or Oklahoma-chartered bank after
the conversion takes place. The directors shall file with the
Commissioner an application for conversion and a firm commitment for,
or evidence of, insurance of deposits and other accounts of a
withdrawable type by the Federal Deposit Insurance Corporation. The
Commissioner may refuse to approve the application if it has reason
to believe that the plan of conversion is not fair and equitable to
all of the members and that sufficient provision is not made to
protect the interests of the depositors of the prospective national
banking association or Oklahoma-chartered bank. Upon the approval by
the Commissioner and by the Office of the Comptroller of the Currency
or the Oklahoma Banking Board, the association shall cease to be a
mutual association.
C. The conversion of a mutual association into a national
banking association or Oklahoma-chartered bank shall be effected in
accordance with a plan of conversion adopted by the members as
provided in this section and consistent with the other provisions of
this title. The plan shall provide that:
1. Each deposit account holder in the converting mutual
association shall receive a deposit account in the converted national
banking association or Oklahoma-chartered bank equal in amount to the
deposit account of such holder in the mutual association;
2. A record date for determining deposit account holders
entitled to purchase stock shall be established which is not less
than ninety (90) days prior to the date of adoption of the plan of
conversion by the board of directors of such association;
3. Officers, directors and employees of the association and
their associates shall forego any participation in the initial
distribution of permanent capital stock to the extent that any such
person increased the account of such person by more than Twenty
Thousand Dollars ($20,000.00) during the six (6) months preceding the
record date established pursuant to this section. For this purpose
the term "associate" shall have the same meaning as in Section 381.50
of this title;
4. The amount of stock of the converted national banking
association or Oklahoma-chartered bank to which a member is entitled
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to subscribe shall be determined on the basis of the ratio of the
deposits of the member with the association on the record date to the
total deposits of the association on the record date, as applied to
the initial issuance of permanent capital stock. Each deposit
account holder as of the record date may receive warrants authorizing
the purchase of shares of permanent capital stock of the converted
national banking association or Oklahoma-chartered bank at a price
determined by the board of directors of the institution and approved
by the Commissioner or the Director of the Office of Thrift
Supervision, and scrip denoting fractional stock interests of less
than one share. However, no deposit account holder shall be entitled
to scrip representing fractional interests of less than one-fifth
(1/5) share of stock; and
5. In connection with a conversion, deposit account holders
shall have a preemptive right to purchase such permanent capital
stock for a period of not less than fourteen (14) days from the date
the offer to sell permanent capital stock is made.
D. In no case of conversion of a mutual association to a
national banking association or Oklahoma-chartered bank shall any
reserves existing at the time of such conversion ever inure to the
benefit of the permanent capital stock, but shall be maintained as
reserves in accordance with directions of the Commissioner. The
reserves of the converted national banking association or Oklahoma-
chartered bank resulting from the conversion of a mutual association
shall be not less than the amount necessary to meet the requirements
of the Office of the Comptroller of the Currency or of the Federal
Deposit Insurance Corporation, respectively.
Added by Laws 1990, c. 173, § 24, emerg. eff. May 3, 1990. Amended
by Laws 1993, c. 183, § 63, eff. July 1, 1993; Laws 2000, c. 81, §
70, eff. Nov. 1, 2000.
§18-381.66b. Conversion of national banking association or Oklahoma-
chartered bank into stock association.
A. At an annual meeting or at any special meeting of the
stockholders called to consider such action, any national banking
association or Oklahoma-chartered bank may convert itself into a
stock association pursuant to this act upon a majority vote of the
outstanding stock entitled to vote thereon, and in compliance with
any federal laws, or provisions of the Oklahoma Banking Code,
applicable to such a transaction by the converting national banking
association or Oklahoma-chartered bank. Copies of the minutes of the
proceedings of such meeting of stockholders, verified by the
affidavit of the secretary or an assistant secretary, and verified
copies of the plan of conversion shall be filed for approval with the
State Banking Commissioner. At the meeting at which conversion is
voted upon, the stockholders shall also vote upon the directors who
shall be the directors of the state-chartered association after
4(#$0&($"!$"+$ -8:
conversion takes effect. Such directors then shall execute and file
an application for conversion, a proposed certificate of
incorporation and proposed bylaws, and the Commissioner shall, upon
approval, issue a certificate of authority, all as provided in this
act. The Commissioner shall approve the application for conversion
and issue a certificate of authority if it appears that:
1. The resulting stock association meets all of the requirements
of this act as to the formation of a new stock association; and
2. The resulting stock association will have an adequate capital
structure including surplus. The association shall include in the
certificate of incorporation the following, as applicable: "This
association is incorporated by conversion from a national banking
association/Oklahoma-chartered bank." All of the directors who are
chosen for the association shall sign and acknowledge the certificate
of incorporation as the subscribers. The Commissioner may provide,
by regulation, for any additional procedure to be followed by any
such national banking association or Oklahoma-chartered bank
converting into an association under this act, including the amount
of the application fee to be paid to the Oklahoma State Banking
Department. All the provisions regarding property and other rights
and liabilities contained in Section 381.66a of this title shall
apply, in reverse order, to the conversion of a national banking
association or Oklahoma-chartered bank into an association
incorporated under this act, so that the state-chartered association
shall be a continuation of the corporate entity of the converting
national banking association or Oklahoma-chartered bank.
B. In connection with the review of the application for
conversion, the Commissioner may conduct an examination of the
converting institution, and such examination shall be paid for by the
converting institution according to the fees prescribed in subsection
D of Section 381.15 of this title for special examinations. The
deposit payable by the converting institution pursuant to paragraph 5
of Section 381.16 of this title shall not be a limitation on the
examination fee payable by the converting institution.
C. If a converting national banking association or Oklahoma-
chartered bank has assets which do not conform to the requirements of
state law for the converted state association, or there are business
activities which are not permitted for the converted state
association, the Commissioner may permit a reasonable time to conform
with state law.
Added by Laws 1990, c. 173, § 25, emerg. eff. May 3, 1990. Amended
by Laws 1993, c. 183, § 64, eff. July 1, 1993; Laws 2000, c. 81, §
71, eff. Nov. 1, 2000.
§18-381.66c. Merger of national banking associations or Oklahoma-
chartered banks into stock association - Approval by boards of
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directors - Terms of agreement - Approval by Board - Approval by
stockholders.
A. Upon approval of the State Banking Commissioner, one or more
national banking associations or Oklahoma-chartered banks may be
merged with and into a stock association as hereafter prescribed,
except that the action by a constituent national banking association
shall be taken in the manner prescribed by and shall be subject to
any limitation or requirements imposed by any law of the United
States which shall govern the rights of its dissenting shareholders.
B. The board of directors of each constituent institution shall,
by a majority of the entire board, approve a merger agreement which
shall contain:
1. The name of each constituent institution and the location of
each office;
2. With respect to the resulting stock association the name and
the location of each proposed office, the name and residence of each
director to serve until the next annual meeting of the stockholders,
the name and residence of each officer, the amount of capital, the
number of shares and the par value of each share, whether preferred
stock is to be issued and the amount, terms and preferences and the
amendments to the certificate of incorporation and bylaws;
3. The terms for the exchange of shares of the constituent
institutions for the shares or other consideration of the resulting
stock association;
4. A statement that the merger and the merger agreement is
subject to approval by the Commissioner and by the stockholders of
each constituent institution;
5. Provisions governing the manner of disposing of the shares of
the resulting stock association not taken by dissenting stockholders
of the constituent institutions; and
6. Such other provisions as the Commissioner requires to enable
it to discharge its duties with respect to the merger.
C. After approval by the board of directors of each constituent
institution, the merger agreement shall be submitted to the
Commissioner for approval, together with a fee for review of the
merger as required by rule of the Commissioner which shall be
deposited in the Oklahoma State Banking Department revolving fund
pursuant to Section 211.1 of Title 6 of the Oklahoma Statutes,
certified copies of the authorizing resolutions of the several boards
of directors showing approval by a majority of the entire board and
evidence of proper action by the board of directors of any
constituent national banking association.
D. Without approval by the Commissioner, no asset shall be
carried on the books of the resulting stock association at a
valuation higher than that on the books of the constituent bank at
the time of the last examination by a state or national bank examiner
before the effective date of the merger.
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E. Within thirty (30) days after receipt by the Commissioner of
the papers specified in subsection C of this section, the
Commissioner shall approve or disapprove the merger agreement. The
Commissioner shall approve the agreement if it appears that:
1. The resulting stock association meets all of the requirements
of this act as to the formation of a new stock association;
2. The agreement provides an adequate capital structure
including surplus;
3. The agreement is fair; and
4. The merger is not contrary to the public interest. If the
Commissioner disapproves an agreement, the Commissioner shall state
all objections and give an opportunity to the constituent
institutions to amend the merger agreement to obviate such objection.
F. Where the resulting stock association is not to exercise
trust powers, the Commissioner shall not approve a merger until
satisfied that adequate provision has been made for successors to
fiduciary positions held by constituent banks, and the manner of
succession of trust powers and successor trustees shall follow the
same procedure as set out in Section 1018 of Title 6 of the Oklahoma
Statutes.
G. To be effective, a merger must be approved by the
stockholders of each constituent institution by a majority vote of
the outstanding voting stock at a meeting called to consider such
action, which vote shall constitute the adoption of the certificate
of incorporation and bylaws of the resulting stock association,
including the amendments set forth in the merger agreement.
H. The notice of the meeting of stockholders shall be given by
publication in a newspaper of general circulation in the place where
the main office of each constituent institution is located, at least
once a week for four (4) successive weeks, and by mail, at least
fifteen (15) days before the date of the meeting, to each stockholder
of record of each constituent institution at the address of such
stockholder on the books of the institution, who has not waived such
notice in writing. No notice by publication need be given if written
waivers are received from the holders of a majority of the
outstanding shares of each class of voting stock.
I. At the effective time of the merger the charters of the
constituent institutions other than the resulting stock association
shall be deemed to be surrendered.
J. The resulting stock association shall be considered the same
business and corporate entity as each constituent bank with all of
the rights, powers, and duties of each constituent bank, except as
limited by the certificate of incorporation and bylaws of the
resulting stock association.
K. Any reference to any constituent bank in any writing, whether
executed or taking effect before or after the merger, shall be deemed
4(#$0&($"!$"+$ -8;
a reference to the resulting stock association if not inconsistent
with the other provisions of such writing.
L. If a constituent bank has assets which do not conform to the
requirements of state law for the resulting stock association, or if
there are business activities which are not permitted for the
resulting stock association, the Commissioner may permit a reasonable
time to conform with state law.
M. Rights of dissenting stockholders of a constituent bank shall
be those described in Section 1104 of Title 6 of the Oklahoma
Statutes.
Added by Laws 1990, c. 173, § 26, emerg. eff. May 3, 1990. Amended
by Laws 1993, c. 183, § 65, eff. July 1, 1993; Laws 2000, c. 81, §
72, eff. Nov. 1, 2000.
§18-381.66d. Merger of stock association into national banking
association - Rights and liabilities of association and stockholders
- Applicable law.
Nothing in the law of this state shall restrict the right of a
stock association to merge with and into a national banking
association. The action to be taken by a constituent stock
association and its rights and liabilities and those of its
stockholders shall be the same as those prescribed for national
banking associations at the time of the action by the applicable laws
of the United States and not by the laws of this state. Upon the
completion of the merger with and into a national banking
association, the certificate of authority and the certificate of
incorporation of any merging stock association shall automatically
terminate.
Added by Laws 1990, c. 173, § 27, emerg. eff. May 3, 1990.
§18-381.71. Definitions.
As used in this section and Sections 381.72 and 381.73 of this
title:
1. "Acquire" means:
a. the merger or consolidation of an out-of-state savings
institution with or into an in-state savings
institution,
b. the acquisition by an out-of-state savings institution
of direct or indirect ownership or control of voting
shares or, in the case of a mutual savings institution,
voting rights of an in-state savings institution if,
after such acquisition, such out-of-state savings
institution directly or indirectly owns or controls
twenty-five percent (25%) or more of any class of
voting shares or voting rights of such in-state savings
institution, excluding shares or rights owned or held
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by the United States or by any organization wholly
owned by the United States,
c. the acquisition by an out-of-state savings institution
of the direct or indirect ownership of all or
substantially all of the assets, including, if agreed,
the assets of any branches and facilities, of an in-
state savings institution, or
d. any other action that would result in the direct or
indirect ownership or control by an out-of-state
savings institution of an in-state savings institution;
2. "Control" means direct or indirect ownership of or holding
with the power to vote twenty-five percent (25%) or more of the
voting shares, or in the case of a mutual savings institution, the
voting rights, excluding shares or rights owned or held by the United
States or by any organization wholly owned by the United States, or
the power in any manner to elect a majority of the directors or
directly or indirectly to exercise a controlling influence, as
determined by the State Banking Commissioner after notice and an
opportunity for hearing, on the management or policies of a company;
3. "Holding company" means a company which owns or controls one
or more savings institutions organized under the laws of any state or
the laws of the United States;
4. "Main office" means the office of a savings institution
designated by the Commissioner or the Office of Thrift Supervision as
the main office of the institution and located within the United
States;
5. "In-state savings institution" means a savings institution
organized under the laws of this state or the laws of the United
States whose main office is located in Oklahoma;
6. "Oklahoma holding company" means a holding company organized
under the laws of this state;
7. "Out-of-state savings institution" means any savings
institution organized under the laws of another state or the laws of
the United States whose main office is located in another state;
8. "Savings institution" means any association or federal
association, or as the context requires, any holding company or
subsidiary of such savings institution; and
9. "Subsidiary" means a company which is owned or controlled by
a savings institution.
Added by Laws 1986, c. 219, § 1, emerg. eff. June 9, 1986. Amended
by Laws 1987, c. 61, § 17, emerg. eff. May 4, 1987; Laws 1988, c. 65,
§ 34, emerg. eff. March 25, 1988; Laws 1993, c. 183, § 66, eff. July
1, 1993; Laws 2000, c. 81, § 73, eff. Nov. 1, 2000.
§18-381.72. Repealed by Laws 1990, c. 118, § 26, emerg eff. April
23, 1990.
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§18-381.73. Acquisition of control - Prohibited transactions -
Approval of acquisition - Branching, acquisition and conversion by
subsidiaries - Limitations and restrictions - Applicable law -
Penalties.
A. An out-of-state savings institution, upon approval by the
State Banking Commissioner, may acquire direct or indirect control of
an unlimited number of in-state savings associations for operation as
in-state savings institutions, and may acquire any such institutions'
parent Oklahoma holding company. Any acquisition made pursuant to
the provisions of this section may include assets and liabilities of
the in-state savings institution or its parent Oklahoma holding
company and all branches and facilities thereof.
B. 1. No in-state savings institution which becomes a
subsidiary of an out-of-state savings institution under any
extraordinary acquisition provisions of federal law, or which is
otherwise controlled by an out-of-state savings institution, shall be
permitted to acquire direct or indirect ownership or control of, or
to convert to a branch, any additional in-state savings institution
or to establish additional branches or facilities, except as
otherwise provided for in this section.
2. No out-of-state savings institution may directly or
indirectly acquire control of an in-state savings institution or its
parent Oklahoma holding company except as otherwise permitted by this
section.
C. No acquisition provided for in this section shall be
permitted unless the approval of the Commissioner required pursuant
to subsection A of this section:
1. Includes, for all acquisitions, a finding that:
a. the in-state savings institution sought to be acquired
or all of the savings institution subsidiaries of the
parent Oklahoma holding company sought to be acquired
have either been in existence and continuous operation
for more than five (5) years, and
b. notice of intent to acquire has been published in a
newspaper of general paid circulation in the county or
counties where the in-state savings institution to be
acquired is located and that a notice of intent to
acquire has been mailed by certified mail with return
receipt requested to each person owning stock in the
in-state savings institution to be acquired or in its
parent Oklahoma holding company or, if the in-state
savings institution to be acquired is a mutual
association, notice has been given as in the case of a
proceeding under Section 381.61 of this title;
2. Includes, for any acquisition of a majority of the voting
shares of a stock association or of its parent Oklahoma holding
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company, or for any acquisition of a mutual association by merger or
purchase and assumption transaction with another in-state savings
association, a finding that the acquisition has been approved by the
board of directors and a majority of the stockholders of or holders
of voting rights in the in-state savings institution or of its parent
Oklahoma holding company, as applicable;
3. Subjects the acquisition to any conditions, restrictions, and
requirements that would be applicable to such an acquisition by an
in-state savings institution of an out-of-state savings institution
in the state where the out-of-state savings institution has its main
office, if such state has enacted and implemented legislation
authorizing the acquisition by an in-state savings institution of
out-of-state savings institutions located in that state, but that
would not be applicable to acquisitions in that state by an out-of-
state savings institution all of whose savings institution
subsidiaries are located in that state; and
4. Except when the additional acquisition is of an in-state
savings institution whose stock is held as stock acquired in the
course of realizing upon a security interest which secured a debt
previously contracted in good faith prior to the original acquisition
by the out-of-state savings institution, prohibits additional
branching and further acquisitions by an in-state savings institution
which is a subsidiary of an out-of-state savings institution unless
and until the earlier of:
a. such time as the Commissioner determines that the state
in which the out-of-state savings institution has its
main office has enacted and implemented legislation
authorizing in-state savings institutions to acquire
savings institutions in that state on a reciprocal
basis, or
b. the expiration of a four-year period commencing on the
date of acquisition by the out-of-state savings
institution.
D. Any in-state savings institution or its parent Oklahoma
holding company which becomes a subsidiary of an out-of-state
financial institution under the extraordinary acquisition provisions
of federal law, or which is otherwise deemed to be controlled by an
out-of-state financial institution, may acquire direct or indirect
ownership or control of any additional in-state financial institution
or its parent Oklahoma holding company, establish additional branches
or facilities, or convert the existing controlled in-state savings
institution to branches of another in-state savings institution:
1. If the Commissioner has determined that the principal place
of business of the out-of-state savings institution has enacted and
implemented reciprocal acquisition legislation within the purview of
this section; or
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2. Upon the expiration of a four-year period commencing on the
date of acquisition by the out-of-state savings institution.
E. All limitations and restrictions of this act applicable to
in-state savings institutions shall apply to an in-state savings
institution which becomes a direct or indirect subsidiary of an out-
of-state savings institution and to the out-of-state savings
institution. The provisions of this subsection shall not be
construed to prohibit the acquisition by an out-of-state savings
institution of all or substantially all of the shares of an in-state
savings institution organized solely for the purpose of facilitating
the acquisition of a savings institution which has been in existence
and continuous operation as a savings institution for more than five
(5) years, if the acquisition has otherwise been approved pursuant to
this subsection. Nor shall the provisions of this subsection be
construed to prohibit an out-of-state savings institution which
acquires an in-state savings institution under this section from
additional acquisitions under this section, if such acquisition would
otherwise be permitted.
F. Any out-of-state savings institution which controls an in-
state savings institution shall be subject to the laws of this state
and the rules of its agencies relating to the acquisition, ownership,
and operation of in-state savings institutions. The Commissioner
shall make such rules including the imposition of reasonable
application and administration fees as it finds necessary to
implement the provisions of this act.
G. The Commissioner may enter into cooperative agreements with
other regulatory agencies to facilitate the regulation of savings
institutions doing business in this state. If such agreements result
in the payment of fees, however calculated, by any other regulatory
agency to the Oklahoma State Banking Department for examination
activities conducted by Department personnel, whether such
examination activity is conducted inside or outside this state, such
fees shall be deposited in the Bank Examination Revolving Fund
established in Section 211.2 of Title 6 of the Oklahoma Statutes. If
such agreements result in the payment of fees, however calculated, by
the Department to any other bank supervisory agency for examination
activities conducted by such other regulatory agency, whether such
examination activity is conducted inside or outside this state, such
fees shall be paid by the Department from the Bank Examination
Revolving Fund established by Section 211.2 of Title 6 of the
Oklahoma Statutes. The Commissioner may accept reports of
examinations and other records from such other agencies in lieu of
the Commissioner conducting examinations of in-state savings
institutions controlled by out-of-state savings institutions. The
Commissioner may take any action jointly with other regulatory
agencies having concurrent jurisdiction over savings institutions
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doing business in this state or may take such actions independently
in order to carry out its responsibilities.
H. The Commissioner shall have the power to enforce the
prohibitions provided for in subsection B of this section by
requiring divestiture and through the imposition of fines and
penalties, the issuance of cease and desist orders, and such other
remedies as are provided by law.
I. Any organization which intentionally and willfully violates
any provision of this section, upon conviction, shall be fined not
less than Five Hundred Dollars ($500.00) nor more than Five Thousand
Dollars ($5,000.00) for each day during which the violation
continues. Any individual who intentionally and willfully
participates in a violation of any provision of this section, upon
conviction, shall be fined not more than Ten Thousand Dollars
($10,000.00) or imprisoned not more than one (1) year, or both such
fine and imprisonment.
J. Any final order of the Commissioner pursuant to this section
shall be appealable pursuant to Section 207 of Title 6 of the
Oklahoma Statutes.
Added by Laws 1986, c. 219, § 3, operative July 1, 1987. Amended by
Laws 1989, c. 292, § 1, operative July 1, 1989; Laws 1990, c. 118, §
23, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 67, eff. July 1,
1993; Laws 2000, c. 81, § 74, eff. Nov. 1, 2000.
§18-381.74. Taking possession by Commissioner.
A. Except as otherwise provided in this act, the State Banking
Commissioner may take possession of a state-chartered savings and
loan association, if the Commissioner determines that:
1. The business of the association is being conducted in an
unlawful or unsound manner;
2. The association does not have funds available to pay all
withdrawals of savings deposits when due or is otherwise unable to
continue normal operations;
3. The examination of the association has been obstructed or
impeded; or
4. The association is operating in violation of provisions of
this act despite written notice to discontinue such violation.
B. 1. The Commissioner may take possession of any state-
chartered savings association by posting upon the premises of such
association a notice reciting that possession is being assumed
pursuant to the provisions of this section and stating when
possession shall be deemed effective. Possession may become
effective no earlier than the posting of the notice. A copy of the
notice shall be filed in the district court of the county where the
association is located. The Commissioner shall notify, if
applicable, the appropriate district offices of the Director of the
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Office of Thrift Supervision and the Federal Deposit Insurance
Corporation of taking possession of the association.
2. a. Once possession is effective the Commissioner shall be
vested with the full and exclusive power of management
and control, including the power to:
(1) continue or discontinue the business of the
association,
(2) stop or limit the payment of the obligations of
the association,
(3) employ any necessary assistants, including legal
counsel,
(4) execute any instrument in the name of the
association as Commissioner in charge of
liquidation,
(5) commence, defend or conduct in the name of the
association any action or proceeding to which it
may be a party,
(6) enforce the liabilities of stockholders, officers
and directors of the association,
(7) terminate possession by restoring the assets of
the association to its board of directors, and
(8) reorganize or liquidate the association in
accordance with this act.
b. As soon as practicable after taking possession the
Commissioner shall make an inventory of the assets of
the association and file a copy thereof with the
district court where the notice of possession was
filed.
3. While the Commissioner is in possession there shall be a
postponement of six (6) months after the effective date of
possession, of the date upon which any period of limitation fixed by
statute or agreement would otherwise expire on a claim or right of
action of the association, or upon which a review must be taken or a
pleading or other document must be filed by the association in any
pending action or proceeding.
4. a. The Commissioner, within two (2) days after taking
possession of a stock association, shall call a special
meeting of the stockholders to allow the stockholders
to retain the incumbent board of directors or to elect
a newly constituted board of directors, who may
represent the stockholders in the liquidation
proceedings and observe, assist and protect the
interests of the stockholders.
b. The board of directors of the association is authorized
to bring all necessary legal actions for and on behalf
of the stockholders and to pay attorney's fees in a
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reasonable amount, if such action benefits the
liquidating account of the failed association.
c. The board of directors, as authorized by the
stockholders, shall represent the stockholders in the
district court in which the notice of possession was
filed by the Commissioner, as to all matters affecting
the association.
5. The association shall continue to exist as a body corporate
for all purposes, except for the purpose of continuing the business
for which the association was organized, and may function to assist
the Commissioner or to protect the stockholders' interests in the
assets of the liquidating account.
C. 1. If the Commissioner determines that an emergency exists
which may result in serious losses to the depositors of an
association, he may take possession of the association without a
prior hearing. Within ten (10) days after the Commissioner has taken
possession any interested person may appeal such action pursuant to
the provisions of Section 207 of Title 6 of the Oklahoma Statutes.
2. If the Commissioner determines that liquidation of the
association is warranted, notice of such determination shall be given
to such directors, stockholders, depositors and creditors of the
association as the Commissioner may prescribe. The notice shall be
by restricted delivery to the directors and stockholders at their
last-known address as shown on the records of the association, and
notice to the depositors and creditors shall be published in a
newspaper of general circulation in the county where the main office
of such association is located. Any objection to such determination
by a person directly affected thereby shall be appealed pursuant to
the provisions of Section 207 of Title 6 of the Oklahoma Statutes.
Unless within ten (10) days after the date of publication an order is
issued staying the liquidation or unless the Commissioner tenders to
the Federal Deposit Insurance Corporation the appointment as
liquidator pursuant to Section 381.77 of this title, the Commissioner
shall liquidate the association after providing a bond executed by a
surety company authorized to do business in this state, for the
benefit of the people of this state, for the faithful discharge of
the duties of the Commissioner in connection with such liquidation
and the accounting for all monies coming into the possession of the
Commissioner. The cost of such bond shall be paid from the assets of
the association. Suit may be maintained on such bond by any person
injured by a breach of the conditions thereof.
3. After the Commissioner takes possession of an association
pursuant to the provisions of this section, the stockholders thereof
may repair its credit, restore or substitute its reserves, and
otherwise improve its condition so that it is qualified to do a
general savings and loan business as provided for by law. Such
association shall not reopen its business until the Commissioner
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issues written permission therefor after an investigation of the
affairs of the association and a determination that the board of
directors of the association has complied with all applicable laws,
that the association's credit and funds are in all respects repaired,
and its reserves restored or sufficiently substituted, and that it
again should be permitted to reopen for business. Written permission
to reopen to do a general savings and loan business shall be issued
in the same manner as is provided by law for granting permission to
do business after incorporation.
4. If the Commissioner determines that reorganization of the
association is warranted or if the Supreme Court, after staying the
liquidation of the association, orders such reorganization, the
Commissioner, after according a hearing to all interested persons,
shall enter an order proposing a reorganization plan. A copy of the
plan shall be sent to each depositor and creditor who will not
receive full payment of their claim under the plan, together with
notice that, unless the plan is disapproved, within fifteen (15) days
after the date of the mailing of the plan, in writing by persons
holding one-third (1/3) or more of the aggregate amount of such
claims, the Commissioner shall proceed to effect the reorganization.
A department, agency, or political subdivision of this state holding
a claim which will not be paid in full is authorized to participate
in the reorganization as any other creditor.
5. a. Notwithstanding any other provision to the contrary,
the Commissioner, upon taking possession of an
association, may immediately liquidate said association
without giving prior notice to the directors,
stockholders, depositors and creditors of such
association, if it is determined by order of the
district court where notice of possession was filed
that the immediate liquidation of the association is
necessary to protect the interests of the depositors of
the association and is otherwise in the public
interest.
b. In proceeding with the immediate liquidation of the
association, the Commissioner, in order to facilitate
the assumption of the deposit liabilities of the closed
insured association by another association, may borrow
monies from the Federal Deposit Insurance Corporation
and pledge some or all of the assets of the closed
insured association as security for such borrowing or
may sell some or all of the assets of the closed
insured association to the Federal Deposit Insurance
Corporation.
6. Once the Commissioner takes possession of an association for
purposes of liquidation, neither the ten-day periods provided by
subsection C of this section nor the pendency of any proceeding for
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review of the action of the Commissioner shall operate to defer,
delay, impede or prevent the payment by the Federal Deposit Insurance
Corporation of the insured deposits of an insured association.
7. The Commissioner shall make available to the Federal Deposit
Insurance Corporation such facilities in or of an insured association
and such books, records and other relevant data of the insured
association as may be necessary or appropriate to enable the Federal
Deposit Insurance Corporation to pay the insured deposits in the
insured association as provided in this subsection. The Federal
Deposit Insurance Corporation, its directors, officers, agents, and
employees, and the Commissioner, and the agents and employees of the
Commissioner, shall be free from any liability to the insured
association, its directors, stockholders, and creditors, for any
action relating to the payment of insured deposits.
D. No judgment, lien, or attachment shall be executed upon any
asset of the association while it is in the possession of the
Commissioner. The Commissioner, in connection with a liquidation or
reorganization may:
1. Vacate and void any lien or attachment, other than an
attorney's or mechanic's lien, obtained upon any asset of the
association during the Commissioner's possession or within four (4)
months prior to commencement thereof, except liens created by the
Commissioner while in possession; and
2. Void any transfer of an asset of the association made after
or in contemplation of its insolvency with intent to effect a
preference.
E. The Commissioner may borrow money in the name of the
association and may pledge its assets as security for a loan.
F. All necessary and reasonable expenses of the Commissioner
relating to the possession of an association and of its
reorganization or liquidation shall be defrayed from the assets of
the association. Compensation to liquidating agents and employees
shall not be in excess of amounts which such individuals would be
entitled to in their regular employment or for like services rendered
within the area of the insolvent association, and in no event shall a
liquidating agent be paid a monthly salary or wage from the assets of
the association in excess of the amount of the monthly salary of the
highest paid official of the insolvent association. Any attorney's
fee allowed to an attorney representing the liquidating agent shall
not exceed the reasonable amount charged by other attorneys of
similar competence for like services in regular employment of an
attorney in the area of the association.
Added by Laws 1987, c. 61, § 21, emerg. eff. May 4, 1987. Amended by
Laws 1990, c. 118, § 24, emerg. eff. April 23, 1990; Laws 1993, c.
183, § 68, eff. July 1, 1993; Laws 2000, c. 81, § 75, eff. Nov. 1,
2000.
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§18-381.75. Reorganization plan.
A. A plan of reorganization shall not be acceptable unless:
1. Such plan is feasible and fair to all classes of depositors,
creditors and stockholders;
2. The aggregate face amount of the interest accorded to any
class of depositors, creditors or stockholders under the plan does
not exceed the value of the assets upon liquidation less the full
amount of the claims of all prior classes, subject, however, to any
fair adjustment for new capital that any class will pay in under the
plan;
3. Such plan provides for the issuance of capital stock and, if
necessary, debentures in an amount that will provide an adequate
ratio to deposits;
4. Any exchange of new common stock for obligations or stock of
the association will be effected in inverse order to the priorities
in liquidation of the classes that will retain an interest in the
association and upon terms that fairly adjust any change in the
relative interests of the respective classes that will be produced by
the exchange;
5. The plan assures the removal of any director, officer or
employee responsible for any unsound or unlawful practice or the
existence of an unsound condition; and
6. Any merger or consolidation provided by the plan conforms to
the requirements of this act.
B. Whenever, in the course of reorganization, supervening
conditions render the plan unfair or its execution impractical, the
State Banking Commissioner may modify the plan or liquidate the
association. Any such action shall be taken by order of the
Commissioner upon appropriate notice.
Added by Laws 1987, c. 61, § 22, emerg. eff. May 4, 1987. Amended by
Laws 1993, c. 183, § 69, eff. July 1, 1993; Laws 2000, c. 81, § 76,
eff. Nov. 1, 2000.
§18-381.76. Liquidation by Commissioner.
A. In liquidating an association, the State Banking Commissioner
may exercise any power of such association, but shall not, without
the approval of the district court where notice of possession was
filed:
1. Sell any asset of the association having a value in excess of
Five Hundred Dollars ($500.00) or such larger sum as may be
determined by the court, but not exceeding One Hundred Thousand
Dollars ($100,000.00);
2. Compromise or release any claim exceeding Five Hundred
Dollars ($500.00), exclusive of interest or such larger sum as may be
determined by the court, but not exceeding One Hundred Thousand
Dollars ($100,000.00); or
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3. Make any payment on any claim, other than a claim upon an
obligation incurred by the Commissioner, before preparing and filing
a schedule of determinations in accordance with subsection H of this
section.
B. 1. The Commissioner may lease for oil and/or gas purposes
any land vested in the Commissioner as assets of an insolvent
association.
2. In making or executing any such lease the Commissioner shall
retain and reserve a royalty of not less than one-eighth (1/8) of the
oil and/or gas produced from said land. Said lease shall be made in
the same manner as provided for by law for the sale of other assets
of state-chartered associations in the possession of the
Commissioner.
C. Within six (6) months after the commencement of liquidation
proceedings, the Commissioner may terminate any executory contract,
including but not limited to contracts for services or advertising,
to which the association is a party or any obligation of the
association as a lessee. A lessor who receives at least sixty (60)
days' notice of the Commissioner's decision to terminate the lease
shall not be entitled to a claim for rent other than rent accrued to
the date of termination nor for damages for such termination, except
that on building or association premises the lessor may receive
damages not exceeding one (1) year's rent as provided in such lease.
D. As soon after the commencement of liquidation as is
practicable, the Commissioner shall take the necessary steps to
terminate all fiduciary positions held by the association and take
such action as may be necessary to surrender all property held by the
association as a fiduciary and to settle its fiduciary accounts. The
Commissioner may transfer such fiduciary accounts to another
qualified corporate fiduciary in the same community without assent of
the parties. Notice of such transfer shall be given by registered
mail to the parties, and the manner of succession of trust powers and
successor trustees shall be in accordance with the procedure provided
in Section 1018 of Title 6 of the Oklahoma Statutes.
E. The right of any agency of the United States insuring
deposits to be subrogated to the rights of depositors upon payment of
their claims shall not be less extensive than what the law of the
United States requires as a condition of the authority to issue such
insurance or make such payments to depositors of federal
associations.
F. Within ten (10) days after taking possession, the
Commissioner shall send notice of the liquidation to each known
depositor, creditor, lessee of a safe deposit box, and bailor of
property held by the association, at the address shown on the books
of the association. The notice shall also be published in a
newspaper of general circulation in the county in which the main
office of the association is located once a week for three (3)
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successive weeks. The Commissioner shall send with each notice a
statement of the amount shown on the books of the association to be
the claim of the depositor or creditor, with all setoffs and any
amounts due to the association. The notice shall demand that
property held by the association as bailee or in a safe deposit box
be withdrawn by the person entitled thereto and, if the amount
claimed differs from that stated in the statement to be due, that the
depositor or creditor file a claim with the Commissioner within sixty
(60) days from the date of the first publication of the notice of the
liquidation given by the Commissioner, in accordance with the
procedure prescribed in the notice. The failure of any depositor,
creditor or claimant to receive a notice, or observe the published
notice of the liquidation by the Commissioner, shall not relieve such
claimant of the obligation to file a claim, if the amount thereof
differs from the amount found by the Commissioner. If no claim is
filed by the claimant within the time specified, then the
determination of the Commissioner shall be final and shall constitute
the claim of that claimant.
G. Safe deposit boxes, the contents of which have not been
removed within sixty (60) days from the date of first publication of
the notice of liquidation, shall be opened by the Commissioner.
Sealed packages containing the contents of such box, with a
certificate of inventory of contents, together with any unclaimed
property held by the association as bailee and certified inventories
thereof, shall be held by the Commissioner and administered in
accordance with the provisions of the Uniform Unclaimed Property Act.
H. The Commissioner shall:
1. Notify each person whose claim has not been allowed in full,
by mailing to the last-known address of such person, as shown on the
records of the association, a notice of the time when and the place
where the schedule of determinations will be available for inspection
and the date when the Commissioner shall file the schedule in court;
2. As soon as practical and within one hundred twenty (120) days
from the date of first publication of the notice of liquidation,
determine the amount, if any, owing to each known creditor or
depositor and the priority class of such claim under subsection K of
this section, and file such determination in the district court where
notice of possession was filed; and
3. As soon as practical and within sixty (60) days from the date
of filing, reject any claim if the Commissioner doubts the validity
thereof.
I. Within twenty (20) days after the filing of the schedule of
determinations, any creditor, depositor or stockholder may file an
objection to any determination which adversely affects such creditor,
depositor or stockholder. Objections so filed shall be heard and
determined by the court. The clerk of such district court shall
enter the objection upon the court docket under the case number
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assigned to the liquidation proceedings. The Commissioner and
interested claimants as the court determines shall be notified of
such objection not less than ten (10) days prior to the hearing on
such objection. The matter shall be tried de novo. No person having
a claim against an insolvent association shall maintain action
thereon except as herein provided.
J. After filing the schedule of determinations and establishing
proper reserves for the payment of costs, expenses of liquidation and
disputed claims, the Commissioner shall pay to any agency of the
United States insuring deposits in the insolvent association such sum
as may be then available but not exceeding the amount paid out by
such agency as such an insurer of deposits and accounts. The
Commissioner from time to time may also make partial distribution to
the holders of claims which are undisputed or which have been allowed
by the district court, in the order of their priority as provided in
subsection K of this section. The district court supervising the
liquidation, as soon as practicable after the establishment of an
adequate and proper reserve for payment of disputed claims, costs and
expenses of liquidation, shall direct the Commissioner to make a
substantial partial pro rata distribution that will not interfere
with orderly liquidation, to the holders of undisputed claims and
those allowed by the court in the order of their priority, to the
extent that there remains only the determination and settlement of
disputed claims and the procedures of the final accounting and final
distribution to be made by the Commissioner as provided in this
section.
K. 1. The following claims shall have priority in the order
specified:
a. obligations incurred by the Commissioner, fees and
assessments due to the Oklahoma State Banking
Department, and all expenses of liquidation, all of
which may be covered by a proper reserve of funds,
b. approved claims of depositors against the general
liquidating account of the association,
c. approved claims of general creditors against the
general liquidating account of the association,
d. claims otherwise proper which were not filed within the
time prescribed by subsection F of this section, and
e. claims of stockholders of the association.
2. No claim shall be entitled to interest thereon if it is paid
within six (6) months after the first publication of notice of the
liquidation by the Commissioner. If the claim is paid after such
period, then the unpaid balance of the claim shall be credited with
interest at the rate of six percent (6%) per annum for the expiration
of the six (6) months until paid or finally canceled by exhaustion of
all assets.
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3. All distribution declared in accordance with subsection J of
this section, which shall not be claimed within one (1) year, shall
be canceled upon the order of the district court having jurisdiction
of the liquidation of such insolvent association, and the proceeds
thereof returned to the general liquidating account of the insolvent
association. Provided, that notice of the application of the
Commissioner to the district court for permission to cancel such
unclaimed distributions shall be given by publication for two (2)
successive weeks in a newspaper of general circulation in the county
where the main office of the insolvent association is located. The
notice shall describe the unclaimed distributions sought to be
canceled, giving the name and location of the insolvent association,
the name of the payee and the amount and shall recite the
Commissioner has filed an application in the designated district
court for cancellation of such distributions and shall refer to the
application for further particulars.
4. Any assets remaining after all partial distributions, after
all claims have been paid, or ample provisions for reserves are made
for payment thereof by the court, shall be distributed to the
stockholders in accordance with their respective interests.
L. Unclaimed funds, other than unclaimed distributions,
remaining after completion of the liquidation shall be retained by
the Commissioner and administered in accordance with the Uniform
Unclaimed Property Act.
M. 1. During the liquidation procedure, the Commissioner and
the agents and employees of the Commissioner shall prepare an annual
report that details all receipts and disbursements made from assets
in the possession of the Commissioner. A copy of the annual report
shall be filed with the district court of the county where the notice
of taking possession was filed and a hearing shall be held thereon.
Interested parties and the board of directors of the insolvent
association shall be given such notice of the hearing as the court
directs and shall make such objections as they shall desire to the
account. The failure to object at a hearing shall not prejudice the
right of any claimant or interested party to object to items of
expense and proceedings in the liquidation upon the final account.
2. When the assets have been distributed in accordance with this
section, except unclaimed funds and contents of safe deposit boxes
held by the Commissioner, the Commissioner shall file a final account
with the court. Notice of hearing upon the final account shall be
given, of not less than ten (10) days nor more than thirty (30) days
prior to the date of the hearing, by registered or certified mail, to
all interested persons and to the board of directors of the insolvent
association and the notice shall be published for two (2) successive
weeks in some newspaper of general circulation published in the
county where the association is located, showing the nature of the
hearing, the date and time of the hearing and that such account is
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for final settlement of the liquidating account of such insolvent
association.
3. The final account shall reflect all the acts of the
Commissioner as supported by annual reports and such necessary items
to support the account, including distribution of such remaining cash
to the stockholders in accordance with their interests and all other
assets to the board of directors of the association as liquidating
agents for the stockholders under the Oklahoma General Corporation
Act.
4. The court shall hear all matters relating to the final
account; allow, reduce or reject any item of expense; and determine
all matters before it. Any person aggrieved by the judgment of the
court may appeal as in any other civil action.
5. Upon approval of the final account by the court, the
Commissioner shall be relieved of liability in connection with the
liquidation and shall cancel the charter upon the records of the
Department.
Added by Laws 1987, c. 61, § 23, emerg. eff. May 4, 1987. Amended by
Laws 1991, c. 331, § 50, eff. Sept. 1, 1991; Laws 2000, c. 81, § 77,
eff. Nov. 1, 2000.
§18-381.77. Liquidation by Federal Deposit Insurance Corporation.
A. The Federal Deposit Insurance Corporation (FDIC) may act
without bond as the liquidating agent of any insured association
closed by the State Banking Commissioner.
B. The Commissioner, upon closing an insured association, may
tender to the FDIC the appointment as liquidator of such association.
C. Upon being notified in writing of the acceptance of such an
appointment, the Commissioner shall immediately file in the office of
the county clerk of the county where the main office of the insured
association is situated a certificate evidencing the appointment of
the FDIC as liquidator. Upon the filing of the certificate the
possession of all the assets, business and property of such
association of every kind and nature, wheresoever situated, shall be
deemed transferred from such association and the Commissioner to the
FDIC. Without the execution of any instruments of conveyance,
assignment, transfer or endorsement, the title to all such assets and
property shall be vested in the FDIC and the Commissioner thereafter
shall be forever relieved from any and all responsibility and
liability with respect to the liquidation of such association. With
respect to a federal association, it shall be sufficient to file a
certified copy of the resolution of the Director of the Office of
Thrift Supervision appointing a receiver.
D. When the Director of the Office of Thrift Supervision or FDIC
transfers all real property, interests in real property, and liens on
real property of a closed insured association or federal association,
collectively referred to for the purpose of this subsection as the
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"transferred property", to a single existing association, federal
association or bank or a newly chartered federal association, the
Director of the Office of Thrift Supervision or FDIC shall file a
memorandum of transfer or a memorandum of assignment so stating in
the office of the county clerk of the county where real property
records must be recorded with respect to the transferred property.
The memorandum shall be executed by an authorized special
representative of the Director of the Office of Thrift Supervision or
of the FDIC and shall have attached to it certified copies of the
resolutions of the Director of the Office of Thrift Supervision or of
the FDIC appointing and authorizing the special representative and
authorizing the transfer. In that event, regardless of whether the
date of closing predates this statute, it shall not be necessary for
the memorandum to describe the transferred property with specificity,
nor shall it be necessary for any of the transferred property to be
separately conveyed to the transferee association, federal
association or bank by an additional instrument. Thereafter, when
the transferee association, federal association or bank conveys,
assigns, or releases any of the transferred property, such
conveyances, assignments, and releases shall recite that the
transferee association, federal association or bank is successor in
title to the closed association as evidenced by the memorandum of
transfer or the memorandum of assignment and shall further recite the
date and county of filing and the book and page of recording the
memorandum.
E. If the FDIC accepts the appointment as liquidator, it shall
have and possess all the powers and privileges provided by the laws
of this state with respect to the liquidation of an insured
association and with respect to the depositors and other creditors of
such an association and shall proceed in liquidation as if it were
the Commissioner, and shall have the right and power, upon the order
of a court of record of competent jurisdiction, to enforce the
individual liability of the directors of any such association.
F. To the extent that any action is required or permitted to be
taken by the FDIC or the Director of the Office of Thrift Supervision
pursuant to the terms of this section, any similar action taken by
the Federal Savings and Loan Insurance Corporation or the Federal
Home Loan Bank Board as predecessor federal agencies, either prior to
or subsequent to the effective date of this section, shall be equally
legal and effective as if such action were taken by the FDIC or the
Director of the Office of Thrift Supervision pursuant to the
authorization granted herein.
Added by Laws 1987, c. 61, § 24, emerg. eff. May 4, 1987. Amended by
Laws 1989, c. 292, § 2, operative July 1, 1989; Laws 1990, c. 118, §
25, emerg. eff. April 23, 1990; Laws 1993, c. 183, § 70, eff. July 1,
1993; Laws 2000, c. 81, § 78, eff. Nov. 1, 2000.
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§18-381.78. Removal of officer, director or employee by
Commissioner.
Any officer, director or employee of an association found by the
State Banking Commissioner to be dishonest, reckless, unfit to
participate in the conduct of the affairs of the association, or to
have engaged or participated in any unsafe or unsound practice in
connection with an association, or to be practicing a continuing
disregard or violation of laws, rules, regulations or orders which
are likely to cause substantial loss to the association or likely to
seriously weaken the condition of the association shall be removed
immediately from office by the board of directors of the association
of which such person is an officer, director or employee on the
written order of the Commissioner. The association or officer,
employee or director thereof, within ten (10) days of the date of the
written order directing removal, may appeal such removal pursuant to
the provisions of Section 207 of Title 6 of the Oklahoma Statutes.
As soon as possible thereafter the Supreme Court shall review the
order of the Commissioner and make such findings as it deems proper.
During the pendency of the review of the protest against removal, the
officer, employee or director shall not perform any of the duties of
such office.
Added by Laws 1987, c. 61, § 25, emerg. eff. May 4, 1987. Amended by
Laws 1993, c. 183, § 71, eff. July 1, 1993; Laws 2000, c. 81, § 79,
eff. Nov. 1, 2000.
§18-381.79. Appeal of orders.
Any final order of the Commissioner issued under this act or
rules promulgated under this act shall be appealable pursuant to the
provisions and requirements of Section 207 of Title 6 of the Oklahoma
Statutes.
Added by Laws 2000, c. 81, § 80, eff. Nov. 1, 2000.
§18-381.80. Criminal offenses - Penalties.
A. Any person responsible for an act or omission or a criminal
offense expressly declared to be unlawful by this act or rules
promulgated under this act shall be guilty:
1. Of a misdemeanor punishable by imprisonment for a term not
exceeding one (1) year or a fine not exceeding Fifty Thousand Dollars
($50,000.00), or both; and
2. If the act or omission was intended to defraud, of a felony
punishable by imprisonment not exceeding five (5) years or a fine not
exceeding One Hundred Thousand Dollars ($100,000.00), or both.
B. An officer, director, employee, agent or attorney of an
association shall be responsible for an act or omission of the
institution declared to be a criminal offense against this act
whenever, knowing that such act or omission is unlawful, such person
participates in authorizing, executing, ratifying or concealing such
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act, or in authorizing or ratifying such omission or, having a duty
to take the required action, omits to do so. A director shall be
deemed to participate in any action, of which the director has or
should have had knowledge, taken or omitted to be taken by the board
of which the director is a member unless the director dissents
therefrom in writing and promptly notifies the Commissioner of such
dissent.
C. It shall be a criminal offense against this act to violate
any lawful order of the Commissioner. The Commissioner may refer
evidence concerning violations of this act or of any rule or order
hereunder to the Attorney General of the State of Oklahoma or to the
district attorney for the county where a violation occurred in order
that an information or indictment for such violations may be filed.
The Attorney General or district attorney may designate and appoint a
lawyer of the Oklahoma State Banking Department as special assistant,
if available, for the purpose of assisting in or conducting criminal
prosecutions arising because of the proceedings provided for in this
section.
D. Unless otherwise provided in this act, it shall be no defense
to a criminal prosecution under this act that the defendant did not
know the facts establishing the criminal character of the act or
omission charged if the defendant could and should have known such
facts in the proper performance of such duty.
E. This section shall not apply to specific offenses for which
criminal sanctions have been imposed in other sections of this act.
Added by Laws 2000, c. 81, § 81, eff. Nov. 1, 2000.
§18-381.81. Payment or reimbursement by association for fine,
penalty or judgment upon another person.
It shall be unlawful for an association to pay a fine or penalty
imposed by law upon any other person or any judgment against such
person or to reimburse directly or indirectly any person by whom such
fine, penalty or judgment has been paid, except as otherwise provided
in Section 1411 of Title 6 of the Oklahoma Statutes.
Added by Laws 2000, c. 81, § 82, eff. Nov. 1, 2000.
§18-381.82. Receipt of deposit after notification of insolvency.
It shall be unlawful for an association to receive any deposit
after it has been notified by its primary regulator that it is
insolvent or for an officer, director or employee who knows or, in
the proper performance of such duty should know of the notification
of such insolvency, to receive or authorize the receipt of such
deposit, if such deposit, when aggregated together with other funds
held by the depositor in the same right and capacity, would exceed
the limit of any federal deposit insurance coverage.
Added by Laws 2000, c. 81, § 83, eff. Nov. 1, 2000.
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§18-381.83. Certain persons prohibited from serving as officer or
director.
It shall be unlawful for any person to serve as an officer or
director of an association who:
1. Has been convicted of an offense constituting, in the
jurisdiction in which the conviction was rendered, a violation of the
banking, savings institution or credit union laws or other felony
involving dishonesty or a breach of trust; and
2. Is indebted to the bank for more than thirty (30) days based
on a judgment that has become final.
Added by Laws 2000, c. 81, § 84, eff. Nov. 1, 2000.
§18-381.84. Criminal embezzlement, abstraction, or misapplication of
association funds.
It shall be a criminal offense for any officer, director,
shareholder or employee of any association to directly or indirectly
embezzle, abstract, or misapply, or cause to be embezzled, abstracted
or misapplied any of the funds or securities or other property of or
under the control of the association with intent to deceive, injure,
cheat, wrong, or defraud any person or entity.
Added by Laws 2000, c. 81, § 85, eff. Nov. 1, 2000.
§18-381.85. Publishing, uttering, or circulating false statement or
representation.
It shall be unlawful for any person to publish, utter, or
circulate any false, malicious, or unprivileged statement or
representation for the purpose of injuring any association chartered,
existing and doing business within the State of Oklahoma, under and
by virtue of the laws of this state, or under and by virtue of the
laws of the United States of America.
Added by Laws 2000, c. 81, § 86, eff. Nov. 1, 2000.
§18-381.86. Injunctions – Enforcement of orders.
A. Whenever a violation of this act by an association or any
officer, director or employee thereof is threatened or impending and
will cause substantial injury to the institution or to the
depositors, creditors, or stockholders thereof, the district court of
the county in which the association is located shall, upon the suit
of the State Banking Commissioner, issue an injunction restraining
such violation.
B. Whenever any corporation, not authorized to carry on
association business under this act, shall falsely act as an
association, or shall use an artificial or corporate name implying it
is a trust company, the district court of the county in which lawful
service is obtained shall, upon suit of the Commissioner, issue an
injunction restraining such act.
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C. All orders of the Commissioner shall be enforced by the
district court of the district of domicile of the person or persons
to whom the order is directed.
Added by Laws 2000, c. 81, § 87, eff. Nov. 1, 2000.
§18-411. Reports - Misapplication of funds solicited.
Thirty (30) days after the passage and approval of this bill, all
chambers of commerce, commercial clubs, or any such associations
organized and doing business in this state as is commonly done by
such associations shall make a report to their entire membership,
setting forth and itemizing their receipts and disbursements for the
year ending at the date of the passage and approval of this bill, and
shall thereafter make a like report each year ending June 30th.
Every committee or individual who solicits or receives any funds
from the public for such associations herein named shall make a full
itemized report of all receipts and disbursements thereof. The
report shall be filed with the city clerk where the committee or
person soliciting such fund resides, or where the funds were
collected; provided, that any person or committee who diverts the
funds so collected from the purposes for which they were solicited or
collected shall be guilty of a felony and on conviction therefor
shall be punished by confinement in the State Penitentiary for a term
of not less than one (1) year nor more than five (5) years.
Added by Laws 1919, c. 260, p. 370, § 1. Amended by Laws 1997, c.
133, § 140, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 66,
eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date
of Laws 1997, c. 133, § 140 from July 1, 1998, to July 1, 1999.
§18-421. Corporations authorized - Formation - Purposes.
Ten or more persons may form a corporation for the purpose of
conducting an agricultural, dairy, livestock, irrigation,
horticultural, mercantile, mining, manufacturing, mechanical, or
industrial business upon a co-operative plan, and with their
associates, successors and assigns may become and be a body politic
and corporate by complying with the provisions of this act.
Laws 1919, c. 147, p. 211, § 1; Laws 1923, c. 167, p. 269, § 1.
§18-422. Articles of incorporation.
The incorporators shall sign and acknowledge, in the manner
required for the signing and acknowledgment of deeds, a certificate
of incorporation showing the following facts:
(1) The corporate name.
(2) The purpose of corporation.
(3) The amount of capital stock.
(4) The number of shares, and the par value of the shares into
which the capital stock is divided.
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(5) The term of the corporate existence.
(6) The number of directors, not less than five and the names and
addresses of the incorporating directors who shall manage the
concerns of the corporation for the first corporate year.
(7) The name of the town or post office and the county where the
principal office or place of business of the corporation shall be
located.
(8) Any further provision, not inconsistent with law, which the
incorporators may deem expedient to be embodied in such certificate.
Added by Laws 1919, c. 147, p. 211, § 2.
§18-423. Filing of articles - Certificate - Election by existing
corporations.
The articles of incorporation shall be filed with the Secretary
of State whereupon he shall issue to the corporation over the Great
Seal of the State of Oklahoma, a certificate that the articles
containing the required statement of facts have been filed in his
office, and thereupon the persons signing the articles and their
associates, successors and assigns shall be a body politic and
corporate by the name and for the purposes stated in said article.
Provided, that any corporation doing business as mentioned in Section
One, now operating in the State of Oklahoma, may, at regular or
special meeting of the shareholders called for such purpose, by a
majority vote elect to operate under the provisions of this act,
after the action taken at such meeting shall be properly certified by
the secretary of such corporation to the Secretary of State.
Laws 1919, c. 147, p. 212, § 3.
§18-424. Amendment of articles.
The articles of incorporation may be amended at any time, or from
time to time, by the affirmative vote of two-thirds of the members
present at any annual meeting of the stockholders, if notice of the
proposed amendment shall have been given in the call for such
meeting. Such amendments shall be put into effect by the directors,
who shall sign and acknowledge and file, as above provided, new or
revised articles containing such amendments and superseding the
original articles.
Laws 1919, c. 147, p. 212, § 4.
§18-425. Powers.
Each corporation formed under the provisions of this act shall
have power:
(1) To have succession by its corporate name for the period
limited in its certificate.
(2) To sue and be sued, complain and defend in any court.
(3) To establish and use a common seal and alter the same.
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(4) To hold, purchase and convey such real and personal property
as the purpose of the corporation may require, including stock in
subsidiary or allied cooperative corporations within or without the
state.
(5) To appoint such officers and agents as the business may
require, including in every case a president and secretary, and to
fix their compensation.
(6) To make bylaws not inconsistent with law for the management
of its property, the regulation of its business and the transfer of
its stock.
(7) To exercise all other lawful powers necessary or proper for
the exercise of the powers herein conferred.
Laws 1919, c. 147, p. 212, § 5.
§18-426. Stock.
The stock of such corporation shall not be sold at less than its
par value. Twenty percent (20%) of the par value of the stock
subscribed for shall be paid in before the corporation shall commence
business, and the remainder of such subscriptions shall be paid from
time to time upon call of the directors. No certificate of stock
shall be issued to any person until the full amount of the
subscription therefor shall have been paid. No person shall become a
shareholder except by consent of the board of directors. Not more
than ten percent (10%) of the stock outstanding at any time, and not
more than Three Thousand Dollars ($3,000.00) in par value, shall be
held by or for one person, firm or corporation.
Laws 1919, c. 147, p. 212, § 6; Laws 1969, c. 226, § 1.
§18-427. Voting rights.
Each shareholder or subscriber shall be entitled to one vote, and
no more, irrespective of the number of shares owned, at any meeting
of the stockholders. Voting by proxies or absentee voting may be
permitted and regulated by the bylaws. In the absence of such
provision in the bylaws, no voting by proxies or absentees shall be
allowed.
Laws 1919, c. 147, p. 213, § 7.
§18-428. Liability of subscribers and shareholders.
All subscribers or shareholders shall be severally and
individually liable to the creditors of the corporation, to the
amount of the unpaid capital stock subscribed for, or held by them,
respectively and to no other or further amount.
Laws 1919, c. 147, p. 213, § 8; Laws 1923, c. 167, p. 269, § 2.
§18-429. Directors - Selection and term - Quorum.
The stock, property and affairs, of such corporation shall be
managed by the board of directors, which shall consist of five (5)
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members, all of whom must be stockholders, and who shall be elected
at the annual meeting of the stockholders. At the first meeting of
the stockholders, there shall be elected five directors, one of whom
shall serve one (1) year, two of whom shall serve two (2) years, and
the remaining two of whom shall serve three (3) years. As the term
of office of each of these directors expires a successor shall be
elected, who shall serve for three (3) years, unless sooner removed,
or until his successor is elected and qualified.
Notice of the time and place of holding such election shall be
published not less than two (2) weeks previous thereto in the
newspaper printed nearest to the place where the principal office or
place of business of the corporation is located. A quorum shall
consist of at least ten percent (10%) in number of all the
stockholders or subscribers for stock who are entitled to vote.
Laws 1919, c. 147, p. 213, § 9; Laws 1923, c. 167, p. 270, § 3; Laws
1941, p. 58, § 1.
§18-430. Removal of director or officer - Vacancies.
Any director or officer of such corporation may be removed by a
majority vote of the stockholders at any regular or special
stockholders' meeting lawfully called, and the vacancy may be filled
at such meeting or by the remaining directors at any regular or
special meeting thereafter.
Laws 1919, c. 147, p. 213, § 10.
§18-431. Liability of directors.
If the indebtedness of such corporation shall at any time exceed
the amount of its subscribed capital stock and surplus the directors
assenting thereto shall be personally and individually liable for
such excess to the creditors. Except any indebtedness created in
favor of the State warehouse revolving fund.
Laws 1919, c. 147, p. 231, § 11; Laws 1923, c. 167, p. 270, § 4.
§18-432. Dividends and profits - Reserve fund.
The directors, subject to revision by the stockholders, at any
general or special meeting lawfully called, shall apportion the net
earnings and profits thereof from time to time at least once in each
year in the following manner:
(1) Not less than ten percent (10%) thereof accruing since the
last apportionment shall be set aside in a surplus or reserve fund
until such fund shall equal at least fifty percent (50%) of the paid
up capital stock.
(2) Dividends at a rate not to exceed eight percent (8%) per
annum, may, in the discretion of the directors, be declared upon the
paid up capital stock. Five percent (5%) may be set aside for
educational purposes.
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(3) The remainder of such net earnings and profits shall be
apportioned and paid to its members ratably upon the amounts of the
products sold to the corporation by its members, and the amounts of
the purchases of members from the corporation: provided, that if the
bylaws of the corporation shall so provide the directors may
apportion such earnings and profits in part to nonmembers upon the
amounts of their purchases and sales from or to the corporation.
Laws 1919, c. 147, p. 213, § 12.
§18-433. Illegal dividends - Liability of directors.
If the directors of such corporation shall declare and pay any
dividend or apportionment of earnings, or profits to members or
nonmembers when the corporation is insolvent or when it would be
rendered insolvent by such payment, such directors shall be jointly
and severally liable for all debts of the corporation then existing
and for all such debts as shall be thereafter incurred while they
shall respectively continue in office. Any director may relieve
himself from such liability at any time before the time fixed for the
payment of such dividend or apportionment by filing a certificate in
writing of his objection with the secretary of the corporation, and
with the county clerk of the county in which the principal office is
located.
Laws 1919, c. 147, p. 214, § 13.
§18-434. Financial statements.
At the time of each dividend or apportionment of profits and at
least once in every year, the directors shall cause to be prepared a
statement showing the financial condition of the corporation at the
end of the period to which such dividend or apportionment relates, in
such form as shall fully exhibit the assets and liabilities of the
corporation; its earnings and profits, purchases and sales, expenses
and outlays, for the period covered by such dividend or
apportionment, in such manner that a good understanding of the
condition of the company, may be obtained from such statement, and
shall cause such statement to be kept on file with the secretary
where the same may be examined by any member of the corporation at
all reasonable times.
Laws 1919, c. 147, p. 214, § 14.
§18-435. Use of word "cooperative".
No person, firm or association, nor any corporation other than
such as shall be organized pursuant to Sections 421 through 439.2 of
this title or pursuant to the Uniform Limited Cooperative Association
Act of 2009, shall make use of the word "cooperative", in the name
under which its or their business is carried on. Whoever shall
violate the provisions of this section shall be punishable by fine of
not exceeding One Hundred Dollars ($100.00) for each offense. The
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violation of this section may furthermore be enjoined at the suit of
any citizen of the state.
Added by Laws 1919, c. 147, p. 214, § 15. Amended by Laws 2009, c.
68, § 150, eff. Jan. 1, 2010.
NOTE: Laws 2008, c. 382, § 170 was held unconstitutional by the
Oklahoma Supreme Court in the case of Weddington v. Henry, 202 P.3d
143, 2008 OK 102 (2009) and repealed by Laws 2009, c. 68, § 152, eff.
Jan. 1, 2010.
§18-436. Forfeiture of charter.
Any corporation organized under this act, which fails to comply
with all the provisions of this act, shall thereby forfeit its
charter, and the Secretary of State is hereby authorized and directed
to recall the charter of any such corporation.
Laws 1919, c. 147, p. 214, § 16.
§18-437. Short title.
This act may be cited as the "Rural Electric Cooperative Act".
Laws 1939, p. 256, § 1.
§18-437.1. Rural electric cooperatives authorized.
Cooperative, nonprofit, membership corporations may be organized
under this act for the purpose of supplying electric energy and
promoting and extending the use thereof in rural areas. Corporations
organized under this act and corporations which become subject to
this act in the manner hereinafter provided are hereinafter referred
to as "cooperatives".
Laws 1939, p. 256, § 2.
§18-437.2. Powers.
A cooperative shall have power:
(a) To sue and be sued, in its corporate name;
(b) To have a perpetual existence unless a limited period of
duration is stated in its charter;
(c) To adopt a corporate seal and alter the same at pleasure;
(d) To generate, manufacture, purchase, acquire, accumulate and
transmit electric energy, and to distribute, sell, supply and dispose
of electric energy in rural areas to its members, to governmental
agencies and political subdivisions, and to other persons not in
excess of ten percent (10%) of the number of its members;
(e) To make loans to persons to whom electric energy is or will
be supplied by the cooperative for the purpose of, and otherwise to
assist such persons in wiring their premises and installing therein
electric and plumbing fixtures, appliances, apparatus and equipment
of any and all kinds of character, and to accept and otherwise
acquire, and to sell, assign, transfer, endorse, pledge, hypothecate
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and otherwise dispose of notes, bonds, and other evidences of
indebtedness and any and all types of security therefor;
(f) To make loans to persons to whom electric energy is or will
be supplied by the cooperative for the purpose of, and otherwise to
assist such persons in constructing, maintaining and operating
electric refrigeration plants;
(g) To become a member in one or more other cooperatives or
corporations or to own stock therein;
(h) To construct, purchase, take, receive, lease as lessee, or
otherwise acquire, and to own, hold, use, equip, maintain, and
operate and to sell, assign, transfer, convey, exchange, lease as
lessor, mortgage, pledge, or otherwise dispose of or encumber,
electric transmission and distribution lines or systems, electric
generating plants, electric refrigeration plants, lands, buildings,
structures, dams, plants, and equipment, and any and all kinds and
classes of real or personal property whatsoever, which shall be
deemed necessary, convenient or appropriate to accomplish the purpose
for which the cooperative is organized; provided, that any and all
such electrical construction and maintenance shall conform to the
requirements and regulations of the National Electrical Safety Code;
(i) To purchase or otherwise acquire, and to own, hold, use and
exercise and to sell, assign, transfer, convey, mortgage, pledge,
hypothecate, or otherwise dispose of or encumber, franchises, rights,
privileges, licenses, rights-of-way and easements;
(j) To borrow money and otherwise contract indebtedness therefor
and to secure the payment thereof by mortgage, pledge, deed or trust,
or any other encumbrance upon any or all of its then owned or after
acquired real or personal property, assets, franchises, revenues or
income;
(k) To construct, maintain and operate electric transmission and
distribution lines along, upon, under and across all public
thoroughfares, including without limitation, all roads, highways,
streets, alleys and bridges, and upon, under and across all publicly
owned lands, subject, however, to the requirements in respect of the
use of such thoroughfares and lands that are imposed by the
respective authorities having jurisdiction thereof upon corporations,
constructing or operating electric transmission and distribution
lines or systems; provided that in case an area has been or shall be
included, as a result of incorporation, annexation, population
growth, or otherwise, within the boundaries of a city, town or
village, a cooperative which was furnishing electric energy, or was
constructing or operating electric facilities, in such area, prior to
such inclusion, shall be entitled to construct, maintain and operate
electric transmission and distribution lines and related facilities
along, upon, under and across all existing and future public
thoroughfares, and to continue and extend the furnishing of electric
energy or the construction and operation of electric facilities in
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such area without obtaining the consent, franchise, license, permit
or other authority of such city, town or village, subject, however,
to compliance with the lawful safety requirements of such city, town
or village as to the manner of constructing and maintaining
facilities on such thoroughfares, and subject to payment of taxes of
such city, town or village that may be levied and assessed as
provided in Section 1201 of Title 68 of the Oklahoma Statutes; and
provided further that if such city, town or village in which an area
has been or shall be included, as aforesaid, owns and operates a
system for the furnishing of electric energy to its inhabitants, the
cooperative furnishing electric energy in such area shall transfer to
such city, town or village, upon its request, the cooperative's
electric distribution facilities used in furnishing electric energy
in said area, other than facilities used in furnishing electric
energy for resale or to premises of the cooperative, subject,
however, to the following requirement: The city, town or village
shall pay to the cooperative an amount to compensate the cooperative
for the fair value of the cooperative's facilities to be acquired by
the city, town or village. If such cooperative and city, town or
village cannot agree upon the amount to be paid to the cooperative,
the city, town or village is authorized to file a proceeding in the
district court of the county in which such city, town or village, or
any part thereof, is located, for the acquisition of the
cooperative's electric distribution facilities used in furnishing
electric energy in said area, other than facilities used in
furnishing electric energy for resale or to premises of the
cooperative, and the procedure followed and the method of
ascertaining just compensation to be paid the cooperative will be as
provided in Article 2, Section 24, of the Oklahoma Constitution and
Sections 53 to 58, inclusive, of Title 66 of the Oklahoma Statutes.
(l) To conduct its business and exercise any or all of its powers
within or without this state;
(m) To adopt, amend and repeal bylaws; and
(n) To do and perform any and other acts and things, and to have
and exercise any and all other powers which may be necessary,
convenient or appropriate to accomplish the purpose for which the
cooperative is organized;
(o) To have and exercise the right of eminent domain in the same
manner and by like proceedings as provided for railroad corporations
under the laws of this state.
(p) To participate with, jointly own or operate or enter into
loans with any person, firm, corporation, limited liability company
or any other kind of business entity including, but not limited to,
privately owned electric utilities for the construction, operation or
maintenance of electric generation, transmission or distribution
facilities.
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Added by Laws 1939, p. 256, § 3, emerg. eff. April 14, 1939. Amended
by Laws 1939, p. 271, § 1, emerg. eff. May 12, 1939; Laws 1949, p.
128, § 1, emerg. eff. March 25, 1949; Laws 1961, p. 200, § 1; Laws
1988, c. 323, § 1, eff. Nov. 1, 1988; Laws 2002, c. 32, § 1, emerg.
eff. April 10, 2002.
§18-437.3. Name.
The name of each cooperative shall include the words "electric"
and "cooperative", provided, however, such limitation shall not apply
if, in an affidavit made by the president or vice president of a
cooperative and filed with the Secretary of State, it shall appear
that the cooperative desires to transact business in another state
and is precluded therefrom by reason of its name. The name of a
cooperative shall distinguish it from the name of any other
corporation organized under the laws of, or authorized to transact
business in, this state. The words "electric" and "cooperative"
shall not both be used in the name of any corporation organized under
the laws of, or authorized to transact business in, this state,
except a cooperative or a corporation transacting business in this
state pursuant to the provisions of this act.
Laws 1939, p. 258, § 4.
§18-437.4. Incorporators.
Five or more natural persons, or two or more cooperatives, may
organize a cooperative in the manner hereinafter provided.
Laws 1939, p. 258, § 5.
§18-437.5. Articles of incorporation.
(a) The articles of incorporation of a cooperative shall recite
in the caption that they are executed pursuant to this act, shall be
signed and acknowledged by each of the incorporators, and shall
state: (1) The name of the cooperative; (2) The address of its
principal office; (3) The names and addresses of the incorporators;
(4) The names and addresses of the persons who shall constitute its
first board of trustees; and (5) Any provisions not inconsistent with
this act deemed necessary or advisable for the conduct of its
business and affairs.
(b) Such articles of incorporation shall be submitted to the
Secretary of State for filing as provided in this act.
(c) It shall not be necessary to set forth in the articles of
incorporation of a cooperative the purpose for which it is organized
or any of the corporate powers vested in a cooperative under this
act.
Laws 1939, p. 258, § 6.
§18-437.6. Bylaws.
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The original bylaws of a cooperative shall be adopted by its
board of trustees. Thereafter bylaws shall be adopted, amended or
repealed by its members. The bylaws shall set forth the rights and
duties of members and trustees and may contain other provisions for
the regulation and management of the affairs of the cooperative not
inconsistent with this act or with its articles of incorporation.
Laws 1939, p. 259, § 7.
§18-437.7. Members
(a) No person who is not an incorporator shall become a member of
a cooperative unless such person shall agree to use electric energy
furnished by the cooperative when such electric energy shall be
available through its facilities. The bylaws of a cooperative may
provide that any person, including a corporation, shall cease to be a
member thereof if he or she shall fail or refuse to use electric
energy made available by the cooperative or if electric energy shall
not be made available to such person by the cooperative within a
specified time after such person shall have become a member thereof.
Membership in the cooperative shall not be transferable, except as
provided in the bylaws. The bylaws may prescribe additional
qualifications and limitations in respect to membership.
(b) An annual meeting of the members shall be held at such time
as shall be provided in the bylaws.
(c) Special meetings of the members may be called by the board of
trustees, by any three trustees, by not less than ten percent (10%)
of the members, or by the president.
(d) Meetings of members shall be held at such place as may be
provided in the bylaws. In the absence of any such provision, all
meetings shall be held in the city or town in which the principal
office of the cooperative is located.
(e) Except as hereinafter otherwise provided, written or printed
notice stating the time and place of each meeting of members and, in
the case of a special meeting, the purpose or purposes for which the
meeting is called, shall be given to each member, either personally
or by mail, not less than ten (10) nor more than twenty-five (25)
days before the date of the meeting.
(f) Five percent (5%) of all members, present in person, shall
constitute a quorum for the transaction of business at all meetings
of the members, unless the bylaws prescribe the presence of a greater
percentage of the members for a quorum. If less than a quorum is
present at any meeting, a majority of those present in person may
adjourn the meeting from time to time without further notice. If
allowed by the bylaws of a cooperative, mail-in ballots may be
counted toward the required five percent (5%) of members necessary to
constitute a quorum.
(g) Each member shall be entitled to one vote on each matter
submitted to a vote at a meeting. Voting shall be in person, but, if
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the bylaws so provide, may also be by proxy or by mail, or both. If
the bylaws provide for voting by proxy or by mail, they shall also
prescribe the conditions under which proxy or mail voting shall be
exercised. In any event, no person shall vote a proxy for more than
three members at any meeting of the members.
Laws 1939, p. 259, § 8. Amended by Laws 2016, c. 96, § 1, emerg.
eff. Apr. 19, 2016.
§18-437.8. Board of trustees.
(a) The business and affairs of a cooperative shall be managed
by a board of not less than five (5) trustees, each of whom shall be
a member of the cooperative or of another cooperative which shall be
a member thereof. The bylaws shall prescribe the number of trustees,
their qualifications, other than those provided for in this act, the
manner of holding meetings of the board of trustees and of the
election of successors to trustees who shall resign, die, or
otherwise be incapable of acting. The bylaws may also provide for
the removal of trustees from office and for the election of their
successors. Without approval of the members, trustees shall not
receive any salaries for their services as trustees. The bylaws may,
however, provide that a fixed fee and expenses of attendance, if any,
may be allowed to each trustee for attendance at each meeting of the
board of trustees and such other meetings, seminars, workshops,
conferences or for other business purposes authorized by the board of
trustees.
(b) The trustees of a cooperative named in any articles of
incorporation, consolidation, merger or conversion, as the case may
be, shall hold office until the next following annual meeting of the
members or until their successors shall have been elected and
qualified. At each annual meeting or, in case of failure to hold the
annual meeting as specified in the bylaws, at a special meeting
called for that purpose, the members shall elect trustees to hold
office until the next following annual meeting of the members, except
as hereinafter otherwise provided. Each trustee shall hold office
for the term for which he is elected or until his successor shall
have been elected and qualified.
(c) The officers of a cooperative shall consist of a president,
secretary and treasurer, who shall be elected annually by and from
the board of trustees. No person shall continue to hold any of the
above offices after he shall have ceased to be a trustee. The
offices of secretary and/or treasurer may be held by the same person.
The board of trustees may also elect or appoint a chief executive or
operating officer or such other officers, agents, or employees,
whether or not such persons are trustees of the cooperative, as it
shall deem necessary or advisable and shall prescribe the powers and
duties thereof. Any officer may be removed from office and his
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successor elected in the manner prescribed in the bylaws. Vacancies
in office may be filled by the board of trustees.
(d) The bylaws may provide that, in lieu of electing the whole
number of trustees annually, the trustees shall be divided into three
classes at the first or any subsequent annual meeting, each class to
be as nearly equal in number as possible, with the term of office of
the trustees of the first class to expire at the next succeeding
annual meeting and the term of the second class to expire at the
second succeeding annual meeting, and the term of the third class to
expire at the third succeeding annual meeting. At each annual
meeting after such classification a number of trustees equal to the
number of the class whose term expires at the time of such meeting
shall be elected to hold office until the third succeeding annual
meeting.
(e) A majority of the board of trustees shall constitute a
quorum.
(f) If a husband and wife hold a joint membership in a
cooperative, either one, but not both, may be elected a trustee.
(g) The board of trustees may exercise all of the powers of a
cooperative except such as are conferred upon the members by this
act, or its articles of incorporation or bylaws.
Laws 1939, p. 260, § 9; Laws 1955, p. 151, § 1. Amended by Laws
1990, c. 202, § 1, emerg. eff. May 10, 1990.
§18-437.9. Voting districts.
Notwithstanding any other provision of this act, the bylaws may
provide that the territory in which a cooperative supplies electric
energy to its members shall be divided into two or more voting
districts and that, in respect of each such voting district, (1) a
designated number of trustees shall be elected by the members
residing therein, or (2) a designated number of delegates shall be
elected by such members, or (3) both such trustees and delegates
shall be elected by such members. In any such case the bylaws shall
prescribe the manner in which such voting districts and the members
thereof, and the delegates and trustees, if any, elected therefrom
shall function and the powers of the delegates, which may include the
power to elect trustees. No member at any voting district meeting
and no delegate at any meeting shall vote by proxy or by mail.
Laws 1939, p. 261, § 10.
§18-437.10. Officers.
The officers of a cooperative shall consist of a president, vice
president, secretary and treasurer, who shall be elected annually by
and from the board of trustees. No person shall continue to hold any
of the above offices after he shall have ceased to be a trustee. The
offices of secretary and of treasurer may be held by the same person.
The board of trustees may also elect or appoint such other officers,
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agents, or employees as it shall deem necessary or advisable and
shall prescribe the powers and duties thereof. Any officer may be
removed from office and his successor elected in the manner
prescribed in the bylaws. Vacancies in office may be filed by the
board of trustees.
Laws 1953, p. 486, § 10.
§18-437.11. Amendment of articles of incorporation - Change of
location without amending articles.
(a) A cooperative may amend its articles of incorporation by
complying with the following requirements:
(1) The proposed amendment shall be first approved by the board
of trustees and shall then be submitted to a vote of the members at
any annual or special meeting thereof, the notice of which shall set
forth the proposed amendment. The proposed amendment, with such
changes as the members shall choose to make therein, shall be deemed
to be approved on the affirmative vote of not less than two-thirds of
those members voting thereon at such meeting; and
(2) Upon such approval by the members, articles of amendment
shall be executed and acknowledged on behalf of the cooperative by
its president or vice president and its corporate seal shall be
affixed thereto and attested by its secretary. The articles of
amendment shall recite in the caption that they are executed pursuant
to this act and shall state: (a) the name of the cooperative; (b) the
address of its principal office; (c) the date of the filing of its
articles of incorporation in the office of the Secretary of State;
and (d) the amendment to its articles of incorporation. The
president or vice president executing such articles of amendment
shall also make and annex thereto an affidavit stating that the
provisions of this section were duly complied with. Such articles of
amendment and affidavit shall be submitted to the Secretary of State
for filing as provided in this act.
(b) A cooperative may, without amending its articles of
incorporation, upon authorization of its board of trustees, change
the location of its principal office by filing a certificate of
change of principal office, executed and acknowledged by its
president or vice president under its seal attested by its secretary,
in the office of the Secretary of State and also in each county
office in which its articles of incorporation or any prior
certificate of change of principal office of such cooperative has
been filed. Such cooperative shall also, within thirty (30) days
after the filing of such certificate of change of principal office in
any county office, file therein certified copies of its articles of
incorporation and all amendments thereto, if the same are not already
on file therein.
Laws 1939, p. 261, § 12.
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§18-437.12. Consolidation.
Any two or more cooperatives, each of which is hereinafter
designated a "consolidating cooperative", may consolidate into a new
cooperative, hereinafter designated the "new cooperative", by
complying with the following requirements:
(a) The proposition for the consolidation of the consolidating
cooperatives into the new cooperative and proposed articles of
consolidation to give effect thereto shall be first approved by the
board of trustees of each consolidating cooperative. The proposed
articles of consolidation shall recite in the caption that they are
executed pursuant to this act and shall state: (1) The name of each
consolidating cooperative, the address of its principal office, and
the date of the filing of its articles of incorporation in the office
of the Secretary of State; (2) the name of the new cooperative and
the address of its principal office; (3) the names and addresses of
the persons who shall constitute the first board of trustees of the
new cooperative; (4) the terms and conditions of the consolidation
and the mode of carrying the same into effect, including the manner
and basis of converting memberships in each consolidating cooperative
into memberships in the new cooperative and the issuance of
certificates of membership in respect of such converted memberships;
and (5) any provisions not inconsistent with this act deemed
necessary or advisable for the conduct of the business and affairs of
the new cooperative;
(b) The proposition for the consolidation of the consolidating
cooperatives into the new cooperative and the proposed articles of
consolidation approved by the board of trustees of each consolidating
cooperative shall then be submitted to a vote of the members thereof
at any annual or special meeting thereof, the notice of which shall
set forth full particulars concerning the proposed consolidation. The
proposed consolidation and the proposed articles of consolidation
shall be deemed to be approved upon the affirmative vote of not less
than two-thirds of those members of each consolidating cooperative
voting thereon at such meeting; and
(c) Upon such approval by the members of the respective
consolidation cooperatives, articles of consolidation in the form
approved shall be executed and acknowledged on behalf of each
consolidating cooperative by its president or vice president and its
seal shall be affixed thereto and attested by its secretary. The
president or vice president of each consolidating cooperative
executing such articles of consolidation shall also make and annex
thereto an affidavit stating that the provisions of this section were
duly complied with by such cooperative. Such articles of
consolidation and affidavits shall be submitted to the Secretary of
State for filing as provided in this act.
Laws 1939, p. 262, § 13.
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§18-437.13. Merger.
Any one or more cooperatives, each of which is hereinafter
designated a "merging cooperative", may merge into another
cooperative, hereinafter designated the "surviving cooperative", by
complying with the following requirements:
(a) The proposition for the merger of the merging cooperatives
into the surviving cooperative and proposed articles of merger to
give effect thereto shall be first approved by the board of trustees
of each merging cooperative and by the board of trustees of the
surviving cooperative. The proposed articles of merger shall recite
in the caption that they are executed pursuant to this act and shall
state: (1) the name of each merging cooperative, the address of its
principal office, and the date of the filing of its articles of
incorporation in the office of the Secretary of State; (2) the name
of the surviving cooperative and the address of its principal office;
(3) a statement that the merging cooperatives elect to be merged into
the surviving cooperative; (4) the terms and conditions of the merger
and the mode of carrying the same into effect, including the manner
and basis of converting the memberships in the merging cooperative or
cooperatives into memberships in the surviving cooperative and the
issuance of certificates of membership in respect of such converted
memberships; and (6) any provisions not inconsistent with this act
deemed necessary or advisable for the conduct of the business and
affairs of the surviving cooperative;
(b) The proposition for the merger of the merging cooperatives
into the surviving cooperative and the proposed articles of merger
approved by the board of trustees of the respective cooperatives,
parties to the proposed merger, shall then be submitted to a vote of
the members of each such cooperative at any annual or special meeting
thereof, the notice of which shall set forth full particulars
concerning the proposed merger. The proposed merger and the proposed
articles of merger shall be deemed to be approved upon the
affirmative vote of not less than two-thirds of those members of each
cooperative voting thereon at such meeting; and
(c) Upon such approval by the members of the respective
cooperatives, parties to the proposed merger, articles of merger in
form approved shall be executed and acknowledged on behalf of each
such cooperative by its president or vice president and its seal
shall be affixed thereto and attested by its secretary. The
president or vice president of each cooperative executing such
articles of merger shall also make and annex thereto an affidavit
stating that the provisions of this section were duly complied with
by such cooperative. Such articles of merger and affidavits shall be
submitted to the Secretary of State for filing as provided in this
act.
Laws 1939, p. 263, § 14.
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§18-437.14. Effect of consolidation or merger.
The effect of consolidation or merger shall be as follows:
(a) The several cooperatives, parties to the consolidation or
merger, shall be a single cooperative, which, in the case of a
consolidation, shall be the new cooperative provided for in the
articles of consolidation, and, in the case of a merger, shall be
that cooperative designated in the articles of merger as the
surviving cooperative, and the separate existence of all
cooperatives, parties to the consolidation or merger, except the new
or surviving cooperative, shall cease;
(b) Such new or surviving cooperative shall have all the rights,
privileges, immunities, and powers and shall be subject to all the
duties and liabilities of a cooperative organized under the
provisions of this act, and shall possess all the rights, privileges,
immunities, and franchises, as well of a public as of a private
nature, and all property, real and personal, applications for
membership, all debts due on whatever account, and all other choses
in action, of each of the consolidating or merging cooperatives, and
furthermore all and every interest of, or belonging or due to, each
of the cooperatives so consolidated or merged, shall be taken and
deemed to be transferred to and vested in such new or surviving
cooperative without further act or deed; and the title to any real
estate, or any interest therein, under the laws of this state vested
in any such cooperatives shall not revert or be in any way impaired
by reason of such consolidation or merger; (c) Such new or surviving
cooperative shall thenceforth be responsible and liable for all of
the liabilities and obligations of each of the cooperatives so
consolidated or merged, and any claim existing, or action or
proceeding pending, by or against any of such cooperatives may be
prosecuted as if such consolidation or merger had not taken place,
but such new or surviving cooperative may be substituted in its
place;
(d) Neither the rights of creditors nor any liens upon the
property of any of such cooperatives shall be impaired by such
consolidation or merger; and
(e) In the case of a consolidation, the articles of consolidation
shall be deemed to be the articles of incorporation of the new
cooperative; and in the case of a merger, the articles of
incorporation of the surviving cooperative shall be deemed to be
amended to the extent, if any, that changes therein are provided for
in the articles of merger.
Laws 1939, p. 264, § 15.
§18-437.15. Conversion of existing corporations.
Any corporation organized under the laws of this state for the
purpose, among others, of supplying electric energy in rural areas
may be converted into a cooperative and become subject to this act
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with the same effect as if originally organized under this act by
complying with the following requirements:
(a) The proposition for the conversion of such corporation into a
cooperative and proposed articles of conversion to give effect
thereto shall be first approved by the board of trustees or the board
of directors, as the case may be, of such corporation. The proposed
articles of conversion shall recite in the caption that they are
executed pursuant to this act and shall state: (1) the name of the
corporation prior to its conversion into a cooperative; (2) the
address of the principal office of such corporation; (3) the date of
the filing of the articles of incorporation of such corporation in
the office of the Secretary of State; (4) the statute or statutes
under which such corporation was organized; (5) the name assumed by
such corporation; (6) a statement that such corporation elects to
become a cooperative, nonprofit, membership corporation subject to
this act; (7) the manner and basis of converting either memberships
in or shares of stock of such corporation into memberships therein
after completion of the conversion; and (8) any provisions not
inconsistent with this Act deemed necessary or advisable for the
conduct of the business and affairs of such corporation;
(b) The proposition for the conversion of such corporation into a
cooperative and the proposed articles of conversion approved by the
board of trustees or board of directors, as the case may be, of such
corporation shall then be submitted to a vote of the members or
stockholders, as the case may be, of such corporation at any duly
held annual or special meeting thereof, the notice of which shall set
forth full particulars concerning the proposed conversion. The
proposition for the conversion of such corporation into a cooperative
and the proposed articles of conversion, with such amendments thereto
as the members or stockholders of such corporation shall choose to
make, shall be deemed to be approved upon the affirmative vote of not
less than two-thirds of those members of such corporation voting
thereon at such meeting, or, if such corporation is a stock
corporation, upon the affirmative vote of the holders of not less
than two-thirds of the capital stock of such corporation represented
at such meeting;
(c) Upon such approval by the members or stockholders of such
corporation, articles of conversion in the form approved by such
members or stockholders shall be executed and acknowledged on behalf
of such corporation by its president or vice president and its
corporate seal shall be affixed thereto and attested by its
secretary. The president or vice president executing such articles
of conversion on behalf of such corporation shall also make and annex
thereto an affidavit stating that the provisions of this section with
respect to the approval of its trustees or directors and its members
or stockholders, of the proposition for the conversion of such
corporation into a cooperative and such articles of conversion were
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duly complied with. Such articles of conversion and affidavit shall
be submitted to the Secretary of State for filing as provided in this
act. The term "articles of incorporation" as used in this act shall
be deemed to include the articles of conversion of a converted
corporation.
Laws 1939, p. 265, § 16.
§18-437.16. Initiative by members.
Not withstanding any other provision of this act, any proposition
embodied in a petition signed by not less than ten percent (10%) of
the members of a cooperative, together with any document submitted
with such petition to give effect to the proposition, shall be
submitted to the members of a cooperative, either at a special
meeting of the members held within forty-five (45) days after the
presentation of such petition or, if the date of the next annual
meeting of members falls within ninety (90) days after such
presentation or if the petition so requests, at such annual meeting.
The approval of the board of trustees shall not be required in
respect of any proposition or document submitted to the members
pursuant to this section and approved by them, but such proposition
or document shall be subject to all other applicable provisions of
this act. Any affidavit or affidavits required to be filed with any
such document pursuant to applicable provisions of this act shall, in
such case, be modified to show compliance with the provisions of this
section.
Laws 1939, p. 266, § 17.
§18-437.17. Dissolution.
A cooperative may dissolve in the manner provided by law for the
dissolution of private corporations.
Laws 1939, p. 267, § 18.
§18-437.18. Filing of articles - Certificate of incorporation -
Filing.
Articles of incorporation, amendment, consolidation, merger or
conversion, as the case may be, when executed and acknowledged and
accompanied by such affidavits as may be required by applicable
provisions of this act, shall be presented to the Secretary of State
for filing in the records of his office. If the Secretary of State
shall find that the articles presented conform to the requirements of
this act, he shall, upon the payment of the fees as in this act
provided, file the articles so presented in the records of his office
and shall issue over the Great Seal of the state an appropriate
certificate of incorporation, amendment, consolidation, merger or
conversion, as the case may be, and thereupon the incorporation,
amendment, consolidation, merger or conversion provided for therein
shall be in effect.
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Laws 1939, p. 267, § 19; Laws 1979, c. 259, § 3.
§18-437.19. Refunds to members.
Revenues of a cooperative for any fiscal year in excess of the
amount thereof necessary:
(a) To defray expenses of the cooperative and of the operation
and maintenance of its facilities during such fiscal year;
(b) To pay interest and principal obligations of the cooperative
coming due in such fiscal year;
(c) To finance, or to provide a reserve for the financing of, the
construction or acquisition by the cooperative of additional
facilities to the extent determined by the board of trustees;
(d) To provide a reasonable reserve for working capital;
(e) To provide a reserve for the payment of indebtedness of the
cooperative maturing more than one (1) year after the date of the
incurrence of such indebtedness in an amount not less than the total
of the interest and principal payments in respect thereof required to
be made during the next following fiscal year; and
(f) To provide a fund for education in cooperation and for the
dissemination of information concerning the effective use of electric
energy and other services made available by the cooperative, shall,
unless otherwise determined by a vote of the members, be distributed
by the cooperative to its members as patronage refunds prorated in
accordance with the patronage of the cooperative by the respective
members paid for during such fiscal year. Nothing herein contained
shall be construed to prohibit the payment by a cooperative of all or
any part of its indebtedness prior to the date when the same shall
become due.
Laws 1939, p. 267, § 20.
§18-437.20. Disposition of property.
A cooperative may not sell, mortgage, lease or otherwise dispose
of or encumber all or any substantial portion of its property unless
such sale, mortgage, lease, or other disposition or encumbrance is
authorized at a duly held meeting of the members thereof by the
affirmative vote of not less than two-thirds of all of the members of
the cooperative, and unless the notice of such proposed sale,
mortgage, lease, or other disposition or encumbrance shall have been
contained in the notice of the meeting; provided, however, that
notwithstanding anything herein contained, or any other provisions of
law, the board of trustees of a cooperative, without authorization by
the members thereof, shall have full power and authority upon an
affirmative vote of not less than two-thirds (2/3) of the board of
trustees to authorize the execution and delivery of a lease and
leaseback transaction only where the board of trustees determines
that such transaction will not impair the ability of the cooperative
to use the assets as needed to serve the members; provided, however,
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that such transactions shall apply only to the physical assets of a
cooperative and shall not be used to effect a sale or other
disposition of the cooperative business entity itself; and further,
shall have full power and authority to authorize the execution and
delivery of a mortgage or mortgages or a deed or deeds of trust upon,
or the pledging or encumbering of, any or all of the property,
assets, rights, privileges, licenses, franchises and permits of the
cooperative, whether acquired or to be acquired, and wherever
situated, as well as the revenues and income therefrom, all upon such
terms and conditions as the board of trustees shall determine, to
secure any indebtedness of the cooperative to the United States of
America or any instrumentality or agency thereof or to any
corporation or financial institution authorized to assist in the
credit and financial needs of rural electric cooperatives.
Added by Laws 1939, p. 268, § 21, emerg. eff. April 14, 1939.
Amended by Laws 1969, c. 53, § 1; Laws 2002, c. 25, § 1, emerg. eff.
April 5, 2002.
§18-437.21. Nonliability of members, trustees and officers for debts
of cooperative.
No member, trustee or officer of the cooperative shall be liable
or responsible individually for any debts of the cooperative.
Laws 1939, p. 268, § 22.
§18-437.22. Waiver of notice.
Whenever any notice is required to be given under the provisions
of this act or under the provisions of the articles of incorporation
or bylaws of a cooperative, waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after
the time fixed for the giving of such notice, shall be deemed
equivalent to such notice. If a person or persons entitled to notice
of a meeting shall attend such meeting, such attendance shall
constitute a waiver of notice of the meeting, except in case the
attendance is for the express purpose of objecting to the transaction
of any business because the meeting shall not have been lawfully
called or convened.
Laws 1939, p. 269, § 23.
§18-437.23. Foreign corporation.
Any corporation organized on a nonprofit or a cooperative basis
for the purpose of supplying electric energy in rural areas and
owning and operating electric transmission or distribution lines in a
state adjacent to this state may file in the office of the Secretary
of State a certified copy of its charter or articles of incorporation
which shall be recorded in a book to be kept by the Secretary of
State for that purpose, and thereupon, upon payment of the fees
required of a cooperative for the filing of articles of
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incorporation, and the appointment of a service agent as provided by
law, such foreign corporation shall be authorized to transact
business in this state and shall have all the rights, powers and
privileges conferred upon a cooperative under this act.
Laws 1939, p. 269, § 24.
§18-437.24. Fees.
The Secretary of State shall have charge and collect for:
(a) Filing articles of incorporation, Twenty-five Dollars
($25.00);
(b) Filing articles of amendment, Ten Dollars ($10.00);
(c) Filing articles of consolidation or merger, Twenty-five
Dollars ($25.00);
(d) Filing articles of conversion, Twenty-five Dollars ($25.00);
(e) Filing certificate of change of principal office, Ten
Dollars ($10.00);
(f) Issuing certificate of incorporation, amendment,
consolidation, merger or conversion, or any certified copy thereof,
Five Dollars ($5.00).
Amended by Laws 1984, c. 229, § 8, operative July 1, 1984.
§18-437.25. Exemption from excise and income taxes - License fee.
Each cooperative and each foreign corporation transacting
business in this state pursuant to this act shall pay annually, on or
before the thirty-first day of August, to the Oklahoma Tax
Commission, a fee of One Dollar ($1.00) for each one hundred persons
or fraction thereof to whom electricity is supplied within the state
by it, as of June thirtieth preceding, but shall be exempt from all
other excise and income taxes whatsoever.
Laws 1939, p. 270, § 26.
§18-437.27. Securities Act exemption.
The provisions of the Securities Act, Article 23 of Chapter 24,
Oklahoma Statutes 1931, as amended, shall not apply to any note, bond
or other evidence of indebtedness issued by any cooperative or
foreign corporation transacting business in this state pursuant to
this act, to the United States of America or any agency or
instrumentality thereof, or to any mortgage or deed of trust executed
to secure the same. The provisions of said Securities Act shall not
apply to the issuance of membership certificates by any cooperative
or any such foreign corporation.
Laws 1939, p. 270, § 28.
§18-437.28. Definitions.
In this act, unless the context otherwise requires;
(a) "Rural area" means any area not included within the
boundaries of any incorporated or unincorporated city, town or
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village, having a population in excess of one thousand five hundred
(1,500) persons, and any area included within the boundaries of any
such city, town or village as a result of incorporation, annexation,
population growth, or otherwise, in which area a cooperative
commenced or commences the construction or operation of electric
facilities or the furnishing of electric energy prior to such
incorporation, annexation or population growth.
(b) "Person" includes any natural person, firm, association,
corporation, business trust, partnership, federal agency, state or
political subdivision or agency thereof, or any body politic; and
(c) "Member" means each incorporator of a cooperative and each
person admitted to and retaining membership therein, and shall
include a husband and wife admitted to joint membership.
Laws 1939, p. 270, § 29; Laws 1961, p. 201, § 2.
§18-437.29. Construction of act.
This act shall be construed liberally. The enumeration of any
object, purpose, power, manner, method, or thing shall not be deemed
to exclude like or similar object, purposes, powers, manner, methods
or things.
Laws 1939, p. 270, § 30.
§18-438.1. Short title of act.
This act may be cited as the "Telephone Cooperative Corporations
Act".
Laws 1953, p. 484, § 1; Laws 1991, c. 135, § 1, eff. Sept. 1, 1991.
§18-438.2. Organization authorized - Purpose.
Cooperative, nonprofit corporations may be organized under this
act for the purpose of furnishing communication services to the
widest practicable number of users of such service.
Laws 1953, p. 484, § 2; Laws 1991, c. 135, § 2, eff. Sept. 1, 1991.
§18-438.3. Definitions.
As used in this act:
1. "Cooperative" means any corporation organized pursuant to or
which becomes subject to the provisions of the Telephone Cooperative
Corporations Act;
2. "Person" means any natural person, firm, association,
corporation, business trust, or partnership;
3. "Telephone company" means any natural person, firm,
association, corporation, or partnership, other than a cooperative or
mutual telephone company, owning, leasing, or operating any line,
facility, or system used in furnishing telephone service within this
state;
4. "Communication services" means the transmitting, receiving,
or both, of information, signals or messages by wire, radio, cellular
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radio, microwave, fiber optics or any other means, and includes, but
is not limited to, the providing of lines, facilities and systems
used in providing the services;
5. "Member" means the incorporators of a cooperative and each
person thereafter lawfully admitted to membership therein pursuant to
the provisions contained in the bylaws; and
6. "Patron" means a member of the cooperative who is eligible to
receive patronage dividends or to earn capital credits as a result of
the purchase of certain services from the cooperative, as provided by
subsection D of Section 438.9 of this title.
Amended by Laws 1983, c. 3, § 1, emerg. eff. Feb. 21, 1983; Laws
1991, c. 135, § 3, eff. Sept. 1, 1991.
§18-438.4. Powers of cooperative.
A cooperative shall have power:
1. To sue and be sued in its corporate name;
2. To have a perpetual existence unless a limited period of
duration is stated in its articles of incorporation;
3. To adopt a corporate seal and alter the same;
4. To furnish, improve and expand any or all communications
services to its members, to other persons, and through
interconnection of facilities to any number of subscribers of other
communications systems, and through pay stations to any number of
users; provided, however, that no such regulated communications
services, as determined by the Oklahoma Corporation Commission, shall
be furnished to persons located within the certified territory of
another local exchange telephone company; and provided further that a
cooperative which acquires existing communications facilities,
systems or territories may continue service to persons who are
already receiving service from such facilities and systems or who are
located or who become located within the acquired territories. Such
persons may become members as provided in the bylaws;
5. To construct, purchase, lease as lessee, or otherwise
acquire, and to improve, expand, install, equip, maintain, and
operate, and to sell, assign, convey, lease as lessor, mortgage,
pledge, or otherwise dispose of or encumber, communication lines,
facilities or systems, lands, buildings, structures, plants and
equipment, exchanges, and any other real or personal property,
tangible or intangible, which shall be deemed necessary, convenient
or appropriate to accomplish the purpose for which the cooperative is
organized; provided, however, that a cooperative shall not duplicate
existing telephone lines, facilities or systems providing reasonably
adequate service;
6. To connect and interconnect its communication lines,
facilities or systems with other communication lines, facilities or
systems; provided that any such connection or interconnection shall
be in such manner and according to such specifications as will avoid
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interference with or hazards to existing communication lines,
facilities or systems;
7. To make its facilities available to persons furnishing
communication services within or without this state;
8. To purchase, lease as lessee, or otherwise acquire, and to
use and exercise and to sell, assign, convey, mortgage, pledge or
otherwise dispose of or encumber, franchises, rights, privileges,
licenses and easements;
9. To issue membership certificates and nonvoting shares of
stock as hereinafter provided;
10. To borrow money and otherwise contract indebtedness, and to
issue or guarantee notes, bonds, and other evidences of indebtedness,
and to secure the payment thereof by mortgage, pledge, or deed of
trust of, or any other encumbrance upon, any or all of its then-owned
or after-acquired real or personal property, assets, franchises, or
revenues;
11. To construct, maintain and operate communication lines and
facilities along, upon, under and across publicly owned lands and
public thoroughfares, including, without limitation, all roads,
highways, streets, alleys, bridges and causeways; subject, however,
to the same requirements and limitations with respect to the use or
occupancy of such thoroughfares and lands as are now or hereafter
imposed by the laws of this state;
12. To exercise the power of eminent domain in the manner
provided by the laws of this state for the exercise of such power by
other corporations constructing or operating telephone lines,
facilities or systems;
13. To become a member of other cooperatives, joint ventures,
partnerships, corporations or other legal entities or to own stock
therein;
14. To conduct its business and exercise its powers within or
without this state;
15. To adopt, amend and repeal bylaws;
16. To make any and all legal contracts necessary, convenient or
appropriate for the full exercise of the powers herein granted; and
17. To do and perform any other acts and things, and to have and
exercise any other powers which may be necessary, convenient or
appropriate to accomplish the purpose for which the cooperative is
organized.
Amended by Laws 1988, c. 323, § 2, eff. Nov. 1, 1988; Laws 1991, c.
135, § 4, eff. Sept. 1, 1991.
§18-438.5. Name.
The name of a cooperative shall include the words "telephone" and
"cooperative", and the abbreviation "Inc.", unless, in an affidavit
made by its president or vice president, and filed with the Secretary
of State, or in an affidavit made by a person signing articles of
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incorporation, consolidation, merger or conversion, which relate to
such cooperative, and filed, together with any such articles, with
the Secretary of State, it shall appear that the cooperative desires
to do business in another state and is or would be precluded
therefrom by reason of the inclusion of such words or either thereof
in its name. The name of a cooperative shall be distinct from the
name of any other cooperative or corporation organized under the laws
of, or authorized to do business in, this state. This section shall
not apply to any corporation which becomes subject to this act by
complying with the provisions of Section 20 of this act, or which
does business in this state pursuant to Section 29 of this act and
which elects to retain a corporate name which does not comply with
this section.
Laws 1953, p. 485, § 5.
§18-438.6. Incorporators.
Five or more natural persons who are residents of the areas in
which the principal operations of the cooperative are to be conducted
may organize a cooperative in the manner hereinafter provided.
Laws 1953, p. 486, § 6.
§18-438.7. Articles of incorporation.
Articles of incorporation of a cooperative shall recite that they
are executed pursuant to this act and shall state: (1) the name of
the cooperative; (2) the address of its principal office; (3) the
names and addresses of the incorporators; (4) the names and addresses
of its trustees; (5) the purpose for which the cooperative is formed;
and (6) the period of its existence and may contain any provisions
not inconsistent with this act deemed necessary or advisable for the
conduct of its business, including provisions for the issuance of
nonvoting shares of stock as hereinafter provided. Such articles
shall be signed by each incorporator and acknowledged by at least two
of the incorporators, or on their behalf, if they are cooperatives.
If a cooperative desires to issue nonvoting shares of stock, its
articles of incorporation shall state: (1) the total number of such
shares of stock which may be issued and the par value of each share;
(2) the fixed or maximum rate of dividends on the par value of such
shares of stock, in either case not exceeding four percent (4%) per
annum, and whether dividends shall be cumulative or noncumulative;
(3) whether such shares of stock may be issued to members only or to
members and nonmembers; (4) the maximum number of such shares of
stock which may be owned by any person; and (5) the terms and
conditions on which such shares of stock may be transferred, redeemed
and retired.
Laws 1953, p. 486, § 7.
§18-438.8. Bylaws.
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The board of trustees shall adopt the first bylaws of a
cooperative to be adopted following an incorporation, conversion,
combined consolidation and conversion, merger or consolidation.
Thereafter the members shall adopt, amend or repeal the bylaws by the
affirmative vote of a majority of those members voting thereon at a
meeting of the members. The bylaws shall set forth the rights and
duties of members, trustees and shareholders, if any, and may contain
other provisions for the regulation and management of the affairs of
the cooperative not inconsistent with this act or with its articles
of incorporation.
Laws 1953, p. 486, § 8.
§18-438.9. Membership - Shares of stock - Qualification as patron.
A. Each incorporator of a cooperative shall be a member thereof
but no other person may become a member thereof unless such other
person agrees to use communication services furnished by the
cooperative when it is made available through its facilities, except
as otherwise provided in the bylaws. Membership in a cooperative may
be evidenced by a certificate of membership which shall not be
transferable, except as provided by the bylaws. The bylaws may
prescribe additional qualifications and limitations in respect of
membership, provided that ownership of shares of stock, if any are
authorized, shall not be a condition of membership in the
cooperative.
B. In case the issuance of shares of stock is provided for in
the articles of incorporation, ownership thereof shall be evidenced
by share certificates. No share of stock shall be issued except for
cash, or for property at its fair value, in an amount equal to the
par value of such share of stock.
C. Membership and share certificates shall contain such
provisions, consistent with this act and the articles of
incorporation of the cooperative, as shall be prescribed by its
bylaws.
D. Each member who purchases communication services in the
ordinary course of business of the cooperative is a patron of the
cooperative, except the use of inter-exchange access, payment of
inter-exchange access fares or settlements, or the purchase of
equipment does not qualify a member or other person as a patron. The
bylaws of the cooperative may provide other circumstances where a
member or other person will not qualify to be a patron.
Laws 1953, p. 486, § 9; Laws 1991, c. 135, § 5, eff. Sept. 1, 1991.
§18-438.10. Meetings of members.
A. An annual meeting of the members of a cooperative shall be
held at such time and place as shall be provided in the bylaws.
B. Special meetings of the members may be called by the
president, by the board of trustees, by any three trustees, or by not
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less than two hundred members or ten percent (10%) of all members,
whichever shall be the lesser.
C. Except as otherwise provided in this act, written or printed
notice stating the time and place of each meeting of the members and
in the case of a special meeting, the purpose or purposes for which
the meeting is called, shall be given to each member, either
personally or by mail, not less than ten (10) days nor more than
twenty-five (25) days before the date of the meeting. If mailed,
such notice shall be deemed to be given when deposited in the United
States mail with postage prepaid, addressed to the member at his
address as it appears on the records of the cooperative.
D. Unless the bylaws prescribe the presence of a greater
percentage or number of the members for a quorum, a quorum for the
transaction of business at all meetings of the members of a
cooperative having not more than five hundred members, shall be ten
percent (10%) of all members, present in person, and of a cooperative
having more than five hundred members, shall be fifty members or two
percent (2%) of all members, whichever is greater, present in person.
If less than a quorum is present at any meeting, a majority of those
present in person may adjourn the meeting from time to time without
further notice.
E. Each member shall be entitled to one vote on each matter
submitted to a vote at a meeting of the members. Voting shall be in
person, but, if the bylaws so provide, may also be by mail.
Laws 1953, p. 486, § 10; Laws 1991, c. 135, § 6, eff. Sept. 1, 1991.
§18-438.11. Waiver of notice of meeting.
Any person entitled to notice of a meeting may waive such notice
in writing either before or after such meeting. If any such person
shall attend such meeting, such attendance shall constitute a waiver
of notice of such meeting, unless such person participates therein
solely to object to the transaction of any business because the
meeting has not been legally called or convened.
Laws 1953, p. 487, § 11.
§18-438.12. Board of trustees.
A. The business of a cooperative shall be managed by a board of
not less than five (5) trustees, each of whom shall be a member of
the cooperative. The bylaws shall prescribe the number of trustees,
their qualifications, other than those prescribed in this act, the
manner of holding meetings of the board of trustees and of electing
successors to trustees who shall resign, die, or otherwise be
incapable of acting. The bylaws may also provide for the removal of
trustees from office and for the election of their successors.
Trustees shall not receive any salaries for their services as
trustees and, except in emergencies, shall not receive any salaries
for their services in any other capacity without the approval of the
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members. The cooperative may provide liability, accident, life and
health insurance coverage for trustees choosing to have that
coverage. The bylaws may also prescribe a fixed fee for attendance
at each meeting of the board of trustees and may provide for
reimbursement of actual expenses of attendance.
B. The trustees of a cooperative named in any articles of
incorporation, consolidation, merger, conversion, or combined
consolidation and conversion shall hold office until the next annual
meeting of the members and until their successors are elected and
qualify. At each annual meeting or, in case of failure to hold the
annual meeting as specified in the bylaws, at a special meeting
called for that purpose, the members shall elect trustees to hold
office until the next annual meeting of the members, except as
otherwise provided in this act or the bylaws. Each trustee shall
hold office for the term for which he is elected and until his
successor is elected and qualifies. Vacancies shall be filled in
accordance with provisions of the bylaws.
C. The bylaws may provide that:
1. In lieu of electing the whole number of trustees annually,
the trustees shall be divided into three classes at the first or any
subsequent annual meeting, each class to be as nearly equal in number
as possible, with the term of office of the trustees of the first
class to expire at the next succeeding annual meeting, the term of
the second class to expire at the second succeeding annual meeting,
and the term of the third class to expire at the third succeeding
annual meeting; and
2. At each annual meeting or at district meetings, after such
classification, a number of trustees equal to the number of the class
whose term expires at the time of such meeting shall be elected to
hold office until the third succeeding annual or district meeting.
D. A majority of the board of trustees, as determined by the
bylaws, shall constitute a quorum.
E. The board of trustees may exercise all of the powers of a
cooperative conferred upon the members by this act, or its articles
of incorporation or bylaws.
Laws 1953, p. 487, § 12; Laws 1961, p. 202, § 1; Laws 1991, c. 135, §
7, eff. Sept. 1, 1991.
§18-438.13. Division of territory into districts.
The bylaws may provide for the division of the territory served
or to be served by a cooperative into two or more districts for the
nomination and election of trustees and the election and functioning
of district delegates. Such delegates, who shall be members, may
nominate and elect trustees. The bylaws shall prescribe the
boundaries of the districts, or the manner of establishing such
boundaries, and the manner of changing such boundaries, and the
manner in which such districts shall function. No member at any
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district meeting and no district delegate at any meeting shall vote
by proxy or by mail.
Laws 1953, p. 488, § 13.
§18-438.14. Officers.
The officers of a cooperative shall consist of a president, vice
president, secretary and treasurer, who shall be elected annually by
and from the board of trustees. When a person holding any such
office ceases to be a trustee he shall cease to hold such office. The
offices of secretary and of treasurer may be held by the same person.
The board of trustees may also elect or appoint such other officers,
agents, or employees as it deems necessary or advisable and shall
prescribe their powers and duties. Any officer may be removed from
office and his successor elected in the manner prescribed in the
bylaws.
Laws 1953, p. 488, § 14.
§18-438.15. Amendment of articles of incorporation.
A cooperative may amend its articles of incorporation by
complying with the following requirements, provided, however, that a
change of location of principal office may be effected in the manner
set forth in Section 16 of this act: The proposed amendment shall be
presented to a meeting of the members, the notice of which shall set
forth or have attached thereto the proposed amendment. If the
proposed amendment, with any changes, is approved by the affirmative
vote of not less than two thirds of those members voting thereon at
such meeting, articles of amendment shall be executed and
acknowledged on behalf of the cooperative by its president or vice
president and its seal shall be affixed thereto and attested by its
secretary. The articles of amendment shall recite that they are
executed pursuant to this act and shall state: (1) the name of the
cooperative; (2) the address of its principal office; and (3) the
amendment to its articles of incorporation. The president or vice
president executing such articles of amendment shall make and annex
thereto an affidavit stating that the provisions of this section in
respect of the amendment set forth in such articles were duly
complied with.
Laws 1953, p. 488, § 15.
§18-438.16. Change of location of principal office.
A cooperative may, upon authorization of its board of trustees or
its members, change the location of its principal office in this
state by filing a certificate reciting such change of principal
office, executed and acknowledged by its president or vice president
under its seal attested by its Secretary, in the office of the
Secretary of State.
Laws 1953, p. 488, § 16.
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§18-438.17. Consolidation of cooperatives.
Any two or more cooperatives (each of which is hereinafter
designated a "consolidating cooperative"), may consolidate into a new
cooperative (hereinafter designated the "new cooperative"), by
complying with the following requirements:
(a) The proposition for the consolidation of the consolidating
cooperatives into the new cooperative and proposed articles of
consolidation to give effect thereto shall be submitted to a meeting
of the members of each consolidating cooperative, the notice of which
shall have attached thereto a copy of the proposed articles of
consolidation;
(b) If the proposed consolidation and the proposed articles of
consolidation, with any amendments, are approved by the affirmative
vote of not less than two thirds of those members of each
consolidating cooperative voting thereon at each such meeting,
articles of consolidation in the form approved shall be executed and
acknowledged on behalf of each consolidating cooperative by its
president or vice president and its seal shall be affixed thereto and
attested by its secretary. The articles of consolidation shall
recite that they are executed pursuant to this act and shall state:
(1) the name of each consolidating cooperative and the address of its
principal office; (2) the name of the new cooperative and the address
of its principal office; (3) a statement that each consolidating
cooperative agrees to the consolidation; (4) the names and addresses
of the trustees of the new cooperative; (5) the terms and conditions
of the consolidation and the mode of carrying the same into effect,
including the manner in which members and shareholders, if any, of
the consolidating cooperatives may or shall become members and
shareholders, respectively, of the new cooperative; (6) the purpose
for which the cooperative is formed; (7) the period of existence of
the new cooperative, and may contain any provisions not inconsistent
with this act deemed necessary or advisable for the conduct of the
business of the new cooperative. The president or vice president of
each consolidating cooperative executing such articles of
consolidation shall make and annex thereto an affidavit stating that
the provisions of this section in respect of such articles were duly
complied with by such cooperative.
Laws 1953, p. 488, § 17.
§18-438.18. Merger of cooperatives.
Any one or more cooperatives (each of which is hereinafter
designated a "merging cooperative") may merge into another
cooperative (hereinafter designated the "surviving cooperative"), by
complying with the following requirements:
(a) The proposition for the merger of the merging cooperative
into the surviving cooperative and proposed articles of merger to
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give effect thereto shall be submitted to a meeting of the members of
each merging cooperative and of the surviving cooperative, the notice
of which shall have attached thereto a copy of the proposed articles
of merger;
(b) If the proposed merger and the proposed articles of merger,
with any amendments, are approved by the affirmative vote of not less
than two thirds of those members of each cooperative voting thereon
at each such meeting, articles of merger in the form approved shall
be executed and acknowledged on behalf of each such cooperative by
its president or vice president and its seal shall be affixed thereto
and attested by its secretary. The articles of merger shall recite
that they are executed pursuant to this act and shall state: (1) the
name of each merging cooperative and the address of its principal
office; (2) the name of the surviving cooperative and the address of
its principal office; (3) a statement that each merging cooperative
and the surviving cooperative agree to the merger; (4) the names and
addresses of the trustees of the surviving cooperative; and (5) the
terms and conditions of the merger and the mode of carrying the same
into effect, including the manner in which members and shareholders,
if any, of the merging cooperatives may or shall become members and
shareholders, respectively, of the surviving cooperative; (6) the
period of existence of the new cooperative; and (7) the purpose for
which the cooperative is formed; and may contain any provisions not
inconsistent with this act deemed necessary or advisable for the
conduct of the business of the surviving cooperative. The president
or vice president of each cooperative executing such articles of
merger shall make and annex thereto an affidavit stating that the
provisions of this section in respect of such articles were duly
complied with by such cooperative.
Laws 1953, p. 489, § 18.
§18-438.19. Effect of consolidation or merger.
(a) In the case of a consolidation the existence of the
consolidating cooperative shall cease and the articles of
consolidation shall be deemed to be the articles of incorporation of
the new cooperative; and in the case of a merger the separate
existence of the merging cooperatives shall cease and the articles of
incorporation of the surviving cooperative shall be deemed to be
amended to the extent, if any, that changes therein are provided for
in the articles of merger;
(b) All the rights, privileges, immunities and franchises and all
property, real and personal, including without limitation
applications for membership, all debts due on whatever account and
all other choses in action, of each of the consolidating or merging
cooperatives shall be deemed to be transferred to and vested in the
new or surviving cooperative without further act or deed;
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(c) The new or surviving cooperative shall be responsible and
liable for all the liabilities and obligations of each of the
consolidating or merging cooperatives and any claim existing or
action or proceeding pending by or against any of the consolidating
or merging cooperatives may be prosecuted as if the consolidation or
merger had not taken place, but the new or surviving cooperative may
be substituted in its place; and
(d) Neither the rights of creditors nor any liens upon the
property of any of such cooperatives shall be impaired by such
consolidation or merger.
Laws 1953, p. 489, § 19.
§18-438.20. Conversion of other corporations into cooperatives.
A. Any corporation organized under the laws of this state and
furnishing or having the corporative power to furnish communication
services may be converted into a cooperative by complying with the
following requirements and shall thereupon become subject to this act
with the same effect as if originally organized under this act:
1. The proposition for the conversion of such corporation into a
cooperative and proposed articles of conversion to give effect
thereto shall be submitted to a meeting of the members or
stockholders of such corporation, or in case of a corporation having
no members or stockholders, to a meeting of the incorporators of such
corporation, the notice of which shall have attached thereto a copy
of the proposed articles of conversion; and
2. If the proposition for the conversion of such corporation
into a cooperative and the proposed articles of conversion, with any
amendments, are approved by the affirmative vote of not less than
two-thirds (2/3) of those members of such corporation voting thereon
at such meeting, or, if such corporation is a stock corporation, by
the affirmative vote of the holders of not less than two-thirds (2/3)
of those shares of the capital stock of such corporation represented
at such meeting and voting thereon, or, in the case of a corporation
having no members and no shares of its capital stock outstanding, by
the affirmative vote of not less than two-thirds (2/3) of its
incorporators; articles of conversion in the form approved shall be
executed and acknowledged on behalf of such corporation by its
president or vice-president and its seal shall be affixed thereto and
attested by its secretary. The articles of conversion shall recite
that they are executed pursuant to this act and shall state:
a. the name of the corporation and the address of its
principal office prior to its conversion into a
cooperative,
b. the statute or statutes under which it was organized,
c. a statement that such corporation elects to become a
cooperative, nonprofit corporation subject to this
act,
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d. its name as a cooperative,
e. the address of the principal office of the cooperative,
f. the names and addresses of the trustees of the
cooperative,
g. the manner in which members, stockholders or
incorporators of such corporation may or shall become
members of the cooperative,
h. the period of existence of the new cooperative, and
i. the purpose for which the cooperative is formed;
and may contain any provisions not inconsistent with this act deemed
necessary or advisable for the conduct of the business of the
cooperative, including provisions for the issuance of nonvoting
shares of stock as provided for in Section 348.7 of this title. If
the articles of conversion shall make provision for the issuance of
such shares of stock, they shall also state the manner in which
members, stockholders or incorporators of such corporation may or
shall become shareholders of the cooperative. The president or vice-
president executing such articles of conversion shall make and annex
thereto an affidavit stating that the provisions of this section were
duly complied with in respect of such articles. The articles of
conversion shall be deemed to be the articles of incorporation of the
cooperative.
B. Any two or more corporations organized under the laws of this
state and furnishing or having the corporate power to furnish
communication services may, if otherwise permitted to consolidate by
the laws of this state, consolidate into a cooperative subject to
this act, with the same effect as if originally organized under this
act, by complying with the following requirements:
1. The proposition for the consolidation into a cooperative and
the proposed articles of consolidation and conversion, with any
amendments, shall be approved by each consolidating corporation in
accordance with the statute or statutes under which it was organized
and the provisions of subsection A of this section;
2. The articles of consolidation and conversion in the form
approved shall be executed, acknowledged and sealed in the manner
prescribed in subsection A of this section and in the statute or
statutes under which the consolidating corporations were organized.
The articles of consolidation and conversion shall state that they
are executed pursuant to this act and such statute or statutes, that
each consolidating corporation elects that the new corporation shall
be a cooperative, and in addition shall contain all other information
required by such statute or statutes and by paragraph 2 of subsection
A of this section; and may contain any provisions not inconsistent
with this act deemed necessary or advisable for the conduct of the
business of the cooperative. The president or vice-president
executing such articles of consolidation and conversion shall make
and annex thereto an affidavit stating that the provisions of this
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section and of the statute or statutes under which the consolidating
corporations were organized were duly complied with in respect of
such articles. The articles of consolidation and conversion shall be
deemed to be the articles of incorporation of the cooperative and
shall be filed both in accordance with the provisions of this act and
of the statute or statutes under which the consolidating corporations
were organized.
Laws 1953, p. 490, § 20; Laws 1991, c. 135, § 8, eff. Sept. 1, 1991.
§18-438.21. Dissolution.
A. A cooperative which has not commenced business may be
dissolved by delivering to the Secretary of State articles of
dissolution which shall be executed and acknowledged on behalf of the
cooperative by a majority of the incorporators and which shall state:
1. The name of the cooperative;
2. The address of its principal office;
3. That the cooperative has not commenced business;
4. That any sums received by the cooperative, less any part
thereof disbursed for expenses of the cooperative, have been returned
or paid to those entitled thereto;
5. That no debt of the cooperative is unpaid; and
6. That a majority of the incorporators elect that the
cooperative be dissolved.
B. 1. A cooperative which has commenced business may be
dissolved in the following manner: The proposition to dissolve shall
be submitted to the members of the cooperative at any annual or
special meeting, the notice of which shall set forth such
proposition. The members at any such meeting shall approve, by the
affirmative vote of not less than a majority of all members of the
cooperative, the proposition that the cooperative be dissolved. Upon
such approval, a certificate of election to dissolve (hereinafter
designated the "certificate"), executed and acknowledged on behalf of
the cooperative by its president or vice-president under its seal,
attested by its secretary, and stating:
(a) the name of the cooperative,
(b) the address of its principal office, and
(c) that the members of the cooperative have duly voted that the
cooperative be dissolved, shall, together with an affidavit
made by its president or vice-president executing the
certificate, stating that the statements in the certificate
are true, be submitted to the Secretary of State for filing.
2. Upon the filing of the certificate and affidavit with the
Secretary of State, the cooperative shall cease to carry on its
business except to the extent necessary for the winding up thereof,
but its corporate existence shall continue until articles of
dissolution have been filed with the Secretary of State. The board
of trustees shall immediately cause notice of the dissolution
4(#$0&($"!$"+$ -**
proceedings to be mailed to each known creditor of and claimant
against the cooperative and to be published once a week for two (2)
successive weeks in a newspaper of general circulation in the county
in which the principal office of the cooperative is located. The
board of trustees shall wind up and settle the affairs of the
cooperative, collect sums owing to it, liquidate its property and
assets, pay and discharge its debts, obligations and liabilities,
other than those to patrons arising by reason of their patronage, and
do all other things required to wind up its business, and after
paying or discharging or adequately providing for the payment or
discharge of all its debts, obligations and liabilities, other than
those to patrons arising by reason of their patronage, shall
distribute any remaining sums: first, to shareholders, if any, for
the pro rata return of the par value of their shares, together with
any accrued dividends; second, to patrons for the pro rata return of
all amounts standing to their credit by reason of their patronage;
and third, to members for the pro rata repayment of membership fees.
Any sums then remaining shall be distributed among its members and
former members in proportion to their patronage. The board of
trustees shall thereupon authorize the execution of articles of
dissolution, which shall be executed and acknowledged on behalf of
the cooperative by its president or vice-president, and its seal
shall be affixed thereto and attested by its secretary. The articles
of dissolution shall recite that they are executed pursuant to this
act and shall state:
a. the name of the cooperative,
b. the address of its principal office,
c. the date on which the certificate of election to dissolve
was filed with the Secretary of State,
d. that there are no actions or suits pending against the
cooperative,
e. that all debts, obligations and liabilities of the
cooperative have been paid and discharged or that adequate
provision has been made therefor, and
f. that the preceding provisions of this subsection have been
duly complied with. The president or vice-president
executing the articles of dissolution shall make and annex
thereto an affidavit stating that the statements made
therein are true.
Laws 1953, p. 491, § 21; Laws 1991, c. 135, § 9, eff. Sept. 1, 1991.
§18-438.22. Presentation and filing of papers with Secretary of
State.
Articles of incorporation, amendment, consolidation, merger,
conversion, combined consolidation and conversion, or dissolution,
when executed and acknowledged and accompanied by such affidavits as
may be required by applicable provisions of this act, shall be
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presented to the Secretary of State for filing in the records of his
office. If the Secretary of State shall find that the articles
presented conform to the requirements of this act, he shall, upon the
payment of the fees as in this act provided, file such articles in
the records of his office and upon such filing the incorporation,
amendment, consolidation, merger, conversion, combined consolidation
and conversion, or dissolution provided for therein shall be in
effect. The provisions of this section shall also apply to
certificates of election to dissolve and affidavits executed in
connection therewith pursuant to subsection (b) of Section 21 of this
act.
Laws 1953, p. 492, § 22.
§18-438.23. Operation for mutual benefit - Disposition of receipts
and revenues.
A cooperative shall be operated on a nonprofit basis for the
mutual benefit of its members and patrons. The bylaws of a
cooperative or its contracts with members and patrons shall contain
such provisions relative to the disposition of revenues and receipts
as may be necessary and appropriate to establish and maintain its
nonprofit and cooperative character. In the case of a cooperative
authorized to issue shares of stock, such bylaws or contracts shall
provide that no monies shall be paid or credits given on the basis of
patronage except after the declaration or payment of dividends on the
outstanding shares of stock in accordance with the articles of
incorporation of the cooperative, and such bylaws or contracts shall
otherwise be consistent with the cooperative's obligations in respect
of such shares of stock.
Laws 1953, p. 492, § 23.
§18-438.24. Mortgages, deeds of trust or pledges - Sale, lease, etc.
A. The board of trustees of a cooperative shall have full power
and authority, without authorization by the members thereof, to
authorize the execution and delivery of a mortgage or mortgages or a
deed or deeds of trust of, or the pledging or encumbering of, any or
all of the property, assets, rights, privileges, licenses, franchises
and permits of the cooperative, whether acquired or to be acquired,
and wherever situated, as well as the revenues therefrom, all upon
such terms and conditions as the board of trustees shall determine,
to secure any indebtedness of the cooperative to United States of
America or any agency or instrumentality thereof or to any
corporation or financial institution permitted to assist in the
credit and financial needs of rural telephone cooperative
corporations.
B. A cooperative may not otherwise sell, mortgage, lease or
otherwise dispose of or encumber all or a substantial portion of its
property unless such sale, mortgage, lease or other disposition or
4(#$0&($"!$"+$ -*2
encumbrance is authorized by the affirmative vote of not less than
two thirds (2/3) of all the members of the cooperative; provided,
however, that notwithstanding any other provision of Section 438.1 et
seq. of this title, or any other provision of law, the board of
trustees may, upon the authorization of a majority of those members
of the cooperative present at a meeting of the members thereof, the
notice of which shall have set forth the proposed action, sell, lease
or otherwise dispose of all or a substantial portion of its property
to another cooperative pursuant to this act or to the holder or
holders of any notes, bonds or other evidences of indebtedness to
United States of America or any agency or instrumentality thereof or
to any corporation or financial institution permitted to assist in
the credit and financial needs of rural telephone cooperative
corporations.
Amended by Laws 1987, c. 57, § 1, emerg. eff. April 30, 1987.
§18-438.25. Members and shareholders not liable for debts.
No member or shareholder shall be liable or responsible for any
debts of the cooperative and the property of the members and
shareholders shall not be subject to execution therefor.
Laws 1953, p. 493, § 25.
§18-438.26. Recording instruments - Lien.
Any mortgage, deed of trust or other instrument executed by a
cooperative or foreign corporation doing business in this state
pursuant to this act, which affects real and personal property and
which is recorded in the real property records in any county in which
such property is located or is to be located, shall have the same
force and effect as if the mortgage, deed of trust or other
instrument were also recorded, filed or indexed as provided by law in
the proper office in such county as a mortgage of personal property.
The lien upon real or personal property of any such mortgage, deed of
trust or other instrument shall, after recordation thereof, continue
in existence and of record for the period of time specified therein
without the refiling thereof of the filing or any renewal
certificate, affidavit, or other supplemental information required by
the laws relating to the renewal, maintenance or extension of liens
upon real or personal property.
Laws 1953, p. 493, § 26; Laws 1991, c. 135, § 10, eff. Sept. 1, 1991.
§18-438.27. Safety standards.
Construction of communication lines and facilities by a
cooperative shall, as a minimum requirement, comply with the
standards of the National Electrical Safety Code in effect at the
time of such construction, and shall be in such manner and according
to such specifications as will avoid interference with or hazards to
existing communication lines, facilities or systems.
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Laws 1953, p. 493, § 27; Laws 1991, c. 135, § 11, eff. Sept. 1, 1991.
§18-438.28. Acknowledgment of instruments.
No person who is authorized to take acknowledgments under the
laws of this state shall be disqualified from taking acknowledgments
of instruments executed in favor of a cooperative or to which it is a
party, by reason of being an officer, trustee, member, or shareholder
of such cooperative.
Laws 1953, p. 493, § 28.
§18-438.29. Foreign nonprofit or cooperative corporation -
Extensions of lines into state.
Any foreign nonprofit or cooperative corporation furnishing or
authorized to furnish communication services and owning or operating
communication lines or facilities in an adjacent state may construct
or acquire extensions of such lines in this state and operate such
extensions by complying with the statutes of this state pertaining to
the qualifications of foreign corporations for the doing of business
in this state. Thereafter, such corporation shall have all the
rights, powers, privileges and immunities of a cooperative organized
under this act.
Laws 1953, p. 493, § 29; Laws 1991, c. 135, § 12, eff. Sept. 1, 1991.
§18-438.30. Connections with other lines.
Any cooperative or foreign corporation doing business in this
state pursuant to this act (such cooperative or corporation being
designated in this section as "applicant") shall have the right to
require any person furnishing telephone service to the public in this
state (such person being designated in this section as "company") to
interconnect the company's lines, facilities or systems with, or
otherwise make available such lines, facilities or systems to the
applicant's telephone lines, facilities or systems, in order to
provide a continuous line of communication for the applicant's
subscribers. In the event the connecting company and the applicant
shall be unable to agree upon the terms and conditions of such
interconnection, including compensation therefor, within thirty (30)
days after request by the applicant, the Corporation Commission shall
by order direct that such interconnection be made and shall prescribe
the terms and conditions thereof, which shall be reasonable and
nondiscriminatory. Nothing in this section shall be deemed to
subject a cooperative to the jurisdiction of the Corporation
Commission except and only to the extent required to carry out the
provisions hereof.
Laws 1953, p. 493, § 30.
§18-438.31. Rates.
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The Corporation Commission shall have the power and authority to
prescribe and enforce rates for regulated communication services
under this act as may be found to be reasonable and just after due
notice and hearing, provided that said commission shall make final
determination of rates within ninety (90) days after the request has
been received by the Commission. In the event that said Commission
fails to act within the period prescribed above, the rate requested
by the applicant in said application shall immediately become
effective. From any action of the Commission prescribing rates and
charges under this act, any party aggrieved may appeal to the Supreme
Court in the manner now provided by law for appealing cases from the
Corporation Commission to the Supreme Court. Nothing in this section
shall be deemed to subject a cooperative to the jurisdiction of the
Corporation Commission except and only to the extent required to
carry out the provisions thereof.
Laws 1953, p. 494, § 31; Laws 1991, c. 135, § 13, eff. Sept. 1, 1991.
§18-438.32. Approval of Corporation Commission - Orders -
Certificate not required.
A. Subject to paragraph 4 of Section 438.4 of this title, any
cooperative may furnish communication services in any territory not
already being furnished communication services by a telephone company
or another cooperative without approval of the Corporation Commission
of this state.
B. In any matter before the Corporation Commission, to which any
cooperative is a party, the Commission shall issue its order
determining such matter within ninety (90) days after the application
therein has been filed.
C. Under this act, no certificate of convenience and necessity,
as provided in Sections 131 through 133 of Title 17 of the Oklahoma
Statutes inclusive, shall be required by the Corporation Commission
for a cooperative organized hereunder.
Laws 1953, p. 494, § 32; Laws 1991, c. 135, § 14, eff. Sept. 1, 1991.
§18-438.33. Cooperatives, nonprofit and mutual corporations and
associations subject to act - Corrected articles of incorporation.
A. Existing domestic and domesticated cooperatives, nonprofit
and mutual corporations and associations formed to engage in or
engaging in the business, undertaking or activity described in or
contemplated hereby, shall be deemed, ipso facto, to come under the
provisions of this act as of the date this act becomes effective and
all provisions hereof shall thereafter fully apply thereto and every
such corporation and association shall have the same rights,
privileges, powers and immunities as it would possess if respectively
created or domesticated hereunder and shall be subject to the same
obligations, duties and jurisdictions as cooperatives organized under
this act.
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B. In the event any cooperative has filed defective articles of
incorporation or has failed to do all things necessary to perfect its
corporate organization, it may, nevertheless, file corrected articles
of incorporation or amend the original articles and do and perform
all acts and things necessary in the premises for the correction of
such defects.
Laws 1953, p. 494, § 33; Laws 1991, c. 135, § 15, eff. Sept. 1, 1991.
§18-438.34. Partial invalidity.
If any provision of this act, or the application of such
provision to any person or circumstance is held invalid, the
remainder of the act and the application of such provisions to other
persons or circumstances shall not be affected thereby.
Laws 1953, p. 494, § 34.
§18-438.35. Act deemed amendment of Constitution.
It is hereby expressly declared by the Legislature that this
entire act is an amendment to, and alteration of, Section 18 through
Section 34 inclusive of Article IX of the Constitution of the State
of Oklahoma, as authorized by Section 35 of Article IX of said
Constitution.
Added by Laws 1991, c. 135, § 16, eff. Sept. 1, 1991.
§18-439.1. Conversion of grain elevator corporations to cooperatives
- Procedure.
Any corporation organized under the laws of this state for the
purpose, among others, of conducting a grain elevator business, may
be converted into a cooperative and become subject to this act with
the same effect as if originally organized under this act by
complying with the following requirements:
1. The proposition for the conversion of such corporation into a
cooperative and proposed articles of conversion to give effect
thereto shall be first approved by the board of trustees or the board
of directors of the corporation. The proposed articles of conversion
shall state:
a. the name of the corporation prior to its conversion
into a cooperative,
b. the address of the principal officer of the
corporation,
c. the date of the filing of the articles of incorporation
of the corporation in the Office of the Secretary of
State,
d. the name assumed by the cooperative,
e. a statement that the corporation elects to become a
cooperative, nonprofit, membership corporation subject
to this act,
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f. the manner and basis of converting either memberships
in or shares of stock of the corporation into
memberships of the cooperative, and
g. any provisions not inconsistent with this act deemed
necessary or advisable for the conduct of the business
and affairs of the corporation;
2. The proposition for the conversion of the corporation into a
cooperative and the proposed articles of conversion approved by the
board of trustees or the board of directors of such corporation shall
then be submitted to a vote of the members or stockholders of the
corporation at any duly held annual or special meeting thereof, the
notice of which shall set forth full particulars concerning the
proposed conversion. The proposition for the conversion of the
corporation into a cooperative and the proposed articles of
conversion, with any amendments thereto as the members or
stockholders of the corporation shall choose to make, shall be deemed
to be approved upon the affirmative vote of a majority of those
members of the corporation voting thereon at such meeting, or, if the
corporation is a stock corporation, upon the affirmative vote of the
holders of a majority of the capital stock of the corporation
represented at such meeting;
3. Upon approval by the members or stockholders of the
corporation, articles of conversion in the form approved by such
members or stockholders shall be executed and acknowledged on behalf
of the corporation by its president or vice-president and its
corporate seal shall be affixed thereto and attested by its
secretary. The president or vice-president executing such articles
of conversion on behalf of the corporation shall also make and annex
thereto an affidavit stating that the provisions of this section with
respect to the approval of its trustees or directors and its members
or stockholders, of the proposition for the conversion of the
corporation into a cooperative and such articles of conversion were
duly complied with. Such articles of conversion and affidavit shall
be submitted to the Secretary of State for filing as provided in this
act. The term "articles of incorporation", as used in Chapter 10 of
Title 18, of the Oklahoma Statutes, shall be deemed to include the
articles of conversion of a converted corporation; and
4. The value of shares in the corporation shall be converted to
the value of shares in the cooperative, on a dollar-for-dollar basis.
Any dividends payable on shares of stock in the cooperative shall be
paid on preferred stock before dividends are paid on common stock.
Added by Laws 1983, c. 15, § 2, emerg. eff. March 25, 1983.
§18-439.2. Filing articles of conversion with Secretary of State -
Issuance of certificate of conversion.
Articles of conversion, when executed and acknowledged and
accompanied by such affidavits as may be required by applicable
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provisions of this act, shall be presented to the Secretary of State
for filing in the records of his office. If the Secretary of State
shall find that the articles conform to the requirements of this act,
he shall, upon the payment of the fees specified by him file the
articles so presented in the records of his office and shall issue
over the Great Seal of the State an appropriate certificate of
conversion, and thereupon the conversion provided for therein shall
be in effect.
Added by Laws 1983, c. 15, § 3, emerg. eff. March 25, 1983.
§18-440-101. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-102. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-103. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-104. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-105. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-106. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-107. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-108. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
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NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-109. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-110. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-111. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-112. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-113. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-114. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-115. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-116. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-117. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
4(#$0&($"!$"+$ -
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-118. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-119. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-120. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-201. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-202. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-203. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-204. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-205. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-206. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
4(#$0&($"!$"+$ -*
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-207. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-208. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-301. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-302. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-303. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-304. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-401. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-402. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-403. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
4(#$0&($"!$"+$ -
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-404. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-405. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-406. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-407. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-501. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-502. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-503. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-504. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-505. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
4(#$0&($"!$"+$ -2
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-506. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-507. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-508. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-509. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-510. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-511. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-512. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-513. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-514. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
4(#$0&($"!$"+$ -:
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-515. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-516. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-517. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-601. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-602. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-603. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-604. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-605. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-701. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
4(#$0&($"!$"+$ -8
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-702. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-703. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-704. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-801. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-802. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-803. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-804. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-805. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-806. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
4(#$0&($"!$"+$ -
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-807. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-808. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-809. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-810. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-811. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-812. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-813. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-814. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-815. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
4(#$0&($"!$"+$ -;
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-816. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-817. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-818. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-819. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-820. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-821. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-822. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-823. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-901. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1, 2010.
4(#$0&($"!$"+$ -27
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1001. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1002. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1003. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1004. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1005. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1006. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1007. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
4(#$0&($"!$"+$ -2
§18-440-1008. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1009. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1101. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1102. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1103. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1201. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1202. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1203. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
4(#$0&($"!$"+$ -2
§18-440-1204. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1205. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1206. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1207. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1208. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1209. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1210. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1211. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
4(#$0&($"!$"+$ -2*
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1212. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1213. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1214. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1215. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1301. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1302. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1303. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
4(#$0&($"!$"+$ -2
§18-440-1304. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1305. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1401. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1402. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1403. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1404. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1405. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1406. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
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§18-440-1407. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1408. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1501. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1502. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1503. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1504. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1601. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1602. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
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NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1603. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1604. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1605. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1606. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1607. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1608. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1609. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
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§18-440-1610. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1611. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1612. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1701. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1702. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1703. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-440-1704. Repealed by Laws 2009, c. 68, § 151, eff. Jan. 1,
2010.
NOTE: This section was held unconstitutional by the Oklahoma Supreme
Court in the case of Weddington v. Henry, 202 P.3d 143, 2008 OK 102
(2009).
§18-441-101. Short title.
SHORT TITLE. Sections 1 through 149 of this act shall be known
and may be cited as the “Uniform Limited Cooperative Association Act
of 2009”.
Added by Laws 2009, c. 68, § 1, eff. Jan. 1, 2010.
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§18-441-102. Definitions.
DEFINITIONS. In the Uniform Limited Cooperative Association Act
of 2009:
(1) “Articles of organization” means the articles of
organization of a limited cooperative association required by Section
30 of this act. The term includes the articles as amended or
restated.
(2) “Board of directors” means the board of directors of a
limited cooperative association.
(3) “Bylaws” means the bylaws of a limited cooperative
association. The term includes the bylaws as amended or restated.
(4) “Certificate of authority” means a certificate issued by the
Secretary of State for a foreign cooperative to transact business in
this state.
(5) “Contribution”, except as used in subsection (c) of Section
97 of this act, means a benefit that a person provides to a limited
cooperative association to become or remain a member or in the
person’s capacity as a member.
(6) “Cooperative” means a limited cooperative association or an
entity organized under any cooperative law of any jurisdiction.
(7) “Designated office” means the office that a limited
cooperative association or a foreign cooperative is required to
designate and maintain under paragraph (1) of subsection (a) of
Section 17 of this act.
(8) “Director” means a director of a limited cooperative
association.
(9) “Distribution”, except as used in subsection (e) of Section
96 of this act, means a transfer of money or other property from a
limited cooperative association to a member because of the member’s
financial rights or to a transferee of a member’s financial rights.
(10) “Entity” means a person other than an individual.
(11) “Financial rights” means the right to participate in
allocations and distributions as provided in Articles 10 and 12 of
the Uniform Limited Cooperative Association Act of 2009 but does not
include rights or obligations under a marketing contract governed by
Article 7 of the Uniform Limited Cooperative Association Act of 2009.
(12) “Foreign cooperative” means an entity organized in a
jurisdiction other than this state under a law similar to the Uniform
Limited Cooperative Association Act of 2009.
(13) “Governance rights” means the right to participate in
governance of a limited cooperative association.
(14) “Investor member” means a member that has made a
contribution to a limited cooperative association and
(A) is not required by the organic rules to conduct
patronage with the association in the member’s capacity
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as an investor member in order to receive the member’s
interest; or
(B) is not permitted by the organic rules to conduct
patronage with the association in the member’s capacity
as an investor member in order to receive the member’s
interest.
(15) “Limited cooperative association” means an association
organized under the Uniform Limited Cooperative Association Act of
2009.
(16) “Member” means a person that is admitted as a patron member
or investor member, or both, in a limited cooperative association.
The term does not include a person that has dissociated as a member.
(17) “Member’s interest” means the interest of a patron member
or investor member under Section 57 of this act.
(18) “Members meeting” means an annual members meeting or
special meeting of members.
(19) “Organic law” means the statute providing for the creation
of an entity or principally governing its internal affairs.
(20) “Organic rules” means the articles of organization and
bylaws of a limited cooperative association.
(21) “Organizer” means an individual who signs the initial
articles of organization.
(22) “Patron member” means a member that has made a contribution
to a limited cooperative association and:
(A) is required by the organic rules to conduct patronage
with the association in the member’s capacity as a
patron member in order to receive the member’s
interest; or
(B) is permitted by the organic rules to conduct patronage
with the association in the member’s capacity as a
patron member in order to receive the member’s
interest.
(23) “Patronage” means business transactions between a limited
cooperative association and a person which entitle the person to
receive financial rights based on the value or quantity of business
done between the association and the person.
(24) “Person” means an individual, corporation, business trust,
cooperative, estate, trust, partnership, limited partnership, limited
liability company, limited cooperative association, joint venture,
association, public corporation, government or governmental
subdivision, agency, or instrumentality, or any other legal or
commercial entity.
(25) “Principal office” means the principal executive office of
a limited cooperative association or foreign cooperative, whether or
not in this state.
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(26) “Record”, used as a noun, means information that is
inscribed on a tangible medium or that is stored in an electronic or
other medium and is retrievable in perceivable form.
(27) “Required information” means the information a limited
cooperative association is required to maintain under Section 14 of
this act.
(28) “Sign” means, with present intent to authenticate or adopt
a record:
(A) to execute or adopt a tangible symbol; or
(B) to attach to or logically associate with the record an
electronic symbol, sound, or process.
(29) “State” means a state of the United States, the District of
Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the
United States.
(30) “Transfer” includes an assignment, conveyance, deed, bill
of sale, lease, mortgage, security interest, encumbrance, gift, and
transfer by operation of law.
(31) “Voting group” means any combination of one or more voting
members in one or more districts or classes that under the organic
rules or the Uniform Limited Cooperative Association Act of 2009 are
entitled to vote and can be counted together collectively on a matter
at a members meeting.
(32) “Voting member” means a member that, under the organic law
or organic rules, has a right to vote on matters subject to vote by
members under the organic law or organic rules.
(33) “Voting power” means the total current power of members to
vote on a particular matter for which a vote may or is to be taken.
Added by Laws 2009, c. 68, § 2, eff. Jan. 1, 2010.
§18-441-103. Limited cooperative association subject to amendment or
repeal of the Uniform Limited Cooperative Association Act of 2009.
LIMITED COOPERATIVE ASSOCIATION SUBJECT TO AMENDMENT OR REPEAL OF
THE UNIFORM LIMITED COOPERATIVE ASSOCIATION ACT OF 2009. A limited
cooperative association governed by the Uniform Limited Cooperative
Association Act of 2009 is subject to any amendment or repeal of the
Uniform Limited Cooperative Association Act of 2009.
Added by Laws 2009, c. 68, § 3, eff. Jan. 1, 2010.
§18-441-104. Nature of limited cooperative association.
NATURE OF LIMITED COOPERATIVE ASSOCIATION.
(a) A limited cooperative association organized under the
Uniform Limited Cooperative Association Act of 2009 is an autonomous,
unincorporated association of persons united to meet their mutual
interests through a jointly owned enterprise primarily controlled by
those persons, which permits combining:
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(1) Ownership, financing, and receipt of benefits by the members
for whose interests the association is formed; and
(2) Separate investments in the association by members who may
receive returns on their investments and a share of control.
(b) The fact that a limited cooperative association does not
have one or more of the characteristics described in subsection (a)
of this section does not alone prevent the association from being
formed under and governed by the Uniform Limited Cooperative
Association Act of 2009 nor does it alone provide a basis for an
action against the association.
Added by Laws 2009, c. 68, § 4, eff. Jan. 1, 2010.
§18-441-105. Purpose and duration of limited cooperative
association.
PURPOSE AND DURATION OF LIMITED COOPERATIVE ASSOCIATION.
(a) A limited cooperative association is an entity distinct from
its members.
(b) A limited cooperative association may be organized for any
lawful purpose, whether or not for profit except for supplying
electric energy or natural gas in rural areas. A cooperative
organized for the purpose of supplying electric energy and promoting
and extending the use thereof in rural areas must be organized under
the Rural Electric Cooperative Act.
(c) Unless the articles of organization state a term for a
limited cooperative association’s existence, the association has
perpetual duration.
Added by Laws 2009, c. 68, § 5, eff. Jan. 1, 2010.
§18-441-106. Powers.
POWERS. A limited cooperative association may sue and be sued in
its own name and do all things necessary or convenient to carry on
its activities. An association may maintain an action against a
member for harm caused to the association by the member’s violation
of a duty to the association or of the organic law or organic rules.
Added by Laws 2009, c. 68, § 6, eff. Jan. 1, 2010.
§18-441-107. Governing law.
GOVERNING LAW. The law of this state governs:
(1) The internal affairs of a limited cooperative association;
and
(2) The liability of a member as member and a director as
director for the debts, obligations, or other liabilities of a
limited cooperative association.
Added by Laws 2009, c. 68, § 7, eff. Jan. 1, 2010.
§18-441-108. Supplemental principles of law.
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SUPPLEMENTAL PRINCIPLES OF LAW. Unless displaced by particular
provisions of the Uniform Limited Cooperative Association Act of
2009, the principles of law and equity supplement the Uniform Limited
Cooperative Association Act of 2009.
Added by Laws 2009, c. 68, § 8, eff. Jan. 1, 2010.
§18-441-109. Requirements of other laws.
REQUIREMENTS OF OTHER LAWS.
(a) The Uniform Limited Cooperative Association Act of 2009 does
not alter or amend any law that governs the licensing and regulation
of an individual or entity in carrying on a specific business or
profession even if that law permits the business or profession to be
conducted by a limited cooperative association, a foreign
cooperative, or its members.
(b) A limited cooperative association may not conduct an
activity that, under law of this state other than the Uniform Limited
Cooperative Association Act of 2009, may be conducted only by an
entity that meets specific requirements for the internal affairs of
that entity unless the organic rules of the association conform to
those requirements.
Added by Laws 2009, c. 68, § 9, eff. Jan. 1, 2010.
§18-441-110. Relation to restraint of trade and antitrust laws.
RELATION TO RESTRAINT OF TRADE AND ANTITRUST LAWS. To the extent
a limited cooperative association or activities conducted by the
association in this state meet the material requirements for other
cooperatives entitled to an exemption from or immunity under any
provision of Title 79 of the Oklahoma Statutes, the association and
its activities are entitled to the exemption or immunity. This
section does not create any new exemption or immunity for an
association or affect any exemption or immunity provided to a
cooperative organized under any other law.
Added by Laws 2009, c. 68, § 9, eff. Jan. 1, 2010.
§18-441-111. Name.
NAME.
(a) Use of the term “cooperative” or its abbreviation under the
Uniform Limited Cooperative Association Act of 2009 is not a
violation of the provisions restricting the use of the term under
Section 435 of Title 18 of the Oklahoma Statutes.
(b) The name of a limited cooperative association must contain
the words “limited cooperative association” or “limited cooperative”
or the abbreviation “L.C.A.” or “LCA”. “Limited” may be abbreviated
as “Ltd.”. “Cooperative” may be abbreviated as “Co-op” or “Coop”.
“Association” may be abbreviated as “Assoc.” or “Assn.” A limited
cooperative association or a member may enforce the restrictions on
the use of the term “cooperative” under the Uniform Limited
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Cooperative Association Act of 2009 and Section 435 of Title 18 of
the Oklahoma Statutes.
(c) Except as otherwise provided in subsection (d) of this
section, a limited cooperative association may use only a name that
is available. A name is available if it is distinguishable in the
records of the Secretary of State from:
(1) The name of any entity organized or authorized to transact
business in this state;
(2) A name reserved under Section 12 of this act; and
(3) An alternative name approved for a foreign cooperative
authorized to transact business in this state.
(d) A limited cooperative association may apply to the Secretary
of State for authorization to use a name that is not available. The
Secretary of State shall authorize use of the name if:
(1) The person with ownership rights to use the name consents in
a record to the use and applies in a form satisfactory to the
Secretary of State to change the name used or reserved to a name that
is distinguishable upon the records of the Secretary of State from
the name applied for; or
(2) The applicant delivers to the Secretary of State a certified
copy of the final judgment of a court establishing the applicant’s
right to use the name in this state.
Added by Laws 2009, c. 68, § 11, eff. Jan. 1, 2010.
§18-441-112. Reservation of name.
RESERVATION OF NAME.
(a) A person may reserve the exclusive use of the name of a
limited cooperative association, including a fictitious name for a
foreign cooperative whose name is not available under Section 11 of
this act, by delivering an application to the Secretary of State for
filing. The application must set forth the name and address of the
applicant and the name proposed to be reserved. If the Secretary of
State finds that the name applied for is available under Section 11
of this act, the Secretary of State shall reserve the name for the
applicant’s exclusive use for a nonrenewable period of one hundred
twenty (120) days.
(b) A person that has reserved a name for a limited cooperative
association may transfer the reservation to another person by
delivering to the Secretary of State a signed notice of the transfer
which states the name, street address, and, if different, the mailing
address of the transferee. If the person is an organizer of the
association and the name of the association is the same as the
reserved name, the delivery of articles of organization for filing by
the Secretary of State is a transfer by the person to the
association.
Added by Laws 2009, c. 68, § 12, eff. Jan. 1, 2010.
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§18-441-113. Effect of organic rules.
EFFECT OF ORGANIC RULES.
(a) The relations between a limited cooperative association and
its members are consensual. Unless required, limited, or prohibited
by the Uniform Limited Cooperative Association Act of 2009, the
organic rules may provide for any matter concerning the relations
among the members of the association and between the members and the
association, the activities of the association, and the conduct of
its activities.
(b) The matters referred to in paragraphs (1) through (11) of
this subsection may be varied only in the articles of organization.
The articles may:
(1) State a term of existence for the association under
subsection (c) of Section 5 of this act;
(2) Limit or eliminate the acceptance of new or additional
members by the initial board of directors under subsection (b) of
Section 31 of this act;
(3) Vary the limitations on the obligations and liability of
members for association obligations under Section 43 of this act;
(4) Require a notice of an annual members meeting to state a
purpose of the meeting under subsection (b) of Section 47 of this
act;
(5) Vary the board of directors meeting quorum under subsection
(a) of Section 80 of this act;
(6) Vary the matters the board of directors may consider in
making a decision under Section 85 of this act;
(7) Specify causes of dissolution under paragraph (1) of Section
103 of this act;
(8) Delegate amendment of the bylaws to the board of directors
pursuant to subsection (f) of Section 37 of this act;
(9) Provide for member approval of asset dispositions under
Section 130 of this act;
(10) Subject to Section 85 of this act, provide for the
elimination or limitation of liability of a director to the
association or its members for money damages pursuant to Section 83
of this act;
(11) Provide for permitting or making obligatory indemnification
under subsection (a) of Section 89 of this act; and
(12) Provide for any matters that may be contained in the
organic rules, including those under subsection (c) of this section.
(c) The matters referred to in paragraphs (1) through (25) of
this subsection may be varied only in the organic rules. The organic
rules may:
(1) Require more information to be maintained under Section 14
of this act or provided to members under subsection (k) of Section 44
of this act;
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(2) Provide restrictions on transactions between a member and an
association under Section 15 of this act;
(3) Provide for the percentage and manner of voting on
amendments to the organic rules by district, class, or voting group
under subsection (a) of Section 36 of this act;
(4) Provide for the percentage vote required to amend the bylaws
concerning the admission of new members under paragraph (5) of
subsection (e) of Section 37 of this act;
(5) Provide for terms and conditions to become a member under
Section 41 of this act;
(6) Restrict the manner of conducting members meetings under
subsection (c) of Section 45 of this act and subsection (e) of
Section 46 of this act;
(7) Designate the presiding officer of members meetings under
subsection (e) of Section 45 of this act and subsection (g) of
Section 46 of this act;
(8) Require a statement of purposes in the annual meeting notice
under subsection (b) of Section 47 of this act;
(9) Increase quorum requirements for members meetings under
Section 49 of this act and board of directors meetings under Section
80 of this act;
(10) Allocate voting power among members, including patron
members and investor members, and provide for the manner of member
voting and action as permitted by Sections 50 through 56 of this act;
(11) Authorize investor members and expand or restrict the
transferability of members’ interests to the extent provided in
Sections 58 through 60 of this act;
(12) Provide for enforcement of a marketing contract under
subsection (a) of Section 65 of this act;
(13) Provide for qualification, election, terms, removal,
filling vacancies, and member approval for compensation of directors
in accordance with Sections 68 through 70, 72, 74, and 75 of this
act;
(14) Restrict the manner of conducting board meetings and taking
action without a meeting under Sections 76 and 77 of this act;
(15) Provide for frequency, location, notice and waivers of
notice for board meetings under Sections 78 and 79 of this act;
(16) Increase the percentage of votes necessary for board action
under subsection (b) of Section 81 of this act;
(17) Provide for the creation of committees of the board of
directors and matters related to the committees in accordance with
Section 82 of this act;
(18) Provide for officers and their appointment, designation,
and authority under Section 87 of this act;
(19) Provide for forms and values of contributions under Section
91 of this act;
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(20) Provide for remedies for failure to make a contribution
under subsection (b) of Section 92 of this act;
(21) Provide for the allocation of profits and losses of the
association, distributions, and the redemption or repurchase of
distributed property other than money in accordance with Sections 93
through 96 of this act;
(22) Specify when a member’s dissociation is wrongful and the
liability incurred by the dissociating member for damage to the
association under subsections (b) and (c) of Section 99 of this act;
(23) Provide the personal representative, or other legal
representative, of a deceased member or a member adjudged incompetent
with additional rights under Section 101 of this act;
(24) Increase the percentage of votes required for board of
director approval of:
(A) a resolution to dissolve under paragraph (1) of
subsection (a) of Section 106 of this act;
(B) a proposed amendment to the organic rules under
paragraph (1) of subsection (a) of Section 34 of this
act;
(C) a plan of conversion under subsection (a) of Section
136 of this act;
(D) a plan of merger under subsection (a) of Section 140 of
this act; and
(E) a proposed disposition of assets under paragraph (1) of
Section 132 of this act; and
(25) Vary the percentage of votes required for members approval
of:
(A) a resolution to dissolve under Section 106 of this act;
(B) an amendment to the organic rules under Section 37 of
this act;
(C) a plan of conversion under Section 136 of this act;
(D) a plan of merger under Section 141 of this act; and
(E) a disposition of assets under Section 133 of this act.
(d) The organic rules must address members’ contributions
pursuant to Section 90 of this act.
Added by Laws 2009, c. 68, § 13, eff. Jan. 1, 2010.
§18-441-114. Required information.
REQUIRED INFORMATION.
(a) Subject to subsection (b) of this section, a limited
cooperative association shall maintain in a record available at its
principal office:
(1) A list containing the name, last-known street address and,
if different, mailing address, and term of office of each director
and officer;
(2) The initial articles of organization and all amendments to
and restatements of the articles, together with a signed copy of any
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power of attorney under which any article, amendment, or restatement
has been signed;
(3) The initial bylaws and all amendments to and restatements of
the bylaws;
(4) All filed articles of merger and statements of conversion;
(5) All financial statements of the association for the six (6)
most recent years;
(6) The six most recent annual reports delivered by the
association to the Secretary of State;
(7) The minutes of members meetings for the six (6) most recent
years;
(8) Evidence of all actions taken by members without a meeting
for the six (6) most recent years;
(9) A list containing:
(A) the name, in alphabetical order, and last-known street
address and, if different, mailing address of each
patron member and each investor member; and
(B) if the association has districts or classes of members,
information from which each current member in a
district or class may be identified;
(10) The federal income tax returns, any state and local income
tax returns, and any tax reports of the association for the six (6)
most recent years;
(11) Accounting records maintained by the association in the
ordinary course of its operations for the six (6) most recent years;
(12) The minutes of directors meetings for the six (6) most
recent years;
(13) Evidence of all actions taken by directors without a
meeting for the six (6) most recent years;
(14) The amount of money contributed and agreed to be
contributed by each member;
(15) A description and statement of the agreed value of
contributions other than money made and agreed to be made by each
member;
(16) The times at which, or events on the happening of which,
any additional contribution is to be made by each member;
(17) For each member, a description and statement of the
member’s interest or information from which the description and
statement can be derived; and
(18) All communications concerning the association made in a
record to all members, or to all members in a district or class, for
the six (6) most recent years.
(b) If a limited cooperative association has existed for less
than the period for which records must be maintained under subsection
(a) of this section, the period records must be kept is the period of
the association’s existence.
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(c) The organic rules may require that more information be
maintained.
Added by Laws 2009, c. 68, § 14, eff. Jan. 1, 2010.
§18-441-115. Business transactions of member with limited
cooperative association.
BUSINESS TRANSACTIONS OF MEMBER WITH LIMITED COOPERATIVE
ASSOCIATION. Subject to Sections 83 and 84 of this act and except as
otherwise provided in the organic rules or a specific contract
relating to a transaction, a member may lend money to and transact
other business with a limited cooperative association in the same
manner as a person that is not a member.
Added by Laws 2009, c. 68, § 15, eff. Jan. 1, 2010.
§18-441-116. Dual capacity.
DUAL CAPACITY. A person may have a patron member’s interest and
an investor member’s interest. When such person acts as a patron
member, the person is subject to the Uniform Limited Cooperative
Association Act of 2009 and the organic rules governing patron
members. When such person acts as an investor member, the person is
subject to the Uniform Limited Cooperative Association Act of 2009
and the organic rules governing investor members.
Added by Laws 2009, c. 68, § 16, eff. Jan. 1, 2010.
§18-441-117. Designated office and agent for service of process.
DESIGNATED OFFICE AND AGENT FOR SERVICE OF PROCESS.
(a) A limited cooperative association, or a foreign cooperative
that has a certificate of authority under Section 125 of this act,
shall designate and continuously maintain in this state:
(1) An office, as its designated office, which need not be a
place of the association’s or foreign cooperative’s activity in this
state; and
(2) An agent for service of process at the designated office.
(b) An agent for service of process of a limited cooperative
association or foreign cooperative must be an individual who is a
resident of this state or an entity that is authorized to do business
in this state.
Added by Laws 2009, c. 68, § 17, eff. Jan. 1, 2010.
§18-441-118. Change of designated office or agent for service of
process.
CHANGE OF DESIGNATED OFFICE OR AGENT FOR SERVICE OF PROCESS.
(a) Except as otherwise provided in subsection (e) of Section 27
of this act, to change its designated office, its agent for service
of process, or the street address or, if different, mailing address
of its principal office, a limited cooperative association must
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deliver to the Secretary of State for filing a statement of change
containing:
(1) The name of the limited cooperative association;
(2) The street address and, if different, mailing address of its
designated office;
(3) If the designated office is to be changed, the street
address and, if different, mailing address of the new designated
office;
(4) The name of its agent for service of process; and
(5) If the agent for service of process is to be changed, the
name of the new agent.
(b) Except as otherwise provided in subsection (e) of Section 27
of this act, to change its agent for service of process, the address
of its designated office, or the street address or, if different,
mailing address of its principal office, a foreign cooperative shall
deliver to the Secretary of State for filing a statement of change
containing:
(1) The name of the foreign cooperative;
(2) The name, street address and, if different, mailing address
of its designated office;
(3) If the current agent for service of process or an address of
the designated office is to be changed, the new information;
(4) The street address and, if different, mailing address of its
principal office; and
(5) If the street address or, if different, the mailing address
of its principal office is to be changed, the street address and, if
different, the mailing address of the new principal office.
(c) Except as otherwise provided in Section 24 of this act, a
statement of change is effective when filed by the Secretary of
State.
Added by Laws 2009, c. 68, § 18, eff. Jan. 1, 2010.
§18-441-119. Resignation of agent for service of process.
RESIGNATION OF AGENT FOR SERVICE OF PROCESS.
(a) To resign as an agent for service of process of a limited
cooperative association or foreign cooperative, the agent must
deliver to the Secretary of State for filing a statement of
resignation containing the name of the agent and the name of the
association or foreign cooperative.
(b) After receiving a statement of resignation under subsection
(a) of this section, the Secretary of State shall file it and mail or
otherwise provide or deliver a copy to the limited cooperative
association or foreign cooperative at its principal office.
(c) An agency for service of process of a limited cooperative
association or foreign cooperative terminates on the earlier of:
(1) The thirty-first day after the Secretary of State files a
statement of resignation under subsection (b) of this section; or
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(2) When a record designating a new agent for service of process
is delivered to the Secretary of State for filing on behalf of the
association or foreign cooperative and becomes effective.
Added by Laws 2009, c. 68, § 19, eff. Jan. 1, 2010.
§18-441-120. Service of process.
SERVICE OF PROCESS.
(a) An agent for service of process appointed by a limited
cooperative association or foreign cooperative is an agent of the
association or foreign cooperative for service of process, notice, or
a demand required or permitted by law to be served upon the
association or foreign cooperative.
(b) If a limited cooperative association or foreign cooperative
does not appoint or maintain an agent for service of process in this
state or the agent for service of process cannot with reasonable
diligence be found at the address of the designated office on file
with the Secretary of State, the Secretary of State is an agent of
the association or foreign cooperative upon which process, notice, or
a demand may be served.
(c) Service of process, notice, or a demand on the Secretary of
State as agent of a limited cooperative association or foreign
cooperative may be made by delivering to the Secretary of State two
copies of the process, notice, or demand. The Secretary of State
shall forward one copy by registered or certified mail, return
receipt requested, to the association or foreign cooperative at its
principal office.
(d) Service is effected under subsection (c) of this section on
the earliest of:
(1) The date the limited cooperative association or foreign
cooperative receives the process, notice, or demand;
(2) The date shown on the return receipt, if signed on behalf of
the association or foreign cooperative; or
(3) Five (5) days after the process, notice, or demand is
deposited by the Secretary of State for delivery by the United States
Postal Service, if postage is prepaid to the address of the principal
office on file with the Secretary of State.
(e) The Secretary of State shall keep a record of each process,
notice, and demand served pursuant to this section and record the
time of, and the action taken regarding, the service.
(f) This section does not affect the right to serve process,
notice, or a demand in any other manner provided by law.
Added by Laws 2009, c. 68, § 20, eff. Jan. 1, 2010.
§18-441-201. Signing of records delivered for filing to Secretary of
State.
SIGNING OF RECORDS DELIVERED FOR FILING TO SECRETARY OF STATE.
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(a) A record delivered to the Secretary of State for filing
pursuant to the Uniform Limited Cooperative Association Act of 2009
must be signed as follows:
(1) The initial articles of organization must be signed by at
least one organizer.
(2) A statement of cancellation under subsection (d) of Section
30 of this act must be signed by at least one organizer.
(3) Except as otherwise provided in paragraph (4) of this
subsection, a record signed on behalf of an existing limited
cooperative association must be signed by an officer.
(4) A record filed on behalf of a dissolved association must be
signed by a person winding up activities under Section 107 of this
act or a person appointed under Section 107 of this act to wind up
those activities.
(5) Any other record must be signed by the person on whose
behalf the record is delivered to the Secretary of State.
(b) Any record to be signed under the Uniform Limited
Cooperative Association Act of 2009 may be signed by an authorized
agent.
Added by Laws 2009, c. 68, § 21, eff. Jan. 1, 2010.
§18-441-202. Signing and filing of records pursuant to judicial
order.
SIGNING AND FILING OF RECORDS PURSUANT TO JUDICIAL ORDER.
(a) If a person required by the Uniform Limited Cooperative
Association Act of 2009 to sign or deliver a record to the Secretary
of State for filing does not do so, the district court of the county
where the association’s principal office is located, or if the
association does not have a principal office in this state, where its
designated office in this state is located, upon petition of an
aggrieved person, may order:
(1) The person to sign the record and deliver it to the
Secretary of State for filing; or
(2) Delivery of the unsigned record to the Secretary of State
for filing.
(b) An aggrieved person under subsection (a) of this section,
other than the limited cooperative association or foreign cooperative
to which the record pertains, shall make the association or foreign
cooperative a party to the action brought to obtain the order.
(c) An unsigned record filed pursuant to this section is
effective.
Added by Laws 2009, c. 68, § 22, eff. Jan. 1, 2010.
§18-441-203. Delivery to and filing of records by Secretary of State
- Effective time and date.
DELIVERY TO AND FILING OF RECORDS BY SECRETARY OF STATE;
EFFECTIVE TIME AND DATE.
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(a) A record authorized or required by the Uniform Limited
Cooperative Association Act of 2009 to be delivered to the Secretary
of State for filing must be captioned to describe the record’s
purpose, be in a medium and format permitted by the Secretary of
State, and be delivered to the Secretary of State. If the filing
fees have been paid, and unless the Secretary of State determines
that the record does not comply with the filing requirements of the
Uniform Limited Cooperative Association Act of 2009, the Secretary of
State shall file the record and send a copy of the filed record and a
receipt for the fees to the person on whose behalf the record was
filed.
(b) The Secretary of State, upon request and payment of the
required fee, shall furnish a certified copy of any record filed by
the Secretary of State under the Uniform Limited Cooperative
Association Act of 2009 to the person making the request.
(c) Except as otherwise provided in Sections 18 and 24 of this
act, a record delivered to the Secretary of State for filing under
the Uniform Limited Cooperative Association Act of 2009 may specify
an effective time and a delayed effective date that may include an
effective time on that date. Except as otherwise provided in
Sections 18 and 24 of this act, a record filed by the Secretary of
State under the Uniform Limited Cooperative Association Act of 2009
is effective:
(1) If the record does not specify an effective time and does
not specify a delayed effective date, on the date and at the time the
record is filed as evidenced by the Secretary of State’s endorsement
of the date and time on the record;
(2) If the record specifies an effective time but not a delayed
effective date, on the date the record is filed at the time specified
in the record;
(3) If the record specifies a delayed effective date but not an
effective time, at 12:01 a.m. on the earlier of:
(A) the specified date; or
(B) the ninetieth day after the record is filed; or
(4) If the record specifies an effective time and a delayed
effective date, at the specified time on the earlier of:
(A) the specified date; or
(B) the ninetieth day after the record is filed.
Added by Laws 2009, c. 68, § 23, eff. Jan. 1, 2010.
§18-441-204. Correcting filed record.
CORRECTING FILED RECORD.
(a) A limited cooperative association or foreign cooperative may
deliver to the Secretary of State for filing a statement of
correction to correct a record previously delivered by the
association or foreign cooperative to the Secretary of State and
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filed by the Secretary of State if, at the time of filing, the record
contained inaccurate information or was defectively signed.
(b) A statement of correction may not state a delayed effective
date and must:
(1) Describe the record to be corrected, including its filing
date, or have attached a copy of the record as filed;
(2) Specify the inaccurate information and the reason it is
inaccurate or the manner in which the signing was defective; and
(3) Correct the inaccurate information or defective signature.
(c) When filed by the Secretary of State, a statement of
correction is effective:
(1) When filed as to persons relying on the inaccurate
information or defective signature before its correction and
adversely affected by the correction; and
(2) As to all other persons, retroactively as of the effective
date and time of the record the statement corrects.
Added by Laws 2009, c. 68, § 24, eff. Jan. 1, 2010.
§18-441-205. Liability for inaccurate information in filed record.
LIABILITY FOR INACCURATE INFORMATION IN FILED RECORD. If a
record delivered to the Secretary of State for filing under the
Uniform Limited Cooperative Association Act of 2009 and filed by the
Secretary of State contains inaccurate information, a person that
suffers a loss by reliance on the information may recover damages for
the loss from a person that signed the record or caused another to
sign it on the person’s behalf and knew at the time the record was
signed that the information was inaccurate.
Added by Laws 2009, c. 68, § 25, eff. Jan. 1, 2010.
§18-441-206. Certificate of good standing or authorization.
CERTIFICATE OF GOOD STANDING OR AUTHORIZATION.
(a) The Secretary of State, upon request and payment of the
required fee, shall furnish any person that requests it a certificate
of good standing for a limited cooperative association if the records
filed in the Office of the Secretary of State show that the Secretary
of State has filed the association’s articles of organization, that
the association is in good standing, and that the Secretary of State
has not filed a statement of termination.
(b) The Secretary of State, upon request and payment of the
required fee, shall furnish to any person that requests it a
certificate of authority for a foreign cooperative if the records
filed in the Office of the Secretary of State show that the Secretary
of State has filed the foreign cooperative’s certificate of
authority, has not revoked nor has reason to revoke the certificate
of authority, and has not filed a notice of cancellation.
(c) Subject to any exceptions stated in the certificate, a
certificate of good standing or authority issued by the Secretary of
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State establishes conclusively that the limited cooperative
association or foreign cooperative is in good standing or is
authorized to transact business in this state.
Added by Laws 2009, c. 68, § 26, eff. Jan. 1, 2010.
§18-441-207. Annual report for Secretary of State.
ANNUAL REPORT FOR SECRETARY OF STATE.
(a) A limited cooperative association or foreign cooperative
authorized to transact business in this state shall deliver to the
Secretary of State for filing an annual report that states:
(1) The name of the association or foreign cooperative;
(2) The street address and, if different, mailing address of the
association’s or foreign cooperative’s designated office and the name
of its agent for service of process at the designated office;
(3) The street address and, if different, mailing address of the
association’s or foreign cooperative’s principal office; and
(4) In the case of a foreign cooperative, the state or other
jurisdiction under whose law the foreign cooperative is formed and
any alternative name adopted under Section 126 of this act.
(b) Information in an annual report must be current as of the
date the report is delivered to the Secretary of State.
(c) The first annual report must be delivered to the Secretary
of State between January 1 and April 1 of the year following the
calendar year in which the limited cooperative association is formed
or the foreign cooperative is authorized to transact business in this
state. An annual report must be delivered to the Secretary of State
between January 1 and April 1 of each subsequent calendar year.
(d) If an annual report does not contain the information
required by subsection (a) of this section, the Secretary of State
shall promptly notify the reporting limited cooperative association
or foreign cooperative and return the report for correction. If the
report is corrected to contain the information required by subsection
(a) of this section and delivered to the Secretary of State not later
than thirty (30) days after the date of the notice from the Secretary
of State, it is timely delivered.
(e) If a filed annual report contains an address of the
designated office, name of the agent for service of process, or
address of the principal office which differs from the information
shown in the records of the Secretary of State immediately before the
filing, the differing information in the annual report is considered
a statement of change.
(f) If a limited cooperative association fails to deliver an
annual report under this section, the Secretary of State may proceed
under Section 112 of this act to dissolve the association
administratively.
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(g) If a foreign cooperative fails to deliver an annual report
under this section, the Secretary of State may revoke the certificate
of authority of the cooperative.
Added by Laws 2009, c. 68, § 27, eff. Jan. 1, 2010.
§18-441-208. Filing fees.
FILING FEES. The filing fees for records filed under the Uniform
Limited Cooperative Association Act of 2009 by the Secretary of State
shall be:
1. For filing articles of organization, One Hundred Dollars
($100.00);
2. For filing an amendment to articles of organization or
restated articles of organization, Fifty Dollars ($50.00);
3. For filing articles of merger or conversion, One Hundred
Dollars ($100.00);
4. For filing a statement of change of a designated office,
agent for service of process, address of an agent for service of
process, or a statement of resignation of registered agent, Twenty-
five Dollars ($25.00);
5. For filing a name reservation or notice of transfer, Ten
Dollars ($10.00);
6. For filing an annual report, Fifty Dollars ($50.00);
7. For issuing a certificate of good standing, Twenty Dollars
($20.00);
8. For acting as registered agent, One Hundred Dollars
($100.00); and
9. For filing any other certificate, statement, notice or other
document for which a fee is not otherwise specified under the Uniform
Limited Cooperative Association Act of 2009, Fifty Dollars ($50.00).
Added by Laws 2009, c. 68, § 28, eff. Jan. 1, 2010.
§18-441-301. Organizers.
ORGANIZERS. A limited cooperative association must be organized
by one or more organizers.
Added by Laws 2009, c. 68, § 29, eff. Jan. 1, 2010.
§18-441-302. Formation of limited cooperative association - Articles
of organization.
FORMATION OF LIMITED COOPERATIVE ASSOCIATION; ARTICLES OF
ORGANIZATION.
(a) To form a limited cooperative association, an organizer of
the association must deliver articles of organization to the
Secretary of State for filing. The articles must state:
(1) The name of the association;
(2) The purposes for which the association is formed;
(3) The street address and, if different, mailing address of the
association’s initial designated office and the name of the
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association’s initial agent for service of process at the designated
office;
(4) The street address and, if different, mailing address of the
initial principal office;
(5) The name and street address and, if different, mailing
address of each organizer; and
(6) The term for which the association is to exist if other than
perpetual.
(b) Subject to subsection (a) of Section 13 of this act,
articles of organization may contain any other provisions in addition
to those required by subsection (a) of this section.
(c) A limited cooperative association is formed after articles
of organization that substantially comply with subsection (a) of this
section are delivered to the Secretary of State, are filed, and
become effective under subsection (c) of Section 23 of this act.
(d) If articles of organization filed by the Secretary of State
state a delayed effective date, a limited cooperative association is
not formed if, before the articles take effect, an organizer signs
and delivers to the Secretary of State for filing a statement of
cancellation.
Added by Laws 2009, c. 68, § 30, eff. Jan. 1, 2010.
§18-441-303. Organization of limited cooperative association.
ORGANIZATION OF LIMITED COOPERATIVE ASSOCIATION.
(a) After a limited cooperative association is formed:
(1) If initial directors are named in the articles of
organization, the initial directors shall hold an organizational
meeting to adopt initial bylaws and carry on any other business
necessary or proper to complete the organization of the association;
or
(2) If initial directors are not named in the articles of
organization, the organizers shall designate the initial directors
and call a meeting of the initial directors to adopt initial bylaws
and carry on any other business necessary or proper to complete the
organization of the association.
(b) Unless the articles of organization otherwise provide, the
initial directors may cause the limited cooperative association to
accept members, including those necessary for the association to
begin business.
(c) Initial directors need not be members.
(d) An initial director serves until a successor is elected and
qualified at a members’ meeting or the director is removed, resigns,
is adjudged incompetent, or dies.
Added by Laws 2009, c. 68, § 31, eff. Jan. 1, 2010.
§18-441-304. Bylaws.
BYLAWS.
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(a) Bylaws must be in a record and, if not stated in the
articles of organization, must include:
(1) A statement of the capital structure of the limited
cooperative association, including:
(A) the classes or other types of members’ interests and
relative rights, preferences, and restrictions granted
to or imposed upon each class or other type of member’s
interest; and
(B) the rights to share in profits or distributions of the
association;
(2) A statement of the method for admission of members;
(3) A statement designating voting and other governance rights,
including which members have voting power and any restriction on
voting power;
(4) A statement that a member’s interest is transferable if it
is to be transferable and a statement of the conditions upon which it
may be transferred;
(5) A statement concerning the manner in which profits and
losses are allocated and distributions are made among patron members
and, if investor members are authorized, the manner in which profits
and losses are allocated and how distributions are made among
investor members and between patron members and investor members;
(6) A statement concerning:
(A) whether persons that are not members but conduct
business with the association may be permitted to share
in allocations of profits and losses and receive
distributions; and
(B) the manner in which profits and losses are allocated
and distributions are made with respect to those
persons; and
(7) A statement of the number and terms of directors or the
method by which the number and terms are determined.
(b) Subject to subsection (c) of Section 13 of this act and the
articles of organization, bylaws may contain any other provision for
managing and regulating the affairs of the association.
(c) In addition to amendments permitted under Article 4 of the
Uniform Limited Cooperative Association Act of 2009, the initial
board of directors may amend the bylaws by a majority vote of the
directors at any time before the admission of members.
Added by Laws 2009, c. 68, § 32, eff. Jan. 1, 2010.
§18-441-401. Authority to amend organic rules.
AUTHORITY TO AMEND ORGANIC RULES.
(a) A limited cooperative association may amend its organic
rules under this article for any lawful purpose. In addition, the
initial board of directors may amend the bylaws of an association
under Section 32 of this act.
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(b) Unless the organic rules otherwise provide, a member does
not have a vested property right resulting from any provision in the
organic rules, including a provision relating to the management,
control, capital structure, distribution, entitlement, purpose, or
duration of the limited cooperative association.
Added by Laws 2009, c. 68, § 33, eff. Jan. 1, 2010.
§18-441-402. Notice and action on amendment of organic rules.
NOTICE AND ACTION ON AMENDMENT OF ORGANIC RULES.
(a) Except as provided in subsection (a) of Section 33 of this
act and subsection (f) of Section 37 of this act, the organic rules
of a limited cooperative association may be amended only at a members
meeting. An amendment may be proposed by either:
(1) A majority of the board of directors, or a greater
percentage if required by the organic rules; or
(2) One or more petitions signed by at least ten percent (10%)
of the patron members or at least ten percent (10%) of the investor
members.
(b) The board of directors shall call a members meeting to
consider an amendment proposed pursuant to subsection (a) of this
section. The meeting must be held not later than ninety (90) days
following the proposal of the amendment by the board or receipt of a
petition. The board must mail or otherwise transmit or deliver in a
record to each member:
(1) The proposed amendment, or a summary of the proposed
amendment and a statement of the manner in which a copy of the
amendment in a record may be reasonably obtained by a member;
(2) A recommendation that the members approve the amendment, or
if the board determines that because of conflict of interest or other
special circumstances it should not make a favorable recommendation,
the basis for that determination;
(3) A statement of any condition of the board’s submission of
the amendment to the members; and
(4) Notice of the meeting at which the proposed amendment will
be considered, which must be given in the same manner as notice for a
special meeting of members.
Added by Laws 2009, c. 68, § 34, eff. Jan. 1, 2010.
§18-441-403. Method of voting on amendment of organic rules.
METHOD OF VOTING ON AMENDMENT OF ORGANIC RULES.
(a) A substantive change to a proposed amendment of the organic
rules may not be made at the members meeting at which a vote on the
amendment occurs.
(b) A nonsubstantive change to a proposed amendment of the
organic rules may be made at the members meeting at which the vote on
the amendment occurs and need not be separately voted upon by the
board of directors.
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(c) A vote to adopt a nonsubstantive change to a proposed
amendment to the organic rules must be by the same percentage of
votes required to pass a proposed amendment.
Added by Laws 2009, c. 68, § 35, eff. Jan. 1, 2010.
§18-441-404. Voting by district, class, or voting group.
VOTING BY DISTRICT, CLASS, OR VOTING GROUP.
(a) This section applies if the organic rules provide for voting
by district or class, or if there is one or more identifiable voting
groups that a proposed amendment to the organic rules would affect
differently from other members with respect to matters identified in
paragraphs (1) through (5) of subsection (e) of Section 37 of this
act. Approval of the amendment requires the same percentage of votes
of the members of that district, class, or voting group required in
Sections 37 and 53 of this act.
(b) If a proposed amendment to the organic rules would affect
members in two or more districts or classes entitled to vote
separately under subsection (a) of this section in the same or a
substantially similar way, the districts or classes affected must
vote as a single voting group unless the organic rules otherwise
provide for separate voting.
Added by Laws 2009, c. 68, § 36, eff. Jan. 1, 2010.
§18-441-405. Approval of amendment.
APPROVAL OF AMENDMENT.
(a) Subject to Section 36 of this act and subsections (c) and
(d) of this section, an amendment to the articles of organization
must be approved by:
(1) At least two-thirds (2/3) of the voting power of members
present at a members meeting called under Section 34 of this act; and
(2) If the limited cooperative association has investor members,
at least a majority of the votes cast by patron members, unless the
organic rules require a greater percentage vote by patron members.
(b) Subject to Section 36 of this act and subsections (c), (d),
(e) and (f) of this section, an amendment to the bylaws must be
approved by:
(1) At least a majority vote of the voting power of all members
present at a members meeting called under Section 34 of this act,
unless the organic rules require a greater percentage; and
(2) If a limited cooperative association has investor members, a
majority of the votes cast by patron members, unless the organic
rules require a larger affirmative vote by patron members.
(c) The organic rules may require that the percentage of votes
under paragraph (1) of subsection (a) of this section or paragraph
(1) of subsection (b) of this section be:
(1) A different percentage that is not less than a majority of
members voting at the meeting;
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(2) Measured against the voting power of all members; or
(3) A combination of paragraphs (1) and (2) of this subsection.
(d) Consent in a record by a member must be delivered to a
limited cooperative association before delivery of an amendment to
the articles of organization or restated articles of organization for
filing pursuant to Section 39 of this act, if as a result of the
amendment the member will have:
(1) Personal liability for an obligation of the association; or
(2) An obligation or liability for an additional contribution.
(e) The vote required to amend bylaws must satisfy the
requirements of subsection (a) of this section if the proposed
amendment modifies:
(1) The equity capital structure of the limited cooperative
association, including the rights of the association’s members to
share in profits or distributions, or the relative rights,
preferences, and restrictions granted to or imposed upon one or more
districts, classes, or voting groups of similarly situated members;
(2) The transferability of a member’s interest;
(3) The manner or method of allocation of profits or losses
among members;
(4) The quorum for a meeting and the rights of voting and
governance; or
(5) Unless otherwise provided in the organic rules, the terms
for admission of new members.
(f) Except for the matters described in subsection (e) of this
section, the articles of organization may delegate amendment of all
or a part of the bylaws to the board of directors without requiring
member approval.
(g) If the articles of organization delegate amendment of bylaws
to the board of directors, the board shall provide a description of
any amendment of the bylaws made by the board to the members in a
record not later than thirty (30) days after the amendment, but the
description may be provided at the next annual members meeting if the
meeting is held within the thirty-day period.
Added by Laws 2009, c. 68, § 37, eff. Jan. 1, 2010.
§18-441-406. Restated articles of organization.
RESTATED ARTICLES OF ORGANIZATION. A limited cooperative
association, by the affirmative vote of a majority of the board of
directors taken at a meeting for which the purpose is stated in the
notice of the meeting, may adopt restated articles of organization
that contain the original articles as previously amended. Restated
articles may contain amendments if the restated articles are adopted
in the same manner and with the same vote as required for amendments
to the articles under subsection (a) of Section 37 of this act. Upon
filing, restated articles supersede the existing articles and all
amendments.
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Added by Laws 2009, c. 68, § 38, eff. Jan. 1, 2010.
§18-441-407. Amendment or restatement of articles of organization -
Filing.
AMENDMENT OR RESTATEMENT OF ARTICLES OF ORGANIZATION; FILING.
(a) To amend its articles of organization, a limited cooperative
association must deliver to the Secretary of State for filing an
amendment of the articles, or restated articles of organization or
articles of conversion or merger pursuant to Article 16 of the
Uniform Limited Cooperative Association Act of 2009, which contain
one or more amendments of the articles of organization, stating:
(1) The name of the association;
(2) The date of filing of the association’s initial articles;
and
(3) The changes the amendment makes to the articles as most
recently amended or restated.
(b) Before the beginning of the initial meeting of the board of
directors, an organizer who knows that information in the filed
articles of organization was inaccurate when the articles were filed
or has become inaccurate due to changed circumstances shall promptly:
(1) Cause the articles to be amended; or
(2) If appropriate, deliver an amendment to the Secretary of
State for filing pursuant to Section 23 of this act.
(c) If restated articles of organization are adopted, the
restated articles may be delivered to the Secretary of State for
filing in the same manner as an amendment.
(d) Upon filing, an amendment of the articles of organization or
other record containing an amendment of the articles which has been
properly adopted by the members is effective as provided in
subsection (c) of Section 23 of this act.
Added by Laws 2009, c. 68, § 39, eff. Jan. 1, 2010.
§18-441-501. Members.
MEMBERS. To begin business, a limited cooperative association
must have at least two patron members unless the sole member is a
cooperative.
Added by Laws 2009, c. 68, § 40, eff. Jan. 1, 2010.
§18-441-502. Becoming a member.
BECOMING A MEMBER. A person becomes a member:
(1) As provided in the organic rules;
(2) As the result of a merger or conversion under Article 16 of
the Uniform Limited Cooperative Association Act of 2009; or
(3) With the consent of all the members.
Added by Laws 2009, c. 68, § 41, eff. Jan. 1, 2010.
§18-441-503. No power as member to bind association.
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NO POWER AS MEMBER TO BIND ASSOCIATION. A member, solely by
reason of being a member, may not act for or bind the limited
cooperative association.
Added by Laws 2009, c. 68, § 42, eff. Jan. 1, 2010.
§18-441-504. No liability as member for association’s obligations.
NO LIABILITY AS MEMBER FOR ASSOCIATION’S OBLIGATIONS. Unless the
articles of organization otherwise provide, a debt, obligation, or
other liability of a limited cooperative association is solely that
of the association and is not the debt, obligation, or liability of a
member solely by reason of being a member.
Added by Laws 2009, c. 68, § 43, eff. Jan. 1, 2010.
§18-441-505. Right of member and former member to information.
RIGHT OF MEMBER AND FORMER MEMBER TO INFORMATION.
(a) Not later than ten (10) business days after receipt of a
demand made in a record, a limited cooperative association shall
permit a member to obtain, inspect, and copy in the association’s
principal office required information listed in paragraphs (1)
through (8) of subsection (a) of Section 14 of this act during
regular business hours. A member need not have any particular
purpose for seeking the information. The association is not required
to provide the same information listed in paragraphs (2) through (8)
of subsection (a) of Section 14 of this act to the same member more
than once during a six-month period.
(b) On demand made in a record received by the limited
cooperative association, a member may obtain, inspect, and copy in
the association’s principal office required information listed in
paragraphs (9), (10), (12), (13), (16) and (18) of subsection (a) of
Section 14 of this act during regular business hours, if:
(1) The member seeks the information in good faith and for a
proper purpose reasonably related to the member’s interest;
(2) The demand includes a description with reasonable
particularity of the information sought and the purpose for seeking
the information;
(3) The information sought is directly connected to the member’s
purpose; and
(4) The demand is reasonable.
(c) Not later than ten (10) business days after receipt of a
demand pursuant to subsection (b) of this section, a limited
cooperative association shall provide, in a record, the following
information to the member that made the demand:
(1) If the association agrees to provide the demanded
information:
(A) what information the association will provide in
response to the demand; and
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(B) a reasonable time and place at which the association
will provide the information; or
(2) If the association declines to provide some or all of the
demanded information, the association’s reasons for declining.
(d) A person dissociated as a member may obtain, inspect, and
copy information available to a member under subsection (a) or (b) of
this section by delivering a demand in a record to the limited
cooperative association in the same manner and subject to the same
conditions applicable to a member under subsection (b) of this
section if:
(1) The information pertains to the period during which the
person was a member in the association; and
(2) The person seeks the information in good faith.
(e) A limited cooperative association shall respond to a demand
made pursuant to subsection (d) of this section in the manner
provided in subsection (c) of this section.
(f) Not later than ten (10) business days after receipt by a
limited cooperative association of a demand made by a member in a
record, but not more often than once in a six-month period, the
association shall deliver to the member a record stating the
information with respect to the member required by paragraph (17) of
subsection (a) of Section 14 of this act.
(g) A limited cooperative association may impose reasonable
restrictions, including nondisclosure restrictions, on the use of
information obtained under this section. In a dispute concerning the
reasonableness of a restriction under this subsection, the
association has the burden of proving reasonableness.
(h) A limited cooperative association may charge a person that
makes a demand under this section reasonable costs of copying,
limited to the costs of labor and material.
(i) A person that may obtain information under this section may
obtain the information through an attorney or other agent. A
restriction imposed on the person under subsection (g) of this
section or by the organic rules applies to the attorney or other
agent.
(j) The rights stated in this section do not extend to a person
as transferee.
(k) The organic rules may require a limited cooperative
association to provide more information than required by this section
and may establish conditions and procedures for providing the
information.
Added by Laws 2009, c. 68, § 44, eff. Jan. 1, 2010.
§18-441-506. Annual meeting of members.
ANNUAL MEETING OF MEMBERS.
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(a) Members shall meet annually at a time provided in the
organic rules or set by the board of directors not inconsistent with
the organic rules.
(b) An annual members meeting may be held inside or outside this
state at the place stated in the organic rules or selected by the
board of directors not inconsistent with the organic rules.
(c) Unless the organic rules otherwise provide, members may
attend or conduct an annual members meeting through any means of
communication if all members attending the meeting can communicate
with each other during the meeting.
(d) The board of directors shall report, or cause to be
reported, at the association’s annual members meeting the
association’s business and financial condition as of the close of the
most recent fiscal year.
(e) Unless the organic rules otherwise provide, the board of
directors shall designate the presiding officer of the association’s
annual members meeting.
(f) Failure to hold an annual members meeting does not affect
the validity of any action by the limited cooperative association.
Added by Laws 2009, c. 68, § 45, eff. Jan. 1, 2010.
§18-441-507. Special meeting of members.
SPECIAL MEETING OF MEMBERS.
(a) A special meeting of members may be called only:
(1) As provided in the organic rules;
(2) By a majority vote of the board of directors on a proposal
stating the purpose of the meeting;
(3) By demand in a record signed by members holding at least
twenty percent (20%) of the voting power of the persons in any
district or class entitled to vote on the matter that is the purpose
of the meeting stated in the demand; or
(4) By demand in a record signed by members holding at least ten
percent (10%) of the total voting power of all the persons entitled
to vote on the matter that is the purpose of the meeting stated in
the demand.
(b) A demand under paragraph (3) or (4) of subsection (a) of
this section must be submitted to the officer of the limited
cooperative association charged with keeping its records.
(c) Any voting member may withdraw its demand under paragraph
(3) or (4) of subsection (a) of this section before receipt by the
limited cooperative association of demands sufficient to require a
special meeting of members.
(d) A special meeting of members may be held inside or outside
this state at the place stated in the organic rules or selected by
the board of directors not inconsistent with the organic rules.
(e) Unless the organic rules otherwise provide, members may
attend or conduct a special meeting of members through the use of any
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means of communication if all members attending the meeting can
communicate with each other during the meeting.
(f) Only business within the purpose or purposes stated in the
notice of a special meeting of members may be conducted at the
meeting.
(g) Unless the organic rules otherwise provide, the presiding
officer of a special meeting of members shall be designated by the
board of directors.
Added by Laws 2009, c. 68, § 46, eff. Jan. 1, 2010.
§18-441-508. Notice of members meeting.
NOTICE OF MEMBERS MEETING.
(a) A limited cooperative association shall notify each member
of the time, date, and place of a members meeting at least fifteen
(15) and not more than sixty (60) days before the meeting.
(b) Unless the articles of organization otherwise provide,
notice of an annual members meeting need not include any purpose of
the meeting.
(c) Notice of a special meeting of members must include each
purpose of the meeting as contained in the demand under paragraph (3)
or (4) of subsection (a) of Section 46 of this act or as voted upon
by the board of directors under paragraph (2) of subsection (a) of
Section 46 of this act.
(d) Notice of a members meeting must be given in a record unless
oral notice is reasonable under the circumstances.
Added by Laws 2009, c. 68, § 47, eff. Jan. 1, 2010.
§18-441-509. Waiver of members meeting notice.
WAIVER OF MEMBERS MEETING NOTICE.
(a) A member may waive notice of a members meeting before,
during, or after the meeting.
(b) A member’s participation in a members meeting is a waiver of
notice of that meeting unless the member objects to the meeting at
the beginning of the meeting or promptly upon the member’s arrival at
the meeting and does not thereafter vote for or assent to action
taken at the meeting.
Added by Laws 2009, c. 68, § 48, eff. Jan. 1, 2010.
§18-441-510. Quorum of members.
QUORUM OF MEMBERS. Unless the organic rules otherwise require a
greater number of members or percentage of the voting power, the
voting member or members present at a members meeting constitute a
quorum.
Added by Laws 2009, c. 68, § 49, eff. Jan. 1, 2010.
§18-441-511. Voting by patron members.
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VOTING BY PATRON MEMBERS. Except as provided by subsection (a)
of Section 51 of this act, each patron member has one vote. The
organic rules may allocate voting power among patron members as
provided in subsection (a) of Section 51 of this act.
Added by Laws 2009, c. 68, § 50, eff. Jan. 1, 2010.
§18-441-512. Determination of voting power of patron member.
DETERMINATION OF VOTING POWER OF PATRON MEMBER.
(a) The organic rules may allocate voting power among patron
members on the basis of one or a combination of the following:
(1) One member, one vote;
(2) Use or patronage;
(3) Equity; or
(4) If a patron member is a cooperative, the number of its
patron members.
(b) The organic rules may provide for the allocation of patron
member voting power by districts or class, or any combination
thereof.
Added by Laws 2009, c. 68, § 51, eff. Jan. 1, 2010.
§18-441-513. Voting by investor members.
VOTING BY INVESTOR MEMBERS. If the organic rules provide for
investor members, each investor member has one vote, unless the
organic rules otherwise provide. The organic rules may provide for
the allocation of investor member voting power by class, classes, or
any combination of classes.
Added by Laws 2009, c. 68, § 52, eff. Jan. 1, 2010.
§18-441-514. Voting requirements for members.
VOTING REQUIREMENTS FOR MEMBERS. If a limited cooperative
association has both patron and investor members, the following rules
apply:
(1) The total voting power of all patron members may not be less
than a majority of the entire voting power entitled to vote.
(2) Action on any matter is approved only upon the affirmative
vote of at least a majority of:
(A) all members voting at the meeting unless more than a
majority is required by Articles 4, 12, 15 through 16
of the Uniform Limited Cooperative Association Act of
2009 or the organic rules; and
(B) votes cast by patron members unless the organic rules
require a larger affirmative vote by patron members.
(3) The organic rules may provide for the percentage of the
affirmative votes that must be cast by investor members to approve
the matter.
Added by Laws 2009, c. 68, § 53, eff. Jan. 1, 2010.
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§18-441-515. Manner of voting.
MANNER OF VOTING.
(a) Unless the organic rules otherwise provide, voting by a
proxy at a members meeting is prohibited. This subsection does not
prohibit delegate voting based on district or class.
(b) If voting by a proxy is permitted, a patron member may
appoint only another patron member as a proxy and, if investor
members are permitted, an investor member may appoint only another
investor member as a proxy.
(c) The organic rules may provide for the manner of and
provisions governing the appointment of a proxy.
(d) The organic rules may provide for voting on any question by
ballot delivered by mail or voting by other means on questions that
are subject to vote by members.
Added by Laws 2009, c. 68, § 54, eff. Jan. 1, 2010.
§18-441-516. Action without a meeting.
ACTION WITHOUT A MEETING.
(a) Unless the organic rules require that action be taken only
at a members meeting, any action that may be taken by the members may
be taken without a meeting if each member entitled to vote on the
action consents in a record to the action.
(b) Consent under subsection (a) of this section may be
withdrawn by a member in a record at any time before the limited
cooperative association receives a consent from each member entitled
to vote.
(c) Consent to any action may specify the effective date or time
of the action.
Added by Laws 2009, c. 68, § 55, eff. Jan. 1, 2010.
§18-441-517. Districts and delegates - Classes of members.
DISTRICTS AND DELEGATES; CLASSES OF MEMBERS.
(a) The organic rules may provide for the formation of
geographic districts of patron members and:
(1) For the conduct of patron member meetings by districts and
the election of directors at the meetings; or
(2) That districts may elect district delegates to represent and
vote for the district at members meetings.
(b) A delegate elected under paragraph (2) of subsection (a) of
this section has one vote unless voting power is otherwise allocated
by the organic rules.
(c) The organic rules may provide for the establishment of
classes of members, for the preferences, rights, and limitations of
the classes, and:
(1) For the conduct of members meetings by classes and the
election of directors at the meetings; or
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(2) That classes may elect class delegates to represent and vote
for the class in members meetings.
(d) A delegate elected under paragraph (2) of subsection (c) of
this section has one vote unless voting power is otherwise allocated
by the organic rules.
Added by Laws 2009, c. 68, § 56, eff. Jan. 1, 2010.
§18-441-601. Member’s interest.
MEMBER’S INTEREST. A member’s interest:
(1) Is personal property;
(2) Consists of:
(A) governance rights;
(B) financial rights; and
(C) the right or obligation, if any, to do business with
the limited cooperative association; and
(3) May be in certificated or uncertificated form.
Added by Laws 2009, c. 68, § 57, eff. Jan. 1, 2010.
§18-441-602. Patron and investor members’ interests.
PATRON AND INVESTOR MEMBERS’ INTERESTS.
(a) Unless the organic rules establish investor members’
interests, a member’s interest is a patron member’s interest.
(b) Unless the organic rules otherwise provide, if a limited
cooperative association has investor members, while a person is a
member of the association, the person:
(1) If admitted as a patron member, remains a patron member;
(2) If admitted as an investor member, remains an investor
member; and
(3) If admitted as a patron member and investor member remains a
patron and investor member if not dissociated in one of the
capacities.
Added by Laws 2009, c. 68, § 58, eff. Jan. 1, 2010.
§18-441-603. Transferability of member’s interest.
TRANSFERABILITY OF MEMBER’S INTEREST.
(a) The provisions of the Uniform Limited Cooperative Act of
2009 relating to the transferability of a member’s interest are
subject to the Uniform Commercial Code.
(b) Unless the organic rules otherwise provide, a member’s
interest other than financial rights is not transferable.
(c) Unless a transfer is restricted or prohibited by the organic
rules, a member may transfer its financial rights in the limited
cooperative association.
(d) The terms of any restriction on transferability of financial
rights must be:
(1) Set forth in the organic rules and the member records of the
association; and
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(2) Conspicuously noted on any certificates evidencing a
member’s interest.
(e) A transferee of a member’s financial rights, to the extent
the rights are transferred, has the right to share in the allocation
of profits or losses and to receive the distributions to the member
transferring the interest to the same extent as the transferring
member.
(f) A transferee of a member’s financial rights does not become
a member upon transfer of the rights unless the transferee is
admitted as a member by the limited cooperative association.
(g) A limited cooperative association need not give effect to a
transfer under this section until the association has notice of the
transfer.
(h) A transfer of a member’s financial rights in violation of a
restriction on transfer contained in the organic rules is ineffective
as to a person having notice of the restriction at the time of
transfer.
Added by Laws 2009, c. 68, § 59, eff. Jan. 1, 2010.
§18-441-604. Security interest and set-off.
SECURITY INTEREST AND SET-OFF.
(a) A member or transferee may create an enforceable security
interest in its financial rights in a limited cooperative
association.
(b) Unless the organic rules otherwise provide, a member may not
create an enforceable security interest in the member’s governance
rights in a limited cooperative association.
(c) The organic rules may provide that a limited cooperative
association has a security interest in the financial rights of a
member to secure payment of any indebtedness or other obligation of
the member to the association. A security interest provided for in
the organic rules is enforceable under, and governed by, Article 9 of
the Uniform Commercial Code.
(d) Unless the organic rules otherwise provide, a member may not
compel the limited cooperative association to offset financial rights
against any indebtedness or obligation owed to the association.
Added by Laws 2009, c. 68, § 60, eff. Jan. 1, 2010.
§18-441-605. Charging orders for judgment creditor of member or
transferee.
CHARGING ORDERS FOR JUDGMENT CREDITOR OF MEMBER OR TRANSFEREE.
(a) On application by a judgment creditor of a member or
transferee, a court may enter a charging order against the financial
rights of the judgment debtor for the unsatisfied amount of the
judgment. A charging order issued under this subsection constitutes
a lien on the judgment debtor’s financial rights and requires the
limited cooperative association to pay over to the creditor or
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receiver, to the extent necessary to satisfy the judgment, any
distribution that would otherwise be paid to the judgment debtor.
(b) To the extent necessary to effectuate the collection of
distributions pursuant to a charging order under subsection (a) of
this section, the court may:
(1) Appoint a receiver of the share of the distributions due or
to become due to the judgment debtor under the judgment debtor’s
financial rights, with the power to make all inquiries the judgment
debtor might have made; and
(2) Make all other orders that the circumstances of the case may
require to give effect to the charging order.
(c) Upon a showing that distributions under a charging order
will not pay the judgment debt within a reasonable time, the court
may foreclose the lien and order the sale of the financial rights.
The purchaser at the foreclosure sale obtains only the financial
rights that are subject to the charging order, does not thereby
become a member, and is subject to Section 59 of this act.
(d) At any time before a sale pursuant to a foreclosure, a
member or transferee whose financial rights are subject to a charging
order under subsection (a) of this section may extinguish the
charging order by satisfying the judgment and filing a certified copy
of the satisfaction with the court that issued the charging order.
(e) At any time before sale pursuant to a foreclosure, the
limited cooperative association or one or more members whose
financial rights are not subject to the charging order may pay to the
judgment creditor the full amount due under the judgment and succeed
to the rights of the judgment creditor, including the charging order.
Unless the organic rules otherwise provide, the association may act
under this subsection only with the consent of all members whose
financial rights are not subject to the charging order.
(f) The Uniform Limited Cooperative Association Act of 2009 does
not deprive any member or transferee of the benefit of any exemption
laws applicable to the member’s or transferee’s financial rights.
(g) This section provides the exclusive remedy by which a
judgment creditor of a member or transferee may satisfy the judgment
from the member’s or transferee’s financial rights.
Added by Laws 2009, c. 68, § 61, eff. Jan. 1, 2010.
§18-441-701. Authority.
AUTHORITY. In this article, “marketing contract” means a
contract between a limited cooperative association and another
person, that need not be a patron member:
(1) Requiring the other person to sell, or deliver for sale or
marketing on the person’s behalf, a specified part of the person’s
products, commodities, or goods exclusively to or through the
association or any facilities furnished by the association; or
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(2) Authorizing the association to act for the person in any
manner with respect to the products, commodities, or goods.
Added by Laws 2009, c. 68, § 62, eff. Jan. 1, 2010.
§18-441-702. Marketing contracts.
MARKETING CONTRACTS.
(a) If a marketing contract provides for the sale of products,
commodities, or goods to a limited cooperative association, the sale
transfers title to the association upon delivery or at any other
specific time expressly provided by the contract.
(b) A marketing contract may:
(1) Authorize a limited cooperative association to create an
enforceable security interest in the products, commodities, or goods
delivered; and
(2) Allow the association to sell the products, commodities, or
goods delivered and pay the sales price on a pooled or other basis
after deducting selling costs, processing costs, overhead, expenses,
and other charges.
(c) Some or all of the provisions of a marketing contract
between a patron member and a limited cooperative association may be
contained in the organic rules.
Added by Laws 2009, c. 68, § 63, eff. Jan. 1, 2010.
§18-441-703. Duration of marketing contract.
DURATION OF MARKETING CONTRACT. The initial duration of a
marketing contract may not exceed ten (10) years, but the contract
may be self-renewing for additional periods not exceeding five (5)
years each. Unless the contract provides for another manner or time
for termination, either party may terminate the contract by giving
notice in a record at least ninety (90) days before the end of the
current term.
Added by Laws 2009, c. 68, § 64, eff. Jan. 1, 2010.
§18-441-704. Remedies for breach of contract.
REMEDIES FOR BREACH OF CONTRACT.
(a) Damages to be paid to a limited cooperative association for
breach or anticipatory repudiation of a marketing contract may be
liquidated, but only at an amount or under a formula that is
reasonable in light of the actual or anticipated harm caused by the
breach or repudiation. A provision that so provides is not a
penalty.
(b) Upon a breach of a marketing contract, whether by
anticipatory repudiation or otherwise, a limited cooperative
association may seek:
(1) An injunction to prevent further breach; and
(2) Specific performance.
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(c) The remedies in this section are in addition to any other
remedies available to an association under law other than the Uniform
Limited Cooperative Association Act of 2009.
Added by Laws 2009, c. 68, § 65, eff. Jan. 1, 2010.
§18-441-801. Board of directors.
BOARD OF DIRECTORS.
(a) A limited cooperative association must have a board of
directors of at least three individuals, unless the association has
fewer than three members. If the association has fewer than three
members, the number of directors may not be fewer than the number of
members.
(b) The affairs of a limited cooperative association must be
managed by, or under the direction of, the board of directors. The
board may adopt policies and procedures that do not conflict with the
organic rules or the Uniform Limited Cooperative Association Act of
2009.
(c) An individual is not an agent for a limited cooperative
association solely by being a director.
Added by Laws 2009, c. 68, § 66, eff. Jan. 1, 2010.
§18-441-802. No liability as director for limited cooperative
association’s obligations.
NO LIABILITY AS DIRECTOR FOR LIMITED COOPERATIVE ASSOCIATION’S
OBLIGATIONS. A debt, obligation, or other liability of a limited
cooperative association is solely that of the association and is not
a debt, obligation, or liability of a director solely by reason of
being a director. An individual is not personally liable, directly
or indirectly, for an obligation of an association solely by reason
of being a director.
Added by Laws 2009, c. 68, § 67, eff. Jan. 1, 2010.
§18-441-803. Qualifications of directors.
QUALIFICATIONS OF DIRECTORS.
(a) Unless the organic rules otherwise provide, and subject to
subsection (c) of this section, each director of a limited
cooperative association must be an individual who is a member of the
association or an individual who is designated by a member that is
not an individual for purposes of qualifying and serving as a
director. Initial directors need not be members.
(b) Unless the organic rules otherwise provide, a director may
be an officer or employee of the limited cooperative association.
(c) If the organic rules provide for nonmember directors, the
number of nonmember directors may not exceed:
(1) One, if there are two through four directors;
(2) Two, if there are five through eight directors; or
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(3) One-third (1/3) of the total number of directors if there
are at least nine directors.
(d) The organic rules may provide qualifications for directors
in addition to those in this section.
Added by Laws 2009, c. 68, § 68, eff. Jan. 1, 2010.
§18-441-804. Election of directors and composition of board.
ELECTION OF DIRECTORS AND COMPOSITION OF BOARD.
(a) Unless the organic rules require a greater number:
(1) The number of directors that must be patron members may not
be fewer than:
(A) one, if there are two or three directors;
(B) two, if there are four or five directors;
(C) three, if there are six through eight directors; or
(D) one-third (1/3) of the directors if there are at least
nine directors; and
(2) A majority of the board of directors must be elected
exclusively by patron members.
(b) Unless the organic rules otherwise provide, if a limited
cooperative association has investor members, the directors who are
not elected exclusively by patron members are elected by the investor
members.
(c) Subject to subsection (a) of this section, the organic rules
may provide for the election of all or a specified number of
directors by one or more districts or classes of members.
(d) Subject to subsection (a) of this section, the organic rules
may provide for the nomination or election of directors by districts
or classes, directly or by district delegates.
(e) If a class of members consists of a single member, the
organic rules may provide for the member to appoint a director or
directors.
(f) Unless the organic rules otherwise provide, cumulative
voting for directors is prohibited.
(g) Except as otherwise provided by the organic rules,
subsection (e) of this section, or Sections 31, 55, 56 and 74 of this
act, member directors must be elected at an annual members meeting.
Added by Laws 2009, c. 68, § 69, eff. Jan. 1, 2010.
§18-441-805. Term of director.
TERM OF DIRECTOR.
(a) Unless the organic rules otherwise provide, and subject to
subsections (c) and (d) of this section and subsection (c) of Section
31 of this act, the term of a director expires at the annual members
meeting following the director’s election or appointment. The term
of a director may not exceed three (3) years.
(b) Unless the organic rules otherwise provide, a director may
be reelected.
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(c) Except as otherwise provided in subsection (d) of this
section, a director continues to serve until a successor director is
elected or appointed and qualifies or the director is removed,
resigns, is adjudged incompetent, or dies.
(d) Unless the organic rules otherwise provide, a director does
not serve the remainder of the director’s term if the director ceases
to qualify to be a director.
Added by Laws 2009, c. 68, § 70, eff. Jan. 1, 2010.
§18-441-806. Resignation of director.
RESIGNATION OF DIRECTOR. A director may resign at any time by
giving notice in a record to the limited cooperative association.
Unless the notice states a later effective date, a resignation is
effective when the notice is received by the association.
Added by Laws 2009, c. 68, § 71, eff. Jan. 1, 2010.
§18-441-807. Removal of director.
REMOVAL OF DIRECTOR. Unless the organic rules otherwise provide,
the following rules apply:
(1) Members may remove a director with or without cause.
(2) A member or members holding at least ten percent (10%) of
the total voting power entitled to be voted in the election of a
director may demand removal of the director by one or more signed
petitions submitted to the officer of the limited cooperative
association charged with keeping its records.
(3) Upon receipt of a petition for removal of a director, an
officer of the association or the board of directors shall:
(A) call a special meeting of members to be held not later
than ninety (90) days after receipt of the petition by
the association; and
(B) mail or otherwise transmit or deliver in a record to
the members entitled to vote on the removal, and to the
director to be removed, notice of the meeting which
complies with Section 47 of this act.
(4) A director is removed if the votes in favor of removal are
equal to or greater than the votes required to elect the director.
Added by Laws 2009, c. 68, § 72, eff. Jan. 1, 2010.
§18-441-808. Suspension of director by board.
SUSPENSION OF DIRECTOR BY BOARD.
(a) A board of directors may suspend a director if, considering
the director’s course of conduct and the inadequacy of other
available remedies, immediate suspension is necessary for the best
interests of the association and the director is engaging, or has
engaged, in:
(1) Fraudulent conduct with respect to the association or its
members;
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(2) Gross abuse of the position of director;
(3) Intentional or reckless infliction of harm on the
association; or
(4) Any other behavior, act, or omission as provided by the
organic rules.
(b) A suspension under subsection (a) of this section is
effective for thirty (30) days unless the board of directors calls
and gives notice of a special meeting of members for removal of the
director before the end of the thirty-day period in which case the
suspension is effective until adjournment of the meeting or the
director is removed.
Added by Laws 2009, c. 68, § 73, eff. Jan. 1, 2010.
§18-441-809. Vacancy on board.
VACANCY ON BOARD.
(a) Unless the organic rules otherwise provide, a vacancy on the
board of directors must be filled:
(1) Within a reasonable time by majority vote of the remaining
directors until the next annual members meeting or a special meeting
of members called to fill the vacancy; and
(2) For the unexpired term by members at the next annual members
meeting or a special meeting of members called to fill the vacancy.
(b) Unless the organic rules otherwise provide, if a vacating
director was elected or appointed by a class of members or a
district:
(1) The new director must be of that class or district; and
(2) The selection of the director for the unexpired term must be
conducted in the same manner as would the selection for that position
without a vacancy.
(c) If a member appointed a vacating director, the organic rules
may provide for that member to appoint a director to fill the
vacancy.
Added by Laws 2009, c. 68, § 74, eff. Jan. 1, 2010.
§18-441-810. Remuneration of directors.
REMUNERATION OF DIRECTORS. Unless the organic rules otherwise
provide, the board of directors may set the remuneration of directors
and of nondirector committee members appointed under subsection (a)
of Section 82 of this act.
Added by Laws 2009, c. 68, § 75, eff. Jan. 1, 2010.
§18-441-811. Meetings.
MEETINGS.
(a) A board of directors shall meet at least annually and may
hold meetings inside or outside this state.
(b) Unless the organic rules otherwise provide, a board of
directors may permit directors to attend or conduct board meetings
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through the use of any means of communication, if all directors
attending the meeting can communicate with each other during the
meeting.
Added by Laws 2009, c. 68, § 76, eff. Jan. 1, 2010.
§18-441-812. Action without meeting.
ACTION WITHOUT MEETING.
(a) Unless prohibited by the organic rules, any action that may
be taken by a board of directors may be taken without a meeting if
each director consents in a record to the action.
(b) Consent under subsection (a) of this section may be
withdrawn by a director in a record at any time before the limited
cooperative association receives consent from all directors.
(c) A record of consent for any action under subsection (a) of
this section may specify the effective date or time of the action.
Added by Laws 2009, c. 68, § 77, eff. Jan. 1, 2010.
§18-441-813. Meetings and notice.
MEETINGS AND NOTICE.
(a) Unless the organic rules otherwise provide, a board of
directors may establish a time, date, and place for regular board
meetings, and notice of the time, date, place, or purpose of those
meetings is not required.
(b) Unless the organic rules otherwise provide, notice of the
time, date, and place of a special meeting of a board of directors
must be given to all directors at least three (3) days before the
meeting, the notice must contain a statement of the purpose of the
meeting, and the meeting is limited to the matters contained in the
statement.
Added by Laws 2009, c. 68, § 78, eff. Jan. 1, 2010.
§18-441-814. Waiver of notice of meeting.
WAIVER OF NOTICE OF MEETING.
(a) Unless the organic rules otherwise provide, a director may
waive any required notice of a meeting of the board of directors in a
record before, during, or after the meeting.
(b) Unless the organic rules otherwise provide, a director’s
participation in a meeting is a waiver of notice of that meeting
unless:
(1) The director objects to the meeting at the beginning of the
meeting or promptly upon the director’s arrival at the meeting and
does not thereafter vote in favor of or otherwise assent to the
action taken at the meeting; or
(2) The director promptly objects upon the introduction of any
matter for which notice under Section 78 of this act has not been
given and does not thereafter vote in favor of or otherwise assent to
the action taken on the matter.
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Added by Laws 2009, c. 68, § 79, eff. Jan. 1, 2010.
§18-441-815. Quorum.
QUORUM.
(a) Unless the articles of organization provide for a greater
number, a majority of the total number of directors specified by the
organic rules constitutes a quorum for a meeting of the directors.
(b) If a quorum of the board of directors is present at the
beginning of a meeting, any action taken by the directors present is
valid even if withdrawal of directors originally present results in
the number of directors being fewer than the number required for a
quorum.
(c) A director present at a meeting but objecting to notice
under paragraph (1) or (2) of subsection (b) of Section 79 of this
act does not count toward a quorum.
Added by Laws 2009, c. 68, § 80, eff. Jan. 1, 2010.
§18-441-816. Voting.
VOTING.
(a) Each director shall have one vote for purposes of decisions
made by the board of directors.
(b) Unless the organic rules otherwise provide, the affirmative
vote of a majority of directors present at a meeting is required for
action by the board of directors.
Added by Laws 2009, c. 68, § 81, eff. Jan. 1, 2010.
§18-441-817. Committees.
COMMITTEES.
(a) Unless the organic rules otherwise provide, a board of
directors may create one or more committees and appoint one or more
individuals to serve on a committee.
(b) Unless the organic rules otherwise provide, an individual
appointed to serve on a committee of a limited cooperative
association need not be a director or member.
(c) An individual who is not a director and is serving on a
committee has the same rights, duties, and obligations as a director
serving on the committee.
(d) Unless the organic rules otherwise provide, each committee
of a limited cooperative association may exercise the powers
delegated to it by the board of directors, but a committee may not:
(1) Approve allocations or distributions except according to a
formula or method prescribed by the board of directors;
(2) Approve or propose to members action requiring approval of
members; or
(3) Fill vacancies on the board of directors or any of its
committees.
Added by Laws 2009, c. 68, § 82, eff. Jan. 1, 2010.
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§18-441-818. Standards of conduct and liability.
STANDARDS OF CONDUCT AND LIABILITY. Except as otherwise provided
in Section 85 of this act:
(1) The discharge of the duties of a director or member of a
committee of the board of directors is governed by the law applicable
to directors of entities organized under the Oklahoma General
Corporation Act; and
(2) The liability of a director or member of a committee of the
board of directors is governed by the law applicable to directors of
entities organized under the Oklahoma General Corporation Act.
Added by Laws 2009, c. 68, § 83, eff. Jan. 1, 2010.
§18-441-819. Conflict of interest.
CONFLICT OF INTEREST.
(a) The law applicable to conflicts of interest between a
director of an entity organized under the Oklahoma General
Corporation Act governs conflicts of interest between a limited
cooperative association and a director or member of a committee of
the board of directors.
(b) A director does not have a conflict of interest under the
Uniform Limited Cooperative Association Act of 2009 or the organic
rules solely because the director’s conduct relating to the duties of
the director may further the director’s own interest.
Added by Laws 2009, c. 68, § 84, eff. Jan. 1, 2010.
§18-441-820. Other considerations of directors.
OTHER CONSIDERATIONS OF DIRECTORS. Unless the articles of
organization otherwise provide, in considering the best interests of
a limited cooperative association, a director of the association in
discharging the duties of director, in conjunction with considering
the long- and short-term interest of the association and its patron
members, may consider:
(1) The interest of employees, customers, and suppliers of the
association;
(2) The interest of the community in which the association
operates; and
(3) Other cooperative principles and values that may be applied
in the context of the decision.
Added by Laws 2009, c. 68, § 85, eff. Jan. 1, 2010.
§18-441-821. Right of director or committee member to information.
RIGHT OF DIRECTOR OR COMMITTEE MEMBER TO INFORMATION. A director
or a member of a committee appointed under Section 82 of this act may
obtain, inspect, and copy all information regarding the state of
activities and financial condition of the limited cooperative
association and other information regarding the activities of the
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association if the information is reasonably related to the
performance of the director’s duties as director or the committee
member’s duties as a member of the committee. Information obtained
in accordance with this section may not be used in any manner that
would violate any duty of or to the association.
Added by Laws 2009, c. 68, § 86, eff. Jan. 1, 2010.
§18-441-822. Appointment and authority of officers.
APPOINTMENT AND AUTHORITY OF OFFICERS.
(a) A limited cooperative association has the officers:
(1) Provided in the organic rules; or
(2) Established by the board of directors in a manner not
inconsistent with the organic rules.
(b) The organic rules may designate or, if the rules do not
designate, the board of directors shall designate, one of the
association’s officers for preparing all records required by Section
14 of this act and for the authentication of records.
(c) Unless the organic rules otherwise provide, the board of
directors shall appoint the officers of the limited cooperative
association.
(d) Officers of a limited cooperative association shall perform
the duties the organic rules prescribe or as authorized by the board
of directors not in a manner inconsistent with the organic rules.
(e) The election or appointment of an officer of a limited
cooperative association does not of itself create a contract between
the association and the officer.
(f) Unless the organic rules otherwise provide, an individual
may simultaneously hold more than one office in a limited cooperative
association.
Added by Laws 2009, c. 68, § 87, eff. Jan. 1, 2010.
§18-441-823. Resignation and removal of officers.
RESIGNATION AND REMOVAL OF OFFICERS.
(a) The board of directors may remove an officer at any time
with or without cause.
(b) An officer of a limited cooperative association may resign
at any time by giving notice in a record to the association. Unless
the notice specifies a later time, the resignation is effective when
the notice is given.
Added by Laws 2009, c. 68, § 88, eff. Jan. 1, 2010.
§18-441-901. Indemnification.
INDEMNIFICATION.
(a) Indemnification of an individual who has incurred liability
or is a party, or is threatened to be made a party, to litigation
because of the performance of a duty to, or activity on behalf of, a
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limited cooperative association is governed by the Oklahoma General
Corporation Act.
(b) A limited cooperative association may purchase and maintain
insurance on behalf of any individual against liability asserted
against or incurred by the individual to the same extent and subject
to the same conditions as provided by the Oklahoma General
Corporation Act.
Added by Laws 2009, c. 68, § 89, eff. Jan. 1, 2010.
§18-441-1001. Members’ contributions.
MEMBERS’ CONTRIBUTIONS. The organic rules must establish the
amount, manner, or method of determining any contribution
requirements for members or must authorize the board of directors to
establish the amount, manner, or other method of determining any
contribution requirements for members.
Added by Laws 2009, c. 68, § 90, eff. Jan. 1, 2010.
§18-441-1002. Contribution and valuation.
CONTRIBUTION AND VALUATION.
(a) Unless the organic rules otherwise provide, the
contributions of a member to a limited cooperative association may
consist of tangible or intangible property or other benefit to the
association, including money, labor or other services performed or to
be performed, promissory notes, other agreements to contribute money
or property, and contracts to be performed.
(b) The receipt and acceptance of contributions and the
valuation of contributions must be reflected in a limited cooperative
association’s records.
(c) Unless the organic rules otherwise provide, the board of
directors shall determine the value of a member’s contributions
received or to be received and the determination by the board of
directors of valuation is conclusive for purposes of determining
whether the member’s contribution obligation has been met.
Added by Laws 2009, c. 68, § 91, eff. Jan. 1, 2010.
§18-441-1003. Contribution agreements.
CONTRIBUTION AGREEMENTS.
(a) Except as otherwise provided in the agreement, the following
rules apply to an agreement made by a person before formation of a
limited cooperative association to make a contribution to the
association:
(1) The agreement is irrevocable for six (6) months after the
agreement is signed by the person unless all parties to the agreement
consent to the revocation.
(2) If a person does not make a required contribution:
(A) the person is obligated, at the option of the
association, once formed, to contribute money equal to
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the value of that part of the contribution that has not
been made, and the obligation may be enforced as a debt
to the association; or
(B) the association, once formed, may rescind the agreement
if the debt remains unpaid more than twenty (20) days
after the association demands payment from the person,
and upon rescission the person has no further rights or
obligations with respect to the association.
(b) Unless the organic rules or an agreement to make a
contribution to a limited cooperative association otherwise provides,
if a person does not make a required contribution to an association,
the person or the person’s estate is obligated, at the option of the
association, to contribute money equal to the value of the part of
the contribution which has not been made.
Added by Laws 2009, c. 68, § 92, eff. Jan. 1, 2010.
§18-441-1004. Allocations of profits and losses.
ALLOCATIONS OF PROFITS AND LOSSES.
(a) The organic rules may provide for allocating profits of a
limited cooperative association among members, among persons that are
not members but conduct business with the association, to an
unallocated account, or to any combination thereof. Unless the
organic rules otherwise provide, losses of the association must be
allocated in the same proportion as profits.
(b) Unless the organic rules otherwise provide, all profits and
losses of a limited cooperative association must be allocated to
patron members.
(c) If a limited cooperative association has investor members,
the organic rules may not reduce the allocation to patron members to
less than fifty percent (50%) of profits. For purposes of this
subsection, the following rules apply:
(1) Amounts paid or due on contracts for the delivery to the
association by patron members of products, goods, or services are not
considered amounts allocated to patron members.
(2) Amounts paid, due, or allocated to investor members as a
stated fixed return on equity are not considered amounts allocated to
investor members.
(d) Unless prohibited by the organic rules, in determining the
profits for allocation under subsections (a), (b) and (c) of this
section, the board of directors may first deduct and set aside a part
of the profits to create or accumulate:
(1) An unallocated capital reserve; and
(2) Reasonable unallocated reserves for specific purposes,
including expansion and replacement of capital assets; education,
training, cooperative development; creation and distribution of
information concerning principles of cooperation; and community
responsibility.
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(e) Subject to subsections (b) and (f) of this section and the
organic rules, the board of directors shall allocate the amount
remaining after any deduction or setting aside of profits for
unallocated reserves under subsection (d) of this section:
(1) To patron members in the ratio of each member’s patronage to
the total patronage of all patron members during the period for which
allocations are to be made; and
(2) To investor members, if any, in the ratio of each investor
member’s contributions to the total contributions of all investor
members.
(f) For purposes of allocation of profits and losses or specific
items of profits or losses of a limited cooperative association to
members, the organic rules may establish allocation units or methods
based on separate classes of members or, for patron members, on
class, function, division, district, department, allocation units,
pooling arrangements, members’ contributions, or other equitable
methods.
Added by Laws 2009, c. 68, § 93, eff. Jan. 1, 2010.
§18-441-1005. Distributions.
DISTRIBUTIONS.
(a) Unless the organic rules otherwise provide and subject to
Section 96 of this act, the board of directors may authorize, and the
limited cooperative association may make, distributions to members.
(b) Unless the organic rules otherwise provide, distributions to
members may be made in any form, including money, capital credits,
allocated patronage equities, revolving fund certificates, and the
limited cooperative association’s own or other securities.
Added by Laws 2009, c. 68, § 94, eff. Jan. 1, 2010.
§18-441-1006. Redemption or repurchase.
REDEMPTION OR REPURCHASE. Property distributed to a member by a
limited cooperative association, other than money, may be redeemed or
repurchased as provided in the organic rules but a redemption or
repurchase may not be made without authorization by the board of
directors. The board may withhold authorization for any reason in
its sole discretion. A redemption or repurchase is treated as a
distribution for purposes of Section 96 of this act.
Added by Laws 2009, c. 68, § 95, eff. Jan. 1, 2010.
§18-441-1007. Limitations on distributions.
LIMITATIONS ON DISTRIBUTIONS.
(a) A limited cooperative association may not make a
distribution if, after the distribution:
(1) The association would not be able to pay its debts as they
become due in the ordinary course of the association’s activities; or
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(2) The association’s assets would be less than the sum of its
total liabilities.
(b) A limited cooperative association may base a determination
that a distribution is not prohibited under subsection (a) of this
section on financial statements prepared on the basis of accounting
practices and principles that are reasonable in the circumstances or
on a fair valuation or other method that is reasonable in the
circumstances.
(c) Except as otherwise provided in subsection (d) of this
section, the effect of a distribution allowed under subsection (b) of
this section is measured:
(1) In the case of distribution by purchase, redemption, or
other acquisition of financial rights in the limited cooperative
association, as of the date money or other property is transferred or
debt is incurred by the association; and
(2) In all other cases, as of the date:
(A) the distribution is authorized, if the payment occurs
not later than one hundred twenty (120) days after that
date; or
(B) the payment is made, if payment occurs more than one
hundred twenty (120) days after the distribution is
authorized.
(d) If indebtedness is issued as a distribution, each payment of
principal or interest on the indebtedness is treated as a
distribution, the effect of which is measured on the date the payment
is made.
(e) For purposes of this section, “distribution” does not
include reasonable amounts paid to a member in the ordinary course of
business as payment or compensation for commodities, goods, past or
present services, or reasonable payments made in the ordinary course
of business under a bona fide retirement or other benefits program.
Added by Laws 2009, c. 68, § 96, eff. Jan. 1, 2010.
§18-441-1008. Liability for improper distributions - Limitation of
action.
LIABILITY FOR IMPROPER DISTRIBUTIONS; LIMITATION OF ACTION.
(a) A director who consents to a distribution that violates
Section 96 of this act is personally liable to the limited
cooperative association for the amount of the distribution which
exceeds the amount that could have been distributed without the
violation if it is established that in consenting to the distribution
the director failed to comply with Section 83 or 84 of this act.
(b) A member or transferee of financial rights which received a
distribution knowing that the distribution was made in violation of
Section 96 of this act is personally liable to the limited
cooperative association to the extent the distribution exceeded the
amount that could have been properly paid.
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(c) A director against whom an action is commenced under
subsection (a) may:
(1) Implead in the action any other director who is liable under
subsection (a) of this section and compel contribution from the
person; and
(2) Implead in the action any person that is liable under
subsection (b) of this section and compel contribution from the
person in the amount the person received as described in subsection
(b) of this section.
(d) An action under this section is barred if it is commenced
later than two (2) years after the distribution.
Added by Laws 2009, c. 68, § 97, eff. Jan. 1, 2010.
§18-441-1009. Relation to state securities law.
RELATION TO STATE SECURITIES LAW. Patron members’ interest in a
limited cooperative association has the same exemption as provided
for substantially similar interests in cooperatives under Section
437.27 of Title 18 of the Oklahoma Statutes.
Added by Laws 2009, c. 68, § 98, eff. Jan. 1, 2010.
§18-441-1101. Member’s dissociation.
MEMBER’S DISSOCIATION.
(a) A person has the power to dissociate as a member at any
time, rightfully or wrongfully, by express will.
(b) Unless the organic rules otherwise provide, a member’s
dissociation from a limited cooperative association is wrongful only
if the dissociation:
(1) Breaches an express provision of the organic rules; or
(2) Occurs before the termination of the limited cooperative
association and:
(A) the person is expelled as a member under paragraph (3)
or (4) of subsection (d) of this section; or
(B) in the case of a person that is not an individual,
trust other than a business trust, or estate, the
person is expelled or otherwise dissociated as a member
because it dissolved or terminated in bad faith.
(c) Unless the organic rules otherwise provide, a person that
wrongfully dissociates as a member is liable to the limited
cooperative association for damages caused by the dissociation. The
liability is in addition to any other debt, obligation, or liability
of the person to the association.
(d) A member is dissociated from the limited cooperative
association as a member when:
(1) The association receives notice in a record of the member’s
express will to dissociate as a member, or if the member specifies in
the notice an effective date later than the date the association
received notice, on that later date;
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(2) An event stated in the organic rules as causing the member’s
dissociation as a member occurs;
(3) The member is expelled as a member under the organic rules;
(4) The member is expelled as a member by the board of directors
because:
(A) it is unlawful to carry on the association’s activities
with the member as a member;
(B) there has been a transfer of all the member’s financial
rights in the association, other than:
(i) a creation or perfection of a security interest;
or
(ii) a charging order in effect under Section 61 of
this act which has not been foreclosed;
(C) the member is a limited liability company, association,
or partnership, which has been dissolved, and its
business is being wound up; or
(D) the member is a corporation or cooperative and:
(i) the member filed a certificate of dissolution or
the equivalent, or the jurisdiction of formation
revoked the association’s charter or right to
conduct business;
(ii) the association sends a notice to the member that
it will be expelled as a member for a reason
described in division (i) of this subparagraph;
and
(iii) not later than ninety (90) days after the notice
was sent under division (ii) of this subparagraph,
the member did not revoke its certificate of
dissolution or the equivalent, or the jurisdiction
of formation did not reinstate the association’s
charter or right to conduct business; or
(E) the member is an individual and is adjudged
incompetent;
(5) In the case of a member who is an individual, the individual
dies;
(6) In the case of a member that is a trust or is acting as a
member by virtue of being a trustee of a trust, all the trust’s
financial rights in the association are distributed;
(7) In the case of a member that is an estate, the estate’s
entire financial interest in the association is distributed;
(8) In the case of a member that is not an individual,
partnership, limited liability company, cooperative, corporation,
trust, or estate, the member is terminated; or
(9) The association participates in a merger if under the plan
of merger as approved under Article 16 of the Uniform Limited
Cooperative Association Act of 2009 the member ceases to be a member.
Added by Laws 2009, c. 68, § 99, eff. Jan. 1, 2010.
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§18-441-1102. Effect of dissociation as member.
EFFECT OF DISSOCIATION AS MEMBER.
(a) Upon a member’s dissociation:
(1) Subject to Section 101 of this act, the person has no
further rights as a member; and
(2) Subject to Section 101 of this act and Article 16 of the
Uniform Limited Cooperative Association Act of 2009, any financial
rights owned by the person in the person’s capacity as a member
immediately before dissociation are owned by the person as a
transferee.
(b) A person’s dissociation as a member does not of itself
discharge the person from any debt, obligation, or liability to the
limited cooperative association which the person incurred under the
organic rules, by contract, or by other means while a member.
Added by Laws 2009, c. 68, § 100, eff. Jan. 1, 2010.
§18-441-1103. Power of estate of member.
POWER OF ESTATE OF MEMBER. Unless the organic rules provide for
greater rights, if a member is dissociated because of death, dies or
is expelled by reason of being adjudged incompetent, the member’s
personal representative or other legal representative may exercise
the rights of a transferee of the member’s financial rights and, for
purposes of settling the estate of a deceased member, may exercise
the informational rights of a current member to obtain information
under Section 44 of this act.
Added by Laws 2009, c. 68, § 101, eff. Jan. 1, 2010.
§18-441-1201. Dissolution and winding up.
DISSOLUTION AND WINDING UP. A limited cooperative association is
dissolved only as provided in this article and upon dissolution winds
up in accordance with this article.
Added by Laws 2009, c. 68, § 102, eff. Jan. 1, 2010.
§18-441-1202. Nonjudicial dissolution.
NONJUDICIAL DISSOLUTION. Except as otherwise provided in
Sections 104 and 112 of this act, a limited cooperative association
is dissolved and its activities must be wound up:
(1) Upon the occurrence of an event or at a time specified in
the articles of organization;
(2) Upon the action of the association’s organizers, board of
directors, or members under Section 105 or 106 of this act; or
(3) Ninety (90) days after the dissociation of a member, which
results in the association having one patron member and no other
members, unless the association:
(A) has a sole member that is a cooperative; or
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(B) not later than the end of the ninety-day period, admits
at least one member in accordance with the organic
rules and has at least two members, at least one of
which is a patron member.
Added by Laws 2009, c. 68, § 103, eff. Jan. 1, 2010.
§18-441-1203. Judicial dissolution.
JUDICIAL DISSOLUTION. The district court may dissolve a limited
cooperative association or order any action that under the
circumstances is appropriate and equitable:
(1) In a proceeding initiated by the Attorney General, if:
(A) the association obtained its articles of organization
through fraud; or
(B) the association has continued to exceed or abuse the
authority conferred upon it by law; or
(2) In a proceeding initiated by a member, if:
(A) the directors are deadlocked in the management of the
association’s affairs, the members are unable to break
the deadlock, and irreparable injury to the association
is occurring or is threatened because of the deadlock;
(B) the directors or those in control of the association
have acted, are acting, or will act in a manner that is
illegal, oppressive, or fraudulent;
(C) the members are deadlocked in voting power and have
failed to elect successors to directors whose terms
have expired for two consecutive periods during which
annual members meetings were held or were to be held;
or
(D) the assets of the association are being misapplied or
wasted.
Added by Laws 2009, c. 68, § 104, eff. Jan. 1, 2010.
§18-441-1204. Voluntary dissolution before commencement of activity.
VOLUNTARY DISSOLUTION BEFORE COMMENCEMENT OF ACTIVITY. A
majority of the organizers or initial directors of a limited
cooperative association that has not yet begun business activity or
the conduct of its affairs may dissolve the association.
Added by Laws 2009, c. 68, § 105, eff. Jan. 1, 2010.
§18-441-1205. Voluntary dissolution by the board and members.
VOLUNTARY DISSOLUTION BY THE BOARD AND MEMBERS.
(a) Except as otherwise provided in Section 105 of this act, for
a limited cooperative association to voluntarily dissolve:
(1) A resolution to dissolve must be approved by a majority vote
of the board of directors unless a greater percentage is required by
the organic rules;
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(2) The board of directors must call a members meeting to
consider the resolution, to be held not later than ninety (90) days
after adoption of the resolution; and
(3) The board of directors must mail or otherwise transmit or
deliver to each member in a record that complies with Section 47 of
this act:
(A) the resolution required by paragraph (1) of this
subsection;
(B) a recommendation that the members vote in favor of the
resolution or, if the board determines that because of
conflict of interest or other special circumstances it
should not make a favorable recommendation, the basis
of that determination; and
(C) notice of the members meeting, which must be given in
the same manner as notice of a special meeting of
members.
(b) Subject to subsection (c) of this section, a resolution to
dissolve must be approved by:
(1) At least two-thirds (2/3) of the voting power of members
present at a members meeting called under paragraph (2) of subsection
(a) of this section; and
(2) If the limited cooperative association has investor members,
at least a majority of the votes cast by patron members, unless the
organic rules require a greater percentage.
(c) The organic rules may require that the percentage of votes
under paragraph (1) of subsection (b) of this section is:
(1) A different percentage that is not less than a majority of
members voting at the meeting; or
(2) Measured against the voting power of all members; or
(3) A combination of paragraphs (1) and (2) of this subsection.
Added by Laws 2009, c. 68, § 106, eff. Jan. 1, 2010.
§18-441-1206. Winding up.
WINDING UP.
(a) A limited cooperative association continues after
dissolution only for purposes of winding up its activities.
(b) In winding up a limited cooperative association’s
activities, the board of directors shall cause the association to:
(1) Discharge its liabilities, settle and close its activities,
and marshal and distribute its assets;
(2) Preserve the association or its property as a going concern
for no more than a reasonable time;
(3) Prosecute and defend actions and proceedings;
(4) Transfer association property; and
(5) Perform other necessary acts.
(c) After dissolution and upon application of a limited
cooperative association, a member, or a holder of financial rights,
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the district court may order judicial supervision of the winding up
of the association, including the appointment of a person to wind up
the association’s activities, if:
(1) After a reasonable time, the association has not wound up
its activities; or
(2) The applicant establishes other good cause.
(d) If a person is appointed pursuant to subsection (c) of this
section to wind up the activities of a limited cooperative
association, the association shall promptly deliver to the Secretary
of State for filing an amendment to the articles of organization to
reflect the appointment.
Added by Laws 2009, c. 68, § 107, eff. Jan. 1, 2010.
§18-441-1207. Distribution of assets in winding up limited
cooperative association.
DISTRIBUTION OF ASSETS IN WINDING UP LIMITED COOPERATIVE
ASSOCIATION.
(a) In winding up a limited cooperative association’s business,
the association shall apply its assets to discharge its obligations
to creditors, including members that are creditors. The association
shall apply any remaining assets to pay in money the net amount
distributable to members in accordance with their right to
distributions under subsection (b) of this section.
(b) Unless the organic rules otherwise provide, in this
subsection “financial interests” means the amounts recorded in the
names of members in the records of a limited cooperative association
at the time a distribution is made, including amounts paid to become
a member, amounts allocated but not distributed to members, and
amounts of distributions authorized but not yet paid to members.
Unless the organic rules otherwise provide, each member is entitled
to a distribution from the association of any remaining assets in the
proportion of the member’s financial interests to the total financial
interests of the members after all other obligations are satisfied.
Added by Laws 2009, c. 68, § 108, eff. Jan. 1, 2010.
§18-441-1208. Known claims against dissolved limited cooperative
association.
KNOWN CLAIMS AGAINST DISSOLVED LIMITED COOPERATIVE ASSOCIATION.
(a) Subject to subsection (d) of this section, a dissolved
limited cooperative association may dispose of the known claims
against it by following the procedure in subsections (b) and (c) of
this section.
(b) A dissolved limited cooperative association may notify its
known claimants of the dissolution in a record. The notice must:
(1) Specify that a claim be in a record;
(2) Specify the information required to be included in the
claim;
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(3) Provide an address to which the claim must be sent;
(4) State the deadline for receipt of the claim, which may not
be less than one hundred twenty (120) days after the date the notice
is received by the claimant; and
(5) State that the claim will be barred if not received by the
deadline.
(c) A claim against a dissolved limited cooperative association
is barred if the requirements of subsection (b) of this section are
met, and:
(1) The association is not notified of the claimant’s claim, in
a record, by the deadline specified in the notice under paragraph (4)
of subsection (b) of this section;
(2) In the case of a claim that is timely received but rejected
by the association, the claimant does not commence an action to
enforce the claim against the association within ninety (90) days
after receipt of the notice of the rejection; or
(3) If a claim is timely received but is neither accepted nor
rejected by the association within one hundred twenty (120) days
after the deadline for receipt of claims, the claimant does not
commence an action to enforce the claim against the association:
(A) after the one-hundred-twenty-day period; and
(B) not later than ninety (90) days after the one-hundred-
twenty-day period.
(d) This section does not apply to a claim based on an event
occurring after the date of dissolution or a liability that is
contingent on that date.
Added by Laws 2009, c. 68, § 109, eff. Jan. 1, 2010.
§18-441-1209. Other claims against dissolved limited cooperative
association.
OTHER CLAIMS AGAINST DISSOLVED LIMITED COOPERATIVE ASSOCIATION.
(a) A dissolved limited cooperative association may publish
notice of its dissolution and request persons having claims against
the association to present them in accordance with the notice.
(b) A notice under subsection (a) of this section must:
(1) Be published at least once in a newspaper of general
circulation in the county in which the dissolved limited cooperative
association’s principal office is located or, if the association does
not have a principal office in this state, in the county in which the
association’s designated office is or was last located;
(2) Describe the information required to be contained in a claim
and provide an address to which the claim is to be sent; and
(3) State that a claim against the association is barred unless
an action to enforce the claim is commenced not later than three (3)
years after publication of the notice.
(c) If a dissolved limited cooperative association publishes a
notice in accordance with subsection (b) of this section, the claim
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of each of the following claimants is barred unless the claimant
commences an action to enforce the claim not later than three (3)
years after the first publication date of the notice:
(1) A claimant that is entitled to but did not receive notice in
a record under Section 109 of this act; and
(2) A claimant whose claim is contingent or based on an event
occurring after the effective date of dissolution.
(d) A claim not barred under this section may be enforced:
(1) Against a dissolved limited cooperative association, to the
extent of its undistributed assets; or
(2) If the association’s assets have been distributed in
connection with winding up the association’s activities, against a
member or holder of financial rights to the extent of that person’s
proportionate share of the claim or the association’s assets
distributed to the person in connection with the winding up,
whichever is less. The person’s total liability for all claims under
this paragraph shall not exceed the total amount of assets
distributed to the person as part of the winding up of the
association.
Added by Laws 2009, c. 68, § 110, eff. Jan. 1, 2010.
§18-441-1210. Court proceeding.
COURT PROCEEDING.
(a) Upon application by a dissolved limited cooperative
association that has published a notice under Section 110 of this
act, the district court in the county where the association’s
principal office is located or, if the association does not have a
principal office in this state, where its designated office in this
state is located, may determine the amount and form of security to be
provided for payment of claims against the association that are
contingent, have not been made known to the association, or are based
on an event occurring after the effective date of dissolution but
that, based on the facts known to the association, are reasonably
anticipated to arise after the effective date of dissolution.
(b) Not later than ten (10) days after filing an application
under subsection (a) of this section, a dissolved limited cooperative
association shall give notice of the proceeding to each known
claimant holding a contingent claim.
(c) The court may appoint a representative in a proceeding
brought under this section to represent all claimants whose
identities are unknown. The dissolved limited cooperative
association shall pay reasonable fees and expenses of the
representative, including all reasonable attorney and expert witness
fees.
(d) Provision by the dissolved limited cooperative association
for security in the amount and the form ordered by the court
satisfies the association’s obligations with respect to claims that
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are contingent, have not been made known to the association, or are
based on an event occurring after the effective date of dissolution,
and the claims may not be enforced against a member that received a
distribution.
Added by Laws 2009, c. 68, § 111, eff. Jan. 1, 2010.
§18-441-1211. Administrative dissolution.
ADMINISTRATIVE DISSOLUTION.
(a) The Secretary of State may dissolve a limited cooperative
association administratively if the association does not:
(1) Pay, not later than sixty (60) days after the due date, any
fee, tax, or penalty due to the Secretary of State under the Uniform
Limited Cooperative Association Act of 2009 or other law; or
(2) Deliver not later than sixty (60) days after the due date
its annual report to the Secretary of State.
(b) If the Secretary of State determines that a ground exists
for dissolving a limited cooperative association administratively,
the Secretary of State shall file a record of the determination and
serve the association with a copy of the record.
(c) If, not later than sixty (60) days after service of a copy
of the Secretary of State’s determination under subsection (b) of
this section, the association does not correct each ground for
dissolution or demonstrate to the satisfaction of the Secretary of
State that each uncorrected ground determined by the Secretary of
State does not exist, the Secretary of State shall dissolve the
association administratively by preparing and filing a declaration of
dissolution which states the grounds for dissolution. The Secretary
of State shall serve the association with a copy of the declaration.
(d) A limited cooperative association that has been dissolved
administratively continues its existence only for purposes of winding
up its activities.
(e) The administrative dissolution of a limited cooperative
association does not terminate the authority of its agent for service
of process.
Added by Laws 2009, c. 68, § 112, eff. Jan. 1, 2010.
§18-441-1212. Reinstatement following administrative dissolution.
REINSTATEMENT FOLLOWING ADMINISTRATIVE DISSOLUTION.
(a) A limited cooperative association that has been dissolved
administratively may apply to the Secretary of State for
reinstatement not later than two (2) years after the effective date
of dissolution. The application must be delivered to the Secretary
of State for filing and state:
(1) The name of the association and the effective date of its
administrative dissolution;
(2) That the grounds for dissolution either did not exist or
have been eliminated; and
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(3) That the association’s name satisfies the requirements of
Section 11 of this act.
(b) If the Secretary of State determines that an application
contains the information required by subsection (a) of this section
and that the information is correct, the Secretary of State shall:
(1) Prepare a declaration of reinstatement;
(2) File the original of the declaration; and
(3) Serve a copy of the declaration on the association.
(c) When reinstatement under this section becomes effective, it
relates back to and takes effect as of the effective date of the
administrative dissolution, and the limited cooperative association
may resume or continue its activities as if the administrative
dissolution had not occurred.
Added by Laws 2009, c. 68, § 113, eff. Jan. 1, 2010.
§18-441-1213. Denial of reinstatement - Appeal.
DENIAL OF REINSTATEMENT; APPEAL.
(a) If the Secretary of State denies a limited cooperative
association’s application for reinstatement following administrative
dissolution, the Secretary of State shall prepare and file a notice
that explains the reason for denial and serve the association with a
copy of the notice.
(b) Not later than thirty (30) days after service of a notice of
denial of reinstatement by the Secretary of State, a limited
cooperative association may appeal the denial by petitioning the
district court to set aside the dissolution. The petition must be
served on the Secretary of State and contain a copy of the Secretary
of State’s declaration of dissolution, the association’s application
for reinstatement, and the Secretary of State’s notice of denial.
(c) The court may summarily order the Secretary of State to
reinstate the dissolved cooperative association or may take other
action the court considers appropriate.
Added by Laws 2009, c. 68, § 114, eff. Jan. 1, 2010.
§18-441-1214. Statement of dissolution.
STATEMENT OF DISSOLUTION.
(a) A limited cooperative association that has dissolved or is
about to dissolve may deliver to the Secretary of State for filing a
statement of dissolution that states:
(1) The name of the association;
(2) The date the association dissolved or will dissolve; and
(3) Any other information the association considers relevant.
(b) A person has notice of a limited cooperative association’s
dissolution on the later of:
(1) Ninety (90) days after a statement of dissolution is filed;
or
(2) The effective date stated in the statement of dissolution.
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Added by Laws 2009, c. 68, § 115, eff. Jan. 1, 2010.
§18-441-1215. Statement of termination.
STATEMENT OF TERMINATION.
(a) A dissolved limited cooperative association that has
completed winding up may deliver to the Secretary of State for filing
a statement of termination that states:
(1) The name of the association;
(2) The date of filing of its initial articles of organization;
and
(3) That the association is terminated.
(b) The filing of a statement of termination does not itself
terminate the limited cooperative association.
Added by Laws 2009, c. 68, § 116, eff. Jan. 1, 2010.
§18-441-1301. Derivative action.
DERIVATIVE ACTION. A member may maintain a derivative action to
enforce a right of a limited cooperative association if:
(1) The member demands that the association bring an action to
enforce the right; and
(2) Any of the following occur:
(A) the association does not, within ninety (90) days after
the member makes the demand, agree to bring the action;
(B) the association notifies the member that it has
rejected the demand;
(C) irreparable harm to the association would result by
waiting ninety (90) days after the member makes the
demand; or
(D) the association agrees to bring an action demanded and
fails to bring the action within a reasonable time.
Added by Laws 2009, c. 68, § 117, eff. Jan. 1, 2010.
§18-441-1302. Proper plaintiff.
PROPER PLAINTIFF.
(a) A derivative action to enforce a right of a limited
cooperative association may be maintained only by a person that:
(1) Is a member or a dissociated member at the time the action
is commenced and:
(A) was a member when the conduct giving rise to the action
occurred; or
(B) whose status as a member devolved upon the person by
operation of law or the organic rules from a person
that was a member at the time of the conduct; and
(2) Adequately represents the interests of the association.
(b) If the sole plaintiff in a derivative action dies while the
action is pending, the court may permit another member who meets the
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requirements of subsection (a) of this section to be substituted as
plaintiff.
Added by Laws 2009, c. 68, § 118, eff. Jan. 1, 2010.
§18-441-1303. Pleading.
PLEADING. In a derivative action to enforce a right of a limited
cooperative association, the complaint must state:
(1) The date and content of the plaintiff’s demand under
paragraph (1) of Section 117 of this act and the association’s
response;
(2) If ninety (90) days have not expired since the demand, how
irreparable harm to the association would result by waiting for the
expiration of ninety (90) days; and
(3) If the association agreed to bring an action demanded, that
the action has not been brought within a reasonable time.
Added by Laws 2009, c. 68, § 119, eff. Jan. 1, 2010.
§18-441-1304. Approval for discontinuance or settlement.
APPROVAL FOR DISCONTINUANCE OR SETTLEMENT. A derivative action
to enforce a right of a limited cooperative association may not be
discontinued or settled without the court’s approval.
Added by Laws 2009, c. 68, § 120, eff. Jan. 1, 2010.
§18-441-1305. Proceeds and expenses.
PROCEEDS AND EXPENSES.
(a) Except as otherwise provided in subsection (b) of this
section:
(1) Any proceeds or other benefits of a derivative action to
enforce a right of a limited cooperative association, whether by
judgment, compromise, or settlement, belong to the association and
not to the plaintiff; and
(2) If the plaintiff in the derivative action receives any
proceeds, the plaintiff shall immediately remit them to the
association.
(b) If a derivative action to enforce a right of a limited
cooperative association is successful in whole or in part, the court
may award the plaintiff reasonable expenses, including reasonable
attorney fees and costs, from the recovery of the association.
Added by Laws 2009, c. 68, § 121, eff. Jan. 1, 2010.
§18-441-1401. Governing law.
GOVERNING LAW.
(a) The law of the state or other jurisdiction under which a
foreign cooperative is organized governs relations among the members
of the foreign cooperative and between the members and the foreign
cooperative.
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(b) A foreign cooperative may not be denied a certificate of
authority because of any difference between the law of the
jurisdiction under which the foreign cooperative is organized and the
law of this state.
(c) A certificate of authority does not authorize a foreign
cooperative to engage in any activity or exercise any power that a
limited cooperative association may not engage in or exercise in this
state.
Added by Laws 2009, c. 68, § 122, eff. Jan. 1, 2010.
§18-441-1402. Application for certificate of authority.
APPLICATION FOR CERTIFICATE OF AUTHORITY.
(a) A foreign cooperative may apply for a certificate of
authority by delivering an application to the Secretary of State for
filing. The application must state:
(1) The name of the foreign cooperative and, if the name does
not comply with Section 11 of this act, an alternative name adopted
pursuant to Section 126 of this act;
(2) The name of the state or other jurisdiction under whose law
the foreign cooperative is organized;
(3) The street address and, if different, mailing address of the
principal office and, if the law of the jurisdiction under which the
foreign cooperative is organized requires the foreign cooperative to
maintain another office in that jurisdiction, the street address and,
if different, mailing address of the required office;
(4) The street address and, if different, mailing address of the
foreign cooperative’s designated office in this state, and the name
of the foreign cooperative’s agent for service of process at the
designated office; and
(5) The name, street address and, if different, mailing address
of each of the foreign cooperative’s current directors and officers.
(b) A foreign cooperative shall deliver with a completed
application under subsection (a) of this section a certificate of
good standing or a similar record signed by the Secretary of State or
other official having custody of the foreign cooperative’s publicly
filed records in the state or other jurisdiction under whose law the
foreign cooperative is organized.
Added by Laws 2009, c. 68, § 123, eff. Jan. 1, 2010.
§18-441-1403. Activities not constituting transacting business.
ACTIVITIES NOT CONSTITUTING TRANSACTING BUSINESS.
(a) Activities of a foreign cooperative which do not constitute
transacting business in this state under this article include:
(1) Maintaining, defending, and settling an action or
proceeding;
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(2) Holding meetings of the foreign cooperative’s members or
directors or carrying on any other activity concerning the foreign
cooperative’s internal affairs;
(3) Maintaining accounts in financial institutions;
(4) Maintaining offices or agencies for the transfer, exchange,
and registration of the foreign cooperative’s own securities or
maintaining trustees or depositories with respect to those
securities;
(5) Selling through independent contractors;
(6) Soliciting or obtaining orders, whether by mail or
electronic means, through employees, agents, or otherwise, if the
orders require acceptance outside this state before they become
contracts;
(7) Creating or acquiring indebtedness, mortgages, or security
interests in real or personal property;
(8) Securing or collecting debts or enforcing mortgages or other
security interests in property securing the debts, and holding,
protecting, and maintaining property so acquired;
(9) Conducting an isolated transaction that is completed within
thirty (30) days and is not one in the course of similar
transactions; and
(10) Transacting business in interstate commerce.
(b) For purposes of this article, the ownership in this state of
income-producing real property or tangible personal property, other
than property excluded under subsection (a) of this section,
constitutes transacting business in this state.
(c) This section does not apply in determining the contacts or
activities that may subject a foreign cooperative to service of
process, taxation, or regulation under law of this state other than
the Uniform Limited Cooperative Association Act of 2009.
Added by Laws 2009, c. 68, § 124, eff. Jan. 1, 2010.
§18-441-1404. Issuance of certificate of authority.
ISSUANCE OF CERTIFICATE OF AUTHORITY. Unless the Secretary of
State determines that an application for a certificate of authority
does not comply with the filing requirements of the Uniform Limited
Cooperative Association Act of 2009, the Secretary of State, upon
payment by the foreign cooperative of all filing fees, shall file the
application, issue a certificate of authority, and send a copy of the
filed certificate, together with a receipt for the fees, to the
foreign cooperative or its representative.
Added by Laws 2009, c. 68, § 125, eff. Jan. 1, 2010.
§18-441-1405. Noncomplying name of foreign cooperative.
NONCOMPLYING NAME OF FOREIGN COOPERATIVE.
(a) A foreign cooperative whose name does not comply with
Section 11 of this act may not obtain a certificate of authority
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until it adopts, for the purpose of transacting business in this
state, an alternative name that complies with Section 11 of this act.
After obtaining a certificate of authority with an alternative name,
a foreign cooperative’s business in this state must be transacted
under that name.
(b) If a foreign cooperative authorized to transact business in
this state changes its name to one that does not comply with Section
11 of this act, it may not thereafter transact business in this state
until it complies with subsection (a) of this section and obtains an
amended certificate of authority.
Added by Laws 2009, c. 68, § 126, eff. Jan. 1, 2010.
§18-441-1406. Revocation of certificate of authority.
REVOCATION OF CERTIFICATE OF AUTHORITY.
(a) A certificate of authority may be revoked by the Secretary
of State in the manner provided in subsection (b) of this section if
the foreign cooperative does not:
(1) Pay, not later than sixty (60) days after the due date, any
fee, tax, or penalty due to the Secretary of State under the Uniform
Limited Cooperative Association Act of 2009 or law of this state
other than the Uniform Limited Cooperative Association Act of 2009;
(2) Deliver, not later than sixty (60) days after the due date,
its annual report;
(3) Appoint and maintain an agent for service of process; or
(4) Deliver for filing a statement of change not later than
thirty (30) days after a change has occurred in the name of the agent
or the address of the foreign cooperative’s designated office.
(b) To revoke a certificate of authority, the Secretary of State
must file a notice of revocation and send a copy to the foreign
cooperative’s registered agent for service of process in this state
or, if the foreign cooperative does not appoint and maintain an agent
for service of process in this state, to the foreign cooperative’s
principal office. The notice must state:
(1) The revocation’s effective date, which must be at least
sixty (60) days after the date the Secretary of State sends the copy;
and
(2) The foreign cooperative’s noncompliance that is the reason
for the revocation.
(c) The authority of a foreign cooperative to transact business
in this state ceases on the effective date of the notice of
revocation unless before that date the foreign cooperative cures each
failure to comply stated in the notice. If the foreign cooperative
cures the failures, the Secretary of State shall so indicate on the
filed notice.
Added by Laws 2009, c. 68, § 127, eff. Jan. 1, 2010.
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§18-441-1407. Cancellation of certificate of authority - Effect of
failure to have certificate.
CANCELLATION OF CERTIFICATE OF AUTHORITY; EFFECT OF FAILURE TO
HAVE CERTIFICATE.
(a) To cancel its certificate of authority, a foreign
cooperative must deliver to the Secretary of State for filing a
notice of cancellation. The certificate is canceled when the notice
becomes effective under Section 23 of this act.
(b) A foreign cooperative transacting business in this state may
not maintain an action or proceeding in this state unless it has a
certificate of authority.
(c) The failure of a foreign cooperative to have a certificate
of authority does not impair the validity of a contract or act of the
foreign cooperative or prevent the foreign cooperative from defending
an action or proceeding in this state.
(d) A member of a foreign cooperative is not liable for the
obligations of the foreign cooperative solely by reason of the
foreign cooperative’s having transacted business in this state
without a certificate of authority.
(e) If a foreign cooperative transacts business in this state
without a certificate of authority or cancels its certificate, it
appoints the Secretary of State as its agent for service of process
for an action arising out of the transaction of business in this
state.
Added by Laws 2009, c. 68, § 128, eff. Jan. 1, 2010.
§18-441-1408. Action by Attorney General.
ACTION BY ATTORNEY GENERAL. The Attorney General may maintain an
action to restrain a foreign cooperative from transacting business in
this state in violation of this article.
Added by Laws 2009, c. 68, § 129, eff. Jan. 1, 2010.
§18-441-1501. Disposition of assets not requiring member approval.
DISPOSITION OF ASSETS NOT REQUIRING MEMBER APPROVAL. Unless the
articles of organization otherwise provide, member approval under
Section 131 of this act is not required for a limited cooperative
association to:
(1) Sell, lease, exchange, license, or otherwise dispose of all
or any part of the assets of the association in the usual and regular
course of business; or
(2) Mortgage, pledge, dedicate to the repayment of indebtedness,
or encumber in any way all or any part of the assets of the
association whether or not in the usual and regular course of
business.
Added by Laws 2009, c. 68, § 130, eff. Jan. 1, 2010.
§18-441-1502. Member approval of other disposition of assets.
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MEMBER APPROVAL OF OTHER DISPOSITION OF ASSETS. A sale, lease,
exchange, license, or other disposition of assets of a limited
cooperative association, other than a disposition described in
Section 130 of this act, requires approval of the association’s
members under Sections 132 and 133 of this act if the disposition
leaves the association without significant continuing business
activity.
Added by Laws 2009, c. 68, § 131, eff. Jan. 1, 2010.
§18-441-1503. Notice and action on disposition of assets.
NOTICE AND ACTION ON DISPOSITION OF ASSETS. For a limited
cooperative association to dispose of assets under Section 131 of
this act:
(1) A majority of the board of directors, or a greater
percentage if required by the organic rules, must approve the
proposed disposition; and
(2) The board of directors must call a members meeting to
consider the proposed disposition, hold the meeting not later than
ninety (90) days after approval of the proposed disposition by the
board, and mail or otherwise transmit or deliver in a record to each
member:
(A) the terms of the proposed disposition;
(B) a recommendation that the members approve the
disposition, or if the board determines that because of
conflict of interest or other special circumstances it
should not make a favorable recommendation, the basis
for that determination;
(C) a statement of any condition of the board’s submission
of the proposed disposition to the members; and
(D) notice of the meeting at which the proposed disposition
will be considered, which must be given in the same
manner as notice of a special meeting of members.
Added by Laws 2009, c. 68, § 132, eff. Jan. 1, 2010.
§18-441-1504. Disposition of assets.
DISPOSITION OF ASSETS.
(a) Subject to subsection (b) of this section, a disposition of
assets under Section 131 of this act must be approved by:
(1) At least two-thirds (2/3) of the voting power of members
present at a members meeting called under paragraph (2) of Section
132 of this act; and
(2) If the limited cooperative association has investor members,
at least a majority of the votes cast by patron members, unless the
organic rules require a greater percentage vote by patron members.
(b) The organic rules may require that the percentage of votes
under paragraph (1) of subsection (a) of this section is:
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(1) A different percentage that is not less than a majority of
members voting at the meeting;
(2) Measured against the voting power of all members; or
(3) A combination of paragraphs (1) and (2) of this subsection.
(c) Subject to any contractual obligations, after a disposition
of assets is approved and at any time before the consummation of the
disposition, a limited cooperative association may approve an
amendment to the contract for disposition or the resolution
authorizing the disposition or approve abandonment of the
disposition:
(1) As provided in the contract or the resolution; and
(2) Except as prohibited by the resolution, with the same
affirmative vote of the board of directors and of the members as was
required to approve the disposition.
(d) The voting requirements for districts, classes, or voting
groups under Section 36 of this act apply to approval of a
disposition of assets under this article.
Added by Laws 2009, c. 68, § 133, eff. Jan. 1, 2010.
§18-441-1601. Definitions.
DEFINITIONS. In this article:
(1) “Constituent entity” means an entity that is a party to a
merger.
(2) “Constituent limited cooperative association” means a
limited cooperative association that is a party to a merger.
(3) “Converted entity” means the organization into which a
converting entity converts pursuant to Sections 135 through 138 of
this act.
(4) “Converting entity” means an entity that converts into
another entity pursuant to Sections 135 through 138 of this act.
(5) “Converting limited cooperative association” means a
converting entity that is a limited cooperative association.
(6) “Organizational documents” means articles of incorporation,
bylaws, articles of organization, operating agreements, partnership
agreements, or other documents serving a similar function in the
creation and governance of an entity.
(7) “Personal liability” means personal liability for a debt,
liability, or other obligation of an entity imposed, by operation of
law or otherwise, on a person that co-owns or has an interest in the
entity:
(A) by the entity’s organic law solely because of the
person co-owning or having an interest in the entity;
or
(B) by the entity’s organizational documents under a
provision of the entity’s organic law authorizing those
documents to make one or more specified persons liable
for all or specified parts of the entity’s debts,
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liabilities, and other obligations solely because the
person co-owns or has an interest in the entity.
(8) “Surviving entity” means an entity into which one or more
other entities are merged, whether the entity existed before the
merger or is created by the merger.
Added by Laws 2009, c. 68, § 134, eff. Jan. 1, 2010.
§18-441-1602. Conversion.
CONVERSION.
(a) An entity that is not a limited cooperative association may
convert to a limited cooperative association and a limited
cooperative association may convert to an entity that is not a
limited cooperative association pursuant to this section, Sections
136 through 138 of this act, and a plan of conversion, if:
(1) The other entity’s organic law authorizes the conversion;
(2) The conversion is not prohibited by the law of the
jurisdiction that enacted the other entity’s organic law; and
(3) The other entity complies with its organic law in effecting
the conversion.
(b) A plan of conversion must be in a record and must include:
(1) The name and form of the entity before conversion;
(2) The name and form of the entity after conversion;
(3) The terms and conditions of the conversion, including the
manner and basis for converting interests in the converting entity
into any combination of money, interests in the converted entity, and
other consideration; and
(4) The organizational documents of the proposed converted
entity.
Added by Laws 2009, c. 68, § 135, eff. Jan. 1, 2010.
§18-441-1603. Action on plan of conversion by converting limited
cooperative association.
ACTION ON PLAN OF CONVERSION BY CONVERTING LIMITED COOPERATIVE
ASSOCIATION.
(a) For a limited cooperative association to convert to another
entity, a plan of conversion must be approved by a majority of the
board of directors, or a greater percentage if required by the
organic rules, and the board of directors must call a members meeting
to consider the plan of conversion, hold the meeting not later than
ninety (90) days after approval of the plan by the board, and mail or
otherwise transmit or deliver in a record to each member:
(1) The plan, or a summary of the plan and a statement of the
manner in which a copy of the plan in a record may be reasonably
obtained by a member;
(2) A recommendation that the members approve the plan of
conversion, or if the board determines that because of a conflict of
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interest or other circumstances it should not make a favorable
recommendation, the basis for that determination;
(3) A statement of any condition of the board’s submission of
the plan of conversion to the members; and
(4) Notice of the meeting at which the plan of conversion will
be considered, which must be given in the same manner as notice of a
special meeting of members.
(b) Subject to subsections (c) and (d) of this section, a plan
of conversion must be approved by:
(1) At least two-thirds (2/3) of the voting power of members
present at a members meeting called under subsection (a) of this
section; and
(2) If the limited cooperative association has investor members,
at least a majority of the votes cast by patron members, unless the
organic rules require a greater percentage vote by patron members.
(c) The organic rules may require that the percentage of votes
under paragraph (1) of subsection (b) of this section is:
(1) A different percentage that is not less than a majority of
members voting at the meeting;
(2) Measured against the voting power of all members; or
(3) A combination of paragraphs (1) and (2) of this subsection.
(d) The vote required to approve a plan of conversion may not be
less than the vote required for the members of the limited
cooperative association to amend the articles of organization.
(e) Consent in a record to a plan of conversion by a member must
be delivered to the limited cooperative association before delivery
of articles of conversion for filing if as a result of the conversion
the member will have:
(1) Personal liability for an obligation of the association; or
(2) An obligation or liability for an additional contribution.
(f) Subject to subsection (e) of this section and any
contractual rights, after a conversion is approved and at any time
before the effective date of the conversion, a converting limited
cooperative association may amend a plan of conversion or abandon the
planned conversion:
(1) As provided in the plan; and
(2) Except as prohibited by the plan, by the same affirmative
vote of the board of directors and of the members as was required to
approve the plan.
(g) The voting requirements for districts, classes, or voting
groups under Section 36 of this act apply to approval of a conversion
under this article.
Added by Laws 2009, c. 68, § 136, eff. Jan. 1, 2010.
§18-441-1604. Filings required for conversion - Effective date.
FILINGS REQUIRED FOR CONVERSION; EFFECTIVE DATE.
(a) After a plan of conversion is approved:
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(1) A converting limited cooperative association shall deliver
to the Secretary of State for filing articles of conversion, which
must include:
(A) a statement that the limited cooperative association
has been converted into another entity;
(B) the name and form of the converted entity and the
jurisdiction of its governing statute;
(C) the date the conversion is effective under the
governing statute of the converted entity;
(D) a statement that the conversion was approved as
required by the Uniform Limited Cooperative Association
Act of 2009;
(E) a statement that the conversion was approved as
required by the governing statute of the converted
entity; and
(F) if the converted entity is an entity organized in a
jurisdiction other than this state and is not
authorized to transact business in this state, the
street address and, if different, mailing address of an
office which the Secretary of State may use for
purposes of Section 20 of this act; and
(2) If the converting entity is not a converting limited
cooperative association, the converting entity shall deliver to the
Secretary of State for filing articles of organization, which must
include, in addition to the information required by Section 30 of
this act:
(A) a statement that the association was converted from
another entity;
(B) the name and form of the converting entity and the
jurisdiction of its governing statute; and
(C) a statement that the conversion was approved in a
manner that complied with the converting entity’s
governing statute.
(b) A conversion becomes effective:
(1) If the converted entity is a limited cooperative
association, when the articles of conversion take effect pursuant to
subsection (c) of Section 23 of this act; or
(2) If the converted entity is not a limited cooperative
association, as provided by the governing statute of the converted
entity.
Added by Laws 2009, c. 68, § 137, eff. Jan. 1, 2010.
§18-441-1605. Effect of conversion.
EFFECT OF CONVERSION.
(a) An entity that has been converted pursuant to this article
is for all purposes the same entity that existed before the
conversion and is not a new entity but, after conversion, is
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organized under the organic law of the converted entity and is
subject to that law and other law as it applies to the converted
entity.
(b) When a conversion takes effect under this article:
(1) All property owned by the converting entity remains vested
in the converted entity;
(2) All debts, liabilities, and other obligations of the
converting entity continue as obligations of the converted entity;
(3) An action or proceeding pending by or against the converting
entity may be continued as if the conversion had not occurred;
(4) Except as prohibited by other law, all the rights,
privileges, immunities, powers, and purposes of the converting entity
remain vested in the converted entity;
(5) Except as otherwise provided in the plan of conversion, the
terms and conditions of the plan of conversion take effect; and
(6) Except as otherwise provided in the plan of conversion, the
conversion does not dissolve a converting limited cooperative
association for purposes of Article 12 of the Uniform Limited
Cooperative Association Act of 2009.
(c) A converted entity that is an entity organized under the
laws of a jurisdiction other than this state consents to the
jurisdiction of the courts of this state to enforce any obligation
owed by the converting limited cooperative association if, before the
conversion, the converting limited cooperative association was
subject to suit in this state on the obligation. A converted entity
that is an entity organized under the laws of a jurisdiction other
than this state and not authorized to transact business in this state
appoints the Secretary of State as its agent for service of process
for purposes of enforcing an obligation under this subsection.
Service on the Secretary of State under this subsection is made in
the same manner and with the same consequences as under subsections
(c) and (d) of Section 20 of this act.
Added by Laws 2009, c. 68, § 138, eff. Jan. 1, 2010.
§18-441-1606. Merger.
MERGER.
(a) One or more limited cooperative associations may merge with
one or more other entities pursuant to this article and a plan of
merger if:
(1) The governing statute of each of the other entities
authorizes the merger;
(2) The merger is not prohibited by the law of a jurisdiction
that enacted any of those governing statutes; and
(3) Each of the other entities complies with its governing
statute in effecting the merger.
(b) A plan of merger must be in a record and must include:
(1) The name and form of each constituent entity;
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(2) The name and form of the surviving entity and, if the
surviving entity is to be created by the merger, a statement to that
effect;
(3) The terms and conditions of the merger, including the manner
and basis for converting the interests in each constituent entity
into any combination of money, interests in the surviving entity, and
other consideration;
(4) If the surviving entity is to be created by the merger, the
surviving entity’s organizational documents;
(5) If the surviving entity is not to be created by the merger,
any amendments to be made by the merger to the surviving entity’s
organizational documents; and
(6) If a member of a constituent limited cooperative association
will have personal liability with respect to a surviving entity, the
identity of the member by descriptive class or other reasonable
manner.
Added by Laws 2009, c. 68, § 139, eff. Jan. 1, 2010.
§18-441-1607. Notice and action on plan of merger by constituent
limited cooperative association.
NOTICE AND ACTION ON PLAN OF MERGER BY CONSTITUENT LIMITED
COOPERATIVE ASSOCIATION.
(a) For a limited cooperative association to merge with another
entity, a plan of merger must be approved by a majority vote of the
board of directors or a greater percentage if required by the
association’s organic rules.
(b) The board of directors shall call a members meeting to
consider a plan of merger approved by the board, hold the meeting not
later than ninety (90) days after approval of the plan by the board,
and mail or otherwise transmit or deliver in a record to each member:
(1) The plan of merger, or a summary of the plan and a statement
of the manner in which a copy of the plan in a record may be
reasonably obtained by a member;
(2) A recommendation that the members approve the plan of
merger, or if the board determines that because of conflict of
interest or other special circumstances it should not make a
favorable recommendation, the basis for that determination;
(3) A statement of any condition of the board’s submission of
the plan of merger to the members; and
(4) Notice of the meeting at which the plan of merger will be
considered, which must be given in the same manner as notice of a
special meeting of members.
Added by Laws 2009, c. 68, § 140, eff. Jan. 1, 2010.
§18-441-1608. Approval or abandonment of merger by members.
APPROVAL OR ABANDONMENT OF MERGER BY MEMBERS.
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(a) Subject to subsections (b) and (c) of this section, a plan
of merger must be approved by:
(1) At least two-thirds (2/3) of the voting power of members
present at a members meeting called under subsection (b) of Section
140 of this act; and
(2) If the limited cooperative association has investor members,
at least a majority of the votes cast by patron members, unless the
organic rules require a greater percentage vote by patron members.
(b) The organic rules may provide that the percentage of votes
under paragraph (1) of subsection (a) of this section is:
(1) A different percentage that is not less than a majority of
members voting at the meeting;
(2) Measured against the voting power of all members; or
(3) A combination of paragraphs (1) and (2) of this subsection.
(c) The vote required to approve a plan of merger may not be
less than the vote required for the members of the limited
cooperative association to amend the articles of organization.
(d) Consent in a record to a plan of merger by a member must be
delivered to the limited cooperative association before delivery of
articles of merger for filing pursuant to Section 142 of this act if
as a result of the merger the member will have:
(1) Personal liability for an obligation of the association; or
(2) An obligation or liability for an additional contribution.
(e) Subject to subsection (d) of this section and any
contractual rights, after a merger is approved, and at any time
before the effective date of the merger, a limited cooperative
association that is a party to the merger may approve an amendment to
the plan of merger or approve abandonment of the planned merger:
(1) As provided in the plan; and
(2) Except as prohibited by the plan, with the same affirmative
vote of the board of directors and of the members as was required to
approve the plan.
(f) The voting requirements for districts, classes, or voting
groups under Section 36 of this act apply to approval of a merger
under this article.
Added by Laws 2009, c. 68, § 141, eff. Jan. 1, 2010.
§18-441-1609. Filings required for merger - Effective date.
FILINGS REQUIRED FOR MERGER; EFFECTIVE DATE.
(a) After each constituent entity has approved a merger,
articles of merger must be signed on behalf of each constituent
entity by an authorized representative.
(b) The articles of merger must include:
(1) The name and form of each constituent entity and the
jurisdiction of its governing statute;
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(2) The name and form of the surviving entity, the jurisdiction
of its governing statute, and, if the surviving entity is created by
the merger, a statement to that effect;
(3) The date the merger is effective under the governing statute
of the surviving entity;
(4) If the surviving entity is to be created by the merger and:
(A) will be a limited cooperative association, the limited
cooperative association’s articles of organization; or
(B) will be an entity other than a limited cooperative
association, the organizational document that creates
the entity;
(5) If the surviving entity is not created by the merger, any
amendments provided for in the plan of merger to the organizational
document that created the entity;
(6) A statement as to each constituent entity that the merger
was approved as required by the entity’s governing statute;
(7) If the surviving entity is a foreign organization not
authorized to transact business in this state, the street address
and, if different, mailing address of an office which the Secretary
of State may use for the purposes of Section 20 of this act; and
(8) Any additional information required by the governing statute
of any constituent entity.
(c) Each limited cooperative association that is a party to a
merger shall deliver the articles of merger to the Secretary of State
for filing.
(d) A merger becomes effective under this article:
(1) If the surviving entity is a limited cooperative
association, upon the later of:
(A) compliance with subsection (c) of this section; or
(B) subject to subsection (c) of Section 23 of this act, as
specified in the articles of merger; or
(2) If the surviving entity is not a limited cooperative
association, as provided by the governing statute of the surviving
entity.
Added by Laws 2009, c. 68, § 142, eff. Jan. 1, 2010.
§18-441-1610. Effect of merger.
EFFECT OF MERGER.
(a) When a merger becomes effective:
(1) The surviving entity continues or comes into existence;
(2) Each constituent entity that merges into the surviving
entity ceases to exist as a separate entity;
(3) All property owned by each constituent entity that ceases to
exist vests in the surviving entity;
(4) All debts, liabilities, and other obligations of each
constituent entity that ceases to exist continue as obligations of
the surviving entity;
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(5) An action or proceeding pending by or against any
constituent entity that ceases to exist may be continued as if the
merger had not occurred;
(6) Except as prohibited by law other than the Uniform Limited
Cooperative Association Act of 2009, all rights, privileges,
immunities, powers, and purposes of each constituent entity that
ceases to exist vest in the surviving entity;
(7) Except as otherwise provided in the plan of merger, the
terms and conditions of the plan take effect;
(8) Except as otherwise provided in the plan of merger, if a
merging limited cooperative association ceases to exist, the merger
does not dissolve the association for purposes of Article 12 of this
act;
(9) If the surviving entity is created by the merger and:
(A) is a limited cooperative association, the articles of
organization become effective; or
(B) is an entity other than a limited cooperative
association, the organizational document that creates
the entity becomes effective; and
(10) If the surviving entity is not created by the merger, any
amendments made by the articles of merger for the organizational
documents of the surviving entity become effective.
(b) A surviving entity that is an entity organized under the
laws of a jurisdiction other than this state consents to the
jurisdiction of the courts of this state to enforce any obligation
owed by the constituent entity if, before the merger, the constituent
entity was subject to suit in this state on the obligation. A
surviving entity that is an entity organized under the laws of a
jurisdiction other than this state and not authorized to transact
business in this state appoints the Secretary of State as its agent
for service of process for purposes of enforcing an obligation under
this subsection. Service on the Secretary of State under this
subsection is made in the same manner and with the same consequences
as in subsections (c) and (d) of Section 20 of this act.
Added by Laws 2009, c. 68, § 143, eff. Jan. 1, 2010.
§18-441-1611. Consolidation.
CONSOLIDATION.
(a) Constituent entities that are limited cooperative
associations or foreign cooperatives may agree to call a merger a
consolidation under this article.
(b) All provisions governing mergers or using the term merger in
this act apply equally to mergers that the constituent entities
choose to call consolidations under subsection (a) of this section.
Added by Laws 2009, c. 68, § 144, eff. Jan. 1, 2010.
§18-441-1612. Article not exclusive.
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ARTICLE NOT EXCLUSIVE. This article does not prohibit a limited
cooperative association from being converted or merged under law
other than the Uniform Limited Cooperative Association Act of 2009.
Added by Laws 2009, c. 68, § 145, eff. Jan. 1, 2010.
§18-441-1701. Uniformity of application and construction.
UNIFORMITY OF APPLICATION AND CONSTRUCTION. In applying and
construing the Uniform Limited Cooperative Association Act of 2009,
consideration must be given to the need to promote uniformity of the
law with respect to its subject matter among states that enact it.
Added by Laws 2009, c. 68, § 146, eff. Jan. 1, 2010.
§18-441-1702. Relation to Electronic Signatures in Global and
National Commerce Act.
RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE
ACT. The Uniform Limited Cooperative Association Act of 2009
modifies, limits, or supersedes the federal Electronic Signatures in
Global and National Commerce Act, 15 U.S.C., Section 7001 et seq.,
but does not modify, limit, or supersede Section 101(c) of that act,
15 U.S.C., Section 7001(c) or authorize electronic delivery of any of
the notices described in Section 103(b) of that act, 15 U.S.C.,
Section 7003(b).
Added by Laws 2009, c. 68, § 147, eff. Jan. 1, 2010.
§18-441-1703. Savings clause.
SAVINGS CLAUSE. The Uniform Limited Cooperative Association Act
of 2009 does not affect an action or proceeding commenced, or right
accrued, before January 1, 2010.
Added by Laws 2009, c. 68, § 148, eff. Jan. 1, 2010.
§18-441-1704. Act deemed amendment of Constitution.
ACT DEEMED AMENDMENT OF CONSTITUTION. It is the intent of the
Legislature that the Uniform Limited Cooperative Association Act of
2009 be an amendment to, and alteration of, Sections 18 through 34,
inclusive, of Article IX of the Constitution of the State of
Oklahoma, as authorized by Section 35 of Article IX of the
Constitution of the State of Oklahoma.
Added by Laws 2009, c. 68, § 149, eff. Jan. 1, 2010.
§18-471. Venue of actions.
Any foreign corporation, doing business in the State of Oklahoma,
and any person now or hereafter having any cause of action against
such corporation, arising on contract, tort, or otherwise, may file
suit in any county in the State of Oklahoma where the plaintiff
resides or where said corporation has its principal place of
business, or has property, or in any county where said corporation
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has an agent appointed upon whom service of summons or other process
may be had.
Laws 1910-11, c. 26, p. 46, § 1.
§18-476. Repealed by Laws 1998, c. 104, § 40, eff. Nov. 1, 1998.
§18-477. Repealed by Laws 1998, c. 104, § 40, eff. Nov. 1, 1998.
§18-478. Repealed by Laws 1998, c. 104, § 40, eff. Nov. 1, 1998.
§18-481. Corporation surety authorized.
Whenever any recognizance, stipulation, bond, or undertaking
conditioned for the faithful performance of any duty or for the doing
or refraining from doing anything in such recognizances, stipulation,
bond or undertaking specified, is by law of the State of Oklahoma
required or permitted to be given with one surety, or with two or
more sureties, the execution of the same or the guaranteeing of the
performance of the conditions thereof shall be sufficient when
executed or guaranteed solely by a corporation incorporated under the
laws of the United States, or of any state, having power to guarantee
the fidelity of persons holding positions of public or private trust,
and to execute and guarantee bonds and undertakings in judicial
proceedings: Provided, that such recognizance, stipulation, bond or
undertaking be approved by the head of department, court, judge,
officer, board or body executive, legislative or judicial, required
to approve or execute the same.
R.L.1910, § 1344.
§18-482. Permission to do business - Statements - Deposit.
Every company, before transacting any business in the State of
Oklahoma, under Section 481 et seq. of this title, shall deposit with
the Insurance Commissioner of the state a copy of its charter or
articles of incorporation and a statement signed and sworn to by its
president and secretary, showing the assets and liabilities. If said
Insurance Commissioner shall be satisfied that such company has
authority under its charter to do the business provided for in this
article, and that it has a paid-up capital of not less than Five
Hundred Thousand Dollars ($500,000.00) in cash or its equivalent, and
is able tokeep and perform its contracts and has a good reputation
for the prompt and equitable settlement and adjustment of liabilities
accruing upon its undertakings, he shall grant authority in writing
to such company to do business in this state, but before granting
such authority the said corporations shall also be required to comply
with the requirements of Section 613 of Title 36 of the Oklahoma
Statutes, relating to insurers issuing policies of surety insurance.
Provided however, the deposit requirements of subsection A of Section
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613 of Title 36 of the Oklahoma Statutes shall not apply to companies
that solely write bonds that cover grain warehouse storage.
Amended by Laws 1986, c. 129, § 1, emerg. eff. April 14, 1986; Laws
1988, c. 291, § 1, eff. Nov. 1, 1988.
§18-483. Surety contracts, liberal construction of.
The rule of the common law requiring a strict construction of the
obligations of a surety shall have no application to the obligations
of a surety or guarantor or indemnitor for hire, but all such
obligations shall be liberally construed in accordance with the rules
of the general law applicable to policies of insurance.
R.L.1910, § 1346.
§18-484. Quarterly reports - Revocation of authority - Inquiry into
solvency - Additional security.
Every such corporation shall, in the months of January, April,
July and October of each year, file with the Insurance Commissioner
of the state a statement signed and sworn to by its president and
secretary, showing its assets and liabilities as required by Section
1345. And the Insurance Commissioner shall have the power, and it
shall be his duty, to revoke the authority of any such company to
transact any business under this article whenever, in his judgment,
said company is not solvent, or is conducting its business in
violation of this article. He may institute inquiry, at any time,
into the solvency of such company, and may require that additional
security be given, at any time, upon any obligation to the state when
he deems such company no longer sufficient security.
R.L.1910, § 1347.
§18-485. Actions - Venue - Bond considered made where.
Any surety company doing business under the provisions of this
article, may be sued in respect thereof, in any court of the United
States or the State of Oklahoma, which has jurisdiction of actions on
suits upon such recognizances, stipulations, bond, or undertaking,
was made or guaranteed. And for the purpose of this article, such
recognizance, stipulation, bond, or undertaking, shall be treated as
made or guaranteed in the county in which the office is located, to
which it is returnable, or in which it is filed, or in the county in
which the principal of such recognizance, stipulation, bond or
undertaking, resided when it was made or guaranteed.
R.L.1910, § 1348.
§18-486. Failure to pay judgment.
If any such company shall neglect or refuse to pay any final
judgment or decree rendered against it, upon any such recognizance,
stipulation, bond, or undertaking made or guaranteed by it under the
provisions of this article, from which no appeal, writ of error or
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supersedeas has been taken for sixty (60) days after the rendition of
such judgment or decree, it shall forfeit all right to do business
under this act.
R.L.1910, § 1349.
§18-487. Estopped to deny liability.
Any company which shall execute or guarantee any recognizance,
stipulation, bond, or undertaking under the provisions of this
article, shall be estopped in any such proceeding to deny the
liability which it shall have assumed to incur, or to deny its
corporate power to execute or guarantee any such instrument, or
assume such liability.
R.L.1910, § 1350.
§18-488. Penalty for failure to comply.
Any company doing business under the provisions of this article,
which shall fail to comply with any of its provisions, shall forfeit
to the State of Oklahoma for every such failure not less than Five
Hundred Dollars ($500.00) nor more than Five Thousand Dollars
($5,000.00) to be recovered by suit in the name of the State of
Oklahoma, in the same court in which suit may be brought against such
company under the provisions of this article, and such failure shall
not affect the validity of any contract entered into by such company.
R.L.1910, § 1351.
§18-489. Fiduciaries - Cost of bond as lawful expense - Amount of
bond.
That any receiver, assignee, guardian, trustee, executor,
administrator or other fiduciary, required by law or the order of any
court or judge, to give a bond or other obligations as such, may
include as a part of the lawful expense of executing his trust, such
reasonable sum paid a company authorized under the laws of this state
so to do, for becoming his surety on such bond as may be allowed by
the court in which or a judge before whom, he is required to account,
and when any such bond is signed by a surety company as surety, the
penalty must not be in excess of the value of the personal property
and the probable value of the annual rents, profits and issues of
real property, which are likely to come into the hands of such
receiver, assignee, guardian, trustee, executor, administrator or
other fiduciary. But when real estate is to be sold an additional
bond shall be required in amount equal to the probable value of such
real estate.
R.L.1910, § 1352; Laws 1913, c. 86, p. 139, § 1.
§18-490. Cancellation of bond - Grounds - Notice.
Where any surety company bond is required to be executed by any
county, district, or state officer or his deputy or by any county
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employee who has in his custody any money or property belonging to
the county for the purposes of his employment, whether said bond is
required by law or by the board of county commissioners or by the
principal officer, such surety or sureties may, if they deem
themselves unsafe or insecure, upon thirty (30) days written notice
given to the Secretary of State as to state and district officers and
as to county officers the board of county commissioners, withdraw and
cancel their obligations as surety or sureties on said bond; provided
that such cancellation shall not relieve the surety company from any
liability previously incurred, and said pro rata share of the
unearned premium shall be returned.
Laws 1957, p. 450, § 1.
§18-491. Agreement between principal and surety for deposit of
monies and assets.
It shall be lawful for any party of whom a bond, undertaking or
other obligation is required, to agree with his surety or sureties
for the deposit of any or all monies and assets for which he and his
surety or sureties are or may be held responsible, with a bank,
savings bank, safe-deposit or trust company, authorized by law to do
business as such, or with other depository approved by a court or a
judge thereof, if such deposit is otherwise proper, for the
safekeeping thereof, and in such manner as to prevent the withdrawal
of such money or assets or any part thereof, without the written
consent of such surety or sureties, or an order of court, or a judge
thereof made on such notice to such surety or sureties as such court
or judge may direct; provided, however, that such agreement shall not
in any manner release from or change the liability of the principal
or sureties as established by the terms of the said bond.
Laws 1959, p. 81, § 1.
§18-543. Right to hold real property limited.
All corporations organized for religious, charitable, educational
or scientific purposes may hold all the property of the association
owned prior to incorporation, as well as that acquired thereafter in
any manner and transact all business relative thereto; but no such
corporation shall own or hold more real property than may be
reasonably necessary for the business and objects of the said
association.
Amended by Laws 1986, c. 292, § 146, eff. Nov. 1, 1986.
§18-549. Charitable and educational corporations may engage in
business.
Any corporation heretofore or hereafter organized under the laws
of the State of Oklahoma for charitable or educational purposes may
maintain and carry on any and all kinds of business enterprises that
an individual or corporation may lawfully carry on under the laws of
4(#$0&($"!$"+$ -*2
the State of Oklahoma as auxiliary enterprises and may do so either
directly or through any other corporation or corporations, a majority
of whose stock it lawfully owns, in order that additional funds may
be obtained with which to carry out only the charitable or
educational purposes of such corporation.
Amended by Laws 1983, c. 100, § 8, emerg. eff. May 9, 1983.
§18-550. Power to borrow money and incur indebtedness - Mortgage or
pledge of property - Liability of property to taxation.
Any such charitable or educational corporation may borrow money
and incur debts either for its principal purposes, or for the
furtherance of any or all its business enterprises or both. In case
money is borrowed to aid any corporation, a majority of whose stock
is lawfully owned by such charitable or educational corporation, it
may loan or advance the same to such controlled corporation on such
terms as may seem advisable to its trustees. Any such charitable or
educational corporation so borrowing money to aid any other
corporation as aforesaid, may evidence its indebtedness by notes or
bonds and secure their payment by mortgaging and pledging all or any
part of its property, real, personal and mixed, except the real
estate, buildings and personal property consisting of household
goods, farm implements and domestic animals used for the ordinary
conduct and operation of the institution of such corporations, which
last-named property shall never be liable, or in any manner taken for
indebtedness, charge or lien of any nature whatsoever contracted by
such corporation, to aid another corporation as aforesaid, provided
that if any charitable or educational corporation shall maintain or
carry on any auxiliary business under the terms of Section 549 of
this title, either directly or through any other corporation or
corporations, such fact shall be held to be an agreement on its part
and on the part of such other corporation or corporations that all
property owned by, devoted to, or used in such auxiliary business
hereunder, shall be subject to taxation for all purposes in the same
manner as taxable property generally and that such property shall not
be exempt from taxation by reason of the fact that the revenues or
profits or a portion thereof, are used or intended to be used as
additional funds for carrying out the charitable or educational
purposes of such corporation or for reinvestment by or in behalf of
such charitable or educational corporation; and it is hereby declared
that no such property shall be exempt from taxation; and provided,
further, that the real estate, buildings, and personal property
consisting of household goods, farming implements and domestic
animals necessary for the ordinary conduct and operation of such
charitable or educational corporations, shall be exempt from
taxation.
Amended by Laws 1983, c. 100, § 9, emerg. eff. May 9, 1983.
4(#$0&($"!$"+$ -*:
§18-552.1. Citation.
This act may be cited as the Oklahoma Solicitation of Charitable
Contributions Act.
Added by Laws 1959, p. 88, § 1.
§18-552.1a. Oklahoma Solicitation of Charitable Contributions Act.
The Oklahoma Solicitation of Charitable Contributions Act is
enacted for the purpose of promoting integrity and accountability in
the charitable solicitation process; protecting donors and
prospective donors who may be solicited for charitable contributions;
educating the public, charitable organizations, professional
fundraisers, and others in matters relating to ethical and
appropriate behavior in fundraising and charitable solicitation
activities; preventing fraud and abuse in the fundraising process of
charitable organizations and in the solicitation of charitable
contributions; and providing transparency to the public in
fundraising and charitable solicitation activities of charitable
organizations.
Added by Laws 2010, c. 460, § 1, eff. July 1, 2011.
§18-552.2. Definitions.
As used in the Oklahoma Solicitation of Charitable Contributions
Act:
1. "Person" means any individual, organization, group,
association, partnership, corporation, limited liability company,
trust, or other entity, except as otherwise provided in Section 552.1
et seq. of this title;
2. "Charitable organization" means any person soliciting
contributions in this state, other than a natural person, that is
described in Section 501(c) of Title 26 of the United States Code,
that solicits contributions as described in this act and that is
organized and operated primarily for religious, charitable,
scientific, literary, educational, artistic, cultural, economic
development, civic improvement, testing for public safety, research,
humanitarian, animal welfare, recreational, or environmental
protection purposes; to foster national or international amateur
sports competition, but only if no part of its activities involves
the provision of athletic facilities or equipment; to prevent cruelty
to children, the elderly, identified populations, or animals; to
relieve poverty, hunger, or homelessness; to support law enforcement
or citizen protection organizations or agencies; or to provide
emergency relief. "Charitable organization" shall also include a
natural person representing himself or herself as a charitable
organization or purporting to act on behalf of a charitable
organization;
3. "Contribution" means the promise, gift, donation, payment,
pledge, or grant of any money or property of any kind or value,
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including any contribution for operations, capital, endowment,
reserves, dues, memberships, program support, naming opportunities,
or other uses. Contribution does not include a payment for goods,
services, admission to a museum, performances or programs sold or
provided by a charitable organization, if the payment does not exceed
the bona fide fair market value of the goods or services provided;
4. "Professional fundraiser" means any person who for
compensation or other consideration plans, conducts or manages in
this state the solicitation of contributions for or on behalf of any
charitable organization, or who engages in the business of or holds
himself or herself out to persons in this state as independently
engaged in the business of soliciting contributions for such purpose.
For purposes of this act, professional fundraiser does not include an
employee of a charitable organization who engages in such activities
for the charitable organization for which he or she is employed; nor
does it include any volunteer who receives no payment, compensation,
or remuneration of any kind for soliciting any contributions;
provided, a volunteer may receive credit for fulfilling any community
service requirement of an educational institution or government
agency. In addition, for this purpose consideration does not include
incidental benefits that might be received by a noncompensated
person, such as meals, supplies, or similar support, and does not
include reimbursement for expenses incurred by any noncompensated
person in his or her solicitation activities;
5. "Professional solicitor" means any person that is either
located within this state or that is soliciting contributions from
any person in this state and who is employed or retained for
compensation or other consideration by a professional fundraiser to
solicit contributions for or on behalf of any charitable
organization. Professional solicitor does not include an employee of
a charitable organization who is engaged in such activities for the
charitable organization for which he or she is employed; nor does it
include a volunteer who engages in such activities for the charitable
organization for which he or she volunteers if the volunteer receives
no payment, compensation or remuneration of any kind for soliciting
any contributions; provided, a volunteer may receive credit for
fulfilling any community service requirement of an educational
institution or government agency. In addition, for this purpose
consideration does not include incidental benefits that might be
received by a noncompensated person, such as meals, supplies, or
similar support, and does not include reimbursement for expenses
incurred by any noncompensated person in his or her solicitation
activities;
6. "Professional fundraising counsel" means any person that
provides, for compensation or other consideration, services,
including planning, organizing or managing any solicitation, to a
charitable organization, as long as such person does not:
4(#$0&($"!$"+$ -*
a. directly or indirectly solicit contributions alone or
through its employees and agents, or
b. accept, receive, hold, have access to, maintain, manage,
invest, or control any contribution generated by the
solicitation activity.
However, professional fundraising counsel does not include an
employee or volunteer of a charitable organization who is providing
such services on behalf of the charitable organization;
7. "Solicitation" means the request or appeal for any
contribution on the plea or representation that such contribution
will be used by or on behalf of a charitable organization; and
8. "Form 990" means a return of an organization that is exempt
from federal income tax. Form 990, includes, but is not limited to,
Form 990, Form 990-N, Form 990-PF, and other similar returns as
required by federal law.
Added by Laws 1959, p. 88, § 2, emerg. eff. May 8, 1959. Amended by
Laws 1978, c. 244, § 1, eff. July 1, 1978; Laws 1983, c. 100, § 10,
emerg. eff. May 9, 1983; Laws 1999, c. 421, § 1, eff. Nov. 1, 1999;
Laws 2010, c. 460, § 2, eff. July 1, 2011; Laws 2019, c. 281, § 1,
eff. Nov. 1, 2019.
§18-552.3. Registration - Fee - Information to be filed - Out-of-
state organizations.
A. No charitable organization that is either located within this
state or that is soliciting contributions from any person in this
state, except those specifically exempt under Section 552.4 of this
title, shall solicit contributions until the charitable organization
shall have registered with the Office of the Secretary of State and
filed information, as required by the Oklahoma Solicitation of
Charitable Contributions Act, on forms approved by that office. At
the time of registration, each charitable organization, except as
otherwise provided in this section, shall pay a fee of Sixty-five
Dollars ($65.00). The first Fifteen Dollars ($15.00) of the fee
shall be deposited to the credit of the General Revenue Fund of the
State Treasury. Thirty-four Dollars ($34.00) of the fee shall be
deposited to the credit of the Attorney General Charitable
Solicitations Enforcement Revolving Fund and the remaining Sixteen
Dollars ($16.00) shall be deposited to the credit of the Secretary of
State Charitable Solicitations Revolving Fund. Provided, a
charitable organization whose contributions during the previous
registration period did not exceed Ten Thousand Dollars ($10,000.00)
or if this is the charitable organization's first registration period
and the anticipated contributions for the current registration period
are not expected to exceed Ten Thousand Dollars ($10,000.00), shall
pay a fee of Fifteen Dollars ($15.00) of which Ten Dollars ($10.00)
shall be deposited to the credit of the Attorney General Charitable
Solicitations Enforcement Revolving Fund and the remaining Five
4(#$0&($"!$"+$ -*;
Dollars ($5.00) shall be deposited to the credit of the Secretary of
State Charitable Solicitations Revolving Fund. Each charitable
organization that is required to register under this act shall
register annually with the Secretary of State by the date that the
charitable organization files its Form 990 or by the date, plus
extensions, that it is required to file its Form 990, whichever
occurs first. Registration shall not be deemed to constitute an
endorsement by the state or by the Secretary of State of any
charitable organization or the proposed uses of the funds solicited.
The information so filed shall be available to the general public.
The charitable organization shall provide the following information
on the required forms:
1. The legal name of the charitable organization, any trade
names that the charitable organization uses, any other name the
organization may be identified or known as, and any distinctive names
the organization uses for purposes of solicitation of contributions;
2. The mailing address of the charitable organization;
3. The name and mailing address of:
a. each officer, director, trustee, and/or equivalent, and
b. each salaried executive employee of the charitable
organization;
4. The name and mailing address of:
a. each professional fundraiser or professional solicitor
that will have custody of the contributions, and
b. each person associated with a professional fundraiser,
professional solicitor or charitable organization that
is directly responsible for the payment and distribution
of funds collected;
5. The name and mailing address of each professional fundraising
counsel utilized by the charitable organization;
6. For charitable organizations that register for the first
time, a statement of whether or not the charitable organization
believes contributions for the first year of registration will exceed
Ten Thousand Dollars ($10,000.00);
7. The purposes for which the contributions solicited are to be
used;
8. For the initial registration of a newly formed charitable
organization, a copy of a letter from the Internal Revenue Service,
or other evidence, showing that such organization is exempt from
federal income taxation; or, for a charitable organization that has
not applied for federal income tax exemption with the Internal
Revenue Service or is not required to apply for federal income tax
exemption, evidence showing that said charitable organization is
organized in any state or jurisdiction as a not-for-profit entity;
9. An identification of the period of time or periods during
which solicitations are to be conducted, which may be specific
periods, estimated or projected time frames, or continuous, and which
4(#$0&($"!$"+$ -7
may involve different periods for different types of solicitations by
the same charitable organization;
10. An identification of the specific method or methods of
solicitation utilized by the charitable organization and its agents;
11. Whether the solicitation is to be conducted by the following
for or on behalf of the charitable organization: professional
fundraisers, employees or volunteers of the charitable organization,
and/or others; and
12. If the solicitation is to be conducted in whole or in part
by professional fundraisers, the names and addresses of each
professional fundraiser involved in the solicitation; the basis of
payment or other consideration payable to each professional
fundraiser and the nature of the arrangements between the charitable
organization and each professional fundraiser, the specific amount,
formula or percentage of compensation, or property of any kind or
value to be paid or provided to each professional fundraiser; and if
payment is based on a percentage, the amount of compensation as a
percentage of the total contributions received, and the net amount of
the total contributions received (total contributions received, less
expenses of solicitation other than amounts payable to any
professional fundraiser).
B. In addition to the required information in subsection A of
this section, every charitable organization subject to the provisions
of the Oklahoma Solicitation of Charitable Contributions Act that has
solicited contributions during the previous fiscal year shall provide
the following information:
1. The gross amount of the contributions, gifts, grants and
other similar amounts received by the charitable organization;
2. The total Program Service Expenses of the charitable
organization;
3. The total Management and General Expenses of the charitable
organization;
4. The total Fundraising Expenses of the charitable
organization; and
5. The aggregate amount paid, or payable, to professional
fundraisers and professional fundraising counsel.
C. Any registration form required to be filed under this section
shall be executed by signature, without more, of the person or
persons signing the form, in which case the signature or signatures
shall constitute the affirmation of the signatory, under penalty of
perjury, that the signature is that person's act and deed or the act
and deed of the organization, and that the facts stated therein are
true.
D. If a charitable organization that is registered with the
Secretary of State to solicit contributions in this state changes its
name or the mailing address of its principal office, or plans to
engage in the solicitation of contributions using a name that is not
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listed on its registration form, then it shall, prior to soliciting
any funds in this state using any such name, file with the Secretary
of State a statement executed by an authorized officer of the
organization setting forth any new name and mailing address along
with a fee of Twenty-five Dollars ($25.00). Such fee shall be
deposited to the credit of the General Revenue Fund of the State
Treasury.
E. Any fraternal or membership organization not based in
Oklahoma which solicits contributions from any person of this state
by telephone, or contracts with professional fundraisers to solicit
such contributions, shall be required to have at least one member or
employee of the fraternal or membership organization residing within
the county where the call is received.
Added by Laws 1959, p. 88, § 3, emerg. eff. May 8, 1959. Amended by
Laws 1976, c. 200, § 1, emerg. eff. June 4, 1976; Laws 1978, c. 244,
§ 2, eff. July 1, 1978; Laws 1980, c. 364, § 1, eff. Oct. 1, 1980;
Laws 1984, c. 79, § 1, emerg. eff. April 3, 1984; Laws 1991, c. 320,
§ 1, eff. Sept. 1, 1991; Laws 1994, c. 235, § 9, eff. Sept. 1, 1994;
Laws 1997, c. 334, § 1, eff. July 1, 1997; Laws 1999, c. 421, § 2,
eff. Nov. 1, 1999; Laws 2000, c. 6, § 2, emerg. eff. March 20, 2000;
Laws 2005, c. 366, § 1, emerg. eff. June 6, 2005; Laws 2010, c. 460,
§ 3, eff. July 1, 2011; Laws 2013, c. 4, § 1, eff. Nov. 1, 2013.
NOTE: Laws 1999, c. 377, § 2 repealed by Laws 2000, c. 6, § 33,
emerg. eff. March 20, 2000.
§18-552.3a. Repealed by Laws 2010, c. 460, § 15, eff. July 1, 2011.
§18-552.4. Persons and organizations exempt.
Except as otherwise specifically provided in the Oklahoma
Solicitation of Charitable Contributions Act, the provisions of
Sections 552.3 of this title shall not apply to the following
persons:
1. Organizations incorporated for religious purposes and
actually engaged in bona fide religious programs, and other
organizations directly operated, supervised, or controlled by a
religious organization;
2. Educational institutions that have a faculty, regularly
enrolled students and offer courses of study leading to the granting
of recognized degrees when solicitations of contributions are
primarily confined to its student body and their families, alumni,
faculty and trustees and any 501(c)(3) organization authorized by and
having an established identity with such institutions;
3. Fraternal organizations, when soliciting from their own
members, and patriotic and civic organizations, when solicitation of
contributions is confined to the membership of said organizations,
and the solicitation is managed by their own membership without paid
solicitors; and
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4. Persons soliciting contributions for a named individual
person, when such individual person is specified by name at the time
of solicitation, the purpose for such contribution is clearly stated,
and if the gross contributions collected, without any deductions
whatsoever for the benefit of the solicitor or any other person, be
deposited directly to an account in the name of the beneficiary
established for that purpose at a licensed local bank, and if such
contributions are used for the direct benefit of the named individual
person as beneficiary.
Added by Laws 1959, p. 89, § 4, emerg. eff. May 8, 1959. Amended by
Laws 1974, c. 70, § 1; Laws 1980, c. 364, § 2, eff. Oct. 1, 1980;
Laws 2010, c. 460, § 4, eff. July 1, 2011.
§18-552.5. Repealed by Laws 2010, c. 460, § 15, eff. July 1, 2011.
§18-552.6. Records - Inspection.
Every charitable organization shall keep and maintain a full and
true record of the documents and information required for disclosure
pursuant to Section 552.3 of this title for five (5) calendar years
in such form as will enable such charitable organization to
accurately provide the information required herein. All records
required hereunder shall be open to inspection during regular
business hours, except as otherwise provided by court order, by the
Office of the Attorney General and its employees, and upon demand
shall be presented to that office for inspection.
Added by Laws 1959, p. 89, § 6, emerg. eff. May 8, 1959. Amended by
Laws 1978, c. 244, § 4, eff. July 1, 1978; Laws 1984, c. 79, § 3,
emerg. eff. April 3, 1984; Laws 1994, c. 235, § 11, eff. Sept. 1,
1994; Laws 1997, c. 334, § 3, eff. July 1, 1997; Laws 2010, c. 460, §
5, eff. July 1, 2011.
§18-552.7. Professional fundraisers - Registration - Fees - Name and
address changes.
A. No person shall act as a professional fundraiser for any
charitable organization until the person has first registered with
the Office of the Secretary of State. Applications for registration,
signed and acknowledged by a party duly authorized to act on behalf
of the professional fundraiser, shall state the full legal name of
the professional fundraiser, the street address of the principal
place of business of the professional fundraiser, the full legal
names and street addresses of the charitable organizations with which
it has entered into contracts or agreements relating to the
solicitation of contributions, and the names of all professional
solicitors employed by the professional fundraiser who will be
involved in the solicitation of contributions for charitable
organizations. The registration form shall also be accompanied by an
annual fee in the amount of Two Hundred Fifteen Dollars ($215.00).
4(#$0&($"!$"+$ -*
The first Fifty Dollars ($50.00) of the fee collected shall be
deposited to the credit of the General Revenue Fund of the State
Treasury. One Hundred Eleven Dollars ($111.00) of the fee shall be
deposited to the credit of the Attorney General Charitable
Solicitations Enforcement Revolving Fund and the remaining Fifty-four
Dollars ($54.00) shall be deposited to the credit of the Secretary of
State Charitable Solicitations Revolving Fund. Registration shall be
valid for a period of one (1) year from the date of filing with the
Secretary of State, and may be renewed annually upon the filing of a
renewal application and fee prescribed herein.
B. No professional fundraiser or solicitor shall engage in the
solicitation of contributions for a charitable organization that is
not registered with the Secretary of State unless the organization is
exempt from registration.
C. Every professional fundraiser registered with the Secretary
of State which shall change its name or the mailing address of its
principal office, or plans to engage in professional fundraising
activities using a name that is not listed on its registration form,
shall at least fifteen (15) days prior to engaging in such activities
file with the Secretary of State a statement executed by an
authorized officer of the organization setting forth its new name or
mailing address and pay a filing fee of Twenty-five Dollars ($25.00).
Such fee shall be deposited to the credit of the General Revenue Fund
of the State Treasury.
D. The professional fundraiser shall not employ or retain a
professional solicitor who is not registered pursuant to this act.
E. No professional fundraiser shall solicit any contribution for
a charitable organization without the consent of such organization.
F. No person shall act as a professional fundraiser if the
officers, directors, or any person with a controlling interest in the
business, or any person the professional fundraiser employs or
retains to solicit charitable contributions or to advise, consult,
plan, or manage the solicitation of any contributions, has been
convicted by a court of any state or the United States of a felony or
a misdemeanor involving moral turpitude or arising from his or her
conduct in connection with fundraising activities, the solicitation
of any funds, or the use or expenditure of any funds raised,
collected, or received in any fundraising activity.
G. Any registration form required to be filed under this section
shall be executed by signature, without more, of the person or
persons signing the form, in which case the signature or signatures
shall constitute the affirmation of the signatory, under penalty of
perjury, that the signature is that person’s act and deed or the act
and deed of the organization, and that the facts stated therein are
true.
Added by Laws 1959, p. 90, § 7, emerg. eff. May 8, 1959. Amended by
Laws 1978, c. 244, § 5, eff. July 1, 1978; Laws 1984, c. 79, § 4,
4(#$0&($"!$"+$ -
emerg. eff. April 3, 1984; Laws 1994, c. 235, § 12, eff. Sept. 1,
1994; Laws 1997, c. 334, § 4, eff. July 1, 1997; Laws 1999, c. 421, §
5, eff. Nov. 1, 1999; Laws 2000, c. 6, § 3, emerg. eff. March 20,
2000; Laws 2001, c. 406, § 7, emerg. eff. June 4, 2001; Laws 2010, c.
460, § 6, eff. July 1, 2011.
NOTE: Laws 1999, c. 325, § 7 and Laws 1999, c. 377, § 3 repealed by
Laws 2000, c. 6, § 33, emerg. eff. March 20, 2000.
§18-552.8. Contracts.
A. All contracts entered into by a charitable organization with
a professional fundraiser or professional fundraising counsel for
charitable solicitations or fundraising services shall be in writing.
The charitable organization and the professional fundraiser or
professional fundraising counsel shall each keep and maintain such
contracts on file in their principal offices for a period of five (5)
years from the date that the contract was executed. These contracts
shall be available for inspection by the Office of the Attorney
General.
B. The contract shall clearly state:
1. The respective obligations of each party;
2. The compensation arrangement. If the compensation payable to
the professional fundraiser is based on a percentage or formula, the
contract shall state the percentage of the gross revenue derived in
connection with the solicitation that the charitable organization
will receive or other formula for payment;
3. Any goods or services to be offered to the public;
4. The geographic area where the campaign will take place;
5. In the case of a contract with a professional fundraiser, the
period of time or periods during which solicitations are to be
conducted, which may be specific periods, estimated or projected time
frames, or continuous, and which may involve different periods for
different types of solicitations by the same charitable organization;
6. A fundraising budget, if available; and
7. Provisions for a final accounting of contributions raised and
expenses incurred.
The contract shall also describe in reasonable detail the
services to be provided by the professional fundraiser and shall
clearly state whether the professional fundraiser may, at any time,
have custody, possession or control of any contributions.
Added by Laws 1959, p. 90, § 8, emerg. eff. May 8, 1959. Amended by
Laws 1978, c. 244, § 6, eff. July 1, 1978; Laws 1984, c. 79, § 5,
emerg. eff. April 3, 1984; Laws 1994, c. 235, § 13, eff. Sept. 1,
1994; Laws 1997, c. 334, § 5, eff. July 1, 1997; Laws 1999, c. 421, §
6, eff. Nov. 1, 1999; Laws 2010, c. 460, § 7, eff. July 1, 2011.
§18-552.9. Professional solicitors - Registration - Fees.
4(#$0&($"!$"+$ -2
A. Every professional solicitor employed or retained by a
professional fundraiser required to register pursuant to this act,
shall, before engaging in any solicitation of contributions by the
professional fundraiser, register with the Office of the Secretary of
State. An application for registration, signed by the solicitor,
shall state the full legal name and street address of the
professional fundraiser that employs the solicitor and shall be
accompanied by a fee in the amount of Twenty-five Dollars ($25.00) of
which Ten Dollars ($10.00) shall be deposited to the credit of the
General Revenue Fund of the State Treasury. Ten Dollars ($10.00) of
the fee shall be deposited to the credit of the Attorney General
Charitable Solicitations Enforcement Revolving Fund and the remaining
Five Dollars ($5.00) shall be deposited to the credit of the
Secretary of State Charitable Solicitations Revolving Fund.
Registration shall be for a period of one (1) year from the date of
filing with the Secretary of State, and may be renewed annually upon
the filing of a renewal application accompanied by a payment of the
fee prescribed herein.
B. When requesting a contribution, the professional solicitor
shall clearly disclose or provide contact information for the
following information, if requested by the person being solicited:
1. The name of the professional fundraiser that employs or
retains the professional solicitor, as set out in the registration
statement filed with the Secretary of State, and the fact that the
professional fundraiser is being paid for his or her services;
2. The name of the charitable organization the person represents
and a description of how the contributions raised by the solicitation
will be used; and
3. The percentage of the contributions solicited that the
professional fundraiser is to receive and the registration number of
the professional fundraiser, the charitable organization and the
professional solicitor, as requested.
C. No person shall act as a professional solicitor if the person
has been convicted by a court of any state or the United States of a
felony or of a misdemeanor involving moral turpitude or arising from
conduct by the person in connection with fundraising or the
solicitation of any funds, for or on behalf of a charitable
organization, or the use or expenditure of any funds raised,
collected, or received in any fundraising activity.
D. Any registration form required to be filed under this section
shall be executed by signature, without more, of the person signing
the form, in which case the signature shall constitute the
affirmation of the signatory, under penalty of perjury, that the
signature is that person’s act and deed, and that the facts stated
therein are true.
Added by Laws 1959, p. 90, § 9, emerg. eff. May 8, 1959. Amended by
Laws 1978, c. 244, § 7, eff. July 1, 1978; Laws 1984, c. 79, § 6,
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emerg. eff. April 3, 1984; Laws 1994, c. 235, § 14, eff. Sept. 1,
1994; Laws 1997, c. 334, § 6, eff. July 1, 1997; Laws 1999, c. 421, §
7, eff. Nov. 1, 1999; Laws 2000, c. 6, § 4, emerg. eff. March 20,
2000; Laws 2010, c. 460, § 8, eff. July 1, 2011.
NOTE: Laws 1999, c. 377, § 4 repealed by Laws 2000, c. 6, § 33,
emerg. eff. March 20, 2000.
§18-552.10. Repealed by Laws 2010, c. 460, § 15, eff. July 1, 2011.
§18-552.11. Repealed by Laws 2010, c. 460, § 15, eff. July 1, 2011.
§18-552.12. Repealed by Laws 2010, c. 460, § 15, eff. July 1, 2011.
§18-552.13. Reciprocal agreements with other states.
The Secretary of State may enter into reciprocal agreements with
a like authority of any other state or states for the purpose of
exchanging information made available to the Secretary of State.
Pursuant to such agreements the Secretary of State may accept
information filed by a charitable organization with another state in
lieu of the information required to be filed by a charitable
organization in accordance with the provisions of Section 552.3 of
this title, if such information is substantially similar to the
information required to be filed under Section 552.3 of this title.
Added by Laws 1959, p. 91, § 13, emerg. eff. May 8, 1959. Amended by
Laws 1978, c. 244, § 8, eff. July 1, 1978; Laws 1984, c. 79, § 7,
emerg. eff. April 3, 1984; Laws 1994, c. 235, § 15, eff. Sept. 1,
1994; Laws 1997, c. 334, § 7, eff. July 1, 1997.
§18-552.14. Repealed by Laws 2010, c. 460, § 15, eff. July 1, 2011.
§18-552.14a. Professional fundraisers - Violations of act.
A. Applicable to charitable organizations, professional
fundraisers and professional solicitors, the following shall
constitute violations of this act:
1. Knowingly making any false material statement or
representation on a registration application;
2. Using the name of a person when soliciting contributions or
in an advertisement, brochure, stationery or correspondence, without
the consent or approval of such person, other than an officer,
director or trustee of the charitable organization by or for which
contributions are solicited. This paragraph shall not apply to the
use of the name of a person that has contributed to or sponsored an
event or program of the charitable organization in a report,
brochure, program or listing of donors, contributors, sponsors, or
supporters issued or published by a charitable organization. This
paragraph shall not apply to the use of a public figure’s name and/or
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likeness truthfully and in good faith, so long as such use does not
imply a false endorsement;
3. Knowingly using, in connection with solicitation of
contributions for the purpose of deceiving the public, a name similar
to other charitable organizations, professional fundraiser,
professional solicitor or government agency or political subdivision;
4. Failing to register as required pursuant to Sections 552.3,
552.7 or 552.9, as applicable, of Title 18 of the Oklahoma Statutes
unless otherwise exempted by this act;
5. Employing in any solicitation or collection of contributions
for a charitable organization any device, scheme or artifice to
defraud or for obtaining money or property by means of any false
pretense, representation or promise; and
6. Failing or refusing to supply requested information as
required by Section 552.9 of Title 18 of the Oklahoma Statutes.
B. The Attorney General or a district attorney may bring an
action:
1. To obtain a declaratory judgment that an act or practice
violates this act;
2. To enjoin, or to obtain a restraining order against a person
who has violated or is violating this act;
3. To recover actual damages, restitution, disgorgement and
penalties attributed to a violation of this act;
4. To recover reasonable expenses and investigation fees
attributable to a violation of this act;
5. To prosecute any civil or criminal actions as provided by
this act, as applicable; and
6. To revoke the registration of a charitable organization,
professional fundraiser, or professional solicitor for any violation
of this act.
C. In lieu of instigating or continuing an action or proceeding,
the Attorney General or a district attorney may accept a consent
judgment with respect to any act or practice declared to be a
violation of this act. Such a consent judgment shall provide for the
discontinuance by the person entering the same of any act or practice
declared to be a violation of this act, and it may include a
stipulation for the payment by such person of reasonable expenses,
attorney fees, investigation costs and penalties incurred by the
Attorney General or a district attorney. The consent judgment also
may include a stipulation for restitution to be made by such person
to contributors of money, property or other things received from
contributors in connection with a violation of this act and also may
include a stipulation for specific performance. Any consent judgment
entered into pursuant to this section shall not be deemed to admit
the violation, unless it does so by its terms. Before any consent
judgment entered into pursuant to this section shall be effective, it
must be approved by the district court and an entry made in the
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manner required for making an entry of judgment. After such approval
is received, any breach of the conditions of such consent judgment
shall be treated as a violation of a court order, and shall be
subject to all the penalties provided by law therefor.
D. In any action brought by the Attorney General or a district
attorney, the court may:
1. Make such orders or judgments as may be necessary to prevent
the use or employment by a person of any practice declared to be a
violation of this act;
2. Make such orders or judgments as may be necessary to
compensate any person for damages sustained;
3. Enjoin any person from engaging in solicitation of charitable
contributions in this state;
4. Revoke the registration of a charitable organization,
professional fundraiser or professional solicitor;
5. Enter any order that is appropriate in a criminal prosecution
of crimes identified in this act or any other state law; and
6. Grant other appropriate relief.
E. When an action is filed under this act by the Attorney
General or a district attorney, no action seeking an injunction or
declaratory judgment shall be filed in any other district in this
state based upon the same transaction or occurrence, series of
transactions or occurrences, or allegations that form the basis of
the first action filed.
F. When the Attorney General or a district attorney has reason
to believe that a person has engaged in, is engaging in or is about
to engage in any practice declared to be in violation of this act and
he or she believes it to be in the public interest that an
investigation should be made to ascertain whether a person has in
fact engaged in, is engaging in or is about to engage in any such
practice, he or she may execute in writing and cause to be served
upon any such person who is believed to have information, documentary
material or physical evidence relevant to the alleged violation an
investigative demand requiring such person to furnish, under oath or
otherwise, a report in writing setting forth the nonprivileged
relevant facts and circumstances of which the person has knowledge,
or to appear and testify, or to produce relevant nonprivileged
documentary material or physical evidence for examination at such
reasonable time and place as may be stated in the investigative
demand, concerning the solicitation of charitable contributions.
G. To accomplish the objectives and to carry out the duties
prescribed by this act, the Attorney General or district attorney, in
addition to other powers conferred on him or her by this act or the
laws of this state, may issue subpoenas or other process to any
person and conduct hearings in aid of any investigation or inquiry,
administer oaths and take sworn statements under penalty of perjury,
and serve and execute in any county, search warrants; provided, that
4(#$0&($"!$"+$ -;
none of the powers conferred by this act shall be used for the
purpose of compelling any natural person to furnish testimony or
evidence that might tend to incriminate him or her or subject him or
her to a penalty; and provided further, that information obtained
pursuant to the powers conferred by this act shall not be made public
or disclosed by the Attorney General, district attorney or their
employees unless otherwise provided under this act.
H. In addition to any other penalties provided under this act, a
charitable organization, professional fundraiser, or professional
solicitor that is found to be in violation of the Oklahoma
Solicitation of Charitable Contributions Act in a civil action or who
willfully violates the terms of any injunction or court order issued
pursuant to the Oklahoma Solicitation of Charitable Contributions Act
shall pay a civil penalty of not more than Ten Thousand Dollars
($10,000.00) per violation, taking into account the nature and
severity of the violation and the benefit provided to the public by
the violator, along with the need for protecting contributors and
donors. For the purposes of this section, the district court issuing
an injunction shall retain jurisdiction, and in such cases, the
Attorney General, acting in the name of the state, or a district
attorney may petition for recovery of civil penalties.
I. In administering and pursuing actions under this act, the
Attorney General and a district attorney are authorized to sue for
and collect reasonable expenses, attorney fees, and investigation
fees as determined by the court. Civil penalties or contempt
penalties sued for and recovered by the Attorney General or a
district attorney shall be used for the furtherance of their duties
and activities under this act.
J. In addition to other penalties imposed by this act, any
person convicted in a criminal proceeding of committing an act
prohibited in paragraph 1, 3 or 5 of subsection A of this section,
shall be guilty of a felony and upon conviction thereof shall be
subject to a fine not to exceed Ten Thousand Dollars ($10,000.00) or
imprisonment in the custody of the Department of Corrections for not
more than five (5) years, or by both such fine and imprisonment.
Added by Laws 2010, c. 460, § 9, eff. July 1, 2011.
§18-552.15. Repealed by Laws 2010, c. 460, § 15, eff. July 1, 2011.
§18-552.16. Powers and duties not restricted.
The Oklahoma Solicitation of Charitable Contributions Act shall
not be construed to limit or to restrict the exercise of the powers
or the performance of the duties of the Attorney General or of any
district attorney of this state which they otherwise are authorized
to exercise or perform under any other provision of law.
Added by Laws 1959, p. 92, § 16, emerg. eff. May 8, 1959. Amended by
Laws 2010, c. 460, § 10, eff. July 1, 2011.
4(#$0&($"!$"+$ -27
§18-552.17. Repealed by Laws 2010, c. 460, § 15, eff. July 1, 2011.
§18-552.18. Repealed by Laws 2010, c. 460, § 15, eff. July 1, 2011.
§18-552.19. Availability of registration information - Electronic
registration.
A. The Secretary of State shall make available on the Secretary
of State’s website all pertinent information related to the entities
that are required to register under this act including information
included in the entity’s registration. The Secretary of State shall
also create a numbering system and assign a registration number to
each entity that is required to register under this act. The
registration number shall also be identified with the registered
entity on the website.
B. The Secretary of State shall, on or before July 1, 2012,
provide for electronic registration of all entities required to
register under this act.
C. The Secretary of State shall notify the Office of the
Attorney General if, in the opinion of the Secretary of State, there
is such a violation of the Oklahoma Solicitation of Charitable
Contributions Act that the Office of the Attorney General needs to be
aware of in order to investigate or prosecute.
D. The Office of the Attorney General may review all
applications and renewals and other relevant information required to
be filed with the Secretary of State pursuant to this act in order to
determine the reasonableness and accuracy of such information and to
determine if there are any violations of the act. If the Office of
the Attorney General finds any questionable information or
inaccuracies, it may notify the charitable organization, professional
fundraiser or professional solicitor of such discrepancies and allow
a reasonable time to cure such discrepancies. If such discrepancies
are not cured in a reasonable time or if the Office of the Attorney
General becomes aware of any other violations of this act, then it
may investigate and/or prosecute as authorized by this act.
E. If the Office of the Attorney General becomes aware of any
charitable organization, professional fundraiser, or professional
solicitor that has not registered and that is required to register
under the Oklahoma Solicitation of Charitable Contributions Act, then
the Office of the Attorney General shall notify such entity in
writing that it must comply with the act and register. If the entity
has not registered within one month after written notification then
the Office of the Attorney General may take enforcement action
concerning the failure to register.
Added by Laws 2010, c. 460, § 11, eff. July 1, 2011.
4(#$0&($"!$"+$ -2
§18-552.20. Secretary of State Charitable Solicitations Revolving
Fund.
There is hereby created in the State Treasury a revolving fund
for the Office of the Secretary of State to be designated the
"Secretary of State Charitable Solicitations Revolving Fund". The
fund shall be a continuing fund, not subject to fiscal year
limitations, and shall consist of all monies received by the Office
of the Secretary of State from sources provided under this act and
any appropriations made by the Legislature. All monies accruing to
the credit of the fund are hereby appropriated and may be budgeted
and expended by the Secretary of State in furtherance of its duties
under the provisions of the Oklahoma Solicitation of Charitable
Contributions Act. Expenditures from the fund shall be made upon
warrants issued by the State Treasurer against claims filed as
prescribed by law with the Director of the Office of Management and
Enterprise Services for approval and payment.
Added by Laws 2010, c. 460, § 12, eff. July 1, 2011. Amended by Laws
2012, c. 304, § 65.
§18-552.21. Attorney General Charitable Solicitations Enforcement
Revolving Fund.
There is hereby created in the State Treasury a revolving fund
for the Office of the Attorney General to be designated the "Attorney
General Charitable Solicitations Enforcement Revolving Fund". The
fund shall be a continuing fund, not subject to fiscal year
limitations, and shall consist of all monies received by the Office
of the Attorney General from sources provided under this act and any
appropriations made by the Legislature. All monies accruing to the
credit of the fund are hereby appropriated and may be budgeted and
expended by the Attorney General in furtherance of its duties under
the provisions of the Oklahoma Solicitation of Charitable
Contributions Act. Expenditures from the fund shall be made upon
warrants issued by the State Treasurer against claims filed as
prescribed by law with the Director of the Office of Management and
Enterprise Services for approval and payment.
Added by Laws 2010, c. 460, § 13, eff. July 1, 2011. Amended by Laws
2012, c. 304, § 66.
§18-552.22. Effectiveness of registrations made prior to act.
All registrations, unless otherwise terminated pursuant to this
act, made prior to the effective date of this act shall remain
effective until they expire and any registrations occurring after the
effective date of this act shall be made with the Office of the
Secretary of State pursuant to this act.
Added by Laws 2010, c. 460, § 14, eff. July 1, 2011.
§18-553.1. Solicitation under certain promises prohibited.
4(#$0&($"!$"+$ -2
It shall be unlawful for any person, organization, group,
association, partnership, corporation, or combination thereof, to
conduct or carry on any drive for, or to solicit or invite,
contributions of funds for the purpose of or under the guise or
representation or promise of being able to secure old age or other
assistance for any person, under any state or federal law, or of
securing for such person or persons higher or additional assistance.
Laws 1959, p. 220, § 1; Laws 1978, c. 244, § 10, eff. July 1, 1978.
§18-553.2. Solicitations by regulated organizations not prohibited.
Provided that nothing in this act shall be construed to prohibit
solicitations or other activity by any organization whose activities
are regulated by any law or laws of the federal government or any
professional organization of the State of Oklahoma.
Laws 1959, p. 221, § 2.
§18-553.3. Penalties.
Any violation of the provisions of Sections 553.1 and 553.2 of
this title shall constitute a felony and any person guilty thereof
shall, upon conviction, be fined not more than Ten Thousand Dollars
($10,000.00) and may be confined in the State Penitentiary for a
period of not to exceed ten (10) years, or by both such fine and
imprisonment. Any such prohibited communication by any agent or
servant of a corporation shall subject such corporation to the fine
above specified in addition to whatever penalty is imposed upon such
agent or servant. Any corporation may be enjoined in the manner
provided in Section 12, Chapter 70, Title 21, Page 193, Oklahoma
Session Laws 1955, when any of the conditions herein set forth are
found to exist with respect to a violation of this act, or it may be
subject to the cancellation therein specified.
Added by Laws 1959, p. 221, § 3. Amended by Laws 1997, c. 133, §
143, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 69, eff.
July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date
of Laws 1997, c. 133, § 143 from July 1, 1998, to July 1, 1999.
§18-561. Trustees of religious corporations, selection.
The board of trustees, or other officers of any religious
corporation, may be chosen at such times and in such manner as may be
in conformity to the rules, usage or general discipline of such
corporation.
R.L.1910, § 1467.
§18-562. Alternative articles for religious association - Recording
- Powers.
The members of any church or religious society, not less than
three, who by its rules, usage and general discipline, or otherwise,
4(#$0&($"!$"+$ -2*
do not desire to organize and become incorporated under the foregoing
provisions relating to corporations may organize and become
corporate, capable of suing and being sued, holding, purchasing and
receiving title to real estate and other property by devise, gift,
grant or other conveyance, with power to mortgage, sell or convey the
same or any part, parcel or portion thereof, by adopting and signing
articles containing:
First. The name of the church, society, association or
corporation, its general purpose and plan of operation and its place
of location.
Second. The terms of admission and qualifications of membership,
and the selection of officers and the filling of vacancies, and the
manner in which the same is to be governed and managed. Such
articles shall be filed in the office of the Secretary of State and a
filing fee of Twenty-five Dollars ($25.00) shall be paid to the
Secretary of State. The articles shall also be filed in the office
of the register of deeds of the county in which such church, society,
association or corporation is located; and thereupon such church,
society, association or corporation shall have all the powers
hereinbefore provided, and may adopt and establish bylaws and make
all rules and regulations deemed necessary and expedient for the
management of its affairs in accordance with law.
R.L. 1910, § 1468. Amended by Laws 1996, c. 69, § 1, eff. Nov. 1,
1996.
§18-563. Title vests in successors in trust.
All grants or deeds from private individuals, or acts of
legislative bodies, transferring, conveying or granting real estate
in this state to any bishop, dean, rector, vestryman, deacon,
director, minister or any other officer or officers of any church or
organized religious society in trust for the use and benefit of such
society of which they are such officer or officers, which have been
or may be made, done or executed, shall vest in their successor or
successors in office, or other officer which such society may at any
time designate, all the legal or other title, to the same extent and
in all respects the same, as trustee of such trust, for the use and
benefit of such society, which such bishop, dean, rector, vestryman,
deacon, director, minister or other officer or officers, had under
such grant, deed or act; and all transfers or sales made by such
officer or officers so acquiring title by virtue of this article, by
succession in office shall have all the validity, force and effect
that it would have had had it been made by such bishop, dean, rector,
vestryman, deacon, director, minister or other officer or officers,
while holding under and by virtue of such grant, deed or act of such
legislative body.
R.L.1910, § 1469.
4(#$0&($"!$"+$ -2
§18-564.1. Extinct church, religious corporation, etc. -
Preservation and protection of property.
The property, both real and personal, belonging to or held in
trust by or for any church, religious corporation, association,
organization, or society, that has or shall become extinct, or that
has or shall cease to function and use its property, shall be
preserved and protected from waste and dilapidation.
Laws 1943, p. 39, § 1.
§18-564.2. Association, etc. of same denomination or creed to have
jurisdiction.
If there is no superior body, presbytery, synod, conference,
diocese, convention, or other ecclesiastical body having jurisdiction
to take charge of, protect and preserve such property, then, any
statewide religious association, organization, society, or
corporation of the same or similar denomination, faith, creed,
practice or doctrine, shall have and is hereby given jurisdiction to
take charge of and preserve such property.
Laws 1943, p. 39, § 2.
§18-564.3. Petition to district court - Final order - Transfer of
title and possession.
When the condition of being extinct or of ceasing to function and
use its property has existed for two (2) years or longer, and there
is no superior body having jurisdiction, the district court of any
county where any such property is located, upon petition therefor,
after the notice hereinafter provided, and, after hearing and inquiry
into the merits, shall make a final order, declaring such church or
society extinct and dissolving the same; and shall make a final order
transferring the title and possession of all property which may
belong to such church or society or which may be held in trust for
such church or society to a statewide religious association,
organization, society, or corporation of the same or similar
denomination, faith, creed, practice, or doctrine.
Laws 1943, p. 39, § 3.
§18-564.4. Notice of hearing.
Notice of hearing of said petition shall be given by publication
in a newspaper published in the town or city where the church or
religious organization was located if there be one, and if there be
none, then in a newspaper at the county seat of the county, for two
(2) consecutive weekly issues, the first publication being at least
fifteen (15) days prior to the day of the hearing.
Laws 1943, p. 39, § 4.
§18-564.5. Lien or reversionary interest not affected.
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This act shall not affect or impair any valid lien or any
reversionary interest.
Laws 1943, p. 39, § 5.
§18-571. School property - How held.
Any corporation formed for the purpose of establishing an
institution of learning shall hold the property of the institution
solely for the purpose of education, and not for the individual
benefit of itself or any contributor to the endowment thereof.
R.L.1910, § 1470.
§18-572. Objects of expenditure.
The trustees or directors of any such corporation shall
faithfully apply all the funds collected, or the proceeds of the
property belonging to the institution, according to their best
judgment, in erecting, completing or repairing suitable buildings, in
supporting necessary officers, instructors, agents and employees, and
in procuring books, maps, charts, globes and philosophical, chemical
and other apparatus or cabinets, necessary to the objects and success
of the institution; and all donations, devises or bequests made to it
for particular purposes when accepted, shall be applied in conformity
with the express condition of the donor or devisor.
R.L.1910, § 1471.
§18-573. Powers of corporation.
Such corporation has power to appoint a president or principal
for the institution, and such professors, tutors and other agents and
officers, as may be necessary, and to displace any of them as the
interests of the institutions may require; to fill vacancies, to
prescribe and direct the course of studies and the discipline to be
pursued and observed in the institution, and the rates of tuition in
the same; and the president and professors shall constitute the
faculty of such institution; and they have power to enforce the rules
and regulations enacted for the government and discipline of the
students, and to suspend and expel offenders, as may be deemed
expedient.
R.L.1910, § 1472.
§18-574. Degrees conferred.
Every such corporation having the rank of a college or
university, has power to confer, on the recommendation of the
faculty, all such degrees or honors as are usually conferred by
colleges and universities in the United States, and such others,
having reference to the course of studies and the worth and
accomplishment of the student, as may be deemed proper.
R.L.1910, § 1473.
4(#$0&($"!$"+$ -2:
§18-575. Mechanics and agriculture.
Such corporation may connect with its institution, to be used as
a part of its course of education, any mechanical shops or machinery,
or lands for agricultural purposes, not exceeding three hundred and
twenty (320) acres, to which may be attached all necessary buildings
for carrying on the mechanical and agricultural purposes of such
institution.
R.L.1910, § 1474.
§18-581. Benevolent and charitable corporations - Purposes.
The following associations for charitable purposes may become
incorporated, as provided in this article, as follows:
1. To establish and maintain hospitals and infirmaries for the
cure of the sick and support of the aged and indigent, and asylums
for orphans;
2. For the mutual assistance of the members in time of sickness
or necessity, and to provide a fund for this purpose by contributions
of the members thereof from time to time, and for the like incidental
charitable purposes;
3. To establish and maintain lodges, chapters and encampments,
of fraternities or associations commonly known as Free Masons, the
Independent Order of Odd Fellows, Good Templars, Sons of Temperance,
and other like charitable orders or societies;
4. To establish and maintain fire companies in any incorporated
city or town; and
5. To establish and maintain youth organizations to promote the
ideals of good sportsmanship, honesty, loyalty, courage and reverence
by providing supervised competitive athletic games.
Amended by Laws 1983, c. 100, § 11, emerg. eff. May 9, 1983.
§18-582. Transfer of membership.
Any regularly incorporated fraternal beneficiary society shall,
on application of its governing body, be permitted to transfer its
membership to any other society doing business in this state, and
such membership may be accepted without restriction, upon age limit
and without new medical examination on the part of the membership so
transferred where the entrance age limit of fifty-five (55) years and
a medical examination was required and made by the society so
transferring its membership.
R.L.1910, § 1476.
§18-583. Fraternal beneficiary societies - Change of name.
Any fraternal beneficiary society incorporated under the laws of
this state may change its corporate name on application by its
governing body to the Insurance Commissioner of the state. The name
selected shall not be such as will appear to be so near the name of
any other association or society now doing business in this state as
4(#$0&($"!$"+$ -28
to cause confusion in the minds of the people, or to interfere with
the corporate name of such existing association or corporation. On
the approval of the Insurance Commissioner the Secretary of State
shall cause an amended charter to issue, signed by the Governor and
attested by the seal of state, changing the name of such beneficiary
society in accordance with the recommendation of the Insurance
Commissioner, and such change of name shall have the same effect as
if originally set forth in the original articles of incorporation.
R.L.1910, § 1477.
§18-584. Use of society name exclusive.
No person, society, association or corporation shall assume,
adopt or use the name of a humane, fraternal or charitable
organization, incorporated under the laws of this or of any other
state of the United States, or a name so nearly resembling the name
of such incorporated organization as to be a colorable imitation
thereof, or calculated to deceive persons not members, with respect
to such corporation. In all cases where two or more of such
societies, associations or corporations claim the right to the same
name, or to names substantially similar as above provided, the
organization which was first organized and used the name, and first
became incorporated under the laws of the United States or of any
state of the Union, shall be entitled in this state to the prior and
exclusive use of such name, and the rights of such societies,
associations or corporations, and of their individual members shall
be fixed and determined accordingly.
Amended by Laws 1983, c. 100, § 12, emerg. eff. May 9, 1983.
§18-585. Persons not entitled to wear insignia, use name or claim
membership.
No person shall wear or exhibit the badge, button, emblem,
decoration, insignia or charm or shall assume or use the name of any
humane, fraternal or charitable corporation, incorporated under the
laws of this or any other state or of the United States or shall
assume or claim to be a member thereof, or of a humane, fraternal or
charitable corporation, the name of which shall so nearly resemble
the name of any other corporation existing prior to the organization
of the corporation or association of which such person may claim to
be a member, the name whereof may be calculated to deceive the people
with respect to any such prior corporation, unless he shall be
authorized under the laws, statutes, rules, regulations and bylaws of
such former corporation, to wear such badge, button, emblem,
decoration, insignia or charm, or to use and assume such name as a
member thereof.
Amended by Laws 1983, c. 100, § 13, emerg. eff. May 9, 1983.
§18-586. Violation enjoined.
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Whenever there shall be an actual or threatened violation of
Sections 584 and 585 of this title, an application may be made to the
court or judge having jurisdiction, to issue an injunction upon
notice to the defendant of not less than five (5) days, for an
injunction so restraining such actual or threatened violation, or if
it shall appear to such court or justice that the defendant is in
fact using the name of a humane, fraternal or charitable corporation,
incorporated as aforesaid, or a name so nearly resembling it as to be
calculated to deceive the public, or is wearing or exhibiting the
badge, insignia or emblem of such corporation without authority
thereof, and in violation of Sections 584 and 585 of this title, an
injunction may be issued by said court or justice, enjoining or
restraining such actual or threatened violation, without requiring
proof that any person has in fact been misled or deceived thereby.
Amended by Laws 1983, c. 100, § 14, emerg. eff. May 9, 1983.
§18-587. Penalty.
Any person violating the provisions of Sections 1478 and 1479 of
this article, shall be deemed guilty of a misdemeanor, and upon upon
conviction thereof, shall be fined not exceeding Fifty Dollars
($50.00), or imprisoned in the county jail not exceeding thirty (30)
days, or may be punished by both such fine and imprisonment.
R.L. 1910, § 1481.
§18-588. Benevolent corporations may own real or personal property.
Any charitable corporation, including chartered fraternal, grand
and subordinate lodges and societies, are hereby empowered to
receive, either by way of gift, purchase, grant, devise or by will,
real or personal property, and to hold the same, and to dispose of
the same in the carrying out of the purposes of the corporation,
society or lodge.
Amended by Laws 1983, c. 100, § 15, emerg. eff. May 9, 1983.
§18-589. Charter as benevolent corporation - Trustees - Bylaws.
Before being competent to so receive such property, such society
shall obtain a charter as a charitable corporation in the manner
provided by law from the Secretary of State, and elect trustees, who
may be the same trustees already elected under their fraternal rules,
and whose bylaws may, so far as they do not contravene the statute
laws of the state, be substituted for the bylaws required to be
adopted upon obtaining a charter.
Amended by Laws 1983, c. 100, § 16, emerg. eff. May 9, 1983.
§18-590. Community fund or chest corporations - Notice of meetings -
Quorum.
Any corporation organized under the laws of this state as a
community fund or community chest, or that may hereafter be so
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organized, may give notice of the time and place of any regular or
special meeting of its members by publication for not less than two
(2) weeks previous thereto in a newspaper of general circulation in
the city or town where the principal office or place of business of
the corporation is located. At any such regular or special meeting,
the members present in person shall constitute a quorum, and a vote
of a majority of such quorum shall be sufficient to transact any or
all business properly before such meeting, including the adoption or
amendment of bylaws.
Laws 1945, p. 48, § 1.
§18-591. Community fund or chest corporations - Amendment of
articles of incorporation.
Any community fund or community chest corporation organized under
the laws of this state for which a charter has been issued may amend
its articles of incorporation in any particular competent to have
been embodied or inserted in the original articles of incorporation
of such company, including any provision authorized by this act. In
order to amend its articles of incorporation, it shall be necessary
for such amendment to have been authorized at any regular meeting of
its members, or at a special meeting of such members called for the
purpose of making such amendment. When so authorized, new articles
signed by the president and secretary of the corporation and entitled
"Amended Articles of Incorporation" shall be filed with the Secretary
of State, who upon the payment of the fees provided by Section 541,
of Title 18, O.S. 1951, shall cause an amended charter to issue,
signed by him as Secretary of State and attested by the seal of the
state, for which date the amendment shall relate back and be
considered a part of the original articles of incorporation to the
same effect as if originally set forth therein.
Laws 1945, p. 48, § 2.
§18-592. Fire departments for unincorporated areas - Incorporation.
The authority of persons associated together to become
incorporated as a charitable corporation for the purpose of providing
either a volunteer or full-time fire department for an unincorporated
area or place is hereby ratified and confirmed. Such a corporate
fire department shall have authority to provide fire protective
service both to its members and to nonmembers, either within or
without the unincorporated area wherein it is situated.
Amended by Laws 1983, c. 100, § 17, emerg. eff. May 9, 1983.
§18-593. Fire departments for unincorporated areas - Service fees -
Insurance.
A. Any charitable corporation formed for the purpose of
providing either a volunteer or a full-time fire department, pursuant
to Section 592 of this title, shall have authority to establish a
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reasonable schedule of fees to be charged for its services in
extinguishing fires and all other emergencies of its members and
nonmembers who utilize such fire department to extinguish or control
a fire or provide services in response to an emergency either within
or without the unincorporated area wherein it is situated. Such
schedule of fees may contain one fee for members and another fee for
nonmembers, except that no fee shall be established in excess of the
approximate cost of providing the service. Any member or nonmember
utilizing the services of such a fire department to extinguish or
control a fire or provide services in response to an emergency shall
be liable to said corporation in the amount of the established fee.
However, no fee shall be charged by a fire department for merely
appearing at the scene of a controlled fire unless called by the
person setting the fire or at such person's request. If it is
necessary for suit to be brought for collection of such amount due,
such liability shall include costs of suit and a reasonable
attorney's fee.
B. If insurance coverage is provided for the fee specified in
subsection A of this section or for the cost of providing the service
rendered by the fire department and an insurer makes payment for the
service it shall be the duty of the insured party or the responding
fire department to notify the insurer of services rendered. The
instrument of payment for the services of the fire department shall
be made to the order of the responding fire department and the
insured.
Added by Laws 1957, p. 143, § 2. Amended by Laws 1983, c. 100, § 18,
emerg. eff. May 9, 1983; Laws 1989, c. 172, § 1, emerg. eff. May 8,
1989; Laws 1993, c. 8, § 1, eff. Sept. 1, 1993; Laws 2014, c. 343, §
1, eff. Nov. 1, 2014.
§18-594. Fire departments for unincorporated areas - Status as state
agency - Nonliability for tort.
Any charitable corporation formed in an unincorporated area for
the purpose of providing either a volunteer or a full-time fire
department, such as is mentioned in Section 592 of this title, shall
be considered an agency of the State of Oklahoma while actually
performing the function of providing fire protective services either
within or without the unincorporated area wherein it is situated, and
while so engaged such corporation shall not be liable in tort for the
acts of its members or its firemen.
Amended by Laws 1983, c. 100, § 19, emerg. eff. May 9, 1983.
§18-601. Right of way - Use of public ground, streets and highways -
Use of railroad property - Interstate highway system.
(a) There is hereby granted to the owners of any telegraph or
telephone lines operated in this state the right-of-way over lands
and real property in this state, and the right to use public grounds,
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streets, alleys and highways in this state, subject to control of the
proper municipal authorities as to what grounds, streets, alleys or
highways said lines shall run over or across, and the place the poles
to support the wires are located; also the right to condemn and cross
over or under, or build their lines along any railroad property or
right-of-way, subject to the necessary use of such property or right-
of-way by the railroad company; the right-of-way over real property
granted in this section may be acquired in the same manner and by
like proceedings as provided for railroad corporations.
(b) Provided, however, the State Highway Commission, in the
exercise of reasonable discretion, may prevent the installation of
such facilities upon limited access highways which are a part of the
National System of Interstate and Defense Highways, or such
Commission may permit the installation of such facilities on such
portion of Interstate and Defense Highways under such reasonable
regulations as it may prescribe. Provided, further, nothing herein
contained shall affect the right of the owners of telephone and
telegraph lines to cross such Interstate and Defense Highways and to
build their lines either aerial or underground along and upon any
extension of said interstate and defense highways within urban areas
in accordance with Federal Aid Regulations.
R.L.1910, § 1445. Amended by Laws 1961, p. 203, § 1, emerg. eff.
Aug. 7, 1961.
§18-602. State highway rights-of-way - Prior notification required.
Any utility installation, relocation or crossing of state highway
rights-of-way shall be accomplished with prior notification to the
Department of Transportation and shall conform to all state laws.
Added by Laws 2014, c. 408, § 1, eff. July 1, 2014.
§18-603. Request from counties to telephone line owners for future
installation information.
Any county may send out a one-time request for information
regarding the future installation of lines, poles or wires to the
owner of any telephone line operated in the public right-of-way of
the county road system of the requesting county. Upon receipt of the
request, the owner of the telephone line shall provide to that county
notice of the date of installation, the name and contact number of
the installation manager or supervisor, and the location of the
lines, poles or wires.
Added by Laws 2014, c. 408, § 2, eff. July 1, 2014.
§18-671. Share-purchase options or warrants and shares issued
pursuant thereto.
Any option or warrant for the purchase of shares of any domestic
corporation heretofore issued by such corporation, although not
issued in connection with the allotment of shares or the issuance of
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bonds or other securities, and any share issued by such corporation
pursuant to the exercise of such option or warrant is hereby
validated if the issuance of such warrant or option was heretofore
expressly authorized, or hereafter is ratified, by the holders of a
majority of the shares of such corporation having voting power with
respect thereto.
Laws 1961, p. 199, § 1.
§18-801. Short title.
This act is known and may be cited as the "Professional Entity
Act".
Added by Laws 1961, p. 204, § 1, emerg. eff. July 26, 1961. Amended
by Laws 1995, c. 339, § 1, eff. Nov. 1, 1995.
§18-802. Statutory policy.
This act shall be so construed as to effectuate its general
purpose of making available to professional persons the benefits of
the corporate form for the business aspects of their practices while
preserving the established professional aspects of the personal
relationship between the professional person and those he serves.
Laws 1961, p. 204, § 2.
§18-803. Definitions.
A. As used in the Professional Entity Act, unless the context
clearly indicates that a different meaning is intended:
1. "Associated act" means the Oklahoma General Corporation Act,
in the case of a corporation; the Oklahoma Revised Uniform Limited
Partnership Act, in the case of a limited partnership; or the
Oklahoma Limited Liability Company Act, in the case of a limited
liability company;
2. "Interest" means a share of stock in a corporation, a
partnership interest in a limited partnership or a membership
interest in a limited liability company;
3. "Owner" means a shareholder in the case of a corporation, a
general or limited partner in the case of a limited partnership or a
member in the case of a limited liability company;
4. "Manager" means a director or officer in the case of a
corporation, a general partner in the case of a limited partnership
or a manager in the case of a limited liability company;
5. "Professional entity" means a domestic corporation, limited
partnership or limited liability company formed for the purpose of
rendering professional service;
6. "Professional service" means the personal service rendered
by:
a. a physician, surgeon or doctor of medicine pursuant to
a license under Sections 481 through 524 of Title 59 of
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the Oklahoma Statutes, and any subsequent laws
regulating the practice of medicine,
b. an osteopathic physician or surgeon pursuant to a
license under Sections 620 through 645 of Title 59 of
the Oklahoma Statutes, and any subsequent laws
regulating the practice of osteopathy,
c. a chiropractic physician pursuant to a license under
Sections 161.1 through 161.20 of Title 59 of the
Oklahoma Statutes, and any subsequent laws regulating
the practice of chiropractic,
d. a podiatric physician pursuant to a license under
Sections 135.1 through 160.2 of Title 59 of the
Oklahoma Statutes, and any subsequent laws regulating
the practice of podiatric medicine,
e. an optometrist pursuant to a license under Sections 581
through 606 of Title 59 of the Oklahoma Statutes, and
any subsequent laws regulating the practice of
optometry,
f. a veterinarian pursuant to a license under Sections
698.1 through 698.30b of Title 59 of the Oklahoma
Statutes, and any subsequent laws regulating the
practice of veterinary medicine,
g. an architect pursuant to a license under Sections 46.1
through 46.41 of Title 59 of the Oklahoma Statutes, and
any subsequent laws regulating the practice of
architecture,
h. an attorney pursuant to his authority to practice law
granted by the Supreme Court of the State of Oklahoma,
i. a dentist pursuant to a license under Sections 328.1
through 328.53 of Title 59 of the Oklahoma Statutes,
and any subsequent laws regulating the practice of
dentistry,
j. a certified public accountant or a public accountant
pursuant to his or her authority to practice accounting
under Sections 15.1 through 15.38 of Title 59 of the
Oklahoma Statutes, and any subsequent laws regulating
the practice of public accountancy,
k. a psychologist pursuant to a license under Sections
1351 through 1376 of Title 59 of the Oklahoma Statutes,
and any subsequent laws regulating the practice of
psychology,
l. a physical therapist pursuant to a license under
Sections 887.1 through 887.18 of Title 59 of the
Oklahoma Statutes, and any subsequent laws regulating
the practice of physical therapy,
m. a registered nurse pursuant to a license under Sections
567.1 through 567.19 of Title 59 of the Oklahoma
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Statutes, and any other subsequent laws regulating the
practice of nursing,
n. a professional engineer pursuant to a license under
Sections 475.1 through 475.22a of Title 59 of the
Oklahoma Statutes, and any subsequent laws relating to
the practice of engineering,
o. a land surveyor pursuant to a license under Sections
475.1 through 475.22a of Title 59 of the Oklahoma
Statutes, and any subsequent laws relating to the
practice of land surveying,
p. an occupational therapist pursuant to Sections 888.1
through 888.15 of Title 59 of the Oklahoma Statutes and
any subsequent law regulating the practice of
occupational therapy,
q. a speech pathologist or speech therapist pursuant to
Sections 1601 through 1622 of Title 59 of the Oklahoma
Statutes, and any subsequent law regulating the
practice of speech pathology,
r. an audiologist pursuant to Sections 1601 through 1622
of Title 59 of the Oklahoma Statutes, and any
subsequent law regulating the practice of audiology,
s. a registered pharmacist pursuant to Sections 353
through 366 of Title 59 of the Oklahoma Statutes, and
any subsequent law regulating the practice of pharmacy,
t. a licensed perfusionist pursuant to Sections 2051
through 2071 of Title 59 of the Oklahoma Statutes, and
any subsequent laws regulating the practice of
perfusionists,
u. a licensed professional counselor pursuant to Sections
1901 through 1920 of Title 59 of the Oklahoma Statutes,
and any subsequent law regulating the practice of
professional counseling,
v. a licensed marital and family therapist pursuant to
Sections 1925.1 through 1925.18 of Title 59 of the
Oklahoma Statutes, and any subsequent law regulating
the practice of marital and family therapy,
w. a dietitian licensed pursuant to Sections 1721 through
1739 of Title 59 of the Oklahoma Statutes and any
subsequent laws regulating the practice of dietitians,
x. a social worker licensed pursuant to Sections 1250
through 1273 of Title 59 of the Oklahoma Statutes, and
any subsequent laws regulating the practice of social
work,
y. a licensed alcohol and drug counselor pursuant to
Sections 1870 through 1885 of Title 59 of the Oklahoma
Statutes, and any subsequent laws regulating the
practice of alcohol and drug counseling,
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z. a licensed behavioral practitioner pursuant to Sections
1930 through 1949.1 of Title 59 of the Oklahoma
Statutes, and any subsequent laws regulating the
practice of behavioral health services, or
aa. a certified real estate appraiser licensed pursuant to
Sections 858-700 through 858-732 of Title 59 of the
Oklahoma Statutes or listed on the National Registry of
Appraisers by the Appraisal Subcommittee in compliance
with Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act (FIRREA) of 1989, and any
subsequent laws regulating the practice of real estate
appraisal;
7. "Related professional services" means those services which
are combined for professional entity purposes as follows:
a. any combination of the following professionals:
(1) a physician, surgeon or doctor of medicine
pursuant to a license under Sections 481 through
524 of Title 59 of the Oklahoma Statutes, and any
subsequent laws regulating the practice of
medicine,
(2) an osteopathic physician or surgeon pursuant to a
license under Sections 620 through 645 of Title 59
of the Oklahoma Statutes, and any subsequent laws
relating to the practice of osteopathy,
(3) a dentist pursuant to a license under Sections
328.1 through 328.53 of Title 59 of the Oklahoma
Statutes, and any subsequent laws regulating the
practice of dentistry,
(4) a chiropractic physician pursuant to a license
under Sections 161.1 through 161.20 of Title 59 of
the Oklahoma Statutes, and any subsequent laws
regulating the practice of chiropractic,
(5) a psychologist pursuant to a license under
Sections 1351 through 1376 of Title 59 of the
Oklahoma Statutes, and any subsequent laws
regulating the practice of psychology,
(6) an optometrist pursuant to a license under
Sections 581 through 606 of Title 59 of the
Oklahoma Statutes, and any subsequent laws
regulating the practice of optometry,
(7) a podiatric physician pursuant to a license under
Sections 135.1 through 160.2 of Title 59 of the
Oklahoma Statutes, and any subsequent laws
regulating the practice of podiatric medicine,
(8) a dietitian licensed pursuant to Sections 1721
through 1739 of Title 59 of the Oklahoma Statutes
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and subsequent laws regulating the practice of
dietitians, or
(9) an occupational therapist pursuant to Sections
888.1 through 888.15 of Title 59 of the Oklahoma
Statutes and any subsequent law regulating the
practice of occupational therapy, or
b. any combination of the following professions:
(1) an architect pursuant to a license under Sections
46.1 through 46.41 of Title 59 of the Oklahoma
Statutes, and any subsequent laws regulating the
practice of architecture,
(2) a professional engineer pursuant to a license
under Sections 475.1 through 475.22a of Title 59
of the Oklahoma Statutes, and any subsequent laws
relating to the practice of engineering, or
(3) a land surveyor pursuant to a license under
Sections 475.1 through 475.22a of Title 59 of the
Oklahoma Statutes, and any subsequent laws
relating to the practice of land surveying;
8. "Regulating board" means the board which is charged with the
licensing and regulation of the practice of the profession which the
professional entity is organized to render;
9. "Individual", "incorporator" and "shareholder" each include
the trustee of an express trust created by a person duly licensed to
render a professional service who has the right to revoke the trust
and who is serving as the trustee of the trust. Any certificate
required by the Professional Entity Act to be issued to an individual
incorporator or shareholder may be issued to the grantor on behalf of
a trust. All references in the Professional Entity Act to death and
incapacity of a shareholder shall include the death and incapacity of
the grantor of a trust which own stock in a professional corporation;
10. "Incapacity" of a shareholder means a determination by a
court of competent jurisdiction, or otherwise by two independent
licensed physicians, that the shareholder is fully incapacitated or
is partially incapacitated to the extent that the shareholder is not
capable of rendering the professional service for which the
professional corporation was organized; and
11. "Other personal representative" includes the successor
trustee of an express trust owning stock in a professional
corporation, which trust was created by a person duly licensed to
render the professional service for which the professional
corporation was organized who has the right to revoke the trust and
who is the original trustee of the trust.
B. The definitions of the applicable associated act shall apply
to the Professional Entity Act, unless the context clearly indicates
that a different meaning is intended.
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Added by Laws 1961, p. 204, § 3, emerg. eff. July 26, 1961. Amended
by Laws 1963, c. 342, § 1, emerg. eff. June 24, 1963; Laws 1970, c.
95, § 1, emerg. eff. March 30, 1970; Laws 1971, c. 164, § 1, emerg.
eff. May 25, 1971; Laws 1976, c. 27, § 1; Laws 1981, c. 312, § 1,
eff. Oct. 1, 1981; Laws 1983, c. 4, § 1, eff. Nov. 1, 1983; Laws
1986, c. 292, § 147, eff. Nov. 1, 1986; Laws 1990, c. 328, § 1, eff.
Sept. 1, 1990; Laws 1993, c. 345, § 1, eff. Sept. 1, 1993; Laws 1994,
c. 216, § 1, emerg. eff. May 20, 1994; Laws 1995, c. 339, § 2, eff.
Nov. 1, 1995; Laws 1996, c. 226, § 22, eff. July 1, 1996; Laws 1998,
c. 25, § 1, eff. Nov. 1, 1998; Laws 2001, c. 307, § 1, eff. Nov. 1,
2001; Laws 2003, c. 151, § 1, eff. Nov. 1, 2003; Laws 2008, c. 109, §
1, eff. Nov. 1, 2008; Laws 2012, c. 42, § 1, eff. Nov. 1, 2012; Laws
2019, c. 222, § 1, eff. Nov. 1, 2019.
§18-804. Formation of professional entity.
A professional entity may be formed by filing the appropriate
instrument required by the associated act with the Secretary of
State. The individual or individuals forming the professional entity
shall be duly licensed in accordance with the provisions of this
state's licensing laws for the profession and in good standing within
the profession to be practiced through the professional entity. Such
instrument shall meet the requirements of the applicable associated
act and shall also contain the following:
1. The profession or related professions to be practiced through
the professional entity; and
2. A certificate by the regulating board of the profession or
related professions involved that each of the persons who are to
become owners or managers of the professional entity and who are to
engage in the practice of the profession or related profession is
duly licensed in accordance with the provisions of this state's
licensing laws for the profession or related profession to practice
such profession.
Added by Laws 1961, p. 205, § 4, emerg. eff. July 26, 1961. Amended
by Laws 1981, c. 312, § 2, eff. Oct. 1, 1981; Laws 1986, c. 292, §
148, eff. Nov. 1, 1986; Laws 1995, c. 339, § 3, eff. Nov. 1, 1995.
§18-805. Applicability of associated acts.
The respective associated act shall be applicable to each
professional entity, and each professional entity shall enjoy the
powers and privileges and be subject to the duties, restrictions, and
liabilities of other similarly situated business entities, except
where inconsistent with this act. This act shall take precedence in
the event of any conflict with provisions of the applicable
associated act or other laws.
Added by Laws 1961, p. 205, § 5, emerg. eff. July 26, 1961. Amended
by Laws 1986, c. 292, § 149, eff. Nov. 1, 1986; Laws 1995, c. 339, §
4, eff. Nov. 1, 1995.
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§18-806. Purpose of formation of professional entity.
A professional entity may be formed for the purpose of rendering
one specific type of professional service or related professional
services and services ancillary thereto and shall not engage in any
business other than rendering the professional service or services
which it was organized to render and services ancillary thereto;
provided, however, that a professional entity may own real and
personal property necessary or appropriate for rendering the type of
professional services it was organized to render and may invest its
funds in real estate, mortgages, stocks, bonds and any other type of
investments.
Added by Laws 1961, p. 205, § 6, emerg. eff. July 26, 1961. Amended
by Laws 1981, c. 312, § 3, eff. Oct. 1, 1981; Laws 1995, c. 339, § 5,
eff. Nov. 1, 1995.
§18-807. Name of professional entity.
The name of every professional entity shall end with one or more
of the words or abbreviations permitted in the applicable associated
acts; provided, that such words or abbreviations shall be modified by
the word "professional" or some abbreviation of the combination, with
or without punctuation, including, without limitation: "P.C.",
"P.L.P." or "P.L.L.C.". Provided further, each of the regulating
boards may by rule adopt further requirements as to the names of
professional entities organized to render professional services
within the jurisdiction of such regulating board.
Added by Laws 1961, p. 205, § 7, emerg. eff. July 26, 1961. Amended
by Laws 1981, c. 312, § 4, eff. Oct. 1, 1981; Laws 1995, c. 339, § 6,
eff. Nov. 1, 1995; Laws 1996, c. 69, § 2, eff. Nov. 1, 1996; Laws
2001, c. 406, § 8, emerg. eff. June 4, 2001.
§18-808. Office.
The principal office of the professional business entity shall be
designated by street address in the formation instrument and shall
not be changed without amendment of the formation instrument.
Added by Laws 1961, p. 205, § 8, emerg. eff. July 26, 1961. Amended
by Laws 1970, c. 95, § 2, emerg. eff. March 30, 1970; Laws 1986, c.
292, § 150, eff. Nov. 1, 1986; Laws 2001, c. 406, § 9, emerg. eff.
June 4, 2001.
§18-809. License requirement.
Except as provided in Section 815 of this title, no person shall
hold an interest in a professional entity who is not duly licensed in
accordance with the provisions of this state's licensing laws for the
profession or related profession to render the same professional
services or related professional services as those for which the
entity is organized.
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Added by Laws 1961, p. 206, § 9, emerg. eff. July 26, 1961. Amended
by Laws 1981, c. 312, § 5, eff. Oct. 1, 1981; Laws 1993, c. 345, § 2,
eff. Sept. 1, 1993; Laws 1995, c. 339, § 7, eff. Nov. 1, 1995.
§18-810. Managers and stockholders.
No person may be a manager of a professional entity who is not a
person duly licensed in accordance with the provisions of this
state's licensing laws for the profession or related profession to
render the same professional services or related professional
services as those for which the entity is formed. No person may be a
shareholder of a professional corporation who is not an individual
duly licensed to render the same professional services or related
professional services as those for which the corporation is
organized.
Added by Laws 1961, p. 206, § 10, emerg. eff. July 26, 1961. Amended
by Laws 1963, c. 281, § 1; Laws 1971, c. 30, § 1, emerg. eff. March
22, 1971; Laws 1979, c. 6, § 1; Laws 1981, c. 312, § 6, eff. Oct. 1,
1981; Laws 1993, c. 345, § 3, eff. Sept. 1, 1993; Laws 1995, c. 339,
§ 8, eff. Nov. 1, 1995.
§18-811. Professional services through owners, managers, employees
and agents.
A professional entity may render professional services only
through its owners, managers, employees and agents who are duly
licensed in accordance with the provisions of this state's licensing
laws to render professional services; provided, however, this
provision shall not be interpreted to include in the term "employee",
as used herein, clerks, secretaries, bookkeepers, technicians and
other assistants who are not usually and ordinarily considered by
custom and practice to be rendering professional services to the
public for which a license is required.
Added by Laws 1961, p. 206, § 11, emerg. eff. July 26, 1961. Amended
by Laws 1981, c. 312, § 7, eff. Oct. 1, 1981; Laws 1995, c. 339, § 9,
eff. Nov. 1, 1995.
§18-812. Professional relationship preserved.
This act does not alter any law applicable to the relationship
between a person rendering professional services and a person
receiving such services, including liability arising out of such
professional services.
Laws 1961, p. 206, § 12.
§18-813. Professional regulation.
Subject to the provisions of Section 819 of this title, nothing
in this act shall restrict or limit in any manner the authority and
duty of the regulating boards for the licensing of individual persons
rendering professional services or the practice of the profession
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which is within the jurisdiction of such regulating board,
notwithstanding that such person is an owner, manager or employee of
a professional entity and rendering such professional services or
engaging in the practice of such profession through such professional
entity.
Added by Laws 1961, p. 206, § 13, emerg. eff. July 26, 1961. Amended
by Laws 1995, c. 339, § 10, eff. Nov. 1, 1995.
§18-814. Prohibited acts.
No professional entity may do any act which is prohibited to be
done by individual persons licensed to practice a profession which
the professional entity is organized to render.
Added by Laws 1961, p. 206, § 14, emerg. eff. July 26, 1961. Amended
by Laws 1981, c. 312, § 8, eff. Oct. 1, 1981; Laws 1995, c. 339, §
11, eff. Nov. 1, 1995.
§18-815. Death or disqualification of shareholders - Sole
shareholder - Withdrawal.
A. 1. If the professional entity is a corporation, the
certificate of incorporation, bylaws or other agreement may provide
for the purchase or redemption of the shares of any shareholder upon
the death, incapacity, disqualification or ending of employment of
such shareholder. In the absence of a provision in the certificate
of incorporation, or the bylaws, or other agreement, the professional
corporation shall purchase the shares of a deceased shareholder, a
shareholder who is incapacitated or who is no longer qualified to own
shares in such corporation or a shareholder whose employment has
ended, within ninety (90) days after such shareholder's death,
incapacity or disqualification or ending of employment, as the case
may be.
2. The price for such shares shall be the book value as of the
end of the month immediately preceding such shareholder's death,
incapacity, disqualification or ending of employment of the
shareholder. Book value shall be determined from the books and
records of the professional corporation in accordance with the
regular method of accounting used by the corporation. If the
corporation shall fail to purchase the shares by the end of the
ninety day period, then the executor or administrator or other
personal representative of the deceased, incapacitated or
disqualified shareholder may bring an action in the district court of
the county in which the principal office or place of practice of the
professional corporation is located for the enforcement of this
provision. If the plaintiff is successful in such action, he shall
be entitled to recover the book value of the shares involved, a
reasonable attorney's fee and costs. The professional corporation
shall repurchase such shares without regard to restrictions upon the
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repurchase of shares provided for in the Oklahoma General Corporation
Act.
3. If there is only one shareholder of a professional
corporation, and the shareholder dies or becomes incapacitated, the
executor or administrator or other personal representative of the
shareholder shall have the authority to sell the shares of capital
stock owned by the shareholder to a qualified purchaser, or to cause
a dissolution of the professional corporation as provided by law.
The vesting of ownership of shares of stock in a professional
corporation in the executor or administrator or other personal
representative shall be solely for the purposes set forth above and
shall not be deemed to contravene any other provisions of this act.
B. If the professional entity is a limited partnership or a
limited liability company, an owner's disqualification shall be
deemed a withdrawal, and the professional entity shall respond to the
disqualification as it would any other withdrawal.
Added by Laws 1961, p. 206, § 15, emerg. eff. July 26, 1961. Amended
by Laws 1974, c. 52, § 1; Laws 1986, c. 292, § 151, eff. Nov. 1,
1986; Laws 1993, c. 345, § 4, eff. Sept. 1, 1993; Laws 1995, c. 339,
§ 12, eff. Nov. 1, 1995.
§18-817. Prior corporation.
This act shall not apply to any persons within this state who
prior to the passage of this act were permitted to organize a
corporation and perform professional services by the means of such
corporation, and this act shall not apply to any corporation
organized by such persons prior to the passage of this act; provided,
however, any such persons or any such corporation may bring
themselves and such corporation within the provisions of this act by
amending the certificate of incorporation in such a manner so as to
be consistent with all of the provisions of this act and by
affirmatively stating in the amended certificate of incorporation
that the shareholders have elected to bring the corporation within
the provisions of this act.
Amended by Laws 1986, c. 292, § 152, eff. Nov. 1, 1986.
§18-818. Certificates.
The regulating boards of the respective professions described in
Section 803 of this title are hereby authorized and directed to issue
the certificates required by Section 804 of this title upon receipt
of an affidavit or other instrument reciting the names and addresses
of the prospective owners and managers. The regulating boards may
charge and collect a reasonable fee for such issuance. The fee shall
be deposited and expended as provided by law for other fees collected
by each respective regulating board.
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Added by Laws 1961, p. 207, § 18, emerg. eff. July 26, 1961. Amended
by Laws 1988, c. 323, § 3, eff. Nov. 1, 1988; Laws 1995, c. 339, §
13, eff. Nov. 1, 1995.
§18-819. Inapplicability of conflicting laws and rules.
All laws and rules and parts of laws and rules in conflict with
any of the provisions of the Professional Entity Act or otherwise
restricting the forms of organization available to persons providing
professional services shall be inapplicable to professional entities
formed under the Professional Entity Act; provided, however, that
nothing in the Professional Entity Act shall be construed to
supersede the provisions of 59 O.S. 1951, Sections 581 through 592,
both inclusive, Sections 601 through 606, both inclusive, Sections
858-700 through 858-732, both inclusive, or Sections 941 through 947,
of Title 59 of the Oklahoma Statutes, both inclusive, as amended. In
the event of the conflict of any of the provisions of the
Professional Entity Act with any of the above cited sections, then
cited sections shall take precedence over the Professional Entity Act
and the Professional Entity Act shall be construed accordingly.
Added by Laws 1961, p. 207, § 20, emerg. eff. July 26, 1961. Amended
by Laws 1995, c. 339, § 14, eff. Nov. 1, 1995; Laws 2019, c. 222, §
2, eff. Nov. 1, 2019.
§18-863. Nonprofit corporations for creating rural water and sewer
districts - Exemption from taxation and assessments.
A corporation organized not for profit pursuant to the provisions
of the Oklahoma General Corporation Act for the purpose of developing
and providing rural water supply and sewage disposal facilities to
serve rural residents shall be exempt from all excise taxes of
whatsoever nature, and shall be exempt from payment of assessments in
any general or special taxing district levied upon the property of
said corporation, whether real, personal or mixed; such exemption
shall include, but not be limited to, franchise taxes, assessments or
fees levied by any county or municipality for inspections of the
facilities of the corporation which were not requested by the
corporation. Said corporations shall have the right of eminent
domain in the same manner and according to the procedures provided
for in Sections 51 through 65 of Title 66 of the Oklahoma Statutes,
provided, that the use of said eminent domain provisions shall be
restricted to the purpose of developing and providing rural gas
distribution, water supply and sewage disposal facilities. Provided,
however, no personal or real property, easement or right-of-way of
any utility may be acquired by eminent domain.
Added by Laws 1970, c. 328, § 1, emerg. eff. April 28, 1970. Amended
by Laws 1986, c. 53, § 1, eff. Nov. 1, 1986; Laws 1986, c. 292, §
153, eff. Nov. 1, 1986; Laws 1987, c. 124, § 1; Laws 1998, c. 283, §
1, emerg. eff. May 27, 1998.
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§18-865. Liability of directors - Findings of Legislature.
The Legislature finds that nonprofit corporations serve important
functions in providing services and assistance to persons in the
state and that in order for these nonprofit corporations to function
effectively, persons serving on the board of directors should not be
subject to vicarious liability for the negligence of corporate
employees or other directors. The Legislature finds that potential
exposure to vicarious liability has a detrimental effect on the
participation of persons as directors of nonprofit corporations and
that providing immunity to directors of such corporations for certain
types of liability will promote the general health, safety and
welfare of citizens in the state.
Added by Laws 1986, c. 195, § 1, eff. Nov. 1, 1986.
§18-866. Immunity of directors - Scope and extent.
A. Except as otherwise provided by this section, no member of
the board of directors of a nonprofit corporation that holds a valid
exemption from federal income taxation issued pursuant to Section
501(a) of the Internal Revenue Code (26 U.S.C. Section 501(a)) or
Section 528 of the Internal Revenue Code (26 U.S.C. Section 528) and
is listed as an exempt organization in Section 501(c) of the Internal
Revenue Code (26 U.S.C. Section 501(c)) or files as such pursuant to
Section 528 of the Internal Revenue Code shall be held personally
liable for damages resulting from:
1. any negligent act or omission of an employee of the nonprofit
corporation; or
2. any negligent act or omission of another director.
B. The immunity provided by subsection A of this section shall
not extend to intentional torts or grossly negligent acts or
omissions personal to any director of the nonprofit corporation.
C. If a nonprofit corporation transfers assets to a member of
the board of directors of such corporation or to another nonprofit
corporation in order to avoid claims against corporate assets
resulting from a judgment rendered as a result of a suit to recover
damages for the negligence of the corporation, a corporate employee
or a director, the director to whom the asset is transferred or any
director of the corporation from which assets are transferred to
avoid such claims may be held personally liable for any such judgment
rendered and the immunity provided by this section shall be of no
force or effect.
D. The provisions of this section shall only apply to suits for
recovery of damages based upon causes of action that accrue on or
after the effective date of this act.
Added by Laws 1986, c. 195, § 2, eff. Nov. 1, 1986. Amended by Laws
1988, c. 125, § 1, emerg. eff. April 8, 1988; Laws 2004, c. 255, § 1,
eff. Nov. 1, 2004.
4(#$0&($"!$"+$ -8
§18-867. Director - Breach of fiduciary duty - Liability.
In addition to the immunity provisions of Section 866 of Title 18
of the Oklahoma Statutes, no member of the board of directors of a
nonprofit corporation shall be personally liable to the corporation,
or members thereof, for monetary damages for breach of fiduciary duty
as a director, provided that such immunity from liability shall not
extend to:
1. any breach of the director's duty of loyalty to the
corporation; or
2. any acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law; or
3. any transaction from which the director derived an improper
personal benefit.
Added by Laws 1987, c. 166, § 1, eff. Nov. 1, 1987.
§18-868. Nonprofit corporations for benefit of towns, cities and
counties - Issuance of indebtedness - Exemption from taxation.
A. A corporation organized not for profit pursuant to the
provisions of the Oklahoma General Corporation Act and that holds a
valid exemption from federal income taxation issued pursuant to
Section 501(a) of the Internal Revenue Code (26 U.S.C. Section
501(a)) and is listed as an exempt organization in Section 501(c) of
the Internal Revenue Code (26 U.S.C. Section 501(c)) is hereby
authorized to issue indebtedness for the purpose of providing funds
for the benefit of and on behalf of Oklahoma educational
institutions, towns, cities and counties and their citizens
throughout the state and to issue such indebtedness on a tax-exempt
or taxable basis, as applicable under the Internal Revenue Code (26
U.S.C. Section 1, et seq.) as amended. Such not for profit
corporations shall not be subject to the provisions of Sections
695.7, 695.8 and 695.9 of Title 62 of the Oklahoma Statutes, or
similar laws thereto.
B. The interest on any indebtedness or obligations issued by any
public trust or other entity authorized to issue obligations on which
the interest thereon is exempt from federal income taxation and whose
purpose includes providing safe, decent and affordable single family
or multifamily housing, shall not be subject to taxation by the State
of Oklahoma or by any county, municipality, or political subdivision
therein when such indebtedness or obligation is issued to provide
decent and affordable single family or multifamily housing.
Added by Laws 1998, c. 283, § 2, emerg. eff. May 27, 1998. Amended
by Laws 1998, c. 400, § 6, emerg. eff. June 10, 1998; Laws 2000, c.
351, § 13, eff. July 1, 2001.
§18-901. Short title.
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This act shall be known and may be cited as the "Oklahoma
Business Development Corporation Act".
Laws 1970, c. 187, § 1, emerg. eff. April 13, 1970.
§18-902. Definitions.
As used in this act, unless a different meaning is required by
the context, the following words and phrases shall have the following
meanings:
(1) "Corporation" means the Oklahoma Business Development
Corporation created under the provisions of this act.
(2) "Financial institution" means any bank, trust company,
savings and loan association, insurance company, or other institution
engaged in lending or investing funds.
(3) "Member" means any financial institution which shall
undertake to lend money to a corporation created under the provisions
of this act.
(4) "Board of directors" means the board of directors of a
corporation created under this act.
(5) "Loan limit" for any member means the maximum amount
permitted to be outstanding at one time on loans made by such member
to a corporation as determined under the provisions of this act.
(6) "Shareholder" means the holder of record of shares in the
corporation.
Laws 1970, c. 187, § 2, emerg. eff. April 13, 1970.
§18-903. Organization - Purpose.
A business development corporation may be incorporated in this
state pursuant to the provisions of this act and all the provisions
of the Oklahoma General Corporation Act not in conflict with or
inconsistent with the provisions of this act shall apply to such
corporation except as hereinafter otherwise provided.
Ten or more persons, a majority of whom shall be residents of
this state, who desire to create a business development corporation
under the provisions of this act, shall by certificate of
incorporation filed with the Secretary of State, under their hands
and seal, set forth:
(1) The name of the corporation, which shall include the words
"Oklahoma Business Development Corporation".
(2) The location of the principal office of the corporation, but
such corporation may have offices in such other places within the
state as may be fixed by the board of directors.
(3) The purpose for which the corporation is founded, which shall
include the following:
The purposes of the corporation shall be to promote, stimulate,
develop and advance to business prosperity and economic welfare of
the State of Oklahoma and its citizens; to encourage and assist
through loans, investments or other business transactions in the
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location of new business and industry in this state and to improve
and assist existing business and industry, and so to stimulate and
assist in the expansion of all kinds of business activity which will
tend to promote the business development and maintain the economic
stability of this state and provide maximum opportunities for
employment; to cooperate and act in conjunction with other
organizations, public or private, in the promotion and advancement of
industrial, commercial, agricultural and recreational developments in
this state; and to provide financing for the promotion, development,
and conduct of all kinds of business activity in this state.
Amended by Laws 1986, c. 292, § 154, eff. Nov. 1, 1986.
§18-904. Powers.
To accomplish its purposes, the corporation shall, subject to the
restrictions and limitations herein contained, have the following
powers:
(1) To elect, appoint, and employ officers, agents and employees
and to make contracts and incur liabilities for any of the purposes
of the corporation.
(2) To borrow money from its members, any agency or governmental
entity of the Federal Government or the State of Oklahoma or any
agency or department thereof or any other corporation or person, for
any of the purposes of the corporation; to issue therefor its bonds,
debentures, notes or other evidence of indebtedness, whether secured
or unsecured, 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 or interest
therein, without securing stockholder or member approval.
(3) To make loans to any person, firm, corporation, association
or trust, and to establish and regulate the terms and conditions with
respect to any such loans, provided however, that the corporation
shall not approve any application for a loan unless and until the
person applying for said loan shall show that he has applied for the
loan through ordinary banking channels and that the loan has been
refused by at least one bank or other financial institution.
(4) To mortgage, hold, 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 allow the owner or
holder thereof to exercise all the rights, powers and privileges of
ownership, including the right to vote thereon. In the event of
default, the Business Development Corporation must divest itself of
the acquired assets within a reasonable period of time.
(5) To cooperate with and avail itself of the facilities of the
United States Department of Commerce, the Oklahoma Parks and
Industries Board and any other similar state or federal governmental
agency; and to cooperate with and assist, and otherwise encourage
4(#$0&($"!$"+$ -88
organizations in the various communities of the state in the
promotion, assistance and development of the business prosperity and
economic welfare of such communities or of this state or of any part
thereof.
(6) To do all acts and things necessary or convenient to carry
out the powers expressly granted in this act.
Laws 1970, c. 187, § 4, emerg. eff. April 13, 1970.
§18-905. Limitation on amount of capital stock acquired by member -
Minimum capital stock.
(1) Notwithstanding any other provision of law, any person,
corporation, public utility, financial institution, or labor union,
may acquire, hold, sell, assign, transfer, mortgage, pledge, or
otherwise dispose of any bonds, notes, debentures, securities, or
other evidences of indebtedness, or the shares of capital stock of a
corporation created hereunder; provided that the amount of capital
stock which may be acquired by any member of such corporation shall
not exceed ten percent (10%) of the loan limit of such member.
(2) The capital stock of any such corporation shall be not less
than Two Hundred Fifty Thousand Dollars ($250,000.00) to be evidenced
by two thousand five hundred (2,500) shares, having a par value of
One Hundred Dollars ($100.00) each, at least ten percent (10%) of the
capital stock of any such corporation shall be paid into the treasury
before it is authorized to transact any business other than such as
relates to its organization.
Laws 1970, c. 187, § 5, emerg. eff. April 13, 1970.
§18-906. Members - Acceptance of loans.
(1) All financial institutions as defined herein are hereby
authorized to become members of the corporation and to make loans to
the corporation as provided herein.
(2) Any financial institution may request membership in the
coporation by making application to the board of directors on such
form and in such manner as said board of directors may require, and
membership shall become effective upon acceptance of such application
by the board.
(3) 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:
(a) All loan limits shall be established at the thousand-
dollar amount nearest to the amount computed in accordance
with the provisions of this section.
(b) 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
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an outstanding capital stock, reserves or earned surplus of
the corporation.
(c) The total amount outstanding at any one time on loans to
a development corporation made by any member shall not
exceed: (i) twenty percent (20%) of the total amount then
outstanding on loans to such development corporation by all
members thereof, (ii) the following limit, to be determined
as of the time such member becomes a member, on the basis of
figures contained in the most recent year-end statement
prior to its application for membership; three percent (3%)
of the capital and permanent surplus of banks, trust
companies; three percent (3%) of the total reserve and
surplus accounts of a savings and loan association; one
percent (1%) of the capital and unassigned surplus of stock
insurance companies, except fire insurance companies; one
percent (1%) of the unassigned surplus of mutual insurance
companies, except fire insurance companies; one-tenth of one
percent (1/10 of 1%) of the assets of fire insurance
companies; comparable limits for other financial
institutions as established by the board of directors of the
development corporation. All loan limits shall be
recomputed as of the first day of January of each even-
numbered year, but no member's loan limit shall be increased
as the result of such recomputation without the consent of
such member.
(d) 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.
(e) All loans to the corporation by members shall be
evidenced by bonds, debentures, notes, or other evidence of
indebtedness of the corporation, which shall be freely
negotiable at all times, and which shall bear interest at a
rate of not less than one-half of one percent (1/2 of 1%) in
excess of the rate of interest determined by the board of
directors at the date of issuance to be the prime rate
prevailing on unsecured commercial loans.
(f) Membership in the corporation shall be for the duration
of the corporation provided that: (i) upon written notice
given to the corporation one (1) year in advance, a member
may withdraw from membership in the corporation at the
expiration date of such notice, (ii) a member shall not be
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obligated to make any loans to the corporation pursuant to
calls made subsequent to the receipt of notice of the
withdrawal of said member.
Laws 1970, c. 187, § 6, emerg. eff. April 13, 1970.
§18-907. Board of directors.
The business and affairs of a corporation shall be conducted by a
board of directors. The number of directors shall be a multiple of
three with a minimum of fifteen and a maximum of twenty-one. Two-
thirds of the directors shall be elected by the members, and one-
third shall be elected by the stockholders. One-third of the
original board shall be elected for a term of one (1) year, one-third
for a term of two (2) years, and one-third for a term of three (3)
years; all directors subsequently elected shall serve for a term of
three (3) years. Any vacancy in the office of a director elected by
the members shall be filled by the directors elected by the members,
and any vacancy in the office of a director elected by the
stockholders shall be filled by the directors elected by the
stockholders.
Laws 1970, c. 187, § 7, emerg. eff. April 13, 1970.
§18-908. Voting rights.
Each stockholder shall be entitled to one vote, in person or by
proxy, for each share of capital stock held, and each member shall be
entitled to one vote, in person or by proxy, for each One Thousand
Dollars ($1,000.00) of the outstanding loan limit of each member.
Laws 1970, c. 187, § 8, emerg. eff. April 13, 1970.
§18-909. Retention of certain earnings.
Each year the corporation shall set apart as earned surplus not
less than ten percent (10%) of its net earnings for the preceding
fiscal year until such surplus shall be equal in value to one-half of
the amount paid in on the capital stock then outstanding. Whenever
the amount of surplus so established shall become impaired, it shall
be built up again to the required amount in the manner provided for
its original accumulation.
Laws 1970, c. 187, § 9, emerg. eff. April 13, 1970.
§18-910. Deposit of funds.
No corporation organized under the provisions of this act shall
at any time be authorized to receive money on deposit. The
corporation shall not deposit any of its funds in any banking
institution unless such institution has been designated as a
depository by a vote of a majority of the directors present at an
authorized meeting of the board of directors, exclusive of any
director who is an officer or director of the depository so
designated.
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Laws 1970, c. 187, § 10, emerg. eff. April 13, 1970.
§18-911. Amendment of articles of incorporation.
No amendment to the certificate of incorporation shall be made
which increases the obligation of a member to make loans to the
corporation or which makes any change in the principal amount,
interest rate, maturity date, or in the security or credit position
of any outstanding loan made by a member to the corporation or which
affects the right of a member to withdraw from membership or the
voting rights of such member, without the consent of each member who
would be affected by such amendment.
Amended by Laws 1986, c. 292, § 155, eff. Nov. 1, 1986.
§18-912. Audits and reports.
Such corporation shall be subject to an annual examination and
audit by one or more certified public accountants to be selected by
the board of directors, sufficient to reflect the result of the
operations during and the condition of the corporation at the end of
the fiscal year. A report of such examination, audit and condition
of such corporation shall be made in writing to each of the members
and stockholders of such corporation on or before the one hundred
twentieth day of each succeeding fiscal year of said corporation.
Laws 1970, c. 187, § 12, emerg. eff. April 13, 1970.
§18-951. Prohibition on forming - Exceptions.
A. It is hereby declared to be the public policy of this state
and shall be the prohibition of this act that, notwithstanding the
provisions of Section 5 of this act, no foreign corporation shall be
formed or licensed under the Oklahoma General Corporation Act for the
purpose of engaging in farming or ranching or for the purpose of
owning or leasing any interest in land to be used in the business of
farming or ranching. A domestic corporation may, however, be formed
under the Oklahoma General Corporation Act to engage in such activity
if the following requirements are met by that domestic corporation:
1. There shall be no shareholders other than (a) natural
persons; (b) estates; (c) trustees of trusts for the benefit of
natural persons, if such trustees are either (i) natural persons or
(ii) banks or trust companies which either have their principal place
of business in Oklahoma or are organized under the laws of the State
of Oklahoma; or (d) corporations owned by no shareholders other than
those described in paragraph 1 (a), (b) or (c) of this section and
meeting the requirements of paragraph 3 of this section.
2. Not more than thirty-five percent (35%) of the corporation's
annual gross receipts shall be from any source other than (a) farming
or ranching or both, as the case may be, or (b) allowing others to
extract from the corporate lands any minerals underlying the same,
including, but not limited to, oil and gas. Provided, however, in
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the event a corporation does not comply with the thirty-five percent
(35%) annual gross receipt test, then, in that event the corporation
may furnish records of its gross receipts for each of the previous
five (5) years, or for each year that it has been in existence if
less than five (5) years, and the average of said annual gross
receipts shall be used in lieu of the corporation's annual gross
receipts for purposes of complying with this section.
3. Except as otherwise provided in this paragraph, there shall
not be more than ten shareholders unless said shareholders in excess
of ten are related as lineal descendants or are or have been related
by marriage to lineal descendants or persons related to lineal
descendants by adoption or any combination of same. For a
corporation incorporated for the purpose of breeding horses, there
shall not be more than twenty-five shareholders.
4. Certificates of incorporation for domestic corporations which
intend to engage in farming or ranching or owning or leasing any
interest in land to be used in the business of farming or ranching
shall initially be approved by the State Board of Agriculture
concerning the purpose prior to filing in the office of the Secretary
of State. No stated purpose is to be disapproved by the Board of
Agriculture unless such stated purpose violates existing civil or
criminal code.
B. The Secretary of State shall provide the State Department of
Agriculture a list of corporations registering in the state that list
farming or ranching or owning or leasing any interest in land to be
used in the business of farming or ranching at least weekly.
Amended by Laws 1986, c. 292, § 156, eff. Nov. 1, 1986; Laws 1991, c.
38, § 2, emerg. eff. April 3, 1991.
§18-952. Revocation of license - Vacation of franchise - Penalties.
A. Any license issued after June 1, 1971, under the Oklahoma
Business Corporation Act to a foreign corporation for the purpose of
engaging in farming or ranching or for the purpose of owning or
leasing any interest in land to be used in the business of farming or
ranching shall be revoked within five (5) years of the effective date
of this act.
B. The corporate franchise of any existing domestic corporation
formed under the Oklahoma Business Corporation Act after June 1,
1971, for the purpose of engaging in farming or ranching or for the
purpose of owning or leasing any interest in land to be used in the
business of farming or ranching shall be vacated within five (5)
years of the effective date of this act unless its articles of
incorporation comply with Section 951 of this title.
C. The corporate franchise of any domestic corporation governed
by the Oklahoma General Corporation Act formed for the purpose of
farming or ranching or for the purpose of owning or leasing any
interest in land to be used in the business of farming or ranching
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and permitted to engage in such activity under this act shall be
vacated promptly in the manner prescribed by Section 104 of this act,
if the corporation has persistently violated the provisions of
subsection A of Section 951 of this title.
D. The State Board of Agriculture shall initiate and prosecute
civil or criminal actions and proceedings when deemed necessary to
enforce or carry out any of the provisions of this code.
E. This act shall not require any foreign or domestic
corporation to dispose of any property acquired on or before June 1,
1971.
F. Any farming or ranching corporation which violates the
provisions of Section 951 of this title shall be fined an amount not
to exceed Five Hundred Dollars ($500.00). Any other person,
corporation or entity who knowingly violates such section shall be
deemed guilty of a misdemeanor.
Amended by Laws 1986, c. 292, § 157, eff. Nov. 1, 1986.
§18-953. Actions for divestment of interest in land held by
corporation - Exemptions - Dissolution of corporation.
A. No corporation organized for a purpose other than farming or
ranching shall own, lease or hold, directly or indirectly,
agricultural lands in excess of that amount reasonably necessary to
carry out its business purpose.
B. Any resident of the county in which the land is situated, who
is of legal age, may initiate an action for the divestment of an
interest in land held by a corporation in violation of the provisions
of Sections 951 through 954 of this title, in the county in which the
land is situated. If such action is successful all costs of the
action shall be assessed against the defendant corporation, and a
reasonable attorney's fee shall be allowed the plaintiff. Should
judgment be rendered for the defendant, such costs and a reasonable
attorney's fee for the defendant shall be paid by the plaintiff.
C. In the event an action for the divestment of an interest in
land held by a corporation in violation of the provisions of Sections
951 through 954 of this title is successful against said corporation,
said corporation shall be required to dispose of said land within
such reasonable period of time as may be ordered by the court,
subject to the corporation's right of appeal. Except as otherwise
provided by Section 954 of this title, the provisions of Sections 951
through 954 of this title shall not apply to corporations engaging in
food canning operations, food processing or frozen food processing
insofar as such corporations engage in the raising of food products
for aforesaid purposes.
D. Upon the petition to a court of competent jurisdiction by
shareholders holding twenty-five percent (25%) or more of the shares
in a farming or ranching business corporation the court in its
discretion, for good cause shown, may order the corporation dissolved
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and the assets of such corporation divided in kind pro rata to the
shareholders or liquidated and the proceeds of such liquidation
divided pro rata to the shareholders all according to the procedures
specified for the dissolution and liquidation of business
corporations under the Oklahoma General Corporation Act.
Laws 1971, c. 310, § 3, emerg. eff. June 24, 1971; Laws 1978, c. 101,
§ 1, emerg. eff. March 29, 1978; Laws 1986, c. 292, § 158, eff. Nov.
1, 1986; Laws 1994, c. 61, § 1, emerg. eff. April 15, 1994.
§18-954. Exemptions.
The provisions of Section 951 et seq. of this title shall not
apply where a corporation, either domestic or foreign:
1. Engages in research and/or feeding arrangements or operations
concerned with the feeding of livestock or poultry, but only to the
extent of such research and/or feeding arrangements or such livestock
or poultry operations;
2. Engages in operations concerned with the production and
raising of livestock or poultry for sale or use as breeding stock and
including only directly related operations, such as breeding or
feeding livestock or poultry which are not selected or sold as
breeding stock;
3. Engages in swine operations, including only directly related
operations, such as facilities for the production of breeding stock,
feed mills, processing facilities, and providing supervisory,
technical and other assistance to any other persons performing such
services on behalf of the corporation;
4. Engages in poultry operations, including only directly
related operations, such as operating hatcheries, facilities for the
production of breeding stock, feed mills, processing facilities, and
providing supervisory, technical and other assistance to any other
persons performing such services on behalf of the corporation to the
extent of such operations in this state by the corporation on the
effective date of this act;
5. Engages in forestry as defined by Section 1-4 of Title 2 of
the Oklahoma Statutes;
6. Whose corporate purpose is charitable or eleemosynary; or
7. Presently engages in fluid milk processing within the State
of Oklahoma or leases to a fluid milk processor so engaged; provided,
this exception is limited to such dairy operations as are necessary
to meet such processor's needs.
Added by Laws 1971, c. 310, § 4, emerg. eff. June 24, 1971. Amended
by Laws 1988, c. 323, § 32, eff. Nov. 1, 1988; Laws 1991, c. 38, § 1,
emerg. eff. April 3, 1991; Laws 1994, c. 61, § 2, emerg. eff. April
15, 1994; Laws 2002, c. 94, § 1, emerg. eff. April 17, 2002.
§18-954.1. Application of Sections 951 through 956 - Production of
nursery stock.
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The provisions of Sections 951 through 956 of Title 18 of the
Oklahoma Statutes shall not apply if a corporation, partnership,
limited liability company, or other legal entity, either domestic or
foreign engages in the production of nursery stock, as defined in
Section 3-11 of Title 2 of the Oklahoma Statutes.
Added by Laws 2000, c. 196, § 1, eff. Nov. 1, 2000.
§18-955. Limitations on ownership - Exceptions.
A. No person, corporation, association or any other entity
shall engage in farming or ranching, or own or lease any interest in
land to be used in the business of farming or ranching, except the
following:
1. Natural persons and the estates of such persons;
2. Trustees of trusts; provided that:
a. each beneficiary shall be a person or entity enumerated
in paragraphs 1 through 5 of this subsection, and
b. there shall not be more than ten beneficiaries unless
the beneficiaries in excess of ten are related as
lineal descendants or are or have been related by
marriage or adoption to lineal descendants, and
c. at least sixty-five percent (65%) of the trust's annual
gross receipts shall be derived from farming or
ranching, or from allowing others to extract minerals
underlying lands held by the trust. If the trust
cannot comply with the annual gross receipts test, the
trust may furnish records of its gross receipts for
each of the previous five (5) years, or for each year
that it has been in existence if less than five (5)
years, and the average of such annual gross receipts
may be used for purposes of complying with this
section;
3. Corporations, as provided for in Sections 951 through 954 of
this title, or as otherwise permitted by law;
4. Partnerships and limited partnerships; provided that:
a. each partner shall be a person or entity enumerated in
paragraphs 1 through 5 of this subsection, and
b. there shall not be more than ten partners unless said
partners in excess of ten are related as lineal
descendants or are or have been related by marriage or
adoption to lineal descendants, and
c. at least sixty-five percent (65%) of the partnership's
annual gross receipts shall be derived from farming or
ranching, or from allowing others to extract minerals
underlying lands held by the partnership. If the
partnership cannot comply with the annual gross
receipts test, the partnership may furnish records of
its gross receipts for each of the previous five (5)
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years, or for each year that it has been in existence
if less than five (5) years, and the average of such
annual gross receipts may be used for purposes of
complying with this section;
5. Limited liability companies formed pursuant to the Oklahoma
Limited Liability Company Act; provided that:
a. each member shall be a person or entity enumerated in
paragraphs 1 through 5 of this subsection, and
b. there shall not be more than thirty members unless said
members in excess of thirty are related as lineal
descendants or are or have been related by marriage or
adoption to lineal descendants, and
c. at least sixty-five percent (65%) of the limited
liability company's annual gross receipts shall be
derived from farming or ranching, or from allowing
others to extract minerals underlying lands held by the
limited liability company. If the limited liability
company cannot comply with the annual gross receipts
test, the limited liability company may furnish records
of its gross receipts for each of the previous five (5)
years, or for each year that it has been in existence
if less than five (5) years, and the average of such
annual gross receipts may be used for purposes of
complying with this section.
B. Any farming or ranching corporation, trust, partnership,
limited partnership, limited liability company or other entity which
violates any provisions of this section shall be fined an amount not
to exceed Five Hundred Dollars ($500.00). Any other person or entity
who knowingly violates this section shall be deemed guilty of a
misdemeanor.
C. The provisions of this act shall not apply to interests in
land acquired prior to June 1, 1978.
Added by Laws 1978, c. 169, § 1, emerg. eff. April 10, 1978. Amended
by Laws 1993, c. 366, § 1, eff. Sept. 1, 1993; Laws 1994, c. 2, § 6,
emerg. eff. March 2, 1994; Laws 2001, c. 208, § 6, emerg. eff. May
14, 2001.
NOTE: Laws 1993, c. 37, § 1 repealed by Laws 1994, c. 2, § 34,
emerg. eff. March 2, 1994.
§18-956. Action for divestment - Cost - Attorney fees.
A. Any resident of the county in which the land is situated, who
is of legal age, may initiate an action in the district court in the
county wherein the land is situated for the divestment of an interest
in land held in violation of Section 1 of this act. If such action
is successful, all costs of the action shall be assessed against the
defendant and a reasonable attorney fee shall be allowed the
plaintiff, and, should judgment be rendered for the defendant, such
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costs and a reasonable attorney fee for the defendant shall be paid
by the plaintiff.
B. In the event an action for the divestment of an interest in
land held in violation of Section 1 of this act is successful, the
defendant shall be required to dispose of said land within such
reasonable period of time as may be ordered by the court, subject to
the right of appeal of said defendant.
Laws 1978, c. 169, § 2, emerg. eff. April 10, 1978.
§18-1001. Short title.
SHORT TITLE
Sections 1001 through 1144 of this title and Sections 18 and 25
through 27 of this act shall be known and may be cited as the
"Oklahoma General Corporation Act". Section captions are part of the
Oklahoma General Corporation Act.
Added by Laws 1986, c. 292, § 1, eff. Nov. 1, 1986. Amended by Laws
1987, c. 31, § 1, eff. Nov. 1, 1987; Laws 1988, c. 323, § 4, eff.
Nov. 1, 1988.
§18-1002. Scope of Act.
SCOPE OF ACT
A. The provisions of the Oklahoma General Corporation Act shall
be applicable to every corporation, whether profit or not for profit,
stock or nonstock, existing as of the effective date of this act or
thereafter formed or qualified to transact business in this state,
and to all securities thereof, except to the extent that:
1. any such corporation is expressly excluded from the operation
of the Oklahoma General Corporation Act or portions thereof; or
2. special provisions concerning any such corporation conflict
with the provisions of the Oklahoma General Corporation Act, in which
case such special provisions shall govern.
B. Any conflicts with the provisions of the Oklahoma General
Corporation Act and any tax or unclaimed property laws of this state
shall be governed by the tax or unclaimed property provisions,
including those provisions relating to personal liability of
corporate officers and directors.
C. The provisions of the Oklahoma General Corporation Act
concerning qualification of foreign corporations and providing
requirements and duties relating to such corporations shall not apply
to insurance companies subject to the jurisdiction of the Insurance
Commissioner or to foreign transportation companies subject to the
jurisdiction of the Corporation Commission, existing as of the
effective date of this act or thereafter qualified to transact
business in this state.
Added by Laws 1986, c. 292, § 2, eff. Nov. 1, 1986.
§18-1003. Repealed by Laws 1997, c. 418, § 126, eff. Nov. 1, 1997.
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§18-1004. Reserved Power of State to Amend or Repeal - Oklahoma
General Corporation Act Part of Corporation's Chapter or Certificate
of Incorporation.
RESERVED POWER OF STATE TO AMEND OR REPEAL;
OKLAHOMA GENERAL CORPORATION ACT PART OF CORPORATION'S
CHARTER OR CERTIFICATE OF INCORPORATION
The Oklahoma General Corporation Act may be amended or repealed
at the pleasure of the Legislature, but any amendment or repeal shall
not take away or impair any remedy available pursuant to the
provisions of the Oklahoma General Corporation Act against any
corporation or its officers for any liability which shall have been
previously incurred. The Oklahoma General Corporation Act and any
amendments thereto shall be a part of the charter or certificate of
incorporation of every corporation except so far as the same are
inapplicable and inappropriate to the objects of the corporation. The
provisions of this section shall not affect or impair as to any
corporation any rights protected or guaranteed by the Constitution of
this state or of the United States.
Added by Laws 1986, c. 292, § 4, eff. Nov. 1, 1986.
§18-1004.1. Application of act to nonstock corporations.
APPLICATION OF ACT TO NONSTOCK CORPORATIONS
A. Except as otherwise provided in subsections B and C of this
section, the provisions of this chapter shall apply to nonstock
corporations in the manner specified in paragraphs 1 through 4 of
this subsection:
1. All references to shareholders of the corporation shall be
deemed to refer to members of the corporation;
2. All references to the board of directors of the corporation
shall be deemed to refer to the governing body of the corporation;
3. All references to directors or to members of the board of
directors of the corporation shall be deemed to refer to members of
the governing body of the corporation; and
4. All references to stock, capital stock, or shares thereof of
a corporation authorized to issue capital stock shall be deemed to
refer to memberships of a nonprofit nonstock corporation and to
membership interests of any other nonstock corporation.
B. Subsection A of this section shall not apply to:
1. This subsection or to paragraph 4 of subsection A and
paragraphs 1 and 2 of subsection B of Section 1006, subsection A of
Section 1013, Sections 1027, 1035, 1060 and 1073, subsection B of
Section 1075, and Sections 1076, 1077, 1083, 1084, 1085, 1086, 1087,
1092, 1097, 1119 and 1120 of Title 18 of the Oklahoma Statutes, which
apply to nonstock corporations by their terms; and
2. Sections 1032, 1033, 1034, 1036, 1037, subsection D of 1038,
1039, 1042, 1043, 1044, 1045, 1046, 1047, 1056, 1057, 1058, 1059,
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1061, 1064, 1067, 1075.1, 1078, 1079, 1081, 1082, 1083.1, 1090.3,
1095, 1096, 1130 through 1138, 1142, 1159 and subsection A of 1161 of
Title 18 of the Oklahoma Statutes.
C. In the case of a nonprofit, nonstock corporation, subsection
A of this section shall not apply to:
1. The sections listed in subsection B of this section; and
2. Paragraph 3 of subsection B of Section 1006, paragraph 2 of
subsection A of Section 1030, Sections 1032 through 1055, 1062,
subsections A and B of 1063, and 1091 of Title 18 of the Oklahoma
Statutes.
D. For purposes of the Oklahoma General Corporation Act:
1. A "charitable nonstock corporation" is any nonprofit nonstock
corporation that is exempt from taxation under Section 50l(c)(3) of
the United States Internal Revenue Code [26 U.S.C. Section 50l(c)
(3)], or any successor provisions;
2. A "membership interest" is, unless otherwise provided in a
nonstock corporation's certificate of incorporation, a member's share
of the profits and losses of a nonstock corporation, or a member's
right to receive distributions of the nonstock corporation's assets,
or both;
3. A "nonprofit nonstock corporation" is a nonstock corporation
that does not have membership interests;
4. A "nonstock corporation" is any corporation organized under
this act that is not authorized to issue capital stock; and
5. The terms "not-for-profit" and "nonprofit" are synonymous.
Added by Laws 2019, c. 88, § 1, eff. Nov. 1, 2019.
§18-1005. Incorporators - How Corporation Formed - Purposes.
INCORPORATORS; HOW CORPORATION FORMED; PURPOSES
A. Any person, partnership, association or corporation, singly
or jointly with others, and without regard to his or their residence,
domicile or state of incorporation, may incorporate or organize a
corporation pursuant to the provisions of the Oklahoma General
Corporation Act by filing with the Secretary of State a certificate
of incorporation which shall be executed, acknowledged and filed in
accordance with the provisions of Section 7 of this act; provided,
however, at least three (3) persons, partnerships, associations, or
corporations, or any combination thereof, shall be required to
incorporate as a not for profit corporation pursuant to the
provisions of the Oklahoma General Corporation Act.
B. A corporation may be incorporated or organized pursuant to
the provisions of the Oklahoma General Corporation Act to conduct or
promote any lawful business or purposes, except as may otherwise be
provided by the Constitution or other law of this state.
C. Corporations for constructing, maintaining and operating
public utilities, whether in or outside of this state, may be
organized pursuant to the provisions of the Oklahoma General
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Corporation Act, but corporations for constructing, maintaining and
operating public utilities within this state shall be subject to, in
addition to the provisions of the Oklahoma General Corporation Act,
the special provisions and requirements of Title 17 of the Oklahoma
Statutes applicable to such corporations.
Added by Laws 1986, c. 292, § 5, eff. Nov. 1, 1986.
§18-1006. Certificate of incorporation - contents.
CERTIFICATE OF INCORPORATION; CONTENTS
A. The certificate of incorporation shall set forth:
1. The name of the corporation which shall contain one of the
words "association", "company", "corporation", "club", "foundation",
"fund", "incorporated", "institute", "society", "union", "syndicate",
or "limited" or abbreviations thereof, with or without punctuation,
or words or abbreviations thereof, with or without punctuation, of
like import of foreign countries or jurisdictions; provided that such
abbreviations are written in Roman characters or letters, and which
shall be such as to distinguish it upon the records in the Office of
the Secretary of State from:
a. names of other corporations, whether domestic or
foreign, then existing or which existed at any time
during the preceding three (3) years,
b. names of partnerships whether general or limited, or
domestic or foreign, then in good standing or
registered or which were in good standing or registered
at any time during the preceding three (3) years,
c. names of limited liability companies, whether domestic
or foreign, then in good standing or registered or
which were in good standing or registered at any time
during the preceding three (3) years,
d. trade names or fictitious names filed with the
Secretary of State, or
e. corporate, limited liability company or limited
partnership names reserved with the Secretary of State;
2. The address, including the street, number, city and postal
code, of the corporation's registered office in this state, and the
name of the corporation's registered agent at such address;
3. The nature of the business or purposes to be conducted or
promoted. It shall be sufficient to state, either alone or with
other businesses or purposes, that the purpose of the corporation is
to engage in any lawful act or activity for which corporations may be
organized under the general corporation law of Oklahoma, and by such
statement all lawful acts and activities shall be within the purposes
of the corporation, except for express limitations, if any;
4. If the corporation is to be authorized to issue only one
class of stock, the total number of shares of stock which the
corporation shall have authority to issue and the par value of each
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of such shares, or a statement that all such shares are to be without
par value. If the corporation is to be authorized to issue more than
one class of stock, the certificate of incorporation shall set forth
the total number of shares of all classes of stock which the
corporation shall have authority to issue and the number of shares of
each class, and shall specify each class the shares of which are to
be without par value and each class the shares of which are to have
par value and the par value of the shares of each such class. The
provisions of this paragraph shall not apply to corporations which
are not organized for profit and which are not to have authority to
issue capital stock. In the case of such corporations, the fact that
they are not to have authority to issue capital stock shall be stated
in the certificate of incorporation. The provisions of this
paragraph shall not apply to nonstock corporations. In the case of
nonstock corporations, the fact that they are not authorized to issue
capital stock shall be stated in the certificate of incorporation.
The conditions of membership, or other criteria for identifying
members, of nonstock corporations shall likewise be stated in the
certificate of incorporation or the bylaws. Nonstock corporations
shall have members, but the failure to have members shall not affect
otherwise valid corporate acts or work a forfeiture or dissolution of
the corporation. Nonstock corporations may provide for classes or
groups of members having relative rights, powers and duties, and may
make provision for the future creation of additional classes or
groups of members having such relative rights, powers and duties as
may from time to time be established, including rights, powers and
duties senior to existing classes and groups of members. Except as
otherwise provided in the Oklahoma General Corporation Act, nonstock
corporations may also provide that any member or class or group of
members shall have full, limited, or no voting rights or powers,
including that any member or class or group of members shall have the
right to vote on a specified transaction even if that member or class
or group of members does not have the right to vote for the election
of members of the governing body of the corporation. Voting by
members of a nonstock corporation may be on a per capita, number,
financial interest, class, group, or any other basis set forth. The
provisions referred to in the three preceding sentences may be set
forth in the certificate of incorporation or the bylaws. If neither
the certificate of incorporation nor the bylaws of a nonstock
corporation state the conditions of membership, or other criteria for
identifying members, the members of the corporation shall be deemed
to be those entitled to vote for the election of the members of the
governing body pursuant to the certificate of incorporation or bylaws
of such corporation or otherwise until thereafter otherwise provided
by the certificate of incorporation or the bylaws;
5. The name and mailing address of the incorporator or
incorporators;
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6. If the powers of the incorporator or incorporators are to
terminate upon the filing of the certificate of incorporation, the
names and mailing addresses of the persons who are to serve as
directors until the first annual meeting of shareholders or until
their successors are elected and qualify;
7. If the corporation is not for profit:
a. that the corporation does not afford pecuniary gain,
incidentally or otherwise, to its members as such,
b. the name and mailing address of each member of the
governing body,
c. the number of members of the governing body to be
elected at the first meeting, and
d. in the event the corporation is a church, the street
address of the location of the church.
The restriction on affording pecuniary gain to members shall not
prevent a not-for-profit corporation operating as a cooperative from
rebating excess revenues to patrons who may also be members; and
8. If the corporation is a charitable nonstock and does not
otherwise provide in its certificate of incorporation:
a. that the corporation is organized exclusively for
charitable, religious, educational, and scientific
purposes including, for such purposes, the making of
distributions to organizations that qualify as exempt
organizations under section 501(c)(3) of the Internal
Revenue Code, or the corresponding section of any
future federal tax code,
b. that upon the dissolution of the corporation, its
assets shall be distributed for one or more exempt
purposes within the meaning of section 501(c)(3) of the
Internal Revenue Code, or the corresponding section of
any future federal tax code, for a public purpose, and
c. that the corporation complies with the requirements in
paragraph 7 of this subsection.
B. In addition to the matters required to be set forth in the
certificate of incorporation pursuant to the provisions of subsection
A of this section, the certificate of incorporation may also contain
any or all of the following matters:
1. Any provision for the management of the business and for the
conduct of the affairs of the corporation, and any provision
creating, defining, limiting and regulating the powers of the
corporation, the directors, and the shareholders, or any class of the
shareholders, or the governing body, the members, or any class or
group of the members of a nonstock corporation, if such provisions
are not contrary to the laws of this state. Any provision which is
required or permitted by any provision of the Oklahoma General
Corporation Act to be stated in the bylaws may instead be stated in
the certificate of incorporation;
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2. The following provisions, in substantially the following
form:
a. for a corporation, other than a nonstock corporation:
"Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class
of them and/or between this corporation and its
shareholders or any class of them, any court of
equitable jurisdiction within the State of Oklahoma, on
the application in a summary way of this corporation or
of any creditor or shareholder thereof or on the
application of any receiver or receivers appointed for
this corporation under the provisions of Section 1106
of this title or on the application of trustees in
dissolution or of any receiver or receivers appointed
for this corporation under the provisions of Section
1100 of this title, may order a meeting of the
creditors or class of creditors, and/or of the
shareholders or class of shareholders of this
corporation, as the case may be, to be summoned in such
manner as the court directs. If a majority in number
representing three-fourths (3/4) in value of the
creditors or class of creditors, and/or of the
shareholders or class of shareholders of this
corporation, as the case may be, agree to any
compromise or arrangement and to any reorganization of
this corporation as a consequence of such compromise or
arrangement, the compromise or arrangement and the
reorganization, if sanctioned by the court to which the
application has been made, shall be binding on all the
creditors or class of creditors, and/or on all the
shareholders or class of shareholders, of this
corporation, as the case may be, and also on this
corporation", and
b. for a nonstock corporation:
"Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class
of them and/or between this corporation and its members
or any class of them, any court of equitable
jurisdiction within the State of Oklahoma may, on the
application in a summary way of this corporation or of
any creditor or member thereof or on the application of
any receiver or receivers appointed for this
corporation under the provisions of Section 1106 of
this title or on the application of trustees in
dissolution or of any receiver or receivers appointed
for this corporation under the provisions of Section
1100 of this title, order a meeting of the creditors or
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class of creditors, and/or of the members or class of
members of this corporation, as the case may be, to be
summoned in such manner as the court directs. If a
majority in number representing three-fourths (3/4) in
value of the creditors or class of creditors, and/or of
the members or class of members of this corporation, as
the case may be, agree to any compromise or arrangement
and to any reorganization of this corporation as a
consequence of such compromise or arrangement, the
compromise or arrangement and the reorganization, if
sanctioned by the court to which the application has
been made, shall be binding on all the creditors or
class of creditors, and/or on all the members or class
of members, of this corporation, as the case may be,
and also on this corporation";
3. Such provisions as may be desired granting to the holders of
the stock of the corporation, or the holders of any class or series
of a class thereof, the preemptive right to subscribe to any or all
additional issues of stock of the corporation of any or all classes
or series thereof, or to any securities of the corporation
convertible into such stock. No shareholder shall have any
preemptive right to subscribe to an additional issue of stock or to
any security convertible into such stock unless, and except to the
extent that, such right is expressly granted to him in the
certificate of incorporation. Preemptive rights, if granted, shall
not extend to fractional shares;
4. Provisions requiring, for any corporate action, the vote of a
larger portion of the stock or of any class or series thereof, or of
any other securities having voting power, or a larger number of the
directors, than is required by the provisions of the Oklahoma General
Corporation Act;
5. A provision limiting the duration of the corporation's
existence to a specified date; otherwise, the corporation shall have
perpetual existence;
6. A provision imposing personal liability for the debts of the
corporation on its shareholders to a specified extent and upon
specified conditions; otherwise, the shareholders of a corporation
shall not be personally liable for the payment of the corporation's
debts, except as they may be liable by reason of their own conduct or
acts;
7. A provision eliminating or limiting the personal liability of
a director to the corporation or its shareholders for monetary
damages for breach of fiduciary duty as a director, provided that
such provision shall not eliminate or limit the liability of a
director:
a. for any breach of the director's duty of loyalty to the
corporation or its shareholders,
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b. for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation
of law,
c. under Section 1053 of this title, or
d. for any transaction from which the director derived an
improper personal benefit.
No such provision shall eliminate or limit the liability of a
director for any act or omission occurring before the date when such
provision becomes effective.
C. It shall not be necessary to set forth in the certificate of
incorporation any of the powers conferred on corporations by the
provisions of the Oklahoma General Corporation Act.
D. Except for provisions included under paragraphs 1, 2, 5, 6
and 7 of subsection A of this section and paragraphs 2, 5 and 7 of
subsection B of this section, and provisions included under paragraph
4 of subsection A of this section specifying the classes, number of
shares and par value of shares a corporation other than a nonstock
corporation is authorized to issue, any provision of the certificate
of incorporation may be made dependent upon facts ascertainable
outside the instrument, provided that the manner in which the facts
shall operate upon the provision is clearly and explicitly set forth
therein. As used in this subsection, the term "facts" includes, but
is not limited to, the occurrence of any event, including a
determination or action by any person or body, including the
corporation.
Added by Laws 1986, c. 292, § 6, eff. Nov. 1, 1986. Amended by Laws
1987, c. 183, § 1, eff. Nov. 1, 1987; Laws 1988, c. 323, § 5, eff.
Nov. 1, 1988; Laws 1992, c. 99, § 1, eff. Sept. 1, 1992; Laws 1996,
c. 69, § 3, eff. Nov. 1, 1996; Laws 2001, c. 405, § 2, eff. Nov. 1,
2001; Laws 2004, c. 255, § 2, eff. Nov. 1, 2004; Laws 2008, c. 253, §
1; Laws 2019, c. 88, § 2, eff. Nov. 1, 2019.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-1007. Execution, acknowledgment, filing and effective date of
original certificate of incorporation and other instruments -
Exceptions.
EXECUTION, ACKNOWLEDGMENT, FILING AND EFFECTIVE DATE OF ORIGINAL
CERTIFICATE OF INCORPORATION AND OTHER INSTRUMENTS; EXCEPTIONS
A. Whenever any provision of the Oklahoma General Corporation
Act requires any instrument to be filed in accordance with the
provisions of this section or with the provisions of the Oklahoma
General Corporation Act, the instrument shall be executed as follows:
1. The certificate of incorporation and any other instrument to
be filed before the election of the initial board of directors, if
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the initial directors were not named in the certificate of
incorporation, shall be signed by the incorporator or incorporators,
or in case of any other instrument, the incorporator's or
incorporators' successors and assigns. If any incorporator is not
available, then any other instrument may be signed, with the same
effect as if the incorporator had signed it, by any person for whom
or on whose behalf the incorporator, in executing the certificate of
incorporation, was acting directly or indirectly as employee or
agent; provided that the other instrument shall state that the
incorporator is not available and the reason therefor, that the
incorporator in executing the certificate of incorporation was acting
directly or indirectly as employee or agent for or on behalf of the
person, and that the person's signature on the instrument is
otherwise authorized and not wrongful;
2. All other instruments shall be signed:
a. by any authorized officer of the corporation,
b. if it appears from the instrument that there are no
such officers, then by a majority of the directors or
by those directors designated by the board,
c. if it appears from the instrument that there are no
such officers or directors, then by the holders of
record, or those designated by the holders of record,
of a majority of all outstanding shares of stock, or
d. by the holders of record of all outstanding shares of
stock.
B. Whenever any provision of the Oklahoma General Corporation
Act requires any instrument to be acknowledged, that requirement is
satisfied by either:
1. The formal acknowledgment by the person or one of the persons
signing the instrument that it is his or her act and deed or the act
and deed of the corporation, as the case may be, and that the facts
stated therein are true. The acknowledgment shall be made before a
person who is authorized by the law of the place of execution to take
acknowledgments of deeds and who shall affix a seal of office, if
any, to the instrument; or
2. The signature, without more, of the person or persons signing
the instrument, in which case the signature or signatures shall
constitute the affirmation or acknowledgment of the signatory, under
penalty of perjury, that the instrument is his or her act and deed or
the act and deed of the corporation, as the case may be, and that the
facts stated therein are true.
C. Whenever any provision of the Oklahoma General Corporation
Act requires any instrument to be filed in accordance with the
provisions of this section or with the provisions of the Oklahoma
General Corporation Act, the requirement means that:
1. One signed instrument shall be delivered to the Office of the
Secretary of State;
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2. All delinquent franchise taxes authorized by law to be
collected by the Oklahoma Tax Commission shall be tendered to the
Oklahoma Tax Commission as prescribed by Sections 1201 through 1214
of Title 68 of the Oklahoma Statutes;
3. All fees authorized by law to be collected by the Secretary
of State in connection with the filing of the instrument shall be
tendered to the Secretary of State; and
4. Upon delivery of the instrument, and upon tender of the
required taxes and fees, the Secretary of State shall certify that
the instrument has been filed in the Secretary of State's office by
endorsing upon the signed instrument the word "Filed", and the date
of its filing. This endorsement is the "filing date" of the
instrument, and is conclusive of the date of its filing in the
absence of actual fraud. Upon request, the Secretary of State shall
also endorse the hour that the instrument was filed, which
endorsement shall be conclusive of the hour of its filing in the
absence of actual fraud. The Secretary of State shall thereupon file
and index the endorsed instrument.
D. Any instrument filed in accordance with the provisions of
subsection C of this section shall be effective upon its filing date.
Any instrument may provide that it is not to become effective until a
specified time subsequent to the time it is filed, but that date
shall not be later than a time on the ninetieth day after the date of
its filing. If any instrument filed in accordance with subsection C
of this section provides for a future effective date or time and if
the transaction is terminated or its terms are amended to change the
future effective date or time prior to the future effective date or
time, the instrument shall be terminated or amended by the filing,
prior to the future effective date or time set forth in the
instrument, of a certificate of termination or amendment of the
original instrument, executed in accordance with subsection A of this
section, which shall identify the instrument which has been
terminated or amended and shall state that the instrument has been
terminated or the manner in which it has been amended.
E. If another section of the Oklahoma General Corporation Act
specifically prescribes a manner of executing, acknowledging, or
filing a specified instrument or a time when an instrument shall
become effective which differs from the corresponding provisions of
this section, then the provisions of the other section shall govern.
F. Whenever any instrument authorized to be filed with the
Secretary of State under any provision of this title has been so
filed and is an inaccurate record of the corporate action therein
referred to, or was defectively or erroneously executed, sealed, or
acknowledged, the instrument may be corrected by filing with the
Secretary of State a certificate of correction of the instrument
which shall be executed, acknowledged and filed in accordance with
the provisions of this section. The certificate of correction shall
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specify the inaccuracy or defect to be corrected and shall set forth
the portion of the instrument in corrected form. The corrected
instrument shall be effective as of the date the original instrument
was filed, except as to those persons who are substantially and
adversely affected by the correction and as to those persons the
corrected instrument shall be effective from the filing date of the
corrected instrument.
G. If any instrument authorized to be filed with the Secretary
of State pursuant to any provision of this title is filed
inaccurately or defectively, or is erroneously executed, sealed, or
acknowledged, or is otherwise defective in any respect, the Secretary
of State shall have no liability to any person for the preclearance
for filing, the acceptance for filing, or the filing and indexing of
such instrument.
H. When authorized by the rules of the Secretary of State, any
signature on any instrument authorized to be filed with the Secretary
of State under any provision of this title may be a facsimile
signature, a conformed signature, or an electronically transmitted
signature.
I. 1. If:
a. (1) together with the actual delivery of an instrument
and tender of the required taxes and fees, there
is delivered to the Secretary of State a separate
affidavit, which in its heading shall be
designated as an affidavit of extraordinary
condition, attesting, on the basis of personal
knowledge of the affiant or a reliable source of
knowledge identified in the affidavit, that an
earlier effort to deliver the instrument and
tender taxes and fees was made in good faith,
specifying the nature, date and time of the good
faith effort and requesting that the Secretary of
State establish the date and time as the filing
date of the instrument, or
(2) upon the actual delivery of an instrument and
tender of the required taxes and fees, the
Secretary of State in his or her discretion
provides a written waiver of the requirement for
an affidavit stating that it appears to the
Secretary of State that an earlier effort to
deliver the instrument and tender the taxes and
fees was made in good faith and specifying the
date and time of the effort, and
b. the Secretary of State determines that an extraordinary
condition existed at that date and time, that the
earlier effort was unsuccessful as a result of the
existence of an extraordinary condition, and that the
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actual delivery and tender were made within a
reasonable period, not to exceed two (2) business days,
after the cessation of the extraordinary condition,
then the Secretary of State may establish the date and time as the
filing date of the instrument. No fee shall be paid to the Secretary
of State for receiving an affidavit of extraordinary condition.
2. For purposes of this subsection, an extraordinary condition
means: any emergency resulting from an attack on, invasion or
occupation by foreign military forces of, or disaster, catastrophe,
war or other armed conflict, revolution or insurrection, or rioting
or civil commotion in, the United States or a locality in which the
Secretary of State conducts its business or in which the good faith
effort to deliver the instrument and tender the required taxes and
fees is made, or the immediate threat of any of the foregoing; or any
malfunction or outage of the electrical or telephone service to the
Secretary of State's office, or weather or other condition in or
about a locality in which the Secretary of State conducts its
business, as a result of which the Secretary of State's office is not
open for the purpose of the filing of instruments under the Oklahoma
General Corporation Act or the filing cannot be effected without
extraordinary effort. The Secretary of State may require such proof
as it deems necessary to make the determination required under
subparagraph b of paragraph 1 of this subsection, and any
determination shall be conclusive in the absence of actual fraud.
3. If the Secretary of State establishes the filing date of an
instrument pursuant to this subsection, the date and time of delivery
of the affidavit of extraordinary condition or the date and time of
the Secretary of State's written waiver of the affidavit shall be
endorsed on the affidavit or waiver and the affidavit or waiver, so
endorsed, shall be attached to the filed instrument to which it
relates. The filed instrument shall be effective as of the date and
time established as the filing date by the Secretary of State
pursuant to this subsection, except as to those persons who are
substantially and adversely affected by the establishment and, as to
those persons, the instrument shall be effective from the date and
time endorsed on the affidavit of extraordinary condition or written
waiver attached thereto.
Added by Laws 1986, c. 292, § 7, eff. Nov. 1, 1986. Amended by Laws
1990, c. 328, § 2, eff. Sept. 1, 1990; Laws 1991, c. 331, § 54, eff.
Sept. 1, 1991; Laws 1998, c. 422, § 1, eff. Nov. 1, 1998; Laws 2001,
c. 405, § 3, eff. Nov. 1, 2001; Laws 2004, c. 255, § 3, eff. Nov. 1,
2004; Laws 2008, c. 253, § 2; Laws 2019, c. 88, § 3, eff. Nov. 1,
2019.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
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§18-1008. Certificate of incorporation - Definition.
CERTIFICATE OF INCORPORATION; DEFINITION
The term "certificate of incorporation", as used in the Oklahoma
General Corporation Act, unless the context requires otherwise,
includes not only the original certificate of incorporation filed to
create a corporation but also all other certificates, agreements of
merger or consolidation, plans of reorganization, or other
instruments, howsoever designated, which are filed pursuant to the
provisions of Sections 1006, 1023 through 1026, 1032, 1076 through
1087, 1090.2, or 1118 through 1120 of this title, or any other
section of this title, and which have the effect of amending or
supplementing in some respect a corporation's certificate of
incorporation.
Added by Laws 1986, c. 292, § 8, eff. Nov. 1, 1986. Amended by Laws
2019, c. 88, § 4, eff. Nov. 1, 2019.
§18-1009. Certificate of Incorporation and Other Certificates -
Evidence.
CERTIFICATE OF INCORPORATION AND OTHER CERTIFICATES; EVIDENCE
A copy of a certificate of incorporation, or of a restated
certificate of incorporation, or of any other certificate which has
been filed in the Office of the Secretary of State as required by any
provision of Title 18 of the Oklahoma Statutes, when duly certified
by the Secretary of State, shall be received in all courts, public
offices, and official bodies as prima facie evidence of:
1. Due execution, acknowledgment and filing of the instrument;
2. Observance and performance of all acts and conditions
necessary to have been observed and performed precedent to the
instrument becoming effective; and
3. Of any other facts required or permitted by law to be stated
in the instrument.
Added by Laws 1986, c. 292, § 9, eff. Nov. 1, 1986.
§18-1010. Commencement of Corporate Existence.
COMMENCEMENT OF CORPORATE EXISTENCE
Upon the filing with the Secretary of State of the certificate of
incorporation, executed and acknowledged in accordance with the
provisions of Section 7 of this act, the incorporator or
incorporators who signed the certificate, and his or their successors
and assigns, from the date of such filing, shall be and constitute a
body corporate by the name set forth in the certificate, subject to
the provisions of subsection D of Section 7 of this act and subject
to dissolution or other termination of its existence as provided for
in the Oklahoma General Corporation Act.
Added by Laws 1986, c. 292, § 10, eff. Nov. 1, 1986.
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§18-1011. Powers of Incorporators.
POWERS OF INCORPORATORS
If the persons who are to serve as directors until the first
annual meeting of shareholders have not been named in the certificate
of incorporation, the incorporator or incorporators, until the
directors are elected, shall manage the affairs of the corporation
and may do whatever is necessary and proper to perfect the
organization of the corporation, including the adoption of the
original bylaws of the corporation and the election of directors.
Added by Laws 1986, c. 292, § 11, eff. Nov. 1, 1986.
§18-1012. Organization meeting of incorporators or directors named
in certificate of incorporation.
ORGANIZATION MEETING OF INCORPORATORS OR DIRECTORS NAMED IN
CERTIFICATE OF INCORPORATION
A. After the filing of the certificate of incorporation, an
organization meeting of the incorporator or incorporators, or of the
board of directors if the initial directors were named in the
certificate of incorporation, shall be held either within or without
this state at the call of a majority of the incorporators or
directors, as the case may be, for the purposes of adopting bylaws,
electing directors if the meeting is of the incorporators, to serve
or hold office until the first annual meeting of shareholders or
until their successors are elected and qualify, electing officers if
the meeting is of the directors, doing any other or further acts to
perfect the organization of the corporation, and transacting such
other business as may come before the meeting.
B. The persons calling the meeting shall give to each other
incorporator or director, as the case may be, at least two (2) days'
written notice thereof by any usual means of communication, which
notice shall state the time, place and purposes of the meeting as
fixed by the persons calling it. Notice of the meeting need not be
given to anyone who attends the meeting or who signs a waiver of
notice either before or after the meeting.
C. Any action permitted to be taken at the organization meeting
of the incorporators or directors, as the case may be, may be taken
without a meeting if each incorporator or director, where there is
more than one, or the sole incorporator or director where there is
only one, signs an instrument which states the action so taken.
D. If any incorporator is not available to act, then any person
for whom or on whose behalf the incorporator was acting directly or
indirectly as employee or agent may take any action that such
incorporator would have been authorized to take under this section or
Section 1011 of this title; provided, that any instrument signed by
such other person, or any record of the proceedings of a meeting in
which such person participated, shall state that such incorporator is
not available and the reason therefor, that such incorporator was
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acting directly or indirectly as employee or agent for or on behalf
of such person, and that such person's signature on such instrument
or participation in such meeting is otherwise authorized and not
wrongful.
Added by Laws 1986, c. 292, § 12, eff. Nov. 1, 1986. Amended by Laws
2017, c. 323, § 1, eff. Nov. 1, 2017.
§18-1013. Bylaws.
BYLAWS
A. The original or other bylaws of a corporation may be adopted,
amended or repealed by the incorporators, by the initial directors of
a corporation other than a nonstock corporation or initial members of
the governing body of a nonstock corporation if they were named in
the certificate of incorporation, or, before a corporation other than
a nonstock corporation has received any payment for any of its stock,
by its board of directors. After a corporation other than a nonstock
corporation has received any payment for any of its stock, except as
otherwise provided in its certificate of incorporation, the power to
adopt, amend or repeal bylaws shall be in the shareholders entitled
to vote. In the case of a nonstock corporation, the power to adopt,
amend or repeal bylaws shall be in its governing body.
Notwithstanding the foregoing, any corporation may, in its
certificate of incorporation, confer the power to adopt, amend or
repeal bylaws upon the directors or, in the case of a nonstock
corporation, upon its members. The fact that such power has been so
conferred upon the directors or members, as the case may be, shall
not divest the shareholders or governing body of the power, nor limit
their power to adopt, amend or repeal bylaws.
B. The bylaws may contain any provision, not inconsistent with
law or with the certificate of incorporation, relating to the
business of the corporation, the conduct of its affairs, and its
rights or powers or the rights or powers of its shareholders,
directors, officers or employees.
Added by Laws 1986, c. 292, § 13, eff. Nov. 1, 1986. Amended by Laws
2001, c. 405, § 5, eff. Nov. 1, 2001; Laws 2004, c. 255, § 4, eff.
Nov. 1, 2004; Laws 2019, c. 88, § 5, eff. Nov. 1, 2019.
§18-1014. Emergency bylaws and other powers in emergency.
EMERGENCY BYLAWS AND OTHER POWERS IN EMERGENCY
A. The board of directors of any corporation may adopt emergency
bylaws which, notwithstanding any different provision in the Oklahoma
General Corporation Act, in the certificate of incorporation, or
bylaws, shall be operative during any emergency resulting from an
attack on the United States or on a locality in which the corporation
conducts its business or customarily holds meetings of its board of
directors or its shareholders, or during any nuclear or atomic
disaster, or during the existence of any catastrophe, or other
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similar emergency condition, as a result of which a quorum of the
board of directors or a standing committee thereof cannot readily be
convened for action. The emergency bylaws may make any provision
that may be practical and necessary for the circumstances of the
emergency, including provisions that:
1. A meeting of the board of directors or a committee thereof
may be called by an officer or director in such manner and under such
conditions as shall be prescribed in the emergency bylaws;
2. The director or directors in attendance at the meeting, or
any greater number fixed by the emergency bylaws, shall constitute a
quorum; and
3. The officers or other persons designated on a list approved
by the board of directors before the emergency, all in such order of
priority and subject to such conditions and for such period of time,
not longer than reasonably necessary after the termination of the
emergency, as may be provided in the emergency bylaws or in the
resolution approving the list, shall, to the extent required to
provide a quorum at any meeting of the board of directors, be deemed
directors for such meeting.
B. The board of directors, either before or during any such
emergency, may provide, and from time to time modify, lines of
succession in the event that during such emergency any or all
officers or agents of the corporation shall for any reason be
rendered incapable of discharging their duties.
C. The board of directors, either before or during any such
emergency, may, effective in the emergency, change the head office or
designate several alternative head offices or regional offices, or
authorize the officers to do so.
D. No officer, director or employee acting in accordance with
any emergency bylaws shall be liable except for willful misconduct.
E. To the extent not inconsistent with any emergency bylaws so
adopted, the bylaws of the corporation shall remain in effect during
any emergency and upon its termination the emergency bylaws shall
cease to be operative.
F. Unless otherwise provided in emergency bylaws, notice of any
meeting of the board of directors during such an emergency may be
given only to such of the directors as it may be feasible to reach at
the time and by such means as may be feasible at the time, including
publication or radio.
G. To the extent required to constitute a quorum at any meeting
of the board of directors during such an emergency, the officers of
the corporation who are present shall, unless otherwise provided in
emergency bylaws, be deemed, in order of rank and within the same
rank in order of seniority, directors for such meeting.
H. Nothing contained in this section shall be deemed exclusive
of any other provisions for emergency powers consistent with other
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sections of this act which have been or may be adopted by
corporations created pursuant to the provisions of this act.
Added by Laws 1986, c. 292, § 14, eff. Nov. 1, 1986. Amended by Laws
2001, c. 405, § 5, eff. Nov. 1, 2001.
§18-1014.1. Interpretation and enforcement of corporate instruments
and provisions of this title.
NTERPRETATION AND ENFORCEMENT OF CORPORATE INSTRUMENTS AND
PROVISIONS OF THIS TITLE
A. Any shareholder, member or director may bring an action to
interpret, apply or enforce or determine the validity of:
1. The provisions of the certificate of incorporation or the
bylaws of a domestic corporation;
2. Any instrument, document or agreement (a) by which a
corporation creates or sells, or offers to create or sell, any of its
stock, or any rights or options respecting its stock, or (b) to which
a corporation and one or more holders of its stock are parties, and
pursuant to which any such holder or holders sell or offer to sell
any of such stock, or (c) by which a corporation agrees to sell,
lease or exchange any of its property or assets, and which by its
terms provides that one or more holders of its stock approve of or
consent to such sale, lease or exchange;
3. Any written restrictions on the transfer, registration of
transfer or ownership of securities under Section 1055 of this title;
4. Any proxy under Section 1057 or 1060 of this title;
5. Any voting trust or other voting agreement under Section 1063
of this title;
6. Any agreement, certificate of merger or consolidation, or
certificate of ownership and merger governed by Sections 1081 through
1087, or Section 1090.2 of this title;
7. Any certificate of conversion under Section 1090.4 or 1090.5
of this title; or
8. Any other instrument, document, agreement or certificate
required by any provision of this title,
may be brought in the district court, except to the extent that a
statute confers exclusive jurisdiction on a court, agency or tribunal
other than the district court.
B. Any civil action to interpret, apply or enforce any provision
of this title may be brought in the district court.
Added by Laws 2001, c. 405, § 6, eff. Nov. 1, 2001. Amended by Laws
2017, c. 323, § 2, eff. Nov. 1, 2017.
§18-1014.2. Forum selection provisions.
FORUM SELECTION PROVISIONS
The certificate of incorporation or the bylaws may require,
consistent with applicable jurisdictional requirements, that any or
all internal corporate claims shall be brought solely and exclusively
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in any or all of the courts in this state, and no provision of the
certificate of incorporation or the bylaws may prohibit bringing such
claims in the courts of this state. "Internal corporate claims"
means claims, including claims in the right of the corporation, (a)
that are based upon a violation of a duty by a current or former
director or officer or shareholder in such capacity, or (b) as to
which this title confers jurisdiction upon the district court.
Added by Laws 2017, c. 323, § 3, eff. Nov. 1, 2017.
§18-1015. General Powers.
GENERAL POWERS
In addition to the powers enumerated in Section 16 of this act,
every corporation, its officers, directors and shareholders shall
possess and may exercise all the powers and privileges granted by the
provisions of the Oklahoma General Corporation Act or by any other
law or by its certificate of incorporation, together with any powers
incidental thereto, so far as such powers and privileges are
necessary or convenient to the conduct, promotion or attainment of
the business or purposes set forth in its certificate of
incorporation.
Added by Laws 1986, c. 292, § 15, eff. Nov. 1, 1986.
§18-1016. Specific powers.
SPECIFIC POWERS
Every corporation created pursuant to the provisions of the
Oklahoma General Corporation Act shall have power to:
1. Have perpetual succession by its corporate name, unless a
limited period of duration is stated in its certificate of
incorporation;
2. Sue and be sued in all courts and participate, as a party or
otherwise, in any judicial, administrative, arbitrative or other
proceeding, in its corporate name;
3. Have a corporate seal, which may be altered at pleasure, and
use the same by causing it, or a facsimile thereof, to be impressed
or affixed or in any other manner reproduced;
4. Purchase, receive, take by grant, gift, devise, bequest or
otherwise, lease or otherwise acquire, own, hold, improve, employ,
use and otherwise deal in and with real or personal property, or any
interest therein, wherever situated and to sell, convey, lease,
exchange, transfer or otherwise dispose of, or mortgage or pledge,
all or any of its property and assets, or any interest therein,
wherever situated, subject to the limitations prescribed by Section 2
of Article XXII of the Oklahoma Constitution and Section 1020 of this
title;
5. Appoint or elect such officers and agents as the business of
the corporation requires and to pay or otherwise provide for them
suitable compensation;
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6. Adopt, amend and repeal bylaws;
7. Wind up and dissolve itself in the manner provided for in
this act;
8. Conduct its business, carry on its operations, and have
offices and exercise its powers within or without this state;
9. Make donations for the public welfare or for charitable,
scientific or educational purposes, and in time of war or other
national emergency in aid thereof;
10. Be an incorporator, promoter or manager of other
corporations of any type or kind;
11. Participate with others in any corporation, partnership,
limited partnership, joint venture or other association of any kind,
or in any transaction, undertaking or arrangement which the
participating corporation would have power to conduct by itself,
whether or not such participation involves sharing or delegation of
control with or to others;
12. Transact any lawful business which the corporation's board
of directors shall find to be in aid of governmental authority;
13. Make contracts, including contracts of guaranty and
suretyship, incur liabilities, borrow money at such rates of interest
as the corporation may determine, issue its notes, bonds and other
obligations, and secure any of its obligations by mortgage, pledge or
other encumbrance of all or any of its property, franchises and
income, and make contracts of guaranty and suretyship which are
necessary or convenient to the conduct, promotion or attainment of
the business of:
a. a corporation, all of the outstanding stock of which is
owned, directly or indirectly, by the contracting
corporation,
b. a corporation which owns, directly or indirectly, all
of the outstanding stock of the contracting
corporation, or
c. a corporation, all of the outstanding stock of which is
owned, directly or indirectly, by a corporation which
owns, directly or indirectly, all of the outstanding
stock of the contracting corporation, which contracts
of guaranty and suretyship shall be deemed to be
necessary or convenient to the conduct, promotion or
attainment of the business of the contracting
corporation, and to make other contracts of guaranty
and suretyship which are necessary or convenient to the
conduct, promotion or attainment of the business of the
contracting corporation;
14. Lend money for its corporate purposes, invest and reinvest
its funds, and take, hold and deal with real and personal property as
security for the payment of funds so loaned or invested;
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15. Pay pensions and establish and carry out pension, profit
sharing, stock option, stock purchase, stock bonus, retirement,
benefit, incentive and compensation plans, trusts and provisions for
any or all of its directors, officers, and employees, and for any or
all of the directors, officers, and employees of its subsidiaries;
16. Provide insurance for its benefit on the life of any of its
directors, officers, or employees, or on the life of any shareholder
for the purpose of acquiring at his death shares of its stock owned
by such shareholder; and
17. Renounce in its certificate of incorporation or by action of
its board of directors any interest or expectancy of the corporation
in, or in being offered an opportunity to participate in, specified
business opportunities or specified classes or categories of business
opportunities that are presented to the corporation or one or more of
its officers, directors or shareholders.
Added by Laws 1986, c. 292, § 16, eff. Nov. 1, 1986. Amended by Laws
2001, c. 405, § 7, eff. Nov. 1, 2001.
§18-1017. Powers respecting securities of other corporations or
entities.
POWERS RESPECTING SECURITIES OF
OTHER CORPORATIONS OR ENTITIES
Any corporation organized under the laws of this state may
guarantee, purchase, take, receive, subscribe for or otherwise
acquire; own, hold, use or otherwise employ; sell, lease, exchange,
transfer, or otherwise dispose of; mortgage, lend, pledge or
otherwise deal in and with, bonds and other obligations of, or shares
or other securities or interests in, or issued by, any other domestic
or foreign corporation, partnership, association, or individual, or
by any government or agency or instrumentality thereof, subject to
the limitation prescribed by Section 41 of Article IX of the Oklahoma
Constitution. A corporation while the owner of any such securities
may exercise all the rights, powers and privileges of ownership,
including the right to vote.
Added by Laws 1986, c. 292, § 17, eff. Nov. 1, 1986. Amended by Laws
1987, c. 146, § 1, operative Nov. 1, 1987.
§18-1018. Lack of Corporate Capacity or Power, Effect - Ultra Vires.
LACK OF CORPORATE CAPACITY OR POWER, EFFECT; ULTRA VIRES
No act of a corporation and no conveyance or transfer of real or
personal property to or by a corporation shall be invalid by reason
of the fact that the corporation was without capacity or power to do
such act or to make or receive such conveyance or transfer, but such
lack of capacity or power may be asserted:
1. In a proceeding by a shareholder against the corporation to
enjoin the doing of any act or acts or the transfer of real or
personal property by or to the corporation. If the unauthorized acts
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or transfer sought to be enjoined are being, or are to be, performed
or made pursuant to any contract to which the corporation is a party,
the court, if all of the parties to the contract are parties to the
proceeding and if it deems the same to be equitable, may set aside
and enjoin the performance of such contract, and in so doing, may
allow to the corporation or to the other parties to the contract, as
the case may be, such compensation as may be equitable for the loss
or damage sustained by any of them which may result from the action
of the court in setting aside and enjoining the performance of such
contract. Anticipated profits to be derived from the performance of
the contract shall not be awarded by the court as a loss or damage
sustained;
2. In a proceeding by the corporation, whether acting directly
or through a receiver, trustee, or other legal representative, or
through shareholders in a representative suit, against an incumbent
or former officer or director of the corporation for loss or damage
due to his unauthorized act; or
3. In a proceeding by the Attorney General to dissolve the
corporation, or to enjoin the corporation from the transaction of
unauthorized business.
Added by Laws 1986, c. 292, § 18, eff. Nov. 1, 1986.
§18-1019. Private foundations; powers and duties.
PRIVATE FOUNDATIONS; POWERS AND DUTIES
A corporation of this state which is a private foundation under
the United States internal revenue laws and whose certificate of
incorporation does not expressly provide that this section shall not
apply to it is required to act or to refrain from acting so as not to
subject itself to the taxes imposed by Sections 4941, relating to
taxes on self-dealing, 4942, relating to taxes on failure to
distribute income, 4943, relating to taxes on excess business
holdings, 4944, relating to taxes on investments which jeopardize
charitable purpose, or 4945, relating to taxable expenditures, of the
Internal Revenue Code of 1954, as amended, or corresponding
provisions of any subsequent United States internal revenue law.
Added by Laws 1986, c. 292, § 19, eff. Nov. 1, 1986. Amended by Laws
1987, c. 146, § 2, operative Nov. 1, 1987.
§18-1020. Limitations Upon Real Estate Ownership.
LIMITATIONS UPON REAL ESTATE OWNERSHIP
A. No corporation of any sort, whether coming within the general
scope of the Oklahoma General Corporation Act or not, except as
provided for in this section, shall own, hold, or take any real
estate located in this state outside of any incorporated city or
town, or any addition thereto.
B. The provisions of the Oklahoma General Corporation Act shall
not be construed to prohibit the owning, holding or taking of: 1.
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Such real estate as is necessary and proper for carrying on the
business for which any corporation has been lawfully formed or
domesticated in this state;
2. Naked title to real estate by any trust company, as trustee,
to be held solely as security for indebtedness pursuant to such trust
or as trustee of an express or testamentary trust for the benefit of
natural persons;
3. Any real estate mortgage held by any corporation to secure
any loan or debt; 4. Any real estate acquired by any corporation
upon the foreclosure of any real estate mortgage held by such
corporation or acquired in the collection of any loan or debt due
such corporation, except as provided for in subsection C of this
section; or
5. Any real estate acquired by any corporation for lease or sale
to any other corporation, if such latter corporation could have
legally acquired the same in the first instance.
C. Any real estate located in this state outside of any
incorporated city or town, or any addition thereto, acquired by any
corporation by mortgage foreclosure or in collection of debt as
provided for in paragraph 4 of subsection B of this section, shall be
sold and disposed of within seven (7) years from such acquisition.
D. The provisions of subsections A through C of this section
shall not apply to religious, educational, charitable or scientific
corporations, owning or holding taxable property.
E. 1. Any person who takes or holds any real estate for the use
or benefit of any corporation with the intent of evading the
provisions of this section, shall, upon conviction, be deemed guilty
of a misdemeanor and punished by a fine of not less than Fifty
Dollars ($50.00) nor more than Five Hundred Dollars ($500.00) or by
imprisonment in the county jail for a term not less than thirty (30)
days nor more than six (6) months, or by both such fine and
imprisonment.
2. Any corporation that fails or refuses to file a statement as
required by the provisions of subsection F of this section shall,
upon conviction, be deemed guilty of a misdemeanor and punished by a
fine not exceeding One Thousand Dollars ($1,000.00).
F. 1. On or before the first day of April of each year, every
corporation holding any real estate in contravention of the
provisions of this section shall file in the office of the county
clerk of each county where such real estate is located, a statement
in duplicate containing the legal description of each tract, piece,
or parcel of real estate so owned or acquired, the date of the
acquisition of each tract, piece, or parcel, the amount of the last
preceding assessed valuation thereof and the purpose and method of
the acquisition thereof. The statement shall be verified by the oath
of an officer or duly appointed agent of the corporation.
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2. The county clerk shall keep a permanent index and record of
each statement filed by corporations pursuant to the provisions of
this subsection in a permanent record book, which shall be in the
form prescribed by the State Auditor and Inspector. One copy of each
statement so filed shall be retained as a part of the permanent
records of the office of the county clerk.
3. Within thirty (30) days after the statement provided for in
paragraph 1 of this subsection is filed, the county clerk shall
deliver the other duplicate to the district attorney of such county.
G. 1. Any corporation owning or holding any real estate in
violation of the provisions of subsections A through E of this
section, in addition to other penalties provided for in the Oklahoma
General Corporation Act, shall be required to pay, for each year, or
fraction thereof, during which such title or interest is thus
unlawfully owned or held, the following penalties:
a. For the first year, one percent (1%) of the assessed
value of such real estate unlawfully owned or held;
b. For the second year, two percent (2%) thereof;
c. For the third year, three percent (3%) thereof;
d. For the fourth year, four percent (4%) thereof;
e. For the fifth year, five percent (5%) thereof;
f. For the sixth year, six percent (6%) thereof; and
g. For each year thereafter, six percent (6%) thereof.
2. Provided, however, that no corporation shall be subject to
more than one penalty, for each calendar year, for each tract, piece
or parcel of real estate thus held in violation of the provisions of
this section, but the penalties provided for in paragraph 1 of this
subsection shall be cumulative.
3. In determining the penalty under this subsection, the
assessed value of the real estate fixed for the purpose of levying ad
valorem taxes, which last shall have become due and payable preceding
the date of the accrual of such penalty, shall be taken.
4. The penalties, upon collection, shall be immediately paid
over to the Commissioners of the Land Office for credit to the
permanent school fund of this state created pursuant to Section 2 of
Article XI of the Oklahoma Constitution.
5. The state shall have a lien against any piece, parcel or
tract of real estate to secure the payment of all penalties,
interest, and fees accruing from such unlawful owning or holding of
any such real estate; provided, that such lien shall not attach
thereto, or in any way affect the title thereof, until an action to
subject such real estate to such lien and a foreclosure thereof has
been instituted in the district court of the county where such real
estate is located. Filing of such action shall be notice lis pendens
and anyone thereafter acquiring any such real estate shall take it
subject to such lien.
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H. 1. Whenever the district attorney of any county has reason
to believe that any real estate located in such county is owned or
held by a corporation in violation of the provisions of this section,
the district attorney shall give written notice to such corporation
that:
a. it is subject to the penalties provided for in this
section;
b. such penalties must be paid to the district attorney
within thirty (30) days from the date of such notice;
and
c. there is additionally due and payable to the district
attorney a collection fee equal to fifteen percent
(15%) of the total penalties collected as to any tract,
piece or parcel of real estate which is unlawfully
owned or held. If the institution of an action is
necessary to procure a judgment for the collection of
such penalties, the collection fee shall be increased
to twenty-five percent (25%) of the penalty recovered,
and in no event less than One Hundred Dollars
($100.00). Such fee shall be retained by the district
attorney as remuneration for services rendered in
collecting such penalties, which shall be in addition
to any compensation otherwise provided for by law.
2. In the event such penalty shall not be paid within thirty
(30) days from the date of such notice, the district attorney shall
institute an action in the name of the state in the district court of
the county where such real estate is located for the recovery of the
penalties, together with interest thereon at the rate of ten percent
(10%) per annum from the date of such notice, the collection fee
provided for in paragraph 1 of this subsection, all costs of the
action, and for a further judgment establishing and foreclosing any
lien created pursuant to the provisions of paragraph 5 of subsection
G of this section, unless the real estate which is alleged to have
been unlawfully owned or held, is disposed of prior to the
commencement of the action.
a. The petition in such case shall set forth:
(1) a description of the real estate which is alleged
to have been unlawfully owned or held;
(2) the names, as defendants, of the corporation and
all persons alleged to be unlawfully holding the
real estate;
(3) if the establishment and foreclosure of a lien
upon such real estate is sought in the action, the
names as defendants, of all persons claiming real
estate, including all tenants and persons in
actual possession thereof; and
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(4) the facts and circumstances in consequence of
which it is alleged that such real estate is owned
or held in violation of the provisions of this
section.
b. The filing of such petition, and all other procedures
relating thereto, in all respects shall be governed by
and subject to the same laws as in other civil actions.
c. If the state recovers a judgment against such
corporation in such action, the judgment shall include
and be entered for:
(1) the amount of the penalties for which the
corporation is found liable pursuant to the
provisions of this section;
(2) interest on such penalties at the rate of ten
percent (10%) per annum from the date such
penalties become due and receivable pursuant to
the written notice provided for in paragraph 1 of
this subsection;
(3) a collection fee of twenty-five percent (25%) of
such penalties recovered, which fee shall not be
less than One Hundred Dollars ($100.00);
(4) the entire costs of the action; and
(5) if the establishment and foreclosure of a lien
upon the real estate is prayed for in the
petition, a decree establishing such lien upon
such real estate and an order of foreclosure.
d. Upon the judgment becoming final, an execution shall
issue for the collection thereof.
Added by Laws 1986, c. 292, § 20, eff. Nov. 1, 1986.
§18-1021. Registered office in state - Principal office or place of
business in state.
REGISTERED OFFICE IN STATE; PRINCIPAL OFFICE
OR PLACE OF BUSINESS IN STATE
A. Every corporation shall have and maintain in this state a
registered office which may, but need not be, the same as its place
of business.
B. Whenever the term "corporation's principal office or place of
business in this state" or "principal office or place of business of
the corporation in this state", or other term of like import, is or
has been used in a corporation's certificate of incorporation, or in
any other document, or in any statute, it shall be deemed to mean and
refer to, unless the context indicates otherwise, the corporation's
registered office required by this section. It shall not be
necessary for any corporation to amend its certificate of
incorporation or any other document to comply with the provisions of
this section.
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C. As contained in any certificate of incorporation or other
document filed with the Secretary of State under this title, the
address of a registered office shall include the street, number,
city, state and postal code.
Added by Laws 1986, c. 292, § 21, eff. Nov. 1, 1986. Amended by Laws
2017, c. 323, § 4, eff. Nov. 1, 2017.
§18-1022. Registered agent in state - Resident agent.
REGISTERED AGENT IN STATE; RESIDENT AGENT
A. Every domestic corporation shall have and maintain in this
state a registered agent, which agent may be any of the following:
1. The domestic corporation itself;
2. An individual resident of this state;
3. A domestic corporation, a domestic partnership whether
general or limited and including a limited liability partnership or a
limited liability limited partnership or a domestic limited liability
company; or
4. A foreign corporation, a foreign partnership whether general
or limited and including a limited liability partnership or a limited
liability limited partnership or a foreign limited liability company,
if authorized to transact business in this state.
B. Every foreign corporation transacting business in this state
shall have and maintain the Secretary of State as its registered
agent in this state. In addition, such foreign corporation may have
and maintain in this state an additional registered agent, which may
be an individual or entity set forth in subsection A of this section;
provided, that the foreign corporation may not be its own registered
agent. If such additional registered agent is designated, service of
process shall be on such agent and not on the Secretary of State.
C. Each registered agent for a domestic corporation or foreign
corporation shall:
1. If an entity, maintain a business office identical with the
registered office which is open during regular business hours, or if
an individual, be generally present at the registered office to
accept service of process and otherwise perform the functions of a
registered agent;
2. If a foreign entity, be authorized to transact business in
this state; and
3. Accept service of process and other communications directed
to the corporations for which it serves as registered agent and
forward same to the corporation to which the service or communication
is directed.
D. Every corporation formed under the laws of this state or
qualified to do business in this state shall provide to its
registered agent, and update from time to time as necessary, the
name, business address and business telephone number of a natural
person who is an officer, director, employee or designated agent of
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the corporation, who is then authorized to receive communications
from the registered agent. Such person shall be deemed the
communications contact for the corporation. Every registered agent
shall retain, in paper or electronic form, the information required
by this subsection concerning the current communications contact for
each corporation for which he, she or it serves as a registered
agent. If the corporation fails to provide the registered agent with
a current communications contact, the registered agent may resign as
the registered agent for such corporation pursuant to Section 1026 of
this title.
E. Whenever the term "resident agent" or "resident agent in
charge of a corporation's principal office or place of business in
this state", or other term of like import which refers to a
corporation's agent required by statute to be located in this state,
is or has been used in a corporation's certificate of incorporation,
or in any other document, or in any statute, it shall be deemed to
mean and refer to, unless the context indicates otherwise, the
corporation's registered agent required by this section. It shall
not be necessary for any corporation to amend its certificate of
incorporation or any other document to comply with the provisions of
this section.
Added by Laws 1986, c. 292, § 22, eff. Nov. 1, 1986. Amended by Laws
1998, c. 422, § 2, eff. Nov. 1, 1998; Laws 2004, c. 255, § 5, eff.
Nov. 1, 2004; Laws 2017, c. 323, § 5, eff. Nov. 1, 2017.
§18-1023. Change of location of registered office; change of
registered agent.
CHANGE OF LOCATION OF REGISTERED OFFICE;
CHANGE OF REGISTERED AGENT
Any corporation, by resolution of its board of directors, may
change the location of its registered office in this state to any
other place in this state. By like resolution, the registered agent
of a corporation may be changed to any other person or corporation,
including itself. In either such case, the resolution shall be as
detailed in its statement as is required by the provisions of
paragraph 2 of subsection A of Section 1006 of this title. Upon the
adoption of such a resolution, a certificate certifying the change
shall be executed, acknowledged and filed in accordance with the
provisions of Section 1007 of this title.
Added by Laws 1986, c. 292, § 23, eff. Nov. 1, 1986. Amended by Laws
1987, c. 146, § 3, operative Nov. 1, 1987; Laws 1990, c. 328, § 3,
eff. Sept. 1, 1990.
§18-1024. Change of address or name of registered agent.
CHANGE OF ADDRESS OR NAME OF REGISTERED AGENT
A. A registered agent may change the address of the registered
office of the corporation or corporations for which he or she is the
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registered agent to another address in this state by filing with the
Secretary of State a certificate in the name of each affected
corporation, executed and acknowledged by the registered agent,
setting forth the address at which the registered agent has
maintained the registered office, and further certifying to the new
address to which the registered office will be changed on a given
day, and at which new address the registered agent will thereafter
maintain the registered office. Thereafter, or until further change
of address, as authorized by law, the registered office in this state
shall be located at the new address of the registered agent thereof
as given in the certificate.
B. In the event of a change of name of any person or corporation
acting as registered agent in this state, the registered agent shall
file with the Secretary of State a certificate in the name of each
affected, executed and acknowledged by the registered agent, setting
forth the new name of the registered agent, the name of the
registered agent before it was changed, and the address at which the
registered agent has maintained the registered office for the
affected corporation. A change of name of any person or corporation
acting as registered agent as a result of a merger or consolidation
of the registered agent, with or into another person or corporation
which succeeds to its assets by operation of law, shall be deemed a
change of name for purposes of this section.
Added by Laws 1986, c. 292, § 24, eff. Nov. 1, 1986. Amended by Laws
1999, c. 421, § 8, eff. Nov. 1, 1999; Laws 2008, c. 253, § 3.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-1025. Resignation of Registered Agent Coupled with Appointment
of Successor.
RESIGNATION OF REGISTERED AGENT COUPLED
WITH APPOINTMENT OF SUCCESSOR
The registered agent of one or more corporations may resign and
appoint a successor registered agent by filing in the name of each
affected corporation a certificate with the Secretary of State
stating the name and address of the successor agent, in accordance
with the provisions of paragraph 2 of subsection A of Section 1006 of
this title. There shall be attached to the certificate a statement
of the affected corporation ratifying and approving such change of
registered agent. The statement shall be executed and acknowledged
in accordance with the provisions of Section 1007 of this title.
Upon the filing, the successor registered agent becomes the
registered agent of each corporation that has ratified and approved
each substitution and the successor registered agent’s address, as
stated in each certificate, becomes the address of each such
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corporation’s registered office in this state. The Secretary of
State shall then issue his or her certificate that the successor
registered agent has become the registered agent of the corporations
so ratifying and approving the change, and setting out the names of
such corporations.
Added by Laws 1986, c. 292, § 25, eff. Nov. 1, 1986. Amended by Laws
2004, c. 255, § 6, eff. Nov. 1, 2004.
§18-1026. Resignation of registered agent not coupled with
appointment of successor; absence of registered agent.
RESIGNATION OF REGISTERED AGENT NOT COUPLED
WITH APPOINTMENT OF SUCCESSOR; ABSENCE OF REGISTERED AGENT
A. The registered agent of one or more corporations may resign
without appointing a successor by filing in the name of each affected
corporation a certificate of resignation with the Secretary of State;
but a resignation shall not become effective until thirty (30) days
after each certificate is filed. The certificate shall:
1. Be acknowledged by the registered agent;
2. Contain a statement that written notice of resignation was
given to the corporation at least thirty (30) days prior to the
filing of the certificate by mailing or delivering the notice to the
corporation at its address last known to the registered agent and
specify such address therein; and
3. Set forth the date the notice was mailed.
B. 1. After receipt of the notice of the resignation of its
registered agent provided for in subsection A of this section, the
corporation for which the registered agent was acting may obtain and
designate a new registered agent in the same manner as provided for
in Section 1023 of this title for a change of registered agent.
2. If a domestic corporation fails to obtain and designate a new
registered agent prior to the expiration of the period of thirty (30)
days after the filing by the registered agent of the certificate of
resignation, the Secretary of State shall be deemed to be the
registered agent of such corporation until a new registered agent is
designated. The Office of the Secretary of State shall charge the
fee prescribed by Section 1142 of this title for acting as registered
agent.
C. After the resignation of a registered agent has become
effective, if no new registered agent has been obtained and
designated in the time and manner required, service of legal process
against the corporation for which the resigned registered agent had
been acting shall be upon the Secretary of State as provided in
Section 2004 of Title 12 of the Oklahoma Statutes.
Added by Laws 1986, c. 292, § 26, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 6, eff. Nov. 1, 1988; Laws 1991, c. 331, § 55, eff.
Sept. 1, 1991; Laws 1998, c. 422, § 3, eff. Nov. 1, 1998.
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§18-1027. Board of directors – Powers – Number – Qualifications -
Terms and quorum – Committees - Classes of directors - Nonstock
corporations - Reliance upon books - Action without meeting; etc.
BOARD OF DIRECTORS; POWERS; NUMBER; QUALIFICATIONS; TERMS
AND QUORUM; COMMITTEES; CLASSES OF DIRECTORS; NONSTOCK CORPORATIONS;
RELIANCE UPON BOOKS; ACTION WITHOUT MEETING; ETC.
A. The business and affairs of every corporation organized in
accordance with the provisions of the Oklahoma General Corporation
Act shall be managed by or under the direction of a board of
directors, except as may be otherwise provided for in the Oklahoma
General Corporation Act or in the corporation's certificate of
incorporation. If any provision is made in the certificate of
incorporation, the powers and duties conferred or imposed upon the
board of directors by the provisions of the Oklahoma General
Corporation Act shall be exercised or performed to the extent and by
the person or persons stated in the certificate of incorporation.
B. The board of directors of a corporation shall consist of one
or more members, each of whom shall be a natural person. The number
of directors shall be fixed by or in the manner provided for in the
bylaws, unless the certificate of incorporation fixes the number of
directors, in which case a change in the number of directors shall be
made only by amendment of the certificate. Directors need not be
shareholders unless so required by the certificate of incorporation
or the bylaws. The certificate of incorporation or bylaws may
prescribe other qualifications for directors. Each director shall
hold office until a successor is elected and qualified or until his
or her earlier resignation or removal. Any director may resign at
any time upon notice given in writing or by electronic transmission
to the corporation. A resignation is effective when the resignation
is delivered unless the resignation specifies a later effective date
or an effective date determined upon the happening of an event or
events. A resignation that is conditioned upon the director failing
to receive a specified vote for reelection as a director may provide
that it is irrevocable. A majority of the total number of directors
shall constitute a quorum for the transaction of business unless the
certificate of incorporation or the bylaws require a greater number.
Unless the certificate of incorporation provides otherwise, the
bylaws may provide that a number less than a majority shall
constitute a quorum which in no case shall be less than one-third
(1/3) of the total number of directors. The vote of the majority of
the directors present at a meeting at which a quorum is present shall
be the act of the board of directors unless the certificate of
incorporation or the bylaws shall require a vote of a greater number.
C. 1. The board of directors may designate one or more
committees consisting of one or more of the directors of the
corporation. The board may designate one or more directors as
alternate members of any committee, who may replace any absent or
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disqualified member at any meeting of the committee. The bylaws may
provide that in the absence or disqualification of a member of a
committee, the member or members present at a meeting and not
disqualified from voting, whether or not the member or members
constitute a quorum, may unanimously appoint another member of the
board of directors to act at the meeting in the place of any absent
or disqualified member. Any committee, to the extent provided in the
resolution of the board of directors, or in the bylaws of the
corporation, shall have and may exercise all the powers and authority
of the board of directors in the management of the business and
affairs of the corporation, and may authorize the seal of the
corporation to be affixed to all papers which may require it; but no
committee shall have the power or authority to:
a. approve, adopt, or recommend to the shareholders any
action or matter, other than the election or removal of
directors, expressly required by the Oklahoma General
Corporation Act to be submitted to shareholders for
approval, or
b. adopt, amend, or repeal any bylaw of the corporation.
2. Unless otherwise provided in the certificate of
incorporation, the bylaws or the resolution of the board of directors
designating the committee, a committee may create one or more
subcommittees, each subcommittee to consist of one or more members of
the committee, and delegate to a subcommittee any or all of the
powers and authority of the committee. Except for references to
committees and members of committees in subsection C of this section,
every reference in this title to a committee of the board of
directors or a member of a committee shall be deemed to include a
reference to a subcommittee or member of a subcommittee.
3. A majority of the directors then serving on a committee of
the board of directors or on a subcommittee of a committee shall
constitute a quorum for the transaction of business by the committee
or subcommittee, unless the certificate of incorporation, the bylaws,
a resolution of the board of directors or a resolution of a committee
that created the subcommittee requires a greater or lesser number;
provided that in no case shall a quorum be less than one-third (1/3)
of the directors then serving on the committee or subcommittee. The
vote of the majority of the members of a committee or subcommittee
present at a meeting at which a quorum is present shall be the act of
the committee or subcommittee, unless the certificate of
incorporation, the bylaws, a resolution of the board of directors or
a resolution of a committee that created the subcommittee requires a
greater number.
D. The directors of any corporation organized under the Oklahoma
General Corporation Act, by the certificate of incorporation or by an
initial bylaw, or by a bylaw adopted by a vote of the shareholders,
may be divided into one, two, or three classes; the term of office of
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those of the first class to expire at the first annual meeting held
after the classification becomes effective; of the second class one
(1) year thereafter; of the third class two (2) years thereafter; and
at each annual election held after the classification becomes
effective, directors shall be chosen for a full term, as the case may
be, to succeed those whose terms expire. The certificate of
incorporation or bylaw provision dividing the directors into classes
may authorize the board of directors to assign members of the board
then in office to such classes when the classification becomes
effective. The certificate of incorporation may confer upon holders
of any class or series of stock the right to elect one or more
directors who shall serve for the term, and have voting powers as
shall be stated in the certificate of incorporation. The terms of
office and voting powers of the directors elected in the manner so
provided in the certificate of incorporation may be greater than or
less than those of any other director or class of directors. In
addition, the certificate of incorporation may confer upon one or
more directors, whether or not elected separately by the holders of
any class or series of stock, voting powers greater than or less than
those of other directors. Any such provision conferring greater or
lesser voting power shall apply to voting in any committee, unless
otherwise provided in the certificate of incorporation or bylaws. If
the certificate of incorporation provides that directors elected by
the holders of a class or series of stock shall have more or less
than one vote per director on any matter, every reference in the
Oklahoma General Corporation Act to a majority or other proportion of
directors shall refer to a majority or other proportion of the votes
of the directors.
E. A member of the board of directors, or a member of any
committee designated by the board of directors, in the performance of
the member's duties, shall be fully protected in relying in good
faith upon the records of the corporation and upon information,
opinions, reports, or statements presented to the corporation by any
of the corporation's officers or employees, or committees of the
board of directors, or by any other person as to matters the member
reasonably believes are within the officer's, employee's, committee's
or other person's competence and who have been selected with
reasonable care by or on behalf of the corporation.
F. Unless otherwise restricted by the certificate of
incorporation or bylaws:
1. Any action required or permitted to be taken at any meeting
of the board of directors, or of any committee thereof may be taken
without a meeting if all members of the board or committee, as the
case may be, consent thereto in writing or by electronic
transmission, and the writing or writings or electronic transmission
or transmissions are filed with the minutes of proceedings of the
board or committee; and the filing shall be in paper form if the
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minutes are maintained in paper form and shall be in electronic form
if the minutes are maintained in electronic form; and any person
whether or not then a director may provide, whether through
instruction to an agent or otherwise, that a consent to action will
be effective at a future time (including a time determined upon the
happening of an event), no later than sixty (60) days after such
instruction is given or such provision is made and such consent shall
be deemed to have been given for purposes of this subsection at such
effective time so long as such person is then a director and did not
revoke the consent prior to such time; and any such consent shall be
revocable prior to its becoming effective;
2. The board of directors of any corporation organized in
accordance with the provisions of the Oklahoma General Corporation
Act may hold its meetings, and have an office or offices, outside of
this state;
3. The board of directors shall have the authority to fix the
compensation of directors; and
4. Members of the board of directors of any corporation, or any
committee designated by the board, may participate in a meeting of
the board or committee by means of conference telephone or other
communications equipment by means of which all persons participating
in the meeting can hear or otherwise communicate with each other.
Participation in a meeting pursuant to the provisions of this
subsection shall constitute presence in person at the meeting.
G. 1. The certificate of incorporation or bylaws of any
nonstock corporation may provide that less than one-third (1/3) of
the members of the governing body may constitute a quorum thereof and
may otherwise provide that the business and affairs of the
corporation shall be managed in a manner different from that provided
for in this section, which differences may include additional classes
of directors, longer terms of service, the use of less than unanimous
consents for board action, and permitting the Chair of the Board of
Directors to designate committees and appoint members.
2. Except as may be otherwise provided by the certificate of
incorporation, the provisions of this section shall apply to such a
corporation, and when so applied, all references to the board of
directors, to members thereof, and to shareholders shall be deemed to
refer to the governing body of the corporation, the members thereof
and the members of the corporation, respectively; and all references
to stock, capital stock, or shares shall be deemed to refer to
memberships of a nonprofit nonstock corporation and to membership
interests of any other nonstock corporation.
H. 1. Any director or the entire board of directors may be
removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors, except as
follows:
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a. unless the certificate of incorporation otherwise
provides, in the case of a corporation whose board is
classified as provided for in subsection D of this
section, shareholders may effect such removal only for
cause, or
b. in the case of a corporation having cumulative voting,
if less than the entire board is to be removed, no
director may be removed without cause if the votes cast
against the director's removal would be sufficient to
elect the director if then cumulatively voted at an
election of the entire board of directors, or, if there
are classes of directors, at an election of the class
of directors of which the director is a part.
2. Whenever the holders of any class or series are entitled to
elect one or more directors by the provisions of the certificate of
incorporation, the provisions of this subsection shall apply, in
respect to the removal without cause of a director or directors so
elected, to the vote of the holders of the outstanding shares of that
class or series and not to the vote of the outstanding shares as a
whole.
Added by Laws 1986, c. 292, § 27, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 7, eff. Nov. 1, 1988; Laws 1998, c. 422, § 4, eff.
Nov. 1, 1998; Laws 2001, c. 405, § 8, eff. Nov. 1, 2001; Laws 2004,
c. 255, § 7, eff. Nov. 1, 2004; Laws 2008, c. 253, § 4; Laws 2010, c.
384, § 105, eff. Sept. 1, 2010; Laws 2012, c. 1, § 1, emerg. eff.
March 1, 2012; Laws 2013, c. 1, § 1, emerg. eff. March 5, 2013; Laws
2019, c. 88, § 6, eff. Nov. 1, 2019.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-1028. Officers - Titles, Duties, Selection, Term - Failure to
Elect - Vacancies.
OFFICERS; TITLES, DUTIES, SELECTION, TERM;
FAILURE TO ELECT; VACANCIES
A. Every corporation organized in accordance with the provisions
of the Oklahoma General Corporation Act shall have such officers with
such titles and duties as shall be stated in the bylaws or in a
resolution of the board of directors which is not inconsistent with
the bylaws and as may be necessary to enable it to sign instruments
and stock certificates which comply with the provisions of paragraph
2 of subsection A of Section 7 and Section 39 of this act. One of
the officers shall have the duty to record the proceedings of the
meetings of the shareholders and directors in a book to be kept for
that purpose. Any number of offices may be held by the same person
unless the certificate of incorporation or bylaws provide otherwise.
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B. Officers shall be chosen in such manner and shall hold their
offices for such terms as are prescribed by the bylaws or determined
by the board of directors or other governing body. Each officer
shall hold his office until his successor is elected and qualified or
until his earlier resignation or removal. Any officer may resign at
any time upon written notice to the corporation.
C. The corporation may secure the fidelity of any or all of its
officers or agents by bond or otherwise.
D. A failure to elect officers shall not dissolve or otherwise
affect the corporation.
E. Any vacancy occurring in any office of the corporation by
death, resignation, removal or otherwise, shall be filled as the
bylaws provide. In the absence of such provision, the vacancy shall
be filled by the board of directors or other governing body.
Added by Laws 1986, c. 292, § 28, eff. Nov. 1, 1986.
§18-1029. Loans to Employees and Officers - Guaranty of Obligations
of Employees and Officers.
LOANS TO EMPLOYEES AND OFFICERS; GUARANTY OF OBLIGATIONS
OF EMPLOYEES AND OFFICERS
Any corporation may lend money to, or guarantee any obligation
of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee
who is a director of the corporation or its subsidiary whenever, in
the judgment of the directors, such loan, guaranty or assistance may
reasonably be expected to benefit the corporation. The loan,
guaranty or other assistance may be with or without interest, and may
be unsecured, or secured in such manner as the board of directors
shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing contained in this section shall be
construed to deny, limit or restrict the powers of guaranty or
warranty of any corporation at common law or under any statute.
Added by Laws 1986, c. 292, § 29, eff. Nov. 1, 1986.
§18-1030. Interested Directors - Quorum.
INTERESTED DIRECTORS; QUORUM
A. No contract or transaction between a corporation and one or
more of its directors or officers, or between a corporation and any
other corporation, partnership, association, or other organization in
which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer is
present at or participates in the meeting of the board or committee
thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if:
1. The material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to the
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board of directors or the committee, and the board or committee in
good faith authorizes the contract or transaction by the affirmative
votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum;
2. The material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to the
shareholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
shareholders; or
3. The contract or transaction is fair as to the corporation as
of the time it is authorized, approved or ratified, by the board of
directors, a committee thereof, or the shareholders.
B. Common or interested directors may be counted in determining
the presence of a quorum at a meeting of the board of directors or of
a committee which authorizes the contract or transaction.
Added by Laws 1986, c. 292, § 30, eff. Nov. 1, 1986.
§18-1031. Indemnification of officers, directors, employees and
agents – Insurance.
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
INSURANCE
A. A corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, other than
an action by or in the right of the corporation, by reason of the
fact that the person is or was a director, officer, employee, or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise,
against expenses, including attorney fees, judgments, fines, and
amounts paid in settlement actually and reasonably incurred by the
person in connection with the action, suit, or proceeding if the
person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe the conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which the person
reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the conduct was
unlawful.
B. A corporation shall have the power to indemnify any person
who was or is a party or is threatened to be made a party to any
4(#$0&($"!$"+$ -**
threatened, pending, or completed action or suit by or in the right
of the corporation to procure a judgment in its favor by reason of
the fact that the person is or was a director, officer, employee, or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise
against expenses, including attorney fees, actually and reasonably
incurred by the person in connection with the defense or settlement
of an action or suit if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification
shall be made in respect of any claim, issue, or matter as to which
the person shall have been adjudged to be liable to the corporation
unless and only to the extent that the court in which the action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, the person is fairly and reasonably entitled to indemnity for
expenses which the court shall deem proper.
C. To the extent that a present or former director or officer of
a corporation has been successful on the merits or otherwise in
defense of any action, suit, or proceeding referred to in subsection
A or B of this section, or in defense of any claim, issue, or matter
therein, the person shall be indemnified against expenses, including
attorney fees, actually and reasonably incurred by the person in
connection therewith.
D. Any indemnification under the provisions of subsection A or B
of this section, unless ordered by a court, shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the present or former director
or officer is proper in the circumstances because the person has met
the applicable standard of conduct set forth in subsection A or B of
this section. This determination shall be made, with respect to a
person who is a director or officer of the corporation at the time of
the determination:
1. By a majority vote of the directors who are not parties to
the action, suit, or proceeding, even though less than a quorum;
2. By a committee of directors designated by a majority vote of
directors, even though less than a quorum;
3. If there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion; or
4. By the shareholders.
E. Expenses including attorney fees incurred by an officer or
director in defending a civil, criminal, administrative or
investigative action, suit, or proceeding may be paid by the
corporation in advance of the final disposition of the action, suit,
or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it shall ultimately be
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determined that the person is not entitled to be indemnified by the
corporation as authorized by the provisions of this section.
Expenses including attorney fees incurred by former directors or
officers or other employees and agents or persons serving at the
request of the corporation as directors, officers, employees or
agents of another corporation, partnership, joint venture, trust or
other enterprise may be paid upon the terms and conditions, if any,
as the corporation deems appropriate.
F. The indemnification and advancement of expenses provided by
or granted pursuant to the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of shareholders or disinterested directors, or
otherwise, both as to action in the person's official capacity and as
to action in another capacity while holding an office. A right to
indemnification or to advancement of expenses arising under a
provision of the certificate of incorporation or a bylaw shall not be
eliminated or impaired by an amendment to the certificate of
incorporation or the bylaw after the occurrence of the act or
omission that is the subject of the civil, criminal, administrative
or investigative action, suit or proceeding for which indemnification
or advancement of expenses is sought, unless the provision in effect
at the time of such act or omission explicitly authorizes such
elimination or impairment after such action or omission has occurred.
G. A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee, or agent
of another corporation, partnership, joint venture, trust, or other
enterprise against any liability asserted against the person and
incurred by the person in any such capacity, or arising out of the
person's status as such, whether or not the corporation would have
the power to indemnify the person against liability under the
provisions of this section.
H. For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any
constituent corporation, including any constituent of a constituent,
absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to
indemnify its directors, officers, and employees, or agents, so that
any person who is or was a director, officer, employee, or agent of a
constituent corporation, or is or was serving at the request of a
constituent corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other
enterprise, shall stand in the same position under the provisions of
this section with respect to the resulting or surviving corporation
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as the person would have with respect to the constituent corporation
if its separate existence had continued.
I. For purposes of this section, references to "other
enterprises" shall include, but are not limited to, employee benefit
plans; references to "fines" shall include, but are not limited to,
any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the
corporation" shall include, but are not limited to, any service as a
director, officer, employee, or agent of the corporation which
imposes duties on, or involves services, by the director, officer,
employee, or agent with respect to an employee benefit plan, its
participants, or beneficiaries; and a person who acted in good faith
and in a manner the person reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best
interests of the corporation" as referred to in this section.
J. The indemnification and advancement of expenses provided by
or granted pursuant to this section, unless otherwise provided when
authorized or ratified, shall continue as to a person who has ceased
to be a director, officer, employee, or agent and shall inure to the
benefit of the heirs, executors, and administrators of the person.
K. The district court is vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw,
agreement, vote of shareholders or disinterested directors, or
otherwise. The court may summarily determine a corporation's
obligation to advance expenses including attorney fees.
Added by Laws 1986, c. 292, § 31, eff. Nov. 1, 1986. Amended by Laws
1987, c. 183, § 2, eff. Nov. 1, 1987; Laws 1998, c. 422, § 5, eff.
Nov. 1, 1998; Laws 2017, c. 323, § 6, eff. Nov. 1, 2017.
§18-1032. Classes and series of stock; rights, etc.
CLASSES AND SERIES OF STOCK; RIGHTS, ETC.
A. Every corporation may issue one or more classes of stock or
one or more series of stock within any class thereof, any or all of
which classes may be of stock with par value or stock without par
value and which classes or series may have voting powers, full or
limited, or no voting powers, and designations, preferences and
relative, participating, optional, or other special rights, and
qualifications, limitations, or restrictions thereof, as shall be
stated and expressed in the certificate of incorporation or of any
amendment thereto, or in the resolution or resolutions providing for
the issue of the stock adopted by the board of directors pursuant to
authority expressly vested in it by the provisions of its certificate
of incorporation. Any of the voting powers, designations,
preferences, rights, and qualifications, limitations or restrictions
of any class or series of stock may be made dependent upon facts
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ascertainable outside the certificate of incorporation or of any
amendment thereto, or outside the resolution or resolutions providing
for the issue of the stock adopted by the board of directors pursuant
to authority expressly vested in it by the provisions of its
certificate of incorporation; provided, that the manner in which the
facts shall operate upon the voting powers, designations,
preferences, rights, and qualifications, limitations, or restrictions
of the class or series of stock is clearly and expressly set forth in
the certificate of incorporation or in the resolution or resolutions
providing for the issue of the stock adopted by the board of
directors. The power to increase or decrease or otherwise adjust the
capital stock as provided for in the Oklahoma General Corporation Act
shall apply to all or any such classes of stock. The term "facts",
as used in this subsection, includes, but is not limited to, the
occurrence of any event, including a determination or action by any
person or body, including the corporation.
B. Any stock of any class or series may be made subject to
redemption by the corporation at its option or at the option of the
holders of the stock or upon the happening of a specified event;
provided however, immediately following any redemption, the
corporation shall have outstanding one or more shares or one or more
classes or series of stock, which share, or shares together, shall
have full voting powers. Notwithstanding the limitation stated in
the foregoing proviso:
1. Any stock of a regulated investment company registered under
the Investment Company Act of 1940, as heretofore or hereafter
amended, may be made subject to redemption by the corporation at its
option or at the option of the holders of the stock.
2. Any stock of a corporation which directly or indirectly holds
a license or franchise from a governmental agency to conduct its
business or is a member of a national securities exchange, which
license, franchise, or membership is conditioned upon some or all of
the holders of its stock possessing prescribed qualifications, may be
made subject to redemption by the corporation to the extent necessary
to prevent the loss of the license, franchise, or membership or to
reinstate it. Any stock which may be made redeemable under this
section may be redeemed for cash, property, or rights, including
securities of the same or another corporation, at such time or times,
price or prices, or rate or rates, and with any adjustments, as shall
be stated in the certificate of incorporation or in the resolution or
resolutions providing for the issue of the stock adopted by the board
of directors as provided for in subsection A of this section.
C. The holders of preferred or special stock of any class or of
any series thereof shall be entitled to receive dividends at such
rates, conditions, and times as shall be stated in the certificate of
incorporation or in the resolution or resolutions providing for the
issue of the stock adopted by the board of directors as provided for
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in subsection A of this section, payable in preference to, or in
relation to, the dividends payable on any other class or classes or
of any other series of stock, and cumulative or noncumulative as
shall be so stated and expressed. When dividends upon the preferred
and special stocks, if any, to the extent of the preference to which
the stocks are entitled, shall have been paid or declared and set
apart for payment, a dividend on the remaining class or classes or
series of stock may then be paid out of the remaining assets of the
corporation available for dividends as otherwise provided for in the
Oklahoma General Corporation Act.
D. The holders of the preferred or special stock of any class or
of any series thereof shall be entitled to the rights upon the
dissolution of, or upon any distribution of the assets of, the
corporation as shall be stated in the certificate of incorporation or
in the resolution or resolutions providing for the issue of the stock
adopted by the board of directors as provided for in subsection A of
this section.
E. Any stock of any class or of any series thereof may be made
convertible into, or exchangeable for, at the option of either the
holder or the corporation or upon the happening of a specified event,
shares of any other class or classes or any other series of the same
or any other class or classes of stock of the corporation, at the
price or prices or at the rate or rates of exchange, and with
adjustments as shall be stated in the certificate of incorporation or
in the resolution or resolutions providing for the issue of the stock
adopted by the board of directors as provided for in subsection A of
this section.
F. If any corporation shall be authorized to issue more than one
class of stock or more than one series of any class, the powers,
designations, preferences, and relative, participating, optional, or
other special rights of each class of stock or series thereof and the
qualifications, limitations, or restrictions of such preferences or
rights shall be set forth in full or summarized on the face or back
of the certificate which the corporation shall issue to represent the
class or series of stock; provided that, except as otherwise provided
for in Section 1055 of this title, in lieu of the foregoing
requirements, there may be set forth on the face or back of the
certificate which the corporation shall issue to represent the class
or series of stock, a statement that the corporation will furnish
without charge to each shareholder who so requests the powers,
designations, preferences, and relative, participating, optional, or
other special rights of each class of stock or series thereof and the
qualifications, limitations, or restrictions of the preferences or
rights. Within a reasonable time after the issuance or transfer of
uncertificated stock, the corporation shall send to the registered
owner thereof a written notice containing the information required to
be set forth or stated on certificates pursuant to this section or
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Section 1037, subsection A of Section 1055 or subsection A of Section
1063 of this title, or with respect to this section a statement that
the corporation will furnish without charge to each shareholder who
so requests the powers, designations, preferences, and relative,
participating, optional, or other special rights of each class of
stock or series thereof and the qualifications, limitations, or
restrictions of the preferences or rights. Except as otherwise
expressly provided by law, the rights and obligations of the holders
of uncertificated stock and the rights and obligations of the holder
of certificates representing stock of the same class and series shall
be identical.
G. 1. When any corporation desires to issue any shares of stock
of any class or of any series of any class of which the powers,
designations, preferences, and relative, participating, optional, or
other rights, if any, or the qualifications, limitations, or
restrictions thereof, if any, shall not have been set forth in the
certificate of incorporation or in any amendment thereto but shall be
provided for in a resolution or resolutions adopted by the board of
directors pursuant to authority expressly vested in it by the
provisions of the certificate of incorporation or any amendment
thereto, a certificate of designations setting forth a copy of the
resolution or resolutions and the number of shares of stock of the
class or series to which the resolution or resolutions apply shall be
executed, acknowledged, and filed, and shall become effective, in
accordance with the provisions of Section 1007 of this title. Unless
otherwise provided in any resolution or resolutions, the number of
shares of stock of any series to which the resolution or resolutions
apply may be increased, but not above the total number of authorized
shares of the class, or decreased, but not below the number of shares
thereof then outstanding, by a certificate likewise executed,
acknowledged, and filed setting forth a statement that a specified
increase or decrease therein had been authorized and directed by a
resolution or resolutions likewise adopted by the board of directors.
In case the number of the shares shall be decreased, the number of
shares so specified in the certificate shall resume the status which
they had prior to the adoption of the first resolution or
resolutions. Unless otherwise provided in the certificate of
incorporation, if no shares of stock have been issued of a class or
series of stock established by a resolution of the board of
directors, the voting powers, designations, preferences, and
relative, participating, optional, or other rights, if any, or the
qualifications, limitations, or restrictions thereof, may be amended
by a resolution or resolutions adopted by the board of directors. A
certificate which states that no shares of the class or series have
been issued, sets forth a copy of the resolution or resolutions, and,
if the designation of the class or series is being changed, indicates
the original designation and the new designation, shall be executed,
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acknowledged, and filed, and shall become effective, in accordance
with the provisions of Section 1007 of this title. When no shares of
any class or series are outstanding, either because none were issued
or because no issued shares of any class or series remain
outstanding, a certificate setting forth a resolution or resolutions
adopted by the board of directors that none of the authorized shares
of the class or series are outstanding, and that none will be issued
subject to the certificate of designations previously filed with
respect to the class or series, may be executed, acknowledged, and
filed in accordance with the provisions of Section 1007 of this title
and, when the certificate becomes effective, it shall have the effect
of eliminating from the certificate of incorporation all matters set
forth in the certificate of designations with respect to the class or
series of stock.
2. When any certificate filed pursuant to the provisions of this
subsection becomes effective, it shall have the effect of amending
the certificate of incorporation; except that neither the filing of
the certificate nor the filing of a restated certificate of
incorporation pursuant to Section 1080 of this title shall prohibit
the board of directors from subsequently adopting resolutions as
authorized by this subsection.
Added by Laws 1986, c. 292, § 32, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 8, eff. Nov. 1, 1988; Laws 1998, c. 422, § 6, eff.
Nov. 1, 1998; Laws 1999, c. 421, § 9, eff. Nov. 1, 1999.
§18-1033. Issuance of stock, lawful consideration - Fully paid
stock.
ISSUANCE OF STOCK, LAWFUL CONSIDERATION - FULLY PAID STOCK
A. The consideration, as determined pursuant to the provisions
of subsections A and B of Section 1034 of this title, for
subscriptions to, or the purchase of, the capital stock to be issued
by a corporation shall be paid in such form and in such manner as the
board of directors shall determine. The board of directors may
authorize capital stock to be issued for consideration consisting of
cash, any tangible or intangible property or any benefit to the
corporation, or any combination thereof, except for services to be
performed. The board of directors may determine the amount of such
consideration by approving a formula by which the amount of
consideration is determined. In the absence of actual fraud in the
transaction, the judgment of the directors as to the value of such
consideration shall be conclusive. The capital stock so issued shall
be deemed to be fully paid and nonassessable stock upon receipt by
the corporation of the authorized consideration.
B. The provisions of subsection A of this section shall not be
construed to prevent the board of directors from issuing partly paid
shares in accordance with the provisions of Section 1037 of this
title.
4(#$0&($"!$"+$ -**7
Added by Laws 1986, c. 292, § 33, eff. Nov. 1, 1986. Amended by Laws
2008, c. 253, § 5; Laws 2017, c. 323, § 7, eff. Nov. 1, 2017.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-1034. Consideration for Stock.
CONSIDERATION FOR STOCK
A. Shares of stock with par value may be issued for such
consideration, having a value not less than the par value thereof, as
is determined from time to time by the board of directors, or by the
shareholders if the certificate of incorporation so provides.
B. Shares of stock without par value may be issued for such
consideration as is determined from time to time by the board of
directors, or by the shareholders if the certificate of incorporation
so provides.
C. Treasury shares may be disposed of by the corporation for
such consideration as may be determined from time to time by the
board of directors, or by the shareholders if the certificate of
incorporation so provides.
D. If the certificate of incorporation reserves to the
shareholders the right to determine the consideration for the issue
of any shares, the shareholders, unless the certificate requires a
greater vote, shall do so by a vote of a majority of the outstanding
stock entitled to vote thereon.
Added by Laws 1986, c. 292, § 34, eff. Nov. 1, 1986.
§18-1035. Determination of amount of capital - Capital, surplus and
net assets defined.
DETERMINATION OF AMOUNT OF CAPITAL; CAPITAL,
SURPLUS AND NET ASSETS DEFINED
Any corporation, by resolution of its board of directors, may
determine that only a part of the consideration which shall be
received by the corporation for any of the shares of its capital
stock which it shall issue from time to time shall be capital; but,
in case any of the shares issued shall be shares having a par value,
the amount of the part of such consideration so determined to be
capital shall be in excess of the aggregate par value of the shares
issued for such consideration having a par value, unless all the
shares issued shall be shares having a par value, in which case the
amount of the part of such consideration so determined to be capital
need be only equal to the aggregate par value of such shares. In
each such case the board of directors shall specify in dollars the
part of such consideration which shall be capital. If the board of
directors shall not have determined, at the time of issue of any
shares of the capital stock of the corporation issued for cash or
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within sixty (60) days after the issue of any shares of the capital
stock of the corporation issued for consideration other than cash,
what part of the consideration for such shares shall be capital, the
capital of the corporation in respect of such shares shall be an
amount equal to the aggregate par value of such shares having a par
value, plus the amount of the consideration for such shares without
par value. The amount of the consideration so determined to be
capital in respect of any shares without par value shall be the
stated capital of such shares. The capital of the corporation may be
increased from time to time by resolution of the board of directors
directing that a portion of the net assets of the corporation in
excess of the amount so determined to be capital be transferred to
the capital account. The board of directors may direct that the
portion of such net assets so transferred shall be treated as capital
in respect of any shares of the corporation of any designated class
or classes. The excess, if any, at any given time, of the net assets
of the corporation over the amount so determined to be capital shall
be surplus. "Net assets" means the amount by which total assets
exceed total liabilities. Capital and surplus are not liabilities
for this purpose. Notwithstanding anything in this section to the
contrary, for purposes of this section and Sections 1041 and 1049 of
this title, the capital of any nonstock corporation shall be deemed
to be zero.
Added by Laws 1986, c. 292, § 35, eff. Nov. 1, 1986. Amended by Laws
2008, c. 253, § 6; Laws 2019, c. 88, § 7, eff. Nov. 1, 2019.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-1036. Fractions of Shares.
FRACTIONS OF SHARES
A corporation may, but shall not be required to, issue fractions
of a share. If it does not issue fractions of a share, it shall:
1. arrange for the disposition of fractional interests by those
entitled thereto; or
2. pay in cash the fair value of fractions of a share as of the
time when those entitled to receive such fractions are determined; or
3. issue scrip or warrants in registered form (either
represented by a certificate or be uncertificated) or in bearer form
(represented by a certificate) which shall entitle the holder to
receive a certificate for a full share upon the surrender of such
scrip or warrants aggregating a full share.
A certificate for a fractional share or an uncertificated fractional
share shall, but scrip or warrants shall not unless otherwise
provided therein, entitle the holder to exercise voting rights, to
receive dividends thereon, and to participate in any of the assets of
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the corporation in the event of liquidation. The board of directors
may cause scrip or warrants to be issued subject to the conditions
that they shall become void if not exchanged for certificates
representing the full shares or uncertificated full shares before a
specified date, or subject to the conditions that the shares for
which scrip or warrants are exchangeable may be sold by the
corporation and the proceeds thereof distributed to the holders of
scrip or warrants, or subject to any other conditions which the board
of directors may impose.
Added by Laws 1986, c. 292, § 36, eff. Nov. 1, 1986.
§18-1037. Partly paid shares.
PARTLY PAID SHARES
Any corporation may issue the whole or any part of its shares as
partly paid and subject to call for the remainder of the
consideration to be paid therefor. Upon the face or back of each
stock certificate issued to represent any partly paid shares, or upon
the books and records of the corporation in the case of
uncertificated partly paid shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall
be stated and the corporation shall comply with applicable provisions
of Section 8-209 of Title 12A of the Oklahoma Statutes. Upon the
declaration of any dividend on fully paid shares, the corporation
shall declare a dividend upon partly paid shares of the same class,
but only upon the basis of the percentage of the consideration
actually paid thereon.
Added by Laws 1986, c. 292, § 37, eff. Nov. 1, 1986. Amended by Laws
1999, c. 141, § 3, eff. Nov. 1, 1999.
§18-1038. Rights and options respecting stock.
RIGHTS AND OPTIONS RESPECTING STOCK
A. Subject to any provisions in the certificate of
incorporation, every corporation may create and issue, whether or not
in connection with the issue and sale of any shares of stock or other
securities of the corporation, rights or options entitling the
holders thereof to acquire from the corporation any shares of its
capital stock of any class or classes, such rights or options to be
evidenced by or in such instrument or instruments as shall be
approved by the board of directors.
B. The terms upon which, including the time or times, which may
be limited or unlimited in duration, at or within which, and the
consideration, including any formula by which such consideration may
be determined, for which any such shares may be acquired from the
corporation upon the exercise of any such right or option, shall be
such as shall be stated in the certificate of incorporation, or in a
resolution adopted by the board of directors providing for the
creation and issue of such rights or options, and, in every case,
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shall be set forth or incorporated by reference in the instrument or
instruments evidencing such rights or options. In the absence of
actual fraud in the transaction, the judgment of the directors as to
the consideration for the issuance of such rights or options and the
sufficiency thereof shall be conclusive.
C. The board of directors may, by a resolution adopted by the
board, authorize one or more officers of the corporation to do one or
both of the following:
1. Designate officers and employees of the corporation or of any
of its subsidiaries to be recipients of such rights or options
created by the corporation; and
2. Determine the number of such rights or options to be received
by such officers and employees;
provided, however, that the resolution so authorizing such
officer or officers shall specify the total number of rights or
options such officer or officers may so award. The board of
directors may not authorize an officer to designate himself or
herself as a recipient of any such rights or options.
D. In case the shares of stock of the corporation to be issued
upon the exercise of such rights or options shall be shares having a
par value, the consideration so to be received therefor shall have a
value not less than the par value thereof. In case the shares of
stock so to be issued shall be shares of stock without par value, the
consideration therefor shall be determined in the manner provided for
in Section 1034 of this title.
Added by Laws 1986, c. 292, § 38, eff. Nov. 1, 1986. Amended by Laws
2004, c. 255, § 8, eff. Nov. 1, 2004; Laws 2008, c. 253, § 7.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-1039. Stock certificates – Uncertificated shares.
STOCK CERTIFICATES; UNCERTIFICATED SHARES
The shares of a corporation shall be represented by certificates,
provided that the board of directors of the corporation may provide
by resolution or resolutions that some or all of any or all classes
or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate
until the certificate is surrendered to the corporation. Every
holder of stock represented by certificates shall be entitled to have
a certificate signed by, or in the name of, the corporation by any
two authorized officers of the corporation representing the number of
shares registered in certificate form. Any or all the signatures on
the certificate may be a facsimile. In case any officer, transfer
agent, or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer,
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transfer agent, or registrar before the certificate is issued, it may
be issued by the corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue. A
corporation shall not have the power to issue a certificate in bearer
form.
Added by Laws 1986, c. 292, § 39, eff. Nov. 1, 1986. Amended by Laws
2004, c. 255, § 9, eff. Nov. 1, 2004; Laws 2008, c. 253, § 8; Laws
2017, c. 323, § 8, eff. Nov. 1, 2017.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-1040. Shares of Stock - Personal Property, Transfer and
Taxation.
SHARES OF STOCK; PERSONAL PROPERTY, TRANSFER AND TAXATION
The shares of stock in every corporation shall be deemed personal
property and transferable as provided for in the Uniform Commercial
Code - Investment Securities. No stock or bonds issued by any
corporation organized in accordance with the provisions of the
Oklahoma General Corporation Act shall be taxed by this state when
the same shall be owned by nonresidents of this state or by foreign
corporations.
Added by Laws 1986, c. 292, § 40, eff. Nov. 1, 1986.
§18-1041. Corporation's powers respecting ownership, voting, etc. of
its own stock - Rights of stock called for redemption.
CORPORATION'S POWERS RESPECTING OWNERSHIP, VOTING, ETC. OF
ITS OWN STOCK; RIGHTS OF STOCK CALLED FOR REDEMPTION
A. Every corporation may purchase, redeem, receive, take, or
otherwise acquire, own, hold, sell, lend, exchange, transfer, or
otherwise dispose of, pledge, use and otherwise deal in and with its
own shares; provided, however, that no corporation shall:
1. Purchase or redeem its own shares of capital stock for cash
or other property when the capital of the corporation is impaired or
when the purchase or redemption would cause any impairment of the
capital of the corporation, except that a corporation other than a
nonstock corporation may purchase or redeem out of capital any of its
own shares which are entitled upon any distribution of its assets,
whether by dividend or in liquidation, to a preference over another
class or series of its stock, or, if no shares entitled to a
preference are outstanding, any of its own shares if such shares will
be retired upon their acquisition and the capital of the corporation
reduced in accordance with the provisions of Sections 1078 and 1079
of this title. Nothing in this subsection shall invalidate or
otherwise affect a note, debenture, or other obligation of a
corporation given by it as consideration for its acquisition by
4(#$0&($"!$"+$ -**2
purchase, redemption, or the exchange of its shares of stock if at
the time such note, debenture, or obligation was delivered by the
corporation its capital was not then impaired or did not thereby
become impaired;
2. Purchase, for more than the price at which they may then be
redeemed, any of its shares which are redeemable at the option of the
corporation; or
3. a. In the case of a corporation other than a nonstock
corporation, redeem any of its shares unless their
redemption is authorized by subsection B of Section
1032 of this title and then only in accordance with the
provisions of that section and the certificate of
incorporation, or
b. In the case of a nonstock corporation, redeem any of
its membership interests, unless their redemption is
authorized by the certificate of incorporation and then
only in accordance with the certificate of
incorporation.
B. Nothing in this section shall be construed to limit or affect
a corporation's right to resell any of its shares theretofore
purchased or redeemed out of surplus and which have not been retired,
for consideration fixed by the board of directors or by the
shareholders if the certificate of incorporation so provides.
C. Shares of its own capital stock belonging to the corporation
or to another corporation, if a majority of the shares entitled to
vote in the election of directors of the other corporation is held,
directly or indirectly, by the corporation, shall neither be entitled
to vote nor be counted for quorum purposes. Nothing in this section
shall be construed as limiting the right of any corporation to vote
stock including, but not limited to, its own stock, held by it in a
fiduciary capacity.
D. Shares which have been called for redemption shall not be
deemed to be outstanding shares for the purpose of voting or
determining the total number of shares entitled to vote on any matter
on and after the date on which written notice of redemption has been
sent to holders thereof and a sum sufficient to redeem those shares
has been irrevocably deposited or set aside to pay the redemption
price to the holders of the shares upon surrender of the
certificates.
Added by Laws 1986, c. 292, § 41, eff. Nov. 1, 1986. Amended by Laws
1998, c. 422, § 7, eff. Nov. 1, 1998; Laws 2019, c. 88, § 8, eff.
Nov. 1, 2019.
§18-1042. Issuance of Additional Stock - When and by Whom.
ISSUANCE OF ADDITIONAL STOCK; WHEN AND BY WHOM
The directors, at any time and from time to time, if all of the
shares of capital stock which the corporation is authorized by its
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certificate of incorporation to issue have not been issued,
subscribed for, or otherwise committed to be issued, may issue or
take subscriptions for additional shares of its capital stock up to
the amount authorized in its certificate of incorporation.
Added by Laws 1986, c. 292, § 42, eff. Nov. 1, 1986.
§18-1043. Liability of Shareholder or Subscriber for Stock not Paid
in Full.
LIABILITY OF SHAREHOLDER OR SUBSCRIBER
FOR STOCK NOT PAID IN FULL
A. When the whole of the consideration payable for shares of a
corporation has not been paid in, and the assets shall be
insufficient to satisfy the claims of its creditors, each holder of
or subscriber for such shares shall be bound to pay on each share
held or subscribed for by him the sum necessary to complete the
amount of the unpaid balance of the consideration for which such
shares were issued or to be issued by the corporation.
B. The amounts which shall be payable as provided in subsection
A of this section may be recovered as provided for in Section 124 of
this act, after a writ of execution against the corporation has been
returned unsatisfied as provided for in that section.
C. Any person becoming an assignee or transferee of shares or of
a subscription for shares in good faith and without knowledge or
notice that the full consideration therefor has not been paid shall
not be personally liable for any unpaid portion of such
consideration, but the transferor shall remain liable therefor.
D. No person holding shares in any corporation as collateral
security shall be personally liable as a shareholder but the person
pledging such shares shall be considered the holder thereof and shall
be so liable. No executor, administrator, guardian, trustee or other
fiduciary shall be personally liable as a shareholder, but the estate
or funds held by such executor, administrator, guardian, trustee or
other fiduciary in such fiduciary capacity shall be liable.
E. No liability under the provisions of this section or under
the provisions of Section 124 of this act shall be asserted more than
six (6) years after the issuance of the stock or the date of the
subscription upon which the assessment is sought.
F. In any action by a receiver or trustee of an insolvent
corporation or by a judgment creditor to obtain an assessment under
the provisions of this section, any shareholder or subscriber for
stock of the insolvent corporation may appear and contest the claim
or claims of such receiver or trustee.
Added by Laws 1986, c. 292, § 43, eff. Nov. 1, 1986.
§18-1044. Payment for Stock Not Paid in Full.
PAYMENT FOR STOCK NOT PAID IN FULL
4(#$0&($"!$"+$ -**8
The capital stock of a corporation shall be paid for in such
amounts and at such times as the directors may require. The
directors, from time to time, may demand payment, in respect of each
share of stock not fully paid, of such sum of money as the
necessities of the business, in the judgment of the board of
directors, may require, not exceeding in the whole the balance
remaining unpaid on such stock, and such sum so demanded shall be
paid to the corporation at such times and by such installments as the
directors shall direct. The directors shall give written notice of
the time and place of such payments, which notice shall be mailed at
least thirty (30) days before the time for such payment, to each
holder of or subscriber for stock which is not fully paid at his
last-known post office address.
Added by Laws 1986, c. 292, § 44, eff. Nov. 1, 1986.
§18-1045. Failure to Pay for Stock - Remedies.
FAILURE TO PAY FOR STOCK; REMEDIES
When any shareholder fails to pay any installment or call upon
his stock which may have been properly demanded by the directors, at
the time when such payment is due, the directors may collect the
amount of any such installment or call or any balance thereof
remaining unpaid, from the said shareholder by an action at law, or
they shall sell at public sale such part of the shares of such
delinquent shareholder as will pay all demands then due from him with
interest and all incidental expenses, and shall transfer the shares
so sold to the purchaser, who shall be entitled to a certificate
therefor. Notice of the time and place of such sale and of the sum
due on each share shall be given by advertisement at least one (1)
week before the sale, in a newspaper of the county in this state
where such corporation's registered office is located, and such
notice shall be mailed by the corporation to such delinquent
shareholder at his last-known post office address, at least twenty
(20) days before such sale. If no bidder can be had to pay the
amount due on the stock, and if the amount is not collected by an
action at law, which may be brought within the county where the
corporation has its registered office, within one (1) year from the
date of the bringing of such action at law, said stock and the amount
previously paid in by the delinquent shareholder on the stock shall
be forfeited to the corporation.
Added by Laws 1986, c. 292, § 45, eff. Nov. 1, 1986.
§18-1046. Revocability of Pre-Incorporation Subscriptions.
REVOCABILITY OF PRE-INCORPORATION SUBSCRIPTIONS
Unless otherwise provided for by the terms of the subscription, a
subscription for stock of a corporation to be formed shall be
irrevocable, except with the consent of all other subscribers or the
corporation, for a period of six (6) months from its date.
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Added by Laws 1986, c. 292, § 46, eff. Nov. 1, 1986.
§18-1047. Formalities Required of Stock Subscriptions.
FORMALITIES REQUIRED OF STOCK SUBSCRIPTIONS
A subscription for stock of a corporation, whether made before or
after the formation of a corporation, shall not be enforceable
against a subscriber, unless in writing and signed by the subscriber
or by his agent.
Added by Laws 1986, c. 292, § 47, eff. Nov. 1, 1986.
§18-1048. Situs of Ownership of Stock.
SITUS OF OWNERSHIP OF STOCK
For all purposes of title, action, attachment, garnishment and
jurisdiction of all courts held in this state, but not for the
purpose of taxation, the situs of the ownership of the capital stock
of all corporations existing under the laws of this state, whether
organized in accordance with the provisions of the Oklahoma General
Corporation Act or otherwise, shall be regarded as in this state.
Added by Laws 1986, c. 292, § 48, eff. Nov. 1, 1986.
§18-1049. Dividends - Payment - Wasting asset corporations.
DIVIDENDS; PAYMENT; WASTING ASSET CORPORATIONS
A. The directors of every corporation, subject to any
restrictions contained in its certificate of incorporation, may
declare and pay dividends upon the shares of its capital stock,
either out of its surplus, as defined in and computed in accordance
with the provisions of Sections 1035 and 1079 of this title, or in
case there is no surplus, out of its net profits for the fiscal year
in which the dividend is declared or the preceding fiscal year. If
the capital of the corporation, computed in accordance with the
provisions of Sections 1035 and 1079 of this title, shall have been
diminished by depreciation in the value of its property, or by
losses, or otherwise, to an amount less than the aggregate amount of
the capital represented by the issued and outstanding stock of all
classes having a preference upon the distribution of assets, the
directors of the corporation shall not declare and pay out of the net
profits any dividends upon any shares of any classes of its capital
stock until the deficiency in the amount of capital represented by
the issued and outstanding stock of all classes having a preference
upon the distribution of assets shall have been repaired. Nothing in
this subsection shall invalidate or otherwise affect a note,
debenture, or other obligation of the corporation paid by it as a
dividend on shares of its stock, or any payment made thereon, if at
the time the note, debenture, or obligation was delivered by the
corporation, the corporation had either surplus or net profits as
provided in this subsection from which the dividend could lawfully
have been paid.
4(#$0&($"!$"+$ -**;
B. Subject to any restrictions contained in its certificate of
incorporation, the directors of any corporation engaged in the
exploitation of wasting assets including, but not limited to, a
corporation engaged in the exploitation of natural resources or other
wasting assets, including patents, or engaged primarily in the
liquidation of specific assets, may determine the net profits derived
from the exploitation of wasting assets or the net proceeds derived
from liquidation without taking into consideration the depletion of
such assets resulting from lapse of time, consumption, liquidation,
or exploitation.
Added by Laws 1986, c. 292, § 49, eff. Nov. 1, 1986. Amended by Laws
1998, c. 422, § 8, eff. Nov. 1, 1998; Laws 2001, c. 405, § 9, eff.
Nov. 1, 2001; Laws 2019, c. 88, § 9, eff. Nov. 1, 2019.
§18-1050. Special Purpose Reserves.
SPECIAL PURPOSE RESERVES
The directors of a corporation may set apart out of any of the
funds of the corporation available for dividends a reserve or
reserves for any proper purpose and may abolish any such reserve.
Added by Laws 1986, c. 292, § 50, eff. Nov. 1, 1986.
§18-1051. Liability of directors as to dividends or stock
redemption.
LIABILITY OF DIRECTORS AS TO DIVIDENDS OR STOCK REDEMPTION
A member of the board of directors, or a member of any committee
designated by the board of directors, shall be fully protected in
relying in good faith upon the records of the corporation and upon
such information, opinions, reports or statements presented to the
corporation by any of its officers or employees, or committees of the
board of directors, or by any other person as to matters the director
reasonably believes are within such officer's, employee's,
committee's or other person's competence and who have been selected
with reasonable care by or on behalf of the corporation, as to the
value and amount of the assets, liabilities and/or net profits of the
corporation, or any other facts pertinent to the existence and amount
of surplus or other funds from which dividends might properly be
declared and paid, or with which the corporation's stock might
properly be purchased or redeemed.
Added by Laws 1986, c. 292, § 51, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 9, eff. Nov. 1, 1988.
§18-1052. Declaration and Payment of Dividends.
DECLARATION AND PAYMENT OF DIVIDENDS
No corporation shall pay dividends except in accordance with the
provisions of the Oklahoma General Corporation Act. Dividends may be
paid in cash, in property, or in shares of the corporation's capital
stock. If the dividend is to be paid in shares of the corporation's
4(#$0&($"!$"+$ -*7
theretofore unissued capital stock, the board of directors, by
resolution, shall direct that there be designated as capital in
respect of such shares an amount which is not less than the aggregate
par value of par value shares being declared as a dividend and, in
the case of shares without par value being declared as a dividend,
such amount as shall be determined by the board of directors. No
such designation as capital shall be necessary if shares are being
distributed by a corporation pursuant to a split-up or division of
its stock rather than as payment of a dividend declared payable in
stock of the corporation.
Added by Laws 1986, c. 292, § 52, eff. Nov. 1, 1986.
§18-1053. Liability of Directors for Unlawful Payment of Dividend or
Unlawful Stock Purchase or Redemption - Exoneration from Liability -
Contribution among Directors - Subrogation.
LIABILITY OF DIRECTORS FOR UNLAWFUL PAYMENT OF DIVIDEND OR UNLAWFUL
STOCK PURCHASE OR REDEMPTION; EXONERATION FROM LIABILITY;
CONTRIBUTION AMONG DIRECTORS; SUBROGATION
A. In case of any willful or negligent violation of the
provisions of Sections 41 and 52 of this act, the directors under
whose administration the same may happen shall be jointly and
severally liable, at any time within six (6) years after paying any
unlawful dividend or after any unlawful stock purchase or redemption,
to the corporation, and to its creditors in the event of its
dissolution or insolvency, to the full amount of the dividend
unlawfully paid, or to the full amount unlawfully paid for the
purchase or redemption of the corporation's stock, with interest from
the time such liability accrued. Any director who may have been
absent when the same was done, or who may have dissented from the act
or resolution by which the same was done, may exonerate himself from
such liability by causing his dissent to be entered on the books
containing the minutes of the proceedings of the directors at the
time the same was done, or immediately after he has notice of the
same.
B. Any director against whom a claim is successfully asserted
under the provisions of this section shall be entitled to
contribution from the other directors who voted for or concurred in
the unlawful dividend, stock purchase or stock redemption.
C. Any director against whom a claim is successfully asserted
under this section shall be entitled, to the extent of the amount
paid by him as a result of such claim, to be subrogated to the rights
of the corporation against shareholders who received the dividend on,
or assets for the sale or redemption of, their stock with knowledge
of facts indicating that such dividend, stock purchase or redemption
was unlawful pursuant to the provisions of the Oklahoma General
Corporation Act, in proportion to the amounts received by such
shareholders respectively.
4(#$0&($"!$"+$ -*
Added by Laws 1986, c. 292, § 53, eff. Nov. 1, 1986.
§18-1054. Transfer of Stock, Stock Certificates and Uncertificated
Stock.
TRANSFER OF STOCK, STOCK CERTIFICATES AND UNCERTIFICATED STOCK
Except as otherwise provided for in the Oklahoma General
Corporation Act, the transfer of stock and the certificates of stock
which represent the stock or uncertificated stock shall be governed
by the Uniform Commercial Code - Investment Securities. To the
extent that any provision of the Oklahoma General Corporation Act is
inconsistent with any provision of the Uniform Commercial Code -
Investment Securities, the provisions of the Uniform Commercial Code
- Investment Securities shall be controlling.
Added by Laws 1986, c. 292, § 54, eff. Nov. 1, 1986.
§18-1055. Restriction on transfer of securities.
RESTRICTION ON TRANSFER OF SECURITIES
A. A written restriction or restrictions on the transfer or
registration of transfer of a security of a corporation, or on the
amount of a corporation’s securities that may be owned by any person
or group of persons, if permitted by this section and noted
conspicuously on the certificate or certificates representing the
security or securities so restricted or, in the case of
uncertificated shares, contained in the notice or notices sent
pursuant to the provisions of subsection F of Section 1032 of this
title, may be enforced against the holder of the restricted security
or securities or any successor or transferee of the holder including
an executor, administrator, trustee, guardian or other fiduciary
entrusted with like responsibility for the person or estate of the
holder. Unless noted conspicuously on the certificate or
certificates representing the security or securities so restricted
or, in the case of uncertificated shares, contained in the notice or
notices sent pursuant to the provisions of subsection F of Section
1032 of this title, a restriction, even though permitted by this
section, is ineffective except against a person with actual knowledge
of the restriction.
B. A restriction on the transfer or registration of transfer of
securities of a corporation, or on the amount of a corporation’s
securities that may be owned by any person or group of persons, may
be imposed either by the certificate of incorporation or by the
bylaws or by an agreement among any number of security holders or
among such holders and the corporation. No restriction so imposed
shall be binding with respect to securities issued prior to the
adoption of the restriction unless the holders of the securities are
parties to an agreement or voted in favor of the restriction.
C. A restriction on the transfer or registration of transfer of
securities of a corporation or on the amount of a corporation’s
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securities that may be owned by any person or group of persons is
permitted by the provisions of this section if it:
1. Obligates the holder of the restricted securities to offer to
the corporation or to any other holders of securities of the
corporation or to any other person or to any combination of the
foregoing, a prior opportunity, to be exercised within a reasonable
time, to acquire the restricted securities;
2. Obligates the corporation or any holder of securities of the
corporation or any other person or any combination of the foregoing,
to purchase the securities which are the subject of an agreement
respecting the purchase and sale of the restricted securities;
3. Requires the corporation or the holders of any class of
securities of the corporation to consent to any proposed transfer of
the restricted securities or to approve the proposed transferee of
the restricted securities or to approve the amount of securities of
the corporation that may be owned by any person or group of persons;
4. Obligates the holder of the restricted securities to sell or
transfer an amount of restricted securities to the corporation or to
any other holders of securities of the corporation or to any other
person or to any combination of the foregoing, or causes or results
in the automatic sale or transfer of an amount of restricted
securities to the corporation or to any other holders of securities
of the corporation or to any other person or to any combination of
the foregoing; or
5. Prohibits or restricts the transfer of the restricted
securities to, or the ownership of restricted securities by,
designated persons or classes of persons or groups of persons, and
such designation is not manifestly unreasonable.
D. Any restriction on the transfer or the registration of
transfer of the securities of a corporation, or on the amount of
securities of a corporation that may be owned by a person or group of
persons, shall be conclusively presumed to be for a reasonable
purpose for any of the following purposes:
1. Maintaining any local, state, federal or foreign tax
advantage to the corporation or its shareholders, including without
limitation:
a. maintaining the corporation’s status as an electing
small business corporation under Subchapter S of the
United States Internal Revenue Code,
b. maintaining or preserving any tax attribute, including,
without limitation, net operating losses, or
c. qualifying or maintaining the qualification of the
corporation as a real estate investment trust pursuant
to the United States Internal Revenue Code or
regulations adopted pursuant to the United States
Internal Revenue Code; or
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2. Maintaining any statutory or regulatory advantage or
complying with any statutory or regulatory requirements under
applicable local, state, federal, or foreign law.
E. Any other lawful restriction on transfer or registration of
transfer of securities, or on the amount of securities that may be
owned by any person or group of persons, is permitted by the
provisions of this section.
Added by Laws 1986, c. 292, § 55, eff. Nov. 1, 1986. Amended by Laws
2001, c. 405, § 10, eff. Nov. 1, 2001.
§18-1055.1. Ratification of defective corporate acts and stock.
RATIFICATION OF DEFECTIVE CORPORATE ACTS AND STOCK
A. Subject to subsection F of this section, no defective
corporate act or putative stock shall be void or voidable solely as a
result of a failure of authorization if ratified as provided in this
section or validated by the District Court in a proceeding brought
under Section 10 of this act.
B. 1. In order to ratify one or more defective corporate acts
pursuant to this section, other than the ratification of an election
of the initial board of directors pursuant to paragraph 2 of this
subsection, the board of directors of the corporation shall adopt
resolutions stating:
a. the defective corporate act or acts to be ratified,
b. the date of each defective corporate act or acts,
c. if such defective corporate act or acts involved the
issuance of shares of putative stock, the number and
type of shares of putative stock issued and the date or
dates upon which such putative shares were purported to
have been issued,
d. the nature of the failure of authorization in respect
of each defective corporate act to be ratified, and
e. that the board of directors approves the ratification
of the defective corporate act or acts.
The resolutions may also provide that, at any time before the
validation effective time for the defective act or acts,
notwithstanding approval of the ratification by shareholders, the
board of directors may abandon the ratification without further
action of the shareholders. The quorum and voting requirements
applicable to the ratification by the board of directors shall be the
quorum and voting requirements applicable at the time to the type of
defective corporate act proposed to be ratified when the board adopts
the resolutions ratifying the defective corporate act; provided, that
if the certificate of incorporation or bylaws of the corporation, any
plan or agreement to which the corporation was a party or any
provision of Title 18 of the Oklahoma Statutes, in each case as in
effect as of the time of the defective corporate act, would have
required a larger number or portion of directors or of specified
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directors for a quorum to be present or to approve the defective
corporate act, such larger number or portion of such directors or
such specified directors shall be required for a quorum to be present
or to adopt the ratifying resolutions, as applicable, except that the
presence or approval of any director elected, appointed or nominated
by holders of any class or series of which no shares are then
outstanding, or by any person that is no longer a shareholder, shall
not be required.
2. To ratify a defective corporate act in respect of the
election of the initial board of directors of the corporation, a
majority of the persons who, at the time the resolutions required by
this paragraph are adopted, are exercising the powers of directors
under claim and color of an election or appointment as such may adopt
resolutions stating:
a. the name of the person or persons who first took action
in the name of the corporation as the initial board of
directors of the corporation,
b. the earlier of the date on which such persons first
took such action or were purported to have been elected
as the initial board of directors, and
c. that the ratification of the election of such person or
persons as the initial board of directors is approved.
C. Each defective corporate act ratified pursuant to paragraph 1
of subsection B of this section shall be submitted to shareholders
for approval as provided in subsection D of this section, unless (1)
no other provision of Title 18 of the Oklahoma Statutes, and no
provision of the certificate of incorporation or bylaws of the
corporation, or of any plan or agreement to which the corporation is
a party, would have required shareholder approval of the defective
corporate act to be ratified, either at the time of the defective
corporate act or at the time the board of directors adopts the
resolutions ratifying the defective corporate act pursuant to
paragraph 1 of subsection B of this section, and (2) the defective
corporate act did not result from a failure to comply with Section
1090.3 of Title 18 of the Oklahoma Statutes.
D. If ratification of a defective corporate act is required to
be submitted to shareholders for approval pursuant to subsection C of
this section, due notice of the time, place, if any, and purpose of
the meeting shall be given at least twenty (20) days before the date
of the meeting to each holder of valid stock and putative stock,
whether voting or nonvoting, at the address of such holder as it
appears or most recently appeared, as appropriate, on the records of
the corporation. The notice shall also be given to the holders of
record of valid stock and putative stock, whether voting or
nonvoting, as of the time of the defective corporate act, other than
holders whose identities or addresses cannot be determined from the
records of the corporation. The notice shall contain a copy of the
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resolutions adopted by the board of directors pursuant to paragraph 1
of subsection B of this section or the information required by
paragraphs a through e of paragraph 1 of subsection B of this section
and a statement that any claim that the defective corporate act or
putative stock ratified hereunder is void or voidable due to the
failure of authorization, or that the District Court should declare
in its discretion that a ratification in accordance with this section
not be effective or be effective only on certain conditions must be
brought within one hundred twenty (120) days from the validation
effective time. At such meeting the quorum and voting requirements
applicable to the ratification of such defective corporate act shall
be the quorum and voting requirements applicable to the type of
defective corporate act proposed to be ratified at the time of the
approval of the ratification, except that:
1. If the certificate of incorporation or bylaws of the
corporation, any plan or agreement to which the corporation was a
party or any provision of this title in effect as of the time of the
defective corporate act would have required a larger number or
portion of stock or of any class or series thereof or of specified
shareholders for a quorum to be present or to approve the defective
corporate act, the presence or approval of such larger number or
portion of stock or of such class or series thereof or of such
specified shareholders shall be required for a quorum to be present
or to approve the ratification of the defective corporate act, as
applicable, except that the presence or approval of shares of any
class or series of which no shares are then outstanding, or of any
person that is no longer a shareholder, shall not be required;
2. The approval by shareholders of the ratification of the
election of a director shall require the affirmative vote of the
majority of shares present at the meeting and entitled to vote on the
election of such director, except that if the certificate of
incorporation or bylaws of the corporation then in effect or in
effect at the time of the defective election require or required a
larger number or portion of stock or of any class or series thereof
or of specified shareholders to elect such director, the affirmative
vote of such larger number or portion of stock or of any class or
series thereof or of specified shareholders shall be required to
ratify the election of such director, except that the presence or
approval of shares of any class or series of which no shares are then
outstanding, or of any person that is no longer a shareholder, shall
not be required; and
3. In the event of a failure of authorization resulting from
failure to comply with the provisions of Section 1090.3 of Title 18
of the Oklahoma Statutes, the ratification of the defective corporate
act shall require the vote set forth in paragraph 3 of subsection A
of Section 1090.3 of Title 18 of the Oklahoma Statutes, regardless of
whether such vote would have otherwise been required.
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Shares of putative stock on the record date for determining
shareholders entitled to vote on any matter submitted to shareholders
pursuant to subsection C of this section, and without giving effect
to any ratification that becomes effective after such record date,
shall neither be entitled to vote nor counted for quorum purposes in
any vote to ratify any defective corporate act.
E. If a defective corporate act ratified pursuant to this
section would have required under any other section of Title 18 of
the Oklahoma Statutes the filing of a certificate in accordance with
Section 1007 of Title 18 of the Oklahoma Statutes, then, whether or
not a certificate was previously filed in respect of such defective
corporate act and in lieu of filing the certificate otherwise
required by Title 18 of the Oklahoma Statutes, the corporation shall
file a certificate of validation with respect to such defective
corporate act in accordance with Section 1007 of Title 18 of the
Oklahoma Statutes. A separate certificate of validation shall be
required for each defective corporate act requiring the filing of a
certificate of validation under this section, except that (i) two or
more defective corporate acts may be included in a single certificate
of validation if the corporation filed, or to comply with Title 18 of
the Oklahoma Statutes would have filed, a single certificate under
another provision of Title 18 of the Oklahoma Statutes to effect such
acts, and (ii) two or more overissues of shares of any class, classes
or series of stock may be included in a single certificate of
validation, provided that the increase in the number of authorized
shares of each such class or series set forth in the certificate of
validation shall be effective as of the date of the first such
overissue. The certificate of validation shall set forth:
1. Each defective corporate act that is the subject of the
certificate of validation, including, in the case of any defective
corporate act involving the issuance of shares of putative stock, the
number and type of shares of putative stock issued and the date or
dates upon which such putative shares were purported to have been
issued, the date of such defective corporate act, and the nature of
the failure of authorization in respect of such defective corporate
act;
2. A statement that such defective corporate act was ratified in
accordance with this section, including the date on which the board
of directors ratified such defective corporate act and the date, if
any, on which the shareholders approved the ratification of such
defective corporate act; and
3. The information required by one of the following paragraphs:
a. if a certificate was previously filed under Section
1007 of Title 18 of the Oklahoma Statutes in respect of
such defective corporate act and no changes to such
certificate are required to give effect to such
defective corporate act in accordance with this
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section, the certificate of validation shall set forth
(1) the name, title and filing date of the certificate
previously filed and of any certificate of correction
thereto and (2) a statement that a copy of the
certificate previously filed, together with any
certificate of correction thereto, is attached as an
exhibit to the certificate of validation,
b. if a certificate was previously filed under Section
1007 of Title 18 of the Oklahoma Statutes in respect of
the defective corporate act and such certificate
requires any change to give effect to the defective
corporate act in accordance with this section,
including a change to the date and time of the
effectiveness of such certificate, the certificate of
validation shall set forth (1) the name, title and
filing date of the certificate so previously filed and
of any certificate of correction thereto, (2) a
statement that a certificate containing all of the
information required to be included under the
applicable section or sections of Title 18 of the
Oklahoma Statutes to give effect to the defective
corporate act is attached as an exhibit to the
certificate of validation, and (3) the date and time
that such certificate shall be deemed to have become
effective pursuant to this section, or
c. if a certificate was not previously filed under Section
1007 of Title 18 of the Oklahoma Statutes in respect of
the defective corporate act and the defective corporate
act ratified pursuant to this section would have
required under any other section of Title 18 of the
Oklahoma Statutes the filing of a certificate in
accordance with Section 1007 of Title 18 of the
Oklahoma Statutes, the certificate of validation shall
set forth (1) a statement that a certificate containing
all of the information required to be included under
the applicable section or sections of Title 18 of the
Oklahoma Statutes to give effect to the defective
corporate act is attached as an exhibit to the
certificate of validation, and (2) the date and time
that such certificate shall be deemed to have become
effective pursuant to this section.
A certificate attached to a certificate of validation pursuant to
subparagraph b or c of paragraph 3 of this subsection need not be
separately executed and acknowledged and need not include any
statement required by any other section of Title 18 of the Oklahoma
Statutes that such instrument has been approved and adopted in
accordance with the provisions of such other section.
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F. From and after the validation effective time, unless
otherwise determined in an action brought pursuant to Section 10 of
this act:
1. Subject to the last sentence of subsection D of this section,
each defective corporate act ratified in accordance with this section
shall no longer be deemed void or voidable as a result of the failure
of authorization described in the adopted resolutions and such effect
shall be retroactive to the time of the defective corporate act; and
2. Subject to the last sentence of subsection D of this section,
each share or fraction of a share of putative stock issued or
purportedly issued pursuant to any such defective corporate act shall
no longer be deemed void or voidable and shall be deemed to be an
identical share or fraction of a share of outstanding stock as of the
time it was purportedly issued.
G. In respect of each defective corporate act ratified by the
board of directors pursuant to subsection B of this section, prompt
notice of the ratification shall be given to all holders of valid
stock and putative stock, whether voting or nonvoting, as of the date
the board of directors adopts the resolutions approving such
defective corporate act, or as of a date within sixty (60) days after
the date of adoption, as established by the board of directors, at
the address of such holder as it appears or most recently appeared,
as appropriate, on the records of the corporation. The notice shall
also be given to the holders of record of valid stock and putative
stock, whether voting or nonvoting, as of the time of the defective
corporate act, other than holders whose identities or addresses
cannot be determined from the records of the corporation. The notice
shall contain a copy of the resolutions adopted pursuant to
subsection B of this section or the information specified in
subparagraphs a through e of paragraph 1 of subsection B of this
section or subparagraphs a through c of paragraph 2 of subsection B
of this section, as applicable, and a statement that any claim that
the defective corporate act or putative stock ratified hereunder is
void or voidable due to the failure of authorization, or that the
district court should declare in its discretion that a ratification
in accordance with this section not be effective or be effective only
on certain conditions must be brought within one hundred twenty (120)
days from the later of the validation effective time or the time at
which the notice required by this subsection is given.
Notwithstanding the foregoing, no such notice shall be required if
notice of the ratification of the defective corporate act is to be
given in accordance with subsection D of this section, and in the
case of a corporation that has a class of stock listed on a national
securities exchange, the notice required by this subsection may be
deemed given if disclosed in a document publicly filed by the
corporation with the Securities and Exchange Commission pursuant to
Sections 13, 14 or 15(d) of the Securities Exchange Act of 1934, as
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amended, and the rules and regulations promulgated thereunder, or the
corresponding provisions of any subsequent United States federal
securities laws, rules or regulations. If any defective corporate
act has been approved by shareholders acting pursuant to Section 1073
of Title 18 of the Oklahoma Statutes, the notice required by this
subsection may be included in any notice required to be given
pursuant to subsection F of Section 1073 of Title 18 of the Oklahoma
Statutes and, if so given, shall be sent to the shareholders entitled
to notice under subsection F of Section 1073 of Title 18 of the
Oklahoma Statutes and to all holders of valid and putative stock to
whom notice would be required under this subsection if the defective
corporate act had been approved at a meeting other than any
shareholder who approved the action by consent in lieu of a meeting
pursuant to Section 1073 of Title 18 of the Oklahoma Statutes or any
holder of putative stock who otherwise consented thereto in writing.
Solely for purposes of subsection D of this section and this
subsection, notice to holders of putative stock, and notice to
holders of valid stock and putative stock as of the time of the
defective corporate act, shall be treated as notice to holders of
valid stock for purposes of Sections 1067, 1073, 1074, 1075, 1075.2
and 1075.3 of Title 18 of the Oklahoma Statutes.
H. As used in this section and in Section 10 of this act only,
the term:
1. "Defective corporate act" means an overissue, an election or
appointment of directors that is void or voidable due to a failure of
authorization, or any act or transaction purportedly taken by or on
behalf of the corporation that is, and at the time such act or
transaction was purportedly taken would have been, within the power
of a corporation under subchapter II of Title 18 of the Oklahoma
Statutes, but is void or voidable due to a failure of authorization;
2. "Failure of authorization" means (a) the failure to authorize
or effect an act or transaction in compliance with the provisions of
Title 18 of the Oklahoma Statutes, the certificate of incorporation
or bylaws of the corporation, or any plan or agreement to which the
corporation is a party, if and to the extent such failure would
render such act or transaction void or voidable, or (b) the failure
of the board of directors or any officer of the corporation to
authorize or approve any act or transaction taken by or on behalf of
the corporation that would have required for its due authorization
the approval of the board of directors or such officer;
3. "Overissue" means the purported issuance of (a) shares of
capital stock of a class or series in excess of the number of shares
of such class or series the corporation has the power to issue under
Section 1042 of Title 18 of the Oklahoma Statutes at the time of such
issuance, or (b) shares of any class or series of capital stock that
is not then authorized for issuance by the certificate of
incorporation of the corporation;
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4. "Putative stock" means the shares of any class or series of
capital stock of the corporation, including shares issued upon
exercise of options, rights, warrants or other securities convertible
into shares of capital stock of the corporation, or interests with
respect thereto that were created or issued pursuant to a defective
corporate act, that: (a) but for any failure of authorization, would
constitute valid stock, or (b) cannot be determined by the board of
directors to be valid stock;
5. "Time of the defective corporate act" means the date and time
the defective corporate act was purported to have been taken;
6. "Valid stock" means the shares of any class or series of
capital stock of the corporation that have been duly authorized and
validly issued in accordance with Title 18 of the Oklahoma Statutes;
and
7. "Validation effective time" with respect to any defective
corporate act ratified pursuant to this section means the latest of
(a) the time at which the defective act submitted to the shareholders
for approval pursuant to subsection C of this section is approved by
such shareholders, or if no such vote of shareholders is required to
approve the ratification, the time at which the board of directors
adopts the resolutions required by paragraphs 1 or 2 of subsection B
of this section, (b) where no certificate of validation is required
to be filed pursuant to subsection E of this section, the time, if
any, specified by the board of directors in the resolutions adopted
pursuant to paragraphs 1 or 2 of subsection B of this section, which
time shall not precede the time at which such resolutions are
adopted; and (c) the time at which any certificate of validation
filed pursuant to subsection E of this section shall become effective
in accordance with Section 1007 of Title 18 of the Oklahoma Statutes.
In the absence of actual fraud in the transaction, the judgment
of the board of directors that shares of stock are valid stock or
putative stock shall be conclusive, unless otherwise determined by
the District Court in a proceeding brought pursuant to Section 10 of
this act.
I. Ratification under this section or validation under Section
10 of this act shall not be deemed to be the exclusive means of
ratifying or validating any act or transaction taken by or on behalf
of the corporation, including any defective corporate act, or any
issuance of stock, including any putative stock, or of adopting or
endorsing any act or transaction taken by or in the name of the
corporation prior to the commencement of its existence, and the
absence or failure of ratification in accordance with either this
section or validation under Section 10 of this act shall not, of
itself, affect the validity or effectiveness of any act or
transaction or the issuance of any stock properly ratified under
common law or otherwise, nor shall it create a presumption that any
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such act or transaction is or was a defective corporate act or that
such stock is void or voidable.
Added by Laws 2017, c. 323, § 9, eff. Nov. 1, 2017.
§18-1055.2. Proceedings regarding validity of defective corporate
acts and stock.
PROCEEDINGS REGARDING VALIDITY OF DEFECTIVE CORPORATE ACTS AND
STOCK
A. Subject to subsection F of this section, upon application by
the corporation, any successor entity to the corporation, any member
of the board of directors, any record or beneficial holder of valid
stock or putative stock, any record or beneficial holder of valid or
putative stock as of the time of a defective corporate act ratified
pursuant to Section 9 of this act, or any other person claiming to be
substantially and adversely affected by a ratification pursuant to
Section 9 of this act, the district court may:
1. Determine the validity and effectiveness of any defective
corporate act ratified pursuant to Section 9 of this act;
2. Determine the validity and effectiveness of the ratification
of any defective corporate act pursuant to Section 9 of this act;
3. Determine the validity and effectiveness of any defective
corporate act not ratified or not ratified effectively pursuant to
Section 9 of this act;
4. Determine the validity of any corporate act or transaction
and any stock, rights or options to acquire stock; and
5. Modify or waive any of the procedures set forth in Section 9
of this act to ratify a defective corporate act.
B. In connection with an action under this section, the district
court may:
1. Declare that a ratification in accordance with and pursuant
to Section 9 of this act is not effective or shall only be effective
at a time or upon conditions established by the court;
2. Validate and declare effective any defective corporate act or
putative stock and impose conditions upon such validation by the
court;
3. Require measures to remedy or avoid harm to any person
substantially and adversely affected by a ratification pursuant to
Section 9 of this act or from any order of the court pursuant to this
section, excluding any harm that would have resulted if the defective
corporate act had been valid when approved or effectuated;
4. Order the Secretary of State to accept an instrument for
filing with an effective time specified by the court, which effective
time may be prior or subsequent to the time of such order; provided,
that the filing date of such instrument shall be determined in
accordance with paragraph 4 of subsection C of Section 1007 of Title
18 of the Oklahoma Statutes;
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5. Approve a stock ledger for the corporation that includes any
stock ratified or validated in accordance with this section or with
Section 9 of this act;
6. Declare that shares of putative stock are shares of valid
stock or require a corporation to issue and deliver shares of valid
stock in place of any shares of putative stock;
7. Order that a meeting of holders of valid stock or putative
stock be held and exercise the powers provided to the court under
Section 1027 of Title 18 of the Oklahoma Statutes with respect to
such a meeting;
8. Declare that a defective corporate act validated by the court
shall be effective as of the time of the defective corporate act or
at such other time as the court shall determine;
9. Declare that putative stock validated by the court shall be
deemed to be an identical share or fraction of a share of valid stock
as of the time originally issued or purportedly issued or at such
other time as the court shall determine; and
10. Make such other orders regarding such matters as it deems
proper under the circumstances.
C. Service of the application under subsection A of this section
upon the registered agent of the corporation shall be deemed to be
service upon the corporation, and no other party need be joined in
order for the district court to adjudicate the matter. In an action
filed by the corporation, the court may require notice of the action
be provided to other persons specified by the court and permit such
other persons to intervene in the action.
D. In connection with the resolution of matters pursuant to
subsections A and B of this section, the district court may consider
the following:
1. Whether the defective corporate act was originally approved
or effectuated with the belief that the approval or effectuation was
in compliance with the provisions of Title 18 of the Oklahoma
Statutes, the certificate of incorporation or bylaws of the
corporation;
2. Whether the corporation and board of directors has treated
the defective corporate act as a valid act or transaction and whether
any person has acted in reliance on the public record that such
defective corporate act was valid;
3. Whether any person will be or was harmed by the ratification
or validation of the defective corporate act, excluding any harm that
would have resulted if the defective corporate act had been valid
when approved or effectuated;
4. Whether any person will be harmed by the failure to ratify or
validate the defective corporate act; and
5. Any other factors or considerations the court deems just and
equitable.
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E. The district court is hereby vested with exclusive
jurisdiction to hear and determine all actions brought under this
section.
F. Notwithstanding any other provision of this section, no
action asserting:
1. That a defective corporate act or putative stock ratified in
accordance with Section 9 of this act is void or voidable due to a
failure of authorization identified in the resolution adopted in
accordance with subsection B of Section 9 of this act; or
2. That the district court should declare in its discretion that
a ratification in accordance with Section 9 of this act not be
effective or be effective only on certain conditions,
may be brought after the expiration of one hundred twenty (120) days
from the later of the validation effective time and the time notice,
if any, that is required to be given pursuant to subsection G of
Section 9 of this act is given with respect to such ratification,
except that this subsection shall not apply to an action asserting
that a ratification was not accomplished in accordance with Section 9
of this act or to any person to whom notice of the ratification was
required to have been given pursuant to subsection D or G of Section
9 of this act, but to whom such notice was not given.
Added by Laws 2017, c. 323, § 10, eff. Nov. 1, 2017.
§18-1056. Meetings of shareholders.
MEETINGS OF SHAREHOLDERS
A. 1. Meetings of shareholders may be held at such place,
either within or without this state, as may be designated by or in
the manner provided in the certificate of incorporation or bylaws or,
if not so designated, as determined by the board of directors. If,
pursuant to this paragraph or the certificate of incorporation or the
bylaws of the corporation, the board of directors is authorized to
determine the place of a meeting of shareholders, the board of
directors may, in its sole discretion, determine that the meeting
shall not be held at any place, but may instead be held solely by
means of remote communication as authorized by paragraph 2 of this
subsection.
2. If authorized by the board of directors in its sole
discretion, and subject to such guidelines and procedures as the
board of directors may adopt, shareholders and proxyholders not
physically present at a meeting of shareholders may, by means of
remote communication:
a. participate in a meeting of shareholders, and
b. be deemed present in person and vote at a meeting of
shareholders whether the meeting is to be held at a
designated place or solely by means of remote
communication, provided that:
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(1) the corporation shall implement reasonable
measures to verify that each person deemed present
and permitted to vote at the meeting by means of
remote communication is a shareholder or
proxyholder,
(2) the corporation shall implement reasonable
measures to provide such shareholders and
proxyholders a reasonable opportunity to
participate in the meeting and to vote on matters
submitted to the shareholders, including an
opportunity to read or hear the proceedings of the
meeting substantially concurrently with the
proceedings, and
(3) if any shareholder or proxyholder votes or takes
other action at the meeting by means of remote
communication, a record of the vote or other
action shall be maintained by the corporation.
B. 1. Unless directors are elected by written consent in lieu
of an annual meeting as permitted by this subsection, an annual
meeting of shareholders shall be held for the election of directors
on a date and at a time designated by or in the manner provided for
in the bylaws. Shareholders may, unless the certificate of
incorporation otherwise provides, act by written consent to elect
directors; provided, however, that if the consent is less than
unanimous, the action by written consent may be in lieu of holding an
annual meeting only if all of the directorships to which directors
could be elected at an annual meeting held at the effective time of
the action are vacant and are filled by the action.
2. Any other proper business may be transacted at the annual
meeting.
C. A failure to hold the annual meeting at the designated time
or to elect a sufficient number of directors to conduct the business
of the corporation shall not affect otherwise valid corporate acts or
work a forfeiture or dissolution of the corporation except as may be
otherwise specifically provided for in this act. If the annual
meeting for election of directors is not held on the date designated
therefor or action by written consent to elect directors in lieu of
an annual meeting has not been taken, the directors shall cause the
meeting to be held as soon as is convenient. If there is a failure
to hold the annual meeting or action by written consent to elect
directors in lieu of an annual meeting for a period of thirty (30)
days after the date designated for the annual meeting, or if no date
has been designated, for a period of thirteen (13) months after the
latest to occur of the organization of the corporation, its last
annual meeting, or the last action by written consent to elect
directors in lieu of an annual meeting, the district court may
summarily order a meeting to be held upon the application of any
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shareholder or director. The shares of stock represented at the
meeting, either in person or by proxy, and entitled to vote thereat,
shall constitute a quorum for the purpose of the meeting,
notwithstanding any provision of the certificate of incorporation or
bylaws to the contrary. The district court may issue orders as may
be appropriate, including, without limitation, orders designating the
time and place of the meeting, the record date or dates for
determination of shareholders entitled to notice of the meeting and
to vote, and the form of notice of the meeting.
D. Special meetings of the shareholders may be called by the
board of directors or by the person or persons as may be authorized
by the certificate of incorporation or by the bylaws.
E. All elections of directors shall be by written ballot, unless
otherwise provided for in the certificate of incorporation; if
authorized by the board of directors, the requirement of a written
ballot shall be satisfied by a ballot submitted by electronic
transmission; provided that the electronic transmission must either
set forth or be submitted with information from which it can be
determined that the electronic transmission was authorized by the
shareholder or proxyholder.
Added by Laws 1986, c. 292, § 56, eff. Nov. 1, 1986. Amended by Laws
1998, c. 422, § 9, eff. Nov. 1, 1998; Laws 2001, c. 405, § 11, eff.
Nov. 1, 2001; Laws 2017, c. 323, § 11, eff. Nov. 1, 2017.
§18-1057. Voting Rights of Shareholders - Proxies - Limitations.
VOTING RIGHTS OF SHAREHOLDERS; PROXIES; LIMITATIONS
A. Unless otherwise provided for in the certificate of
incorporation and subject to the provisions of Section 1058 of this
title, each shareholder shall be entitled to one vote for each share
of capital stock held by the shareholder. If the certificate of
incorporation provides for more or less than one vote for any share
on any matter, every reference in this act to a majority or other
proportion of stock, voting stock or shares shall refer to such
majority or other proportion of the votes of such stock, voting stock
or shares.
B. Each shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to
act for the shareholder by proxy, but no proxy shall be voted or
acted upon after three (3) years from its date, unless the proxy
provides for a longer period.
C. Without limiting the manner in which a shareholder may
authorize another person or persons to act as a proxy pursuant to
subsection B of this section, the following shall constitute a valid
means by which a shareholder may grant such authority:
1. A shareholder may execute a writing authorizing another
person or persons to act for him or her as proxy. Execution may be
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accomplished by the shareholder or the shareholder’s authorized
officer, director, employee, or agent signing the writing or causing
his or her signature to be affixed to the writing by any reasonable
means including, but not limited to, by facsimile signature.
2. A shareholder may authorize another person or persons to act
for him or her as proxy by transmitting or authorizing the
transmission of a telegram, cablegram, or other means of electronic
transmission to the person who will be the holder of the proxy or to
a proxy solicitation firm, proxy support service organization, or
like agent duly authorized by the person who will be the holder of
the proxy to receive the transmission; provided, that any telegram,
cablegram, or other means of electronic transmission must either set
forth, or be submitted with information from which it can be
determined, that the telegram, cablegram, or other electronic
transmission was authorized by the shareholder. If it is determined
that telegrams, cablegrams, or other electronic transmissions are
valid, the inspectors or, if there are no inspectors, any other
person making that determination shall specify the information upon
which they relied.
D. Any copy, facsimile telecommunication, or other reliable
reproduction of the writing or transmission created pursuant to
subsection C of this section may be substituted or used in lieu of
the original writing or transmission for any and all purposes for
which the original writing or transmission could be used; provided,
that the copy, facsimile telecommunication, or other reproduction
shall be a complete reproduction of the entire original writing or
transmission.
E. A duly executed proxy shall be irrevocable if it states that
it is irrevocable and if, and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable power. A proxy
may be made irrevocable regardless of whether the interest with which
it is coupled is an interest in the stock itself or an interest in
the corporation generally.
Added by Laws 1986, c. 292, § 57, eff. Nov. 1, 1986. Amended by Laws
1998, c. 422, § 10, eff. Nov. 1, 1998; Laws 2004, c. 255, § 10, eff.
Nov. 1, 2004.
§18-1058. Fixing date for determination of shareholders of record.
FIXING DATE FOR DETERMINATION OF SHAREHOLDERS OF RECORD
A. In order that the corporation may determine the shareholders
entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, the board of directors may fix a record
date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty (60)
nor less than ten (10) days before the date of such meeting. If the
board of directors so fixes a date, such date shall also be the
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record date for determining the shareholders entitled to vote at such
meeting unless the board of directors determines, at the time it
fixes such record date, that a later date on or before the date of
the meeting shall be the date for making such determination. If no
record date is fixed by the board of directors, the record date for
determining shareholders entitled to notice of or to vote at a
meeting of shareholders shall be at the close of business on the day
next preceding the day on which notice is given, or, if notice is
waived, at the close of business on the day next preceding the day on
which the meeting is held. A determination of shareholders of record
entitled to notice of or to vote at a meeting of shareholders shall
apply to any adjournment of the meeting; provided, however, that the
board of directors may fix a new record date for the adjourned
meeting and in such case shall also fix as the record date for
shareholders entitled to notice of such adjourned meeting the same or
an earlier date as that fixed for determination of shareholders
entitled to vote in accordance with the foregoing provisions of this
section at the adjourned meeting.
B. 1. In order that the corporation may determine the
shareholders entitled to consent to corporate action in writing
without a meeting, the board of directors may fix a record date,
which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of
directors, and which date shall not be more than ten (10) days after
the date upon which the resolution fixing the record date is adopted
by the board of directors. If no record date has been fixed by the
board of directors, the record date for determining shareholders
entitled to consent to corporate action in writing without a meeting,
when no prior action by the board of directors is required by the
Oklahoma General Corporation Act, shall be the first date on which a
signed written consent setting forth the action taken or proposed to
be taken is delivered to the corporation by delivery to its
registered office in this state, its principal place of business, or
an officer or agent of the corporation having custody of the book in
which proceedings of meetings of shareholders are recorded. Delivery
made to a corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested. If no record
date has been fixed by the board of directors and prior action by the
board of directors is required by the Oklahoma General Corporation
Act, the record date for determining shareholders entitled to consent
to corporate action in writing without a meeting shall be at the
close of business on the day on which the board of directors adopts
the resolution taking such prior action.
2. The provisions of this subsection shall be effective with
respect to corporate actions taken by written consent, and to such
written consent or consents, as to which the first written consent is
executed or solicited after November 1, 1988.
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C. In order that the corporation may determine the shareholders
entitled to receive payment of any dividend or other distribution or
allotment of any rights or the shareholders entitled to exercise any
rights in respect of any change, conversion or exchange of stock, or
for the purpose of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and
which record date shall be not more than sixty (60) days prior to
such action. If no record date is fixed, the record date for
determining shareholders for any such purpose shall be at the close
of business on the day on which the board of directors adopts the
resolution relating thereto.
Added by Laws 1986, c. 292, § 58, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 10, eff. Nov. 1, 1988; Laws 2017, c. 323, § 12, eff.
Nov. 1, 2017.
§18-1059. Cumulative Voting.
CUMULATIVE VOTING
The certificate of incorporation of any corporation may provide
that at all elections of directors of the corporation, or at
elections held under specified circumstances, each holder of stock or
of any class or classes or of a series or series thereof shall be
entitled to as many votes as shall equal the number of votes which,
except for such provision as to cumulative voting, he would be
entitled to cast for the election of directors with respect to his
shares of stock multiplied by the number of directors to be elected
by him, and that he may cast all of such votes for a single director
or may distribute them among the number to be voted for, or for any
two (2) or more of them as he may see fit.
Added by Laws 1986, c. 292, § 59, eff. Nov. 1, 1986.
§18-1060. Voting rights of members of nonstock corporations - Quorum
- Proxies.
VOTING RIGHTS OF MEMBERS OF NONSTOCK
CORPORATIONS; QUORUM; PROXIES
A. The provisions of Sections 1056 through 1059 and 1061 of this
title shall not apply to nonstock corporations, except that
subsections A and D of Section 1056 and subsections C, D and E of
Section 1057 of this title shall apply to nonstock corporations, and,
when so applied, all references therein to shareholders and to the
board of directors shall be deemed to refer to the members and the
governing body of a nonstock corporation, respectively; and all
references to stock, capital stock, or shares thereof shall be deemed
to refer to memberships of a nonprofit nonstock corporation and to
membership interests of any other nonstock corporation.
B. Unless otherwise provided for in the certificate of
incorporation or the bylaws of a nonstock corporation, and subject to
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subsection F of this section, each member shall be entitled at every
meeting of members to one vote on each matter submitted to a vote of
members. A member may exercise such voting rights in person or by
proxy, but no proxy shall be voted on after three (3) years from its
date, unless the proxy provides for a longer period.
C. Unless otherwise provided for in the Oklahoma General
Corporation Act, the certificate of incorporation or bylaws of a
nonstock corporation may specify the number of members having voting
power who shall be present or represented by proxy at any meeting in
order to constitute a quorum for, and the votes that shall be
necessary for, the transaction of any business. In the absence of
such specification in the certificate of incorporation or bylaws of a
nonstock corporation:
1. One-third (1/3) of the members of the corporation shall
constitute a quorum at a meeting of the members;
2. In all matters other than the election of the governing body
of the corporation, the affirmative vote of a majority of the members
present in person or represented by proxy at the meeting and entitled
to vote on the subject matter shall be the act of the members, unless
the vote of a greater number is required by the provisions of the
Oklahoma General Corporation Act, the certificate of incorporation or
bylaws;
3. Members of the governing body shall be elected by a plurality
of the votes of the members of the corporation present in person or
represented by proxy at the meeting and entitled to vote; and
4. When a separate vote by a class or group or classes or groups
is required, a majority of the members of such class or group or
classes or groups, present in person or represented by proxy, shall
constitute a quorum entitled to take action with respect to that vote
on that matter and, in all matters other than the election of members
of the governing body, the affirmative vote of the majority of the
members of such class or group or classes or groups present in person
or represented by proxy at the meeting shall be the act of such class
or group or classes or groups.
D. If the election of the governing body of any nonstock
corporation shall not be held on the day designated by the bylaws,
the governing body shall cause the election to be held as soon
thereafter as convenient. The failure to hold such an election at
the designated time shall not work any forfeiture or dissolution of
the corporation, but the district court may summarily order such an
election to be held upon the application of any member of the
corporation. At any election pursuant to such order the persons
entitled to vote in such election who shall be present at such
meeting, either in person or by proxy, shall constitute a quorum for
such meeting, notwithstanding any provision of the certificate of
incorporation or the bylaws of the corporation to the contrary.
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E. If authorized by the governing body, any requirement of a
written ballot shall be satisfied by a ballot submitted by electronic
transmission, provided that the electronic transmission shall either
set forth or be submitted with information from which it can be
determined that the electronic transmission was authorized by the
member or proxy holder.
F. Except as otherwise provided in the certificate of
incorporation, in the bylaws, or by resolution of the governing body,
the record date for any meeting or corporate action shall be deemed
to be the date of such meeting or corporate action; provided,
however, that no record date may precede any action by the governing
body fixing such record date.
Added by Laws 1986, c. 292, § 60, eff. Nov. 1, 1986. Amended by Laws
1999, c. 421, § 10, eff. Nov. 1, 1999; Laws 2004, c. 255, § 11, eff.
Nov. 1, 2004; Laws 2019, c. 88, § 10, eff. Nov. 1, 2019.
§18-1061. Quorum and required vote for stock corporations.
QUORUM AND REQUIRED VOTE FOR STOCK CORPORATIONS
Subject to the provisions of the Oklahoma General Corporation
Act, in respect of the vote that shall be required for a specified
action, the certificate of incorporation or bylaws of any corporation
authorized to issue stock may specify the number of shares and/or the
amount of other securities having voting power the holders of which
shall be present or represented by proxy at any meeting in order to
constitute a quorum for, and the votes that shall be necessary for,
the transaction of any business, but in no event shall a quorum
consist of less than one-third (1/3) of the shares entitled to vote
at the meeting, except that, where a separate vote by a class or
series or classes or series is required, a quorum shall consist of no
less than one-third (1/3) of the share of that class or series or
classes or series. In the absence of such specification in the
certificate of incorporation or bylaws of the corporation:
1. A majority of the shares entitled to vote, present in person
or represented by proxy, shall constitute a quorum at a meeting of
shareholders;
2. In all matters other than the election of directors, the
affirmative vote of the majority of shares present in person or
represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders;
3. Directors shall be elected by a plurality of the votes of the
shares present in person or represented by proxy at the meeting and
entitled to vote on the election of directors; and
4. Where a separate vote by a class or series or classes or
series is required, a majority of the outstanding shares of such
class or series or classes or series, present in person or
represented by proxy, shall constitute a quorum entitled to take
action with respect to that vote on that matter and the affirmative
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vote of the majority of shares of such class or series or classes or
series present in person or represented by proxy at the meeting shall
be the act of such class or series or classes or series.
Added by Laws 1986, c. 292, § 61, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 11, eff. Nov. 1, 1988; Laws 1999, c. 421, § 11, eff.
Nov. 1, 1999.
§18-1062. Voting Rights of Fiduciaries, Pledgors and Joint Owners of
Stock.
VOTING RIGHTS OF FIDUCIARIES, PLEDGORS
AND JOINT OWNERS OF STOCK
A. Persons holding stock in a fiduciary capacity shall be
entitled to vote the shares so held. Persons whose stock is pledged
shall be entitled to vote, unless in the transfer by the pledgor on
the books of the corporation he has expressly empowered the pledgee,
to vote thereon, in which case only the pledgee, or his proxy may
represent such stock and vote thereon.
B. If shares or other securities having voting power stand of
record in the names of two (2) or more persons, whether fiduciaries,
members of a partnership, joint tenants, tenants in common, tenants
by the entirety or otherwise, or if two (2) or more persons have the
same fiduciary relationship respecting the same shares, unless the
secretary of the corporation is given written notice to the contrary
and is furnished with a copy of the instrument or order appointing
them or creating the relationship wherein it is so provided, their
acts with respect to voting shall have the following effect:
1. If only one (1) vote, his act binds all; or
2. If more than one (1) vote, the act of the majority so voting
binds all; or
3. If more than one (1) vote, but the vote is evenly split on
any particular matter, each faction may vote the securities in
question proportionally, or any person voting the shares, or a
beneficiary, if any, may apply to the district court to appoint an
additional person to act with the persons so voting the shares, which
shall then be voted as determined by a majority of such persons and
the person appointed by such court. If the instrument so filed shows
that any such tenancy is held in unequal interests, a majority or
even-split for the purpose of this subsection shall be a majority or
even-split in interest.
Added by Laws 1986, c. 292, § 62, eff. Nov. 1, 1986.
§18-1063. Voting trusts and other voting agreements.
VOTING TRUSTS AND OTHER VOTING AGREEMENTS
A. One (1) or more shareholders, by agreement in writing, may
deposit capital stock of an original issue with or transfer capital
stock to any person or persons, or entity or entities, authorized to
act as trustee, for the purpose of vesting in the person or persons,
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or entity or entities, who may be designated voting trustee, or
voting trustees, the right to vote thereon for any period of time
determined by the agreement upon the terms and conditions stated in
the agreement. The agreement may contain any other lawful provisions
not inconsistent with its purpose. After delivery of a copy of the
agreement to the registered office of the corporation in this state
or the principal place of business of the corporation, which copy
shall be open to the inspection of any shareholder of the corporation
or any beneficiary of the trust under the agreement daily during
business hours, certificates of stock or uncertificated stock shall
be issued to the voting trustee or trustees to represent any stock of
an original issue so deposited with the trustee or trustees, and any
certificates of stock or uncertificated stock so transferred to the
voting trustee or trustees shall be surrendered and canceled and new
certificates or uncertificated stock shall be issued therefor to the
voting trustee or trustees. In the certificate so issued, if any, it
shall be stated that it is issued pursuant to the agreement and that
fact shall also be stated in the stock ledger of the corporation.
The voting trustee or trustees may vote the stock so issued or
transferred during the period specified in the agreement. Stock
standing in the name of the voting trustee or trustees may be voted
either in person or by proxy. In voting the stock, the voting
trustee or trustees shall incur no responsibility as shareholder,
trustee, or otherwise, except for the trustee's or trustees' own
individual malfeasance. In any case where two (2) or more persons or
entities are designated as voting trustees, and the right and method
of voting any stock standing in their names at any meeting of the
corporation are not fixed by the agreement appointing the trustees,
the right to vote the stock and the manner of voting it at the
meeting shall be determined by a majority of the trustees, or if they
be equally divided or the right and manner of voting the stock in any
particular case, the vote of the stock shall be divided equally among
the trustees.
B. Any amendment to a voting trust agreement shall be made by a
written agreement, a copy of which shall be delivered to the
registered office of the corporation in this state or the principal
place of business of the corporation.
C. An agreement between two (2) or more shareholders, if in
writing and signed by the parties thereto, may provide that in
exercising any voting rights, the shares held by them shall be voted
as provided by the agreement, or as the parties may agree, or as
determined in accordance with a procedure agreed upon by them.
D. This section shall not be construed to invalidate any voting
or other agreement among shareholders or any irrevocable proxy which
is not otherwise illegal.
Added by Laws 1986, c. 292, § 63, eff. Nov. 1, 1986. Amended by Laws
1987, c. 146, § 4, emerg. eff. June 24, 1987; Laws 1998, c. 422, §
4(#$0&($"!$"+$ -*:*
11, eff. Nov. 1, 1998; Laws 2004, c. 255, § 12, eff. Nov. 1, 2004;
Laws 2017, c. 323, § 13, eff. Nov. 1, 2017.
§18-1064. List of shareholders entitled to vote - Penalty for
refusal to produce stock ledger.
LIST OF SHAREHOLDERS ENTITLED TO VOTE; PENALTY FOR REFUSAL TO PRODUCE
STOCK LEDGER
A. The officer who has charge of the stock ledger of a
corporation shall prepare and make, at least ten (10) days before
every meeting of shareholders, a complete list of the shareholders
entitled to vote at the meeting; provided, however, if the record
date for determining the shareholders entitled to vote is less than
ten (10) days before the meeting date, the list shall reflect the
shareholders entitled to vote as of the tenth day before the meeting
date, arranged in alphabetical order, and showing the address of each
shareholder and the number of shares registered in the name of each
shareholder. Nothing contained in this section shall require the
corporation to include electronic mail addresses or other electronic
contact information on the list. The list shall be open to the
examination of any shareholder, for any purpose germane to the
meeting for a period of at least ten (10) days prior to the meeting:
1. On a reasonably accessible electronic network; provided that
the information required to gain access to the list is provided with
the notice of the meeting; or
2. During ordinary business hours, at the principal place of
business of the corporation. In the event that the corporation
determines to make the list available on an electronic network, the
corporation may take reasonable steps to ensure that the information
is available only to shareholders of the corporation. If the meeting
is to be held at a place, then the list shall also be produced and
kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any shareholder who is present. If
the meeting is to be held solely by means of remote communication,
then the list shall also be open to the examination of any
shareholder during the whole time of the meeting on a reasonably
accessible electronic network, and the information required to access
the list shall be provided with the notice of the meeting.
B. Upon the willful neglect or refusal of the directors to
produce such a list at any meeting for the election of directors held
at a place, or to open such a list to examination on a reasonably
accessible electronic network during any meeting for the election of
directors held solely by means of remote communication, they shall be
ineligible for election to any office at the meeting.
C. The stock ledger shall be the only evidence as to who are the
shareholders entitled by this section to examine the list required by
this section or to vote in person or by proxy at any meeting of
shareholders.
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Added by Laws 1986, c. 292, § 64, eff. Nov. 1, 1986. Amended by Laws
2001, c. 405, § 12, eff. Nov. 1, 2001; Laws 2004, c. 255, § 13, eff.
Nov. 1, 2004; Laws 2017, c. 323, § 14, eff. Nov. 1, 2017.
§18-1065. Inspection of books and records.
INSPECTION OF BOOKS AND RECORDS
A. As used in this section:
1. "Shareholder" means a shareholder of record in a stock
corporation, or a person who is the beneficial owner of shares of
stock held either in a voting trust or by a nominee on behalf of a
person;
2. "Under oath" includes statements the declarant affirms to be
true under penalty of perjury under the laws of the United States or
any state; and
3. "Subsidiary" means any entity directly or indirectly owned,
in whole or in part, by the corporation of which the shareholder is a
shareholder and over the affairs of which the corporation directly or
indirectly exercises control, and includes but is not limited to
corporations, partnerships, limited partnerships, limited liability
partnerships, limited liability companies, statutory trusts and joint
ventures.
B. Any shareholder, in person or by attorney or other agent,
upon written demand under oath stating the purpose thereof, shall
have the right during the usual hours for business to inspect for any
proper purpose, and to make copies and extracts from:
1. The corporation's stock ledger, a list of shareholders, and
its other books and records; and
2. A subsidiary's books and records, to the extent that:
a. the corporation has actual possession and control of
the records of the subsidiary, or
b. the corporation could obtain the records through the
exercise of control over the subsidiary,
provided that as of the date of the making of the demand:
(1) shareholder inspection of the books and records of
the subsidiary would not constitute a breach of an
agreement between the corporation or the
subsidiary and a person or person not affiliated
with the corporation, and
(2) the subsidiary would not have the right under the
law applicable to it to deny the corporation
access to the books and records upon demand by the
corporation.
In every instance where the shareholder is other than a record
holder of stock in a stock corporation, or a member of a nonstock
corporation, the demand under oath shall state the person's status as
a shareholder or member, be accompanied by documentary evidence of
beneficial ownership of the stock or beneficial membership, and state
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that the documentary evidence is a true and correct copy of what it
purports to be. A proper purpose shall mean a purpose reasonably
related to a person's interest as a shareholder or member. In every
instance where an attorney or other agent shall be the person who
seeks the right to inspection, the demand under oath shall be
accompanied by a power of attorney or other writing which authorizes
the attorney or other agent to so act on behalf of the shareholder.
The demand under oath shall be directed to the corporation at its
registered office in this state or at its principal place of
business.
C. 1. If the corporation or an officer or agent thereof refuses
to permit an inspection sought by a shareholder or attorney or other
agent acting for the shareholder pursuant to the provisions of
subsection B of this section or does not reply to the demand within
five (5) business days after the demand has been made, the
shareholder may apply to the district court for an order to compel an
inspection. The court may summarily order the corporation to permit
the shareholder to inspect the corporation's stock ledger, an
existing list of shareholders, and its other books and records, and
to make copies or extracts therefrom; or the court may order the
corporation to furnish to the shareholder a list of its shareholders
as of a specific date on condition that the shareholder first pay to
the corporation the reasonable cost of obtaining and furnishing the
list and on other conditions as the court deems appropriate.
2. Where the shareholder seeks to inspect the corporation's
books and records, other than its stock ledger or list of
shareholders, the shareholder shall first establish that:
a. the shareholder is a shareholder,
b. the shareholder has complied with the provisions of
this section respecting the form and manner of making
demand for inspection of the documents, and
c. the inspection the shareholder seeks is for a proper
purpose.
3. Where the shareholder seeks to inspect the corporation's
stock ledger or list of shareholders and has complied with the
provisions of this section respecting the form and manner of making
demand for inspection of the documents, the burden of proof shall be
upon the corporation to establish that the inspection the shareholder
seeks is for an improper purpose. The court may, in its discretion,
prescribe any limitations or conditions upon the inspection, or award
other or further relief as the court may deem just and proper. The
court may order books, documents, and records, pertinent extracts
therefrom, or duly authenticated copies thereof, to be brought within
this state and kept in this state upon such terms and conditions as
the order may prescribe.
D. Any director shall have the right to examine the
corporation's stock ledger, a list of its shareholders, and its other
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books and records for a purpose reasonably related to his or her
position as a director. The district court may summarily order the
corporation to permit the director to inspect any and all books and
records, the stock ledger, and the list of shareholders and to make
copies or extracts therefrom. The court, in its discretion, may
prescribe any limitations or conditions with reference to the
inspection, or award other or further relief as the court may deem
just and proper. The burden of proof shall be upon the corporation
to establish that the inspection the director seeks is for an
improper purpose.
Added by Laws 1986, c. 292, § 65, eff. Nov. 1, 1986. Amended by Laws
1998, c. 422, § 12, eff. Nov. 1, 1998; Laws 2004, c. 255, § 14, eff.
Nov. 1, 2004; Laws 2019, c. 88, § 11, eff. Nov. 1, 2019.
§18-1065.1. Access to proxy solicitation materials – Proxy expense
reimbursement.
ACCESS
TO PROXY
SOLICITATION MATERIALS; PROXY EXPENSE
REIMBURSEMENT
A. The bylaws may provide that if the
corporation
solicits
proxies with respect
to
an election of
directors,
it may be
required,
to the extent and subject to such
procedures
or
conditions
as may be provided in the bylaws, to include in its
proxy
solicitation
materials, including
any form of proxy it
distributes,
in addition to
individuals nominated
by the board of
directors,
one or more
individuals nominated
by a
shareholder.
Such
procedures
or
conditions
may include any of the
following:
1. A provision requiring a minimum record or beneficial
ownership,
or
duration of ownership, of shares of the
corporation's
capital stock, by the
nominating
shareholder, and
defining beneficial ownership to take into account options or
other
rights in respect of or related to such
stock;
2. A provision requiring the nominating shareholder to submit
specified
information concerning the shareholder and the
shareholder's
nominees,
including
information concerning ownership
by such persons of shares of the
corporation's capital
stock, or
options or other rights in respect of or related to such
stock;
3. A provision conditioning eligibility to require inclusion
in the
corporation's
proxy solicitation materials upon the number
or proportion of directors nominated
by
shareholders or whether the
shareholder previously sought to require such
inclusion;
4. A provision precluding nominations by any person if such
person,
any
nominee of such person, or any affiliate or associate
of such person or nominee,
has
acquired or publicly proposed to
acquire shares constituting a specified percentage of
the
voting
power of the
corporation's
outstanding voting stock within a
specified
period
before the election of
directors;
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5. A provision requiring that the nominating shareholder
undertake
to
indemnify the corporation in respect of any loss
arising as a result of any false
or
misleading information or
statement submitted by the nominating shareholder
in
connection
with a nomination;
and
6. Any other lawful
condition.
B. The bylaws may provide for the reimbursement by the
corporation of
expenses
incurred by a shareholder in soliciting
proxies in connection with an election of
directors,
subject to
such procedures or conditions as the bylaws may prescribe,
including:
1. Conditioning eligibility for reimbursement upon the number
or
proportion
of persons nominated by the shareholder seeking
reimbursement or whether
such
shareholder previously sought
reimbursement for similar
expenses;
2. Limitations on the amount of reimbursement based upon the
proportion
of
votes cast in favor of one or more of the persons
nominated by the shareholder
seeking
reimbursement, or upon the
amount spent by the corporation in soliciting proxies
in
connection
with the
election;
3. Limitations concerning elections of directors by cumulative
voting
pursuant
to Section 1059 of Title 18 of the Oklahoma
Statutes;
or
4. Any other lawful
condition.
C. No bylaw so adopted shall apply to elections for which any
record
date
precedes its
adoption.
Added by Laws 2017, c. 323, § 15, eff. Nov. 1, 2017.
§18-1066. Voting, Inspection and Other Rights of Bondholders and
Debenture Holders.
VOTING, INSPECTION AND OTHER RIGHTS OF
BONDHOLDERS AND DEBENTURE HOLDERS
Every corporation, in its certificate of incorporation, may
confer upon the holders of any bonds, debentures or other obligations
issued or to be issued by the corporation the power to vote in
respect to the corporate affairs and management of the corporation to
the extent and in the manner provided in the certificate of
incorporation, and may confer upon such holders of bonds, debentures
or other obligations the same right of inspection of its books,
accounts and other records, and also any other rights, which the
shareholders of the corporation have or may have by reason of the
provisions of the Oklahoma General Corporation Act or of its
certificate of incorporation. If the certificate of incorporation so
provides, such holders of bonds, debentures or other obligations
shall be deemed to be shareholders, and their bonds, debentures or
other obligations shall be deemed to be shares of stock, for the
purpose of any provision of the Oklahoma General Corporation Act
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which requires the vote of shareholders as a prerequisite to any
corporate action and the certificate of incorporation may divest the
holders of capital stock, in whole or in part, of their right to vote
on any corporate matter whatsoever, except as set forth in paragraph
2 of subsection B of Section 77 of this act.
Added by Laws 1986, c. 292, § 66, eff. Nov. 1, 1986.
§18-1067. Notice of meetings and adjourned meetings.
NOTICE OF MEETINGS AND ADJOURNED MEETINGS
A. Whenever shareholders are required or permitted to take any
action at a meeting, a written notice of the meeting shall be given
which shall state the place, if any, date and hour of the meeting,
the means of remote communications, if any, by which shareholders and
proxyholders may be deemed to be present in person and vote at the
meetings, the record date for determining the shareholders entitled
to vote at the meeting, if such date is different from the record
date for determining shareholders entitled to notice of the meeting
and, in the case of a special meeting, the purpose or purposes for
which the meeting is called.
B. Unless otherwise provided for in the Oklahoma General
Corporation Act, the written notice of any meeting shall be given not
less than ten (10) nor more than sixty (60) days before the date of
the meeting to each shareholder entitled to vote at such meeting as
of the record date for determining the shareholders entitled to
notice of the meeting. If mailed, notice is given when deposited in
the United States mail, postage prepaid, directed to the shareholder
at his address as it appears on the records of the corporation. An
affidavit of the secretary or an assistant secretary or of the
transfer agent or other agent of the corporation that the notice has
been given, in the absence of fraud, shall be prima facie evidence of
the facts stated therein.
C. When a meeting is adjourned to another time or place, unless
the bylaws otherwise require, notice need not be given of the
adjourned meeting if the time, place, if any, thereof, and the means
of remote communications, if any, by which shareholders and
proxyholders may be deemed to be present in person and vote at the
adjourned meeting are announced at the meeting at which the
adjournment is taken. At the adjourned meeting the corporation may
transact any business which might have been transacted at the
original meeting. If the adjournment is for more than thirty (30)
days, a notice of the adjourned meeting shall be given to each
shareholder of record entitled to vote at the meeting. If after the
adjournment a new record date for shareholders entitled to vote is
fixed for the adjourned meeting, the board of directors shall fix a
new record date for notice of such adjourned meeting in accordance
with subsection A of Section 1058 of this title, and shall give
notice of the adjourned meeting to each shareholder of record
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entitled to vote at such adjourned meeting as of the record date
fixed for notice of such adjourned meeting.
Added by Laws 1986, c. 292, § 67, eff. Nov. 1, 1986. Amended by Laws
2001, c. 405, § 13, eff. Nov. 1, 2001; Laws 2017, c. 323, § 16, eff.
Nov. 1, 2017.
§18-1068. Vacancies and newly created directorships.
VACANCIES AND NEWLY CREATED DIRECTORSHIPS
A. 1. Unless otherwise provided in the certificate of
incorporation or bylaws:
a. vacancies and newly created directorships resulting
from any increase in the authorized number of directors
elected by all of the shareholders having the right to
vote as a single class may be filled by a majority of
the directors then in office, although less than a
quorum, or by a sole remaining director, and
b. whenever the holders of any class or classes of stock
or series thereof are entitled to elect one or more
directors by the provisions of the certificate of
incorporation, vacancies and newly created
directorships of such class or classes or series may be
filled by a majority of the directors elected by such
class or classes or series thereof then in office, or
by a sole remaining director so elected.
2. If at any time, by reason of death or resignation or other
cause, a corporation should have no directors in office, then any
officer or any shareholder or an executor, administrator, trustee or
guardian of a shareholder, or other fiduciary entrusted with like
responsibility for the person or estate of a shareholder, may call a
special meeting of shareholders in accordance with the provisions of
the certificate of incorporation or the bylaws, or may apply to the
district court for a decree summarily ordering an election as
provided for in Sections 1056 and 1060 of this title.
B. In the case of a corporation the directors of which are
divided into classes, any directors chosen under subsection A of this
section shall hold office until the next election of the class for
which such directors shall have been chosen, and until their
successors shall be elected and qualified.
C. If, at the time of filling any vacancy or any newly created
directorship, the directors then in office shall constitute less than
a majority of the whole board, as constituted immediately prior to
any such increase, the district court, upon application of any
shareholder or shareholders holding at least ten percent (10%) of the
voting stock at the time outstanding having the right to vote for
such directors, may summarily order an election to be held to fill
any such vacancies or newly created directorships, or to replace the
directors chosen by the directors then in office, which election
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shall be governed by the provisions of Sections 1056 and 1060 of this
title as far as applicable.
D. Unless otherwise provided in the certificate of incorporation
or bylaws, when one or more directors shall resign from the board,
effective at a future date, a majority of the directors then in
office, including those who have so resigned, shall have power to
fill such vacancy or vacancies, the vote thereon to take effect when
such resignation or resignations shall become effective, and each
director so chosen shall hold office as provided for in this section
in the filling of other vacancies.
Added by Laws 1986, c. 292, § 68, eff. Nov. 1, 1986. Amended by Laws
2004, c. 255, § 15, eff. Nov. 1, 2004; Laws 2017, c. 323, § 17, eff.
Nov. 1, 2017.
§18-1069. Form of records.
FORM OF RECORDS
Any records maintained by a corporation in the regular course of
its business, including its stock ledger, books of account, and
minute books, may be kept on, or by means of, or be in the form of,
any information storage device or method; provided that the records
so kept can be converted into clearly legible paper form within a
reasonable time. Any corporation shall so convert any records so
kept upon the request of any person entitled to inspect the records
pursuant to any provision of the Oklahoma General Corporation Act.
Where records are kept in the manner, a clearly legible paper form
produced from or by means of the information storage device or method
shall be admissible in evidence and shall be accepted for all other
purposes, to the same extent as an original paper record of the same
information would have been, when the paper form accurately portrays
the record.
Added by Laws 1986, c. 292, § 69, eff. Nov. 1, 1986. Amended by Laws
2001, c. 405, § 14, eff. Nov. 1, 2001.
§18-1070. Contested election of directors - Proceedings to determine
validity.
CONTESTED ELECTION OF DIRECTORS;
PROCEEDINGS TO DETERMINE VALIDITY
A. Upon application of any shareholder or director, or any
officer whose title to office is contested, the district court may
hear and determine the validity of any election, appointment, removal
or resignation of any director or officer of any corporation, and the
right of any person to hold, or continue to hold, such office, and,
in case any such office is claimed by more than one person, may
determine the person entitled thereto; and to that end make such
order or decree in any such case as may be just and proper, with
power to enforce the production of any books, papers and records of
the corporation relating to the issue. In case it should be
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determined that no valid election has been held, the district court
may order an election to be held in accordance with the provisions of
Section 1056 or 1060 of this title. In any such application, service
of copies of the application upon the registered agent of the
corporation shall be deemed to be service upon the corporation and
upon the person whose title to office is contested and upon the
person, if any, claiming such office; and the registered agent shall
forward immediately a copy of the application to the corporation and
to the person whose title to office is contested and to the person,
if any, claiming such office, in a postpaid, sealed, registered
letter addressed to such corporation and such person at their post
office addresses last known to the registered agent or furnished to
the registered agent by the applicant shareholder. The court may
make such order respecting further or other notice of such
application as it deems proper under the circumstances.
B. Upon application of any shareholder or upon application of
the corporation itself, the district court may hear and determine the
result of any vote of shareholders upon matters other than the
election of directors or officers. Service of the application upon
the registered agent of the corporation shall be deemed to be service
upon the corporation, and no other party need be joined in order for
the court to adjudicate the result of the vote. The court may make
such order respecting notice of the application as it deems proper
under the circumstances.
C. If one or more directors has been convicted of a felony in
connection with the duties of such director or directors to the
corporation, or if there has been a prior judgment on the merits by a
court of competent jurisdiction that one or more directors has
committed a breach of the duty of loyalty in connection with the
duties of such director or directors to that corporation, then, upon
application by the corporation, or derivatively in the right of the
corporation by any shareholder, in a subsequent action brought for
such purpose, the district court may remove from office such director
or directors if the court determines that the director or directors
did not act in good faith in performing the acts resulting in the
prior conviction or judgment and judicial removal is necessary to
avoid irreparable harm to the corporation. In connection with such
removal, the court may make such orders as are necessary to effect
such removal. In any such application, service of copies of the
application upon the registered agent of the corporation shall be
deemed to be service upon the corporation and upon the director or
directors whose removal is sought; and the registered agent shall
forward immediately a copy of the application to the corporation and
to such director or directors, in a postpaid, sealed, registered
letter addressed to such corporation and such director or directors
at their post office addresses last known to the registered agent or
furnished to the registered agent by the applicant. The court may
4(#$0&($"!$"+$ -*8
make such order respecting further or other notice of such
application as it deems proper under the circumstances.
Added by Laws 1986, c. 292, § 70, eff. Nov. 1, 1986. Amended by Laws
2004, c. 255, § 16, eff. Nov. 1, 2004; Laws 2017, c. 323, § 18, eff.
Nov. 1, 2017.
§18-1071. Appointment of custodian or receiver of corporation on
deadlock or for other cause.
APPOINTMENT OF CUSTODIAN OR RECEIVER OF CORPORATION
ON DEADLOCK OR FOR OTHER CAUSE
A. The district court, upon application of any shareholder, may
appoint one or more persons to be custodians, and, if the corporation
is insolvent, to be receivers, of and for any corporation when:
1. At any meeting held for the election of directors the
shareholders are so divided that they have failed to elect successors
to directors whose terms have expired or would have expired upon
qualification of their successors;
2. The business of the corporation is suffering or is threatened
with irreparable injury because the directors are so divided
respecting the management of the affairs of the corporation that the
required vote for action by the board of directors cannot be obtained
and the shareholders are unable to terminate this division; or
3. The corporation has abandoned its business and has failed
within a reasonable time to take steps to dissolve, liquidate or
distribute its assets.
B. A custodian appointed pursuant to the provisions of this
section shall have all the powers and title of a receiver appointed
by the court under applicable law, but the authority of the custodian
is to continue the business of the corporation and not to liquidate
its affairs and distribute its assets, except when the court shall
otherwise order and except in cases arising pursuant to paragraph 3
of subsection A of this section.
C. In the case of a charitable nonstock corporation, the
applicant shall provide a copy of any application referred to in
subsection A of this section to the Attorney General of this state
within one (1) week of its filing with the district court.
Added by Laws 1986, c. 292, § 71, eff. Nov. 1, 1986. Amended by Laws
2019, c. 88, § 12, eff. Nov. 1, 2019.
§18-1072. Powers of court in elections of directors.
POWERS OF COURT IN ELECTIONS OF DIRECTORS
A. The district court, in any proceeding instituted pursuant to
the provisions of Section 1056, 1060 or 1070 of this title, may
determine the right and power of persons claiming to own stock, or in
the case of a corporation without capital stock, of the persons
claiming to be members, to vote at any meeting of the shareholders.
4(#$0&($"!$"+$ -*8*
B. The district court may appoint a master to hold any election
provided for in Section 1056, 1060 or 1070 of this title under such
orders and powers as it deems proper; and it may punish any officer
or director for contempt in case of disobedience of any order made by
the court; and, in case of disobedience by a corporation of any order
made by the court, may enter a decree against such corporation for a
penalty of not more than Five Thousand Dollars ($5,000.00).
Added by Laws 1986, c. 292, § 72, eff. Nov. 1, 1986. Amended by Laws
2019, c. 88, § 13, eff. Nov. 1, 2019.
§18-1073. Consent of shareholders in lieu of meeting.
CONSENT OF SHAREHOLDERS IN LIEU OF MEETING
A. Unless otherwise provided for in the certificate of
incorporation, any action required by the provisions of the Oklahoma
General Corporation Act to be taken at any annual or special meeting
of shareholders of a corporation or any action which may be taken at
any annual or special meeting of shareholders, may be taken without a
meeting, without prior notice, and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take
the action at a meeting at which all shares entitled to vote thereon
were present and voted and shall be delivered to the corporation by
delivery to its registered office in this state, its principal place
of business, or an officer or agent of the corporation having custody
of the book in which proceedings of meetings of shareholders are
recorded. Delivery made to a corporation's registered office shall
be by hand or by certified or registered mail, return receipt
requested.
B. Unless otherwise provided for in the certificate of
incorporation, any action required by the provisions of the Oklahoma
General Corporation Act to be taken at a meeting of the members of a
nonstock corporation, or any action which may be taken at any meeting
of the members of a nonstock corporation, may be taken without a
meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action taken, shall be signed
by members having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at
which all members having a right to vote thereon were present and
voted and shall be delivered to the corporation by delivery to its
registered office in this state, its principal place of business, or
an officer or agent of the corporation having custody of the book in
which proceedings of meetings of shareholders are recorded. Delivery
made to a corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested.
C. 1. A telegram, cablegram or other electronic transmission
consenting to an action to be taken and transmitted by a shareholder,
4(#$0&($"!$"+$ -*8
member or proxyholder, or by a person or persons authorized to act
for a shareholder, member or proxyholder, shall be deemed to be
written, signed and dated for the purposes of this section; provided
that any telegram, cablegram or other electronic transmission sets
forth or is delivered with information from which the corporation can
determine:
a. that the telegram, cablegram or other electronic
transmission was transmitted by the shareholder, member
or proxyholder or by a person or persons authorized to
act for the shareholder, member or proxyholder, and
b. the date on which the shareholder, member or
proxyholder or authorized person or persons transmitted
the telegram, cablegram or electronic transmission.
The date on which the telegram, cablegram or electronic
transmission is transmitted shall be deemed to be the date on which
the consent was signed. No consent given by telegram, cablegram or
other electronic transmission shall be deemed to have been delivered
until the consent is reproduced in paper form and until the paper
form shall be delivered to the corporation by delivery to its
registered office in this state, its principal place of business or
an officer or agent of the corporation having custody of the book in
which proceedings of meetings of shareholders or members are
recorded. Delivery made to a corporation's registered office shall
be made by hand or by certified or registered mail, return receipt
requested. Notwithstanding the foregoing limitations on delivery,
consents given by telegram, cablegram or other electronic
transmission may be otherwise delivered to the principal place of
business of the corporation or to an officer or agent of the
corporation having custody of the book in which proceedings of
meetings of shareholders or members are recorded if, to the extent
and in the manner provided by resolution of the board of directors or
governing body of the corporation.
2. Any copy, facsimile or other reliable reproduction of a
consent in writing may be substituted or used in lieu of the original
writing for any and all purposes for which the original writing could
be used; provided that the copy, facsimile or other reliable
reproduction shall be a complete reproduction of the entire original
writing.
D. Every written consent shall bear the date of signature of
each shareholder or member who signs the consent and no written
consent shall be effective to take the corporate action referred to
therein unless, within sixty (60) days of the earliest dated consent
delivered in the manner required by this section to the corporation,
written consents signed by a sufficient number of holders or members
to take action are delivered to the corporation by delivery to its
registered office in this state, its principal place of business, or
an officer or agent of the corporation having custody of the book in
4(#$0&($"!$"+$ -*82
which proceedings of meetings of shareholders are recorded. Delivery
made to a corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested. Any person
executing a consent may provide, whether through instruction to an
agent or otherwise, that such a consent will be effective at a future
time, including a time determined upon the happening of an event, no
later than sixty (60) days after such instruction is given or such
provision is made and, for the purposes of this section, if evidence
of such instruction or provision is provided to the corporation, such
later effective time shall serve as the date of signature. Unless
otherwise provided, any such consent shall be revocable prior to its
becoming effective.
E. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to
those shareholders or members, as the case may be, who have not
consented in writing and who, if the action had been taken at a
meeting, would have been entitled to notice of the meeting if the
record date for notice of the meeting had been the date that written
consents signed by a sufficient number of shareholders or members to
take the action were delivered to the corporation as provided in
subsection B of this section. In the event that the action for which
consent is given is an action that would have required the filing of
a certificate under any other section of this title if the action had
been voted on by shareholders or by members at a meeting thereof the
certificate filed under the other section shall state, in lieu of any
statement required by the section concerning any vote of shareholders
or members, that written consent has been given in accordance with
the provisions of this section.
Added by Laws 1986, c. 292, § 73, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 12, eff. Nov. 1, 1988; Laws 1991, c. 53, § 1, eff.
Sept. 1, 1991; Laws 1998, c. 422, § 13, eff. Nov. 1, 1998; Laws 2001,
c. 405, § 15, eff. Nov. 1, 2001; Laws 2004, c. 255, § 17, eff. Nov.
1, 2004; Laws 2010, c. 384, § 106, eff. Sept. 1, 2010; Laws 2017, c.
323, § 19, eff. Nov. 1, 2017.
§18-1074. Waiver of notice.
WAIVER OF NOTICE
Whenever notice is required to be given under any provision of
the Oklahoma General Corporation Act or of the certificate of
incorporation or bylaws, a written waiver thereof, signed by the
person entitled to notice, or a waiver by electronic transmission by
the person entitled to notice, whether before or after the time
stated therein, shall be deemed equivalent to notice. Attendance of
a person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully
4(#$0&($"!$"+$ -*8:
called or convened. Neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the shareholders,
directors, or members of a committee of directors need be specified
in any written waiver of notice or any waiver by electronic
transmission unless so required by the certificate of incorporation
or the bylaws.
Added by Laws 1986, c. 292, § 74, eff. Nov. 1, 1986. Amended by Laws
2001, c. 405, § 16, eff. Nov. 1, 2001.
§18-1075. Exception to requirements of notice.
EXCEPTION TO REQUIREMENTS OF NOTICE
A. Whenever notice is required to be given, pursuant to any
provision of this title or of the certificate of incorporation or
bylaws of any corporation, to any person with whom communication is
unlawful, the giving of such notice to such person shall not be
required and there shall be no duty to apply to any governmental
authority or agency for a license or permit to give such notice to
such person. Any action or meeting which shall be taken or held
without notice to any such person with whom communication is unlawful
shall have the same force and effect as if such notice had been duly
given. In the event that the action taken by the corporation is such
as to require the filing of a certificate under any of the other
sections of this title, the certificate shall state, if such is the
fact and if notice is required, that notice was given to all persons
entitled to receive notice except such persons with whom
communication is unlawful.
B. Whenever notice is required to be given pursuant to any
provision of the Oklahoma General Corporation Act or the certificate
of incorporation or bylaws of any corporation, to any shareholder or,
if the corporation is a nonstock corporation, to any member to whom:
1. Notice of two consecutive annual meetings and all notices of
meetings or of the taking of action by written consent without a
meeting to such person during the period between such two consecutive
annual meetings; or
2. All, and at least two, payments, if sent by first-class mail,
of dividends or interest on securities during a twelve-month period,
have been mailed addressed to such person at the person’s address as
shown on the records of the corporation and have been returned
undeliverable, the giving of such notice to such person shall not be
required. Any action or meeting which shall be taken or held without
notice to such person shall have the same force and effect as if such
notice had been duly given. If any such person shall deliver to the
corporation a written notice setting forth the person’s then current
address, the requirement that notice be given to such person shall be
reinstated. In the event that the action taken by the corporation is
such as to require the filing of a certificate under any of the other
sections of this act, the certificate need not state that notice was
4(#$0&($"!$"+$ -*88
not given to persons to whom notice was not required to be given
pursuant to the provisions of this subsection.
C. The exception in paragraph 1 of subsection B to the
requirement that notice be given shall not be applicable to any
notice returned as undeliverable if the notice was given by
electronic transmission.
Added by Laws 1986, c. 292, § 75, eff. Nov. 1, 1986. Amended by Laws
2001, c. 405, § 17, eff. Nov. 1, 2001.
§18-1075.1. Voting procedures and inspectors of elections.
VOTING PROCEDURES AND INSPECTORS OF ELECTIONS
A. The corporation shall, in advance of any meeting of
shareholders, appoint one or more inspectors to act at the meeting
and make a written report thereof. The corporation may designate one
or more persons as alternate inspectors to replace any inspector who
fails to act. If no inspector or alternate is able to act at a
meeting of shareholders, the person presiding at the meeting shall
appoint one or more inspectors to act at the meeting. Each
inspector, before entering upon the discharge of the duties of
inspector, shall take and sign an oath faithfully to execute the
duties of inspector with strict impartiality and according to the
best of the inspector’s ability.
B. The inspectors shall:
1. Ascertain the number of shares outstanding and the voting
power of each;
2. Determine the shares represented at a meeting and the
validity of proxies and ballots;
3. Count all votes and ballots;
4. Determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the
inspectors; and
5. Certify their determination of the number of shares
represented at the meeting, and their count of all votes and ballots.
The inspectors may appoint or retain other persons or entities to
assist the inspectors in the performance of the duties of the
inspectors.
C. The date and time of the opening and the closing of the polls
for each matter upon which the shareholders will vote at a meeting
shall be announced at the meeting. No ballot, proxies or votes, nor
any revocations thereof or changes thereto, shall be accepted by the
inspectors after the closing of the polls unless the district court
upon application by a shareholder shall determine otherwise.
D. In determining the validity and counting of proxies and
ballots, the inspectors shall be limited to an examination of the
proxies, any envelopes submitted with those proxies, any information
provided in accordance with subsection E of Section 1056 or paragraph
2 of subsection C of Section 1057 of this title, or any information
4(#$0&($"!$"+$ -*8
provided pursuant to divisions (1) or (3) of subparagraph b of
paragraph 2 of subsection A of Section 1056 of this title, ballots
and the regular books and records of the corporation, except that the
inspectors may consider other reliable information for the limited
purpose of reconciling proxies and ballots submitted by or on behalf
of banks, brokers, their nominees or similar persons which represent
more votes than the holder of a proxy is authorized by the record
owner to cast or more votes than the shareholder holds of record. If
the inspectors consider other reliable information for the limited
purpose permitted herein, the inspectors at the time they make their
certification pursuant to paragraph 5 of subsection B of this section
shall specify the precise information considered by them including
the person or persons from whom they obtained the information, when
the information was obtained, the means by which the information was
obtained and the basis for the inspectors’ belief that the
information is accurate and reliable.
E. Unless otherwise provided in the certificate of incorporation
or bylaws, this section shall not apply to a corporation that does
not have a class of voting stock that is:
1. Listed on a national securities exchange;
2. Authorized for quotation on an interdealer quotation system
of a registered national securities association; or
3. Held of record by more than 2,000 shareholders.
Added by Laws 2001, c. 405, § 18, eff. Nov. 1, 2001.
§18-1075.2. Electronic notice – Effectiveness - Revocation of
consent.
ELECTRONIC NOTICE; EFFECTIVENESS; REVOCATION OF CONSENT
A. Without limiting the manner of which notice otherwise may be
given effectively to shareholders, any notice to shareholders given
by the corporation under any provision of the Oklahoma General
Corporation Act, the certificate of incorporation, or the bylaws
shall be effective if given by a form of electronic transmission
consented to by the shareholder to whom the notice is given. The
consent shall be revocable by the shareholder by written notice to
the corporation. The consent shall be deemed revoked if:
1. The corporation is unable to deliver by electronic
transmission two consecutive notices given by the corporation in
accordance with the consent; and
2. The inability becomes known to the secretary or an assistant
secretary of the corporation or to the transfer agent, or other
person responsible for the giving of notice; provided, however, the
inadvertent failure to treat the inability as a revocation shall not
invalidate any meeting or other action.
B. Notice given pursuant to subsection A of this section shall
be deemed given if by:
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1. Facsimile telecommunication, when directed to a number at
which the shareholder has consented to receive notice;
2. Electronic mail, when directed to an electronic mail address
at which the shareholder has consented to receive notice;
3. A posting on an electronic network together with separate
notice to the shareholder of the specific posting, upon the later of:
a. the posting, and
b. the giving of the separate notice; and
4. Any other form of electronic transmission, when directed to
the shareholder in accordance with the shareholder's consent.
An affidavit of the secretary or an assistant secretary or of the
transfer agent or other agent of the corporation that the notice has
been given by a form of electronic transmission shall, in the absence
of fraud, be prima facie evidence of the facts stated therein.
C. For purposes of the Oklahoma General Corporation Act,
"electronic transmission" means any form of communication, not
directly involving the physical transmission of paper, that creates a
record that may be retained, retrieved, and reviewed by a recipient
thereof, and that may be directly reproduced in paper form by such a
recipient through an automated process.
D. This section shall not apply to Sections 1045 or 1111 of this
title.
Added by Laws 2001, c. 405, § 19, eff. Nov. 1, 2001. Amended by Laws
2019, c. 88, § 14, eff. Nov. 1, 2019.
§18-1075.3. Single written notice to shareholders sharing an
address.
SINGLE WRITTEN NOTICE TO SHAREHOLDERS SHARING AN ADDRESS
A. Without limiting the manner by which notice otherwise may be
given effectively to shareholders, any notice to shareholders given
by the corporation under any provision of the Oklahoma General
Corporation Act, the certificate of incorporation, or the bylaws
shall be effective if given by a single written notice to
shareholders who share an address if consented to by the shareholders
at that address to whom such notice is given. Any such consent shall
be revocable by the shareholder by written notice to the corporation.
B. Any shareholder who fails to object in writing to the
corporation, within sixty (60) days of having been given written
notice by the corporation of its intention to send the single notice
permitted under subsection A of this section, shall be deemed to have
consented to receiving such single written notice.
C. This section shall not apply to Section 1045, 1111, 1119 or
1120 of this title.
Added by Laws 2004, c. 255, § 18, eff. Nov. 1, 2004. Amended by Laws
2019, c. 88, § 15, eff. Nov. 1, 2019.
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§18-1076. Amendment of certificate of incorporation before receipt
of payment for stock.
AMENDMENT OF CERTIFICATE OF INCORPORATION BEFORE
RECEIPT OF PAYMENT FOR STOCK
A. Before a corporation has received any payment for any of its
stock, or before it has any members, as applicable, it may amend its
certificate of incorporation at any time or times, in any and as many
respects as may be desired, so long as its certificate of
incorporation as amended would contain only such provisions as it
would be lawful and proper to insert in an original certificate of
incorporation filed at the time of filing the amendment.
B. The amendment of certificate of incorporation authorized by
the provisions of this section shall be adopted by a majority of the
incorporators, if directors were not named in the original
certificate of incorporation or have not yet been elected, or, if
directors were named in the original certificate of incorporation or
have been elected and have qualified, by a majority of the directors.
A certificate setting forth the amendment and certifying that the
corporation has not received any payment for any of its stock, or
that the corporation has no members, as applicable, and that the
amendment has been duly adopted in accordance with the provisions of
this section shall be executed, acknowledged and filed in accordance
with the provisions of Section 1007 of this title. Upon such filing,
the corporation's certificate of incorporation shall be deemed to be
amended accordingly as of the date on which the original certificate
of incorporation became effective, except as to those persons who are
substantially and adversely affected by the amendment and as to those
persons the amendment shall be effective from the filing date.
C. This section shall apply to a nonstock corporation before
such a corporation has any members; provided, however, that all
references to directors shall be deemed to be references to members
of the governing body of the corporation.
Added by Laws 1986, c. 292, § 76, eff. Nov. 1, 1986. Amended by Laws
2019, c. 88, § 16, eff. Nov. 1, 2019.
§18-1077. Amendment of certificate of incorporation after receipt of
payment for stock - Nonstock corporations.
AMENDMENT OF CERTIFICATE OF INCORPORATION AFTER RECEIPT OF PAYMENT
FOR STOCK - NONSTOCK CORPORATIONS
A. 1. After a corporation has received payment for any of its
capital stock, or after a nonstock corporation has members, it may
amend its certificate of incorporation, from time to time, in any and
as many respects as may be desired, so long as its certificate of
incorporation as amended would contain only such provisions as it
would be lawful and proper to insert in an original certificate of
incorporation filed at the time of the filing of the amendment; and
if a change in stock or the rights of shareholders, or an exchange,
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reclassification, subdivision, combination, or cancellation of stock
or rights of shareholders is to be made, such provisions as may be
necessary to effect such change, exchange, reclassification,
subdivision, combination, or cancellation. In particular, and
without limitation upon the general power of amendment, a corporation
may amend its certificate of incorporation, from time to time, so as:
a. to change its corporate name,
b. to change, substitute, enlarge or diminish the nature
of its business or its corporate powers and purposes,
c. to increase or decrease its authorized capital stock or
to reclassify the same, by changing the number, par
value, designations, preferences, or relative,
participating, optional, or other special rights of the
shares, or the qualifications, limitations or
restrictions of such rights, or by changing shares with
par value into shares without par value, or shares
without par value into shares with par value either
with or without increasing or decreasing the number of
shares or by subdividing or combining the outstanding
shares of any class or series of a class of shares into
a greater or lesser number of outstanding shares,
d. to cancel or otherwise affect the right of the holders
of the shares of any class to receive dividends which
have accrued but have not been declared,
e. to create new classes of stock having rights and
preferences either prior and superior or subordinate
and inferior to the stock of any class then authorized,
whether issued or unissued,
f. to change the period of its duration, or
g. to delete (1) such provisions of the original
certificate of incorporation which named the
incorporator or incorporators, the initial board of
directors and the original subscribers for shares, and
(2) such provisions contained in any amendment to the
certificate of incorporation as were necessary to
effect a change, exchange, reclassification,
subdivision, combination or cancellation of stock, if
such change, exchange, reclassification, subdivision,
combination or cancellation has become effective.
2. Any or all changes or alterations provided for in paragraph 1
of this subsection may be effected by one certificate of amendment.
B. Every amendment authorized by the provisions of subsection A
of this section shall be made and effected in the following manner:
1. If the corporation has capital stock, its board of directors
shall adopt a resolution setting forth the amendment proposed,
declaring its advisability, and either calling a special meeting of
the shareholders entitled to vote in respect thereof for the
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consideration of the amendment or directing that the amendment
proposed be considered at the next annual meeting of shareholders;
provided, however, that unless otherwise expressly required by the
certificate of incorporation, no meeting or vote of shareholders
shall be required to adopt an amendment that effects only changes
described in paragraph (a) or (g) of subsection A of this section.
The special or annual meeting shall be called and held upon notice in
accordance with the provisions of Section 1067 of this title. The
notice shall set forth the amendment in full or a brief summary of
the changes to be effected thereby, unless such notice constitutes a
notice of Internet availability of proxy materials under the rules
promulgated under the Securities Exchange Act of 1934. At the
meeting a vote of the shareholders entitled to vote thereon shall be
taken for and against any proposed amendment that requires adoption
by shareholders. If no vote of shareholders is required to effect
such amendment, or if a majority of the outstanding stock entitled to
vote thereon, and a majority of the outstanding stock of each class
entitled to vote thereon as a class, has been voted in favor of the
amendment, a certificate setting forth the amendment and certifying
that the amendment has been duly adopted in accordance with the
provisions of this section shall be executed, acknowledged and filed
and shall become effective in accordance with the provisions of
Section 1007 of this title.
2. The holders of the outstanding shares of a class shall be
entitled to vote as a class upon a proposed amendment, whether or not
entitled to vote thereon by the provisions of the certificate of
incorporation, if the amendment would increase or decrease the
aggregate number of authorized shares of the class, increase or
decrease the par value of the shares of the class, or alter or change
the powers, preferences or special rights of the shares of the class
so as to affect them adversely. If any proposed amendment would
alter or change the powers, preferences or special rights of one or
more series of any class so as to affect them adversely, but shall
not so affect the entire class, then only the shares of the series so
affected by the amendment shall be considered a separate class for
the purposes of this paragraph. The number of authorized shares of
any such class or classes of stock may be increased or decreased, but
not below the number of shares thereof then outstanding, by the
affirmative vote of the holders of a majority of the stock of the
corporation entitled to vote irrespective of the provisions of this
paragraph, if so provided in the original certificate of
incorporation, in any amendment thereto which created the class or
classes of stock or which was adopted prior to the issuance of any
shares of the class or classes of stock, or in any amendment thereto
which was authorized by a resolution or resolutions adopted by the
affirmative vote of the holders of a majority of the class or classes
of stock.
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3. If the corporation is a nonstock corporation, then the
governing body thereof shall adopt a resolution setting forth the
amendment proposed and declaring its advisability. If a majority of
all the members of the governing body shall vote in favor of the
amendment, a certificate thereof shall be executed, acknowledged and
filed and shall become effective in accordance with the provisions of
Section 1007 of this title. The certificate of incorporation of any
nonstock corporation may contain a provision requiring an amendment
thereto to be approved by a specified number or percentage of the
members or of any specified class of members of the corporation in
which event the proposed amendment shall be submitted to the members
or to any specified class of members of the corporation in the same
manner, so far as applicable, as is provided for in this section for
an amendment to the certificate of incorporation of a stock
corporation; and in the event of the adoption thereof by the members,
a certificate evidencing the amendment shall be executed,
acknowledged and filed and shall become effective in accordance with
the provisions of Section 1007 of this title.
4. Whenever the certificate of incorporation shall require
action by the board of directors of a corporation other than a
nonstock corporation or by the governing body of a nonstock
corporation, by the holders of any class or series of shares or by
the members, or by the holders of any other securities having voting
power, the vote of a greater number or proportion than is required by
the provisions of the Oklahoma General Corporation Act, the provision
of the certificate of incorporation requiring a greater vote shall
not be altered, amended, or repealed except by a greater vote.
C. The resolution authorizing a proposed amendment to the
certificate of incorporation may provide that at any time prior to
the effectiveness of the filing of the amendment with the Secretary
of State, notwithstanding authorization of the proposed amendment by
the shareholders of the corporation or by the members of a nonstock
corporation, the board of directors or governing body may abandon the
proposed amendment without further action by the shareholders or
members.
Added by Laws 1986, c. 292, § 77, eff. Nov. 1, 1986. Amended by Laws
1996, c. 69, § 4, eff. Nov. 1, 1996; Laws 1998, c. 422, § 14, eff.
Nov. 1, 1998; Laws 1999, c. 421, § 12, eff. Nov. 1, 1999; Laws 2001,
c. 405, § 20, eff. Nov. 1, 2001; Laws 2017, c. 323, § 20, eff. Nov.
1, 2017.
§18-1078. Retirement of stock.
RETIREMENT OF STOCK
A. A corporation, by resolution of its board of directors, may
retire any shares of its capital stock that are issued but are not
outstanding.
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B. Whenever any shares of the capital stock of a corporation are
retired, they shall resume the status of authorized and unissued
shares of the class or series to which they belong unless the
certificate of incorporation otherwise provides. If the certificate
of incorporation prohibits the reissuance of such shares, or
prohibits the reissuance of such shares as a part of a specific
series only, a certificate stating that reissuance of the shares, as
part of the class or series, is prohibited identifying the shares and
reciting their retirement shall be executed, acknowledged and filed
and shall become effective in accordance with the provisions of
Section 1007 of this title. When such certificate becomes effective,
it shall have the effect of amending the certificate of incorporation
so as to reduce accordingly the number of authorized shares of the
class or series to which such shares belong or, if such retired
shares constitute all of the authorized shares of the class or series
to which they belong, of eliminating from the certificate of
incorporation all reference to such class or series of stock.
C. If the capital of the corporation will be reduced by or in
connection with the retirement of shares, the reduction of capital
shall be effected pursuant to the provisions of Section 1079 of this
title.
Added by Laws 1986, c. 292, § 78, eff. Nov. 1, 1986. Amended by Laws
1987, c. 146, § 5, operative Nov. 1, 1987; Laws 1988, c. 323, § 13,
eff. Nov. 1, 1988.
§18-1079. Reduction of Capital.
REDUCTION OF CAPITAL
A. A corporation, by resolution of its board of directors, may
reduce its capital in any of the following ways:
1. By reducing or eliminating the capital represented by shares
of capital stock which have been retired; or
2. By applying to an otherwise authorized purchase or redemption
of outstanding shares of its capital stock some or all of the capital
represented by the shares being purchased or redeemed, or any capital
that has not been allocated to any particular class of its capital
stock; or
3. By applying to an otherwise authorized conversion or exchange
of outstanding shares of its capital stock some or all of the capital
represented by the shares being converted or exchanged, or some or
all of any capital that has not been allocated to any particular
class of its capital stock, or both, to the extent that such capital
in the aggregate exceeds the total aggregate par value or the stated
capital of any previously unissued shares issuable upon such
conversion or exchange; or
4. By transferring to surplus:
a. some or all of the capital not represented by any
particular class of its capital stock; or
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b. some or all of the capital represented by issued shares
of its par value capital stock, which capital is in
excess of the aggregate par value of such shares; or
c. some of the capital represented by issued shares of its
capital stock without par value.
B. Notwithstanding the other provisions of this section, no
reduction of capital shall be made or effected unless the assets of
the corporation remaining after such reduction shall be sufficient to
pay any debts of the corporation for which payment has not been
otherwise provided. No reduction of capital shall release any
liability of any shareholder whose shares have not been fully paid.
Added by Laws 1986, c. 292, § 79, eff. Nov. 1, 1986.
§18-1080. Restated certificate of incorporation.
RESTATED CERTIFICATE OF INCORPORATION
A. A corporation, whenever desired, may integrate into a single
instrument all of the provisions of its certificate of incorporation
which are then in effect and operative as a result of there having up
to that time been filed with the Secretary of State one or more
certificates or other instruments pursuant to any of the sections
referred to in Section 1008 of this title, and it may at the same
time also further amend its certificate of incorporation by adopting
a restated certificate of incorporation.
B. If the restated certificate of incorporation merely restates
and integrates but does not further amend the certificate of
incorporation, as up to that time amended or supplemented by any
instrument that was filed pursuant to any of the sections mentioned
in Section 1008 of this title, it may be adopted by the board of
directors without a vote of the shareholders, or it may be proposed
by the directors and submitted by them to the shareholders for
adoption, in which case the procedure and vote required, if any, by
Section 1077 of this title for amendment of the certificate of
incorporation shall be applicable. If the restated certificate of
incorporation restates and integrates and also further amends in any
respect the certificate of incorporation, as up to that time amended
or supplemented, it shall be proposed by the directors and adopted by
the shareholders in the manner and by the vote prescribed by Section
1077 of this title or, if the corporation has not received any
payment for any of its stock, in the manner and by the vote
prescribed by Section 1076 of this title.
C. A restated certificate of incorporation shall be specifically
designated as such in its heading. It shall state, either in its
heading or in an introductory paragraph, the corporation's present
name, and, if it has been changed, the name under which it was
originally incorporated, and the date of filing of its original
certificate of incorporation with the Secretary of State. If it was
adopted by the board of directors without a vote of the shareholders,
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unless it was adopted pursuant to the provisions of Section 1076 of
this title or without a vote of members pursuant to paragraph 3 of
subsection B of Section 1077 of this title, it shall state that it
only restates and integrates and does not further amend the
provisions of the corporation's certificate of incorporation as up to
that time amended or supplemented, and that there is no discrepancy
between those provisions and the provisions of the restated
certificate. A restated certificate of incorporation may omit:
1. Such provisions of the original certificate of incorporation
which named the incorporator or incorporators, the initial board of
directors, and the original subscribers for shares; and
2. Such provisions contained in any amendment to the certificate
of incorporation as were necessary to effect a change, exchange,
reclassification, subdivision, combination or cancellation of stock,
if such change, exchange, reclassification, subdivision, combination
or cancellation has become effective.
Any such omissions shall not be deemed a further amendment.
D. A restated certificate of incorporation shall be executed,
acknowledged and filed in accordance with the provisions of Section
1007 of this title. Upon its filing with the Secretary of State, the
original certificate of incorporation, as up to that time amended or
supplemented, shall be superseded. From that time forward, the
restated certificate of incorporation, including any further
amendments or changes made thereby, shall be the certificate of
incorporation of the corporation, but the original date of
incorporation shall remain unchanged.
E. Any amendment or change effected in connection with the
restatement and integration of the certificate of incorporation shall
be subject to any other provision of the Oklahoma General Corporation
Act, not inconsistent with the provisions of this section, which
would apply if a separate certificate of amendment were filed to
effect such amendment or change.
Added by Laws 1986, c. 292, § 80, eff. Nov. 1, 1986. Amended by Laws
1996, c. 69, § 5, eff. Nov. 1, 1996; Laws 2004, c. 255, § 19, eff.
Nov. 1, 2004; Laws 2017, c. 323, § 21, eff. Nov. 1, 2017.
§18-1081. Merger or consolidation of domestic corporations.
MERGER OR CONSOLIDATION OF DOMESTIC CORPORATIONS
A. Any two or more corporations existing under the laws of this
state may merge into a single corporation, which may be any one of
the constituent corporations or may consolidate into a new
corporation formed by the consolidation, pursuant to an agreement of
merger or consolidation, as the case may be, complying and approved
in accordance with the provisions of this section.
B. The board of directors of each corporation which desires to
merge or consolidate shall adopt a resolution approving an agreement
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of merger or consolidation and declaring its advisability. The
agreement shall state:
1. The terms and conditions of the merger or consolidation;
2. The mode of carrying the same into effect;
3. In the case of a merger, the amendments or changes in the
certificate of incorporation of the surviving corporation as are
desired to be effected by the merger, which amendments or changes may
amend and restate the certificate of incorporation of the surviving
corporation in its entirety, or, if no amendments or changes are
desired, a statement that the certificate of incorporation of the
surviving corporation shall be its certificate of incorporation of
the surviving or resulting corporation;
4. In the case of a consolidation, that the certificate of
incorporation of the resulting corporation shall be as is set forth
in an attachment to the agreement;
5. The manner, if any, of converting the shares of each of the
constituent corporations into shares or other securities of the
corporation surviving or resulting from the merger or consolidation,
or of canceling some or all of the shares, and, if any shares of any
of the constituent corporations are not to remain outstanding, to be
converted solely into shares or other securities of the surviving or
resulting corporation or to be canceled, the cash, property, rights,
or securities of any other corporation or entity which the holders of
the shares are to receive in exchange for or upon conversion of the
shares and the surrender of any certificates evidencing them, which
cash, property, rights, or securities of any other corporation or
entity may be in addition to or in lieu of shares or other securities
of the surviving or resulting corporation; and
6. Other details or provisions as are deemed desirable,
including without limiting the generality of the foregoing, a
provision for the payment of cash in lieu of the issuance or
recognition of fractional shares, interests or rights, or for any
other arrangement with respect thereto, consistent with the
provisions of Section 1036 of this title. The agreement so adopted
shall be executed and acknowledged in accordance with the provisions
of Section 1007 of this title. Any of the terms of the agreement of
merger or consolidation may be made dependent upon facts
ascertainable outside of the agreement; provided, that the manner in
which these facts shall operate upon the terms of the agreement is
clearly and expressly set forth in the agreement of merger or
consolidation. The term "facts" as used in this paragraph, includes,
but is not limited to, the occurrence of any event, including a
determination or action by any person or body, including the
corporation.
C. The agreement required by the provisions of subsection B of
this section shall be submitted to the shareholders of each
constituent corporation at an annual or special meeting thereof for
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the purpose of acting on the agreement. Due notice of the time,
place, and purpose of the meeting shall be mailed to each holder of
stock whether voting or nonvoting, of the corporation at the address
which appears on the records of the corporation, at least twenty (20)
days before the date of the meeting. The notice shall contain a copy
of the agreement or a brief summary thereof; provided, however, the
notice shall be effective only with respect to mergers or
consolidations for which the notice of the shareholders meeting to
vote thereon has been mailed after November 1, 1988. At the meeting
the agreement shall be considered and a vote taken for its adoption
or rejection. If a majority of the outstanding stock of the
corporation entitled to vote thereon shall be voted for the adoption
of the agreement, that fact shall be certified on the agreement by
the secretary or the assistant secretary of the corporation;
provided, that such certification on the agreement shall not be
required if a certificate of merger or consolidation is filed in lieu
of filing the agreement. If the agreement shall be so adopted and
certified by each constituent corporation, it shall then be filed and
shall become effective in accordance with the provisions of Section
1007 of this title. In lieu of filing an agreement of merger or
consolidation required by this section, the surviving or resulting
corporation may file a certificate of merger or consolidation
executed in accordance with the provisions of Section 1007 of this
title and which states:
1. The name and state of incorporation of each of the
constituent corporations;
2. That an agreement of merger or consolidation has been
approved, adopted, executed, and acknowledged by each of the
constituent corporations in accordance with the provisions of this
section;
3. The name of the surviving or resulting corporation;
4. In the case of a merger, the amendments or changes in the
certificate of incorporation of the surviving corporation, which may
be amended and restated, that are desired to be effected by the
merger, which amendments or changes may amend and restate the
certificate of incorporation of the surviving corporation in its
entirety, or, if no amendments or changes are desired, a statement
that the certificate of incorporation of the surviving corporation
shall be its certificate of incorporation;
5. In the case of a consolidation, that the certificate of
incorporation of the resulting corporation shall be as is set forth
in an attachment to the certificate;
6. That the executed agreement of consolidation or merger is on
file at the principal place of business of the surviving corporation,
stating the address thereof; and
7. That a copy of the agreement of consolidation or merger will
be furnished by the surviving corporation, on request and without
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cost, to any shareholder of any constituent corporation. For
purposes of Sections 1084 and 1086 of this title, the term
"shareholder" shall be deemed to include "member".
D. Any agreement of merger or consolidation may contain a
provision that at any time prior to the time that the agreement, or a
certificate filed with the Secretary of State in lieu thereof,
becomes effective in accordance with Section 1007 of this title, the
agreement may be terminated by the board of directors of any
constituent corporation notwithstanding approval of the agreement by
the shareholders of all or any of the constituent corporations;
provided, if the agreement of merger or consolidation is terminated
after the filing of the agreement, or a certificate filed with the
Secretary of State in lieu thereof, but before the agreement or
certificate has become effective, a certificate of termination of
merger or consolidation shall be filed in accordance with Section
1007 of this title. Any agreement of merger or consolidation may
contain a provision that the boards of directors of the constituent
corporations may amend the agreement at any time prior to the time
that the agreement, or a certificate filed with the Secretary of
State in lieu thereof, becomes effective in accordance with Section
1007 of this title; provided, that an amendment made subsequent to
the adoption of the agreement by the shareholders of any constituent
corporation shall not:
1. Alter or change the amount or kind of shares, securities,
cash, property, or rights to be received in exchange for or on
conversion of all or any of the shares of any class or series thereof
of the constituent corporation;
2. Alter or change any term of the certificate of incorporation
of the surviving corporation to be effected by the merger or
consolidation; or
3. Alter or change any of the terms and conditions of the
agreement if an alteration or change would adversely affect the
holders of any class or series thereof of the constituent
corporation.
If the agreement of merger or consolidation is amended after the
filing of the agreement, or a certificate in lieu thereof, with the
Secretary of State, but before the agreement or certificate has
become effective, a certificate of amendment of merger or
consolidation shall be filed in accordance with Section 1007 of this
title.
E. In the case of a merger, the certificate of incorporation of
the surviving corporation shall automatically be amended to the
extent, if any, that changes in the certificate of incorporation are
set forth in the certificate of merger.
F. Notwithstanding the requirements of subsection C of this
section, unless required by its certificate of incorporation, no vote
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of shareholders of a constituent corporation surviving a merger shall
be necessary to authorize a merger if:
1. The agreement of merger does not amend in any respect the
certificate of incorporation of the constituent corporation;
2. Each share of stock of the constituent corporation
outstanding immediately prior to the effective date of the merger is
to be an identical outstanding or treasury share of the surviving
corporation after the effective date of the merger; and
3. Either no shares of common stock of the surviving corporation
and no shares, securities, or obligations convertible into such stock
are to be issued or delivered under the plan of merger, or the
authorized unissued shares or the treasury shares of common stock of
the surviving corporation to be issued or delivered under the plan of
merger plus those initially issuable upon conversion of any other
shares, securities, or obligations to be issued or delivered under
the plan do not exceed twenty percent (20%) of the shares of common
stock of the constituent corporation outstanding immediately prior to
the effective date of the merger. No vote of shareholders of a
constituent corporation shall be necessary to authorize a merger or
consolidation if no shares of the stock of the corporation shall have
been issued prior to the adoption by the board of directors of the
resolution approving the agreement of merger or consolidation. If an
agreement of merger is adopted by the constituent corporation
surviving the merger, by action of its board of directors and without
any vote of its shareholders pursuant to the provisions of this
subsection, the secretary or assistant secretary of that corporation
shall certify on the agreement that the agreement has been adopted
pursuant to the provisions of this subsection and:
a. if it has been adopted pursuant to paragraph 1 of this
subsection, that the conditions specified have been
satisfied, or
b. if it has been adopted pursuant to paragraph 2 of this
subsection, that no shares of stock of the corporation
were issued prior to the adoption by the board of
directors of the resolution approving the agreement of
merger or consolidation; provided, that such
certification on the agreement shall not be required if
a certificate of merger or consolidation is filed in
lieu of filing the agreement.
The agreement so adopted and certified shall then be filed and
shall become effective in accordance with the provisions of Section
1007 of this title. Filing shall constitute a representation by the
person who executes the certificate that the facts stated in the
certificate remain true immediately prior to filing.
G. 1. Notwithstanding the requirements of subsection C of this
section, unless expressly required by its certificate of
incorporation, no vote of shareholders of a constituent corporation
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shall be necessary to authorize a merger with or into a single direct
or indirect wholly owned subsidiary of the constituent corporation
if:
a. the constituent corporation and the direct or indirect
wholly owned subsidiary of the constituent corporation
are the only constituent entities to the merger,
b. each share or fraction of a share of the capital stock
of the constituent corporation outstanding immediately
before the effective time of the merger is converted in
the merger into a share or equal fraction of share of
capital stock of a holding company having the same
designations, rights, powers, and preferences, and the
qualifications, limitations, and restrictions thereof,
as the share of stock of the constituent corporation
being converted in the merger,
c. the holding company and the constituent corporation are
corporations of this state and the direct or indirect
wholly owned subsidiary that is the other constituent
entity to the merger is a corporation or limited
liability company of this state,
d. the certificate of incorporation and bylaws of the
holding company immediately following the effective
time of the merger contain provisions identical to the
certificate of incorporation and bylaws of the
constituent corporation immediately before the
effective time of the merger, other than provisions, if
any, regarding the incorporator or incorporators, the
corporate name, the registered office and agent, the
initial board of directors, and the initial subscribers
of shares and provisions contained in any amendment to
the certificate of incorporation as were necessary to
effect a change, exchange, reclassification,
subdivision, combination or cancellation of stock, if a
change, exchange, reclassification, or cancellation has
become effective,
e. as a result of the merger, the constituent corporation
or its successor corporation becomes or remains a
direct or indirect wholly owned subsidiary of the
holding company,
f. the directors of the constituent corporation become or
remain the directors of the holding company upon the
effective time of the merger,
g. the organizational documents of the surviving entity
immediately following the effective time of the merger
contain provisions identical to the certificate of
incorporation of the constituent corporation
immediately before the effective time of the merger,
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other than provisions, if any, regarding the
incorporator or incorporators, the corporate or entity
name, the registered office and agent, the initial
board of directors and the initial subscribers for
shares, references to members rather than shareholders,
references to interests, units or the like rather than
stock or shares, references to managers, managing
members or other members of the governing body rather
than directors and such provisions contained in any
amendment to the certificate of incorporation as were
necessary to effect a change, exchange,
reclassification, subdivision, combination or
cancellation of stock, if such change, exchange,
reclassification, subdivision, combination or
cancellation has become effective; provided, however,
that:
(1) if the organizational documents of the surviving
entity do not contain the following provisions,
they shall be amended in the merger to contain
provisions requiring that:
(a) any act or transaction by or involving the
surviving entity, other than the election or
removal of directors or managers, managing
members or other members of the governing
body of the surviving entity, that requires
for its adoption under this act or its
organizational documents the approval of the
shareholders or members of the surviving
entity shall, by specific reference to this
subsection, require, in addition, the
approval of the shareholders of the holding
company (or any successor by merger), by the
same vote as is required by this act and/or
by the organizational documents of the
surviving entity; provided, however, that for
purposes of this subdivision, any surviving
entity that is not a corporation shall
include in such amendment a requirement that
the approval of the shareholders of the
holding company be obtained for any act or
transaction by or involving the surviving
entity, other than the election or removal of
directors or managers, managing members or
other members of the governing body of the
surviving entity, which would require the
approval of the shareholders of the surviving
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entity if the surviving entity were a
corporation subject to this act,
(b) any amendment of the organizational documents
of a surviving entity that is not a
corporation, which amendment would, if
adopted by a corporation subject to this act,
be required to be included in the certificate
of incorporation of such corporation, shall,
by specific reference to this subsection,
require, in addition, the approval of the
shareholders of the holding company, or any
successor by merger, by the same vote as is
required by this act and/or by the
organizational documents of the surviving
entity, and
(c) the business and affairs of a surviving
entity that is not a corporation shall be
managed by or under the direction of a board
of directors, board of managers or other
governing body consisting of individuals who
are subject to the same fiduciary duties
applicable to, and who are liable for breach
of such duties to the same extent as,
directors of a corporation subject to this
act, and
(2) the organizational documents of the surviving
entity may be amended in the merger:
(a) to reduce the number of classes and shares of
capital stock or other equity interests or
units that the surviving entity is authorized
to issue, and
(b) to eliminate any provision authorized by
subsection D of Section 1027 of this title;
and
h. the shareholders of the constituent corporation do not
recognize gain or loss for federal income tax purposes
as determined by the board of directors of the
constituent corporation.
Neither division (1) of subparagraph g of paragraph 1 of this
subsection nor any provision of a surviving entity's organizational
documents required by division (1) of subparagraph g of paragraph 1
of this subsection shall be deemed or construed to require approval
of the shareholders of the holding company to elect or remove
directors or managers, managing members or other members of the
governing body of the surviving entity.
2. As used in this subsection, the term "holding company" means
a corporation which, from its incorporation until consummation of a
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merger governed by this subsection, was at all times a direct or
indirect wholly owned subsidiary of the constituent corporation and
whose capital stock is issued in a merger.
3. As used in this subsection, the term "organizational
documents" means, when used in reference to a corporation, the
certificate of incorporation of the corporation and, when used in
reference to a limited liability company, the articles of
organization and the operating agreement of the limited liability
company.
4. From and after the effective time of a merger adopted by a
constituent corporation by action of its board of directors and
without any vote of shareholders pursuant to this subsection:
a. to the extent the restriction of Section 1090.3 of this
title applied to the constituent corporation and its
shareholders at the effective time of the merger,
restrictions shall apply to the holding company and its
shareholders immediately after the effective time of
the merger as though it were the constituent
corporation, and all shareholders of stock of the
holding company acquired in the merger shall for
purposes of Section 1090.3 of this title be deemed to
have been acquired at the time that the shares of stock
of the constituent corporation converted in the merger
were acquired; provided, that any shareholder who
immediately before the effective time of the merger was
not an interested shareholder within the meaning of
Section 1090.3 of this title shall not solely by reason
of the merger become an interested shareholder of the
holding company,
b. if the corporate name of the holding company
immediately following the effective time of the merger
is the same as the corporate name of the constituent
corporation immediately before the effective time of
the merger, the shares of capital stock of the holding
company into which the shares of capital stock of the
constituent corporation are converted in the merger
shall be represented by the stock certificates that
previously represented the shares of capital stock of
the constituent corporation, and
c. to the extent a shareholder of the constituent
corporation immediately before the merger had standing
to institute or maintain derivative litigation on
behalf of the constituent corporation, nothing in this
section shall be deemed to limit or extinguish such
standing.
5. If any agreement of merger is adopted by a constituent
corporation by action of its board of directors and without any vote
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of shareholders pursuant to this subsection, the secretary or
assistant secretary of the constituent corporation shall certify on
the agreement that the agreement has been adopted pursuant to this
subsection and that the conditions specified in paragraph 1 of this
subsection have been satisfied; provided, that such certification on
the agreement shall not be required if a certificate of merger or
consolidation is filed in lieu of filing the agreement. The
agreement so adopted and certified shall then be filed and become
effective in accordance with Section 1007 of this title. Filing
shall constitute a representation by the person who executes the
agreement that the facts stated in the certificate remain true
immediately before the filing.
H. Notwithstanding the requirements of subsection C of this
section, unless expressly required by its certificate of
incorporation, no vote of shareholders of a constituent corporation
that has a class or series of stock that is listed on a national
securities exchange or held of record by more than two thousand
holders immediately prior to the execution of the agreement of merger
by such constituent corporation shall be necessary to authorize a
merger if:
1. The agreement of merger expressly (a) permits or requires
such merger to be effected under this subsection and (b) provides
that such merger shall be effected as soon as practicable following
the consummation of the offer referred to in paragraph 2 of this
subsection if such merger is effected under this subsection;
2. A corporation consummates an offer for all of the outstanding
stock of such constituent corporation on the terms provided in such
agreement of merger that, absent this subsection, would be entitled
to vote on the adoption or rejection of the agreement of merger;
provided, however, that such offer may be conditioned on the tender
of a minimum number or percentage of shares of the stock of such
constituent corporation, or of any class or series thereof, and such
offer may exclude any excluded stock; and provided further, that
the corporation may consummate separate offers for separate classes
or series of the stock of such constituent corporation;
3. Immediately following the consummation of the offer referred
to in paragraph 2 of this subsection, the stock irrevocably accepted
for purchase or exchange pursuant to such offer and received by the
depository prior to expiration of such offer, together with the stock
otherwise owned by the consummating corporation or its affiliates and
any rollover stock, equals at least such percentage of the shares of
stock of such constituent corporation, and of each class or series
thereof, that, absent this subsection, would be required to adopt the
agreement of merger by this chapter and by the certificate of
incorporation of such constituent corporation;
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4. The corporation consummating the offer referred to in
paragraph 2 of this subsection merges with or into such constituent
corporation pursuant to such agreement;
5. Each outstanding share, other than shares of excluded stock,
of each class or series of stock of the constituent corporation that
is the subject of and not irrevocably accepted for purchase or
exchange in the offer referred to in paragraph 2 of this subsection
is to be converted in such merger into, or into the right to receive,
the same amount and kind of cash, property, rights or securities paid
for shares of such class or series of stock of such constituent
corporation irrevocably accepted for purchase or exchange in such
offer; and
6. As used in this subsection only, the term:
a. "affiliate" means, in respect of the corporation
making the offer referred to in paragraph 2 of this
subsection, any person that (1) owns, directly or
indirectly, all of the outstanding stock of such
corporation or (2) is a direct or indirect wholly
owned subsidiary of such corporation or of any person
referred to in proviso (1) of this subparagraph,
b. "consummates", and with correlative meaning,
"consummation" and "consummating", means irrevocably
accepts for purchase or exchange stock tendered
pursuant to an offer,
c. "depository" means an agent, including a depository,
appointed to facilitate consummation of the offer
referred to in paragraph 2 of this subsection,
d. "excluded stock" means (1) stock of such constituent
corporation that is owned at the commencement of the
offer referred to in paragraph 2 of this subsection by
such constituent corporation, the corporation making
the offer referred to in paragraph 2 of this
subsection, any person that owns, directly or
indirectly, all of the outstanding stock of the
corporation making such offer, or any direct or
indirect wholly owned subsidiary of any of the
foregoing and (2) rollover stock,
e. "person" means any individual, corporation,
partnership, limited liability company, unincorporated
association or other entity,
f. "received" solely for purposes of paragraph 3 of this
subsection means (1) with respect to certificated
shares, physical receipt of a stock certificate
accompanied by an executed letter of transmittal, (2)
with respect to uncertificated shares held of record
by a clearing corporation as nominee, transfer into
the depository's account by means of an agent's
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message, and (3) with respect to uncertificated shares
held of record by a person other than a clearing
corporation as nominee, physical receipt of an
executed letter of transmittal by the depository;
provided, however, that shares shall cease to be
"received" (4) with respect to certificated shares, if
the certificate representing such shares was canceled
prior to consummation of the offer referred to in
paragraph 2 of this subsection, or (5) with respect
to uncertificated shares, to the extent such
uncertificated shares have been reduced or eliminated
due to any sale of such shares prior to consummation
of the offer referred to in paragraph 2 of this
subsection, and
g. "rollover stock" means any shares of stock of such
constituent corporation that are the subject of a
written agreement requiring such shares to be
transferred, contributed or delivered to the
consummating corporation or any of its affiliates in
exchange for stock or other equity interests in such
consummating corporation or an affiliate thereof;
provided, however, that such shares of stock shall
cease to be rollover stock for purposes of paragraph 3
of this subsection if, immediately prior to the time
the merger becomes effective under this chapter, such
shares have not been transferred, contributed or
delivered to the consummating corporation or any of
its affiliates pursuant to such written agreement.
If an agreement of merger is adopted without the vote of
shareholders of a corporation pursuant to this subsection, the
secretary or assistant secretary of the surviving corporation shall
certify on the agreement that the agreement has been adopted pursuant
to this subsection and that the conditions specified in this
subsection, other than the condition listed in paragraph 4 of this
subsection, have been satisfied; provided, that such certification on
the agreement shall not be required if a certificate of merger is
filed in lieu of filing the agreement. The agreement so adopted and
certified shall then be filed and shall become effective, in
accordance with Section 1007 of this title. Such filing shall
constitute a representation by the person who executes the agreement
that the facts stated in the certificate remain true immediately
prior to such filing.
Added by Laws 1986, c. 292, § 81, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 14, eff. Nov. 1, 1988; Laws 1998, c. 422, § 15, eff.
Nov. 1, 1998; Laws 1999, c. 421, § 13, eff. Nov. 1, 1999; Laws 2001,
c. 405, § 21, eff. Nov. 1, 2001; Laws 2004, c. 255, § 20, eff. Nov.
4(#$0&($"!$"+$ -*;
1, 2004; Laws 2008, c. 253, § 9; Laws 2017, c. 323, § 22, eff. Nov.
1, 2017.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-1082. Merger or consolidation of domestic and foreign
corporations - Service of process upon surviving or resulting
corporation.
MERGER OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPORATIONS; SERVICE
OF PROCESS UPON SURVIVING OR RESULTING CORPORATION
A. Any one or more corporations of this state may merge or
consolidate with one or more other corporations of any other state or
states of the United States, or of the District of Columbia, if the
laws of the other state or states or of the District permit a
corporation of the jurisdiction to merge or consolidate with a
corporation of another jurisdiction. The constituent corporations
may merge into a single corporation, which may be any one of the
constituent corporations, or they may consolidate into a new
corporation formed by the consolidation, which may be a corporation
of the state of incorporation of any one of the constituent
corporations, pursuant to an agreement of merger or consolidation, as
the case may be, complying and approved in accordance with the
provisions of this section. In addition, any one or more
corporations organized under the laws of any jurisdiction other than
one of the United States may merge or consolidate with one or more
corporations existing under the laws of this state if the surviving
or resulting corporation will be a corporation of this state, and if
the laws under which the other corporation or corporations are formed
permit a corporation of that jurisdiction to merge or consolidate
with a corporation of another jurisdiction.
B. All the constituent corporations shall enter into an
agreement of merger or consolidation. The agreement shall state:
1. The terms and conditions of the merger or consolidation;
2. The mode of carrying the same into effect;
3. The manner, if any, of converting the shares of each of the
constituent corporations into shares or other securities of the
corporation surviving or resulting from the merger or consolidation,
or of canceling some or all of the shares, and, if any shares of any
of the constituent corporations are not to remain outstanding, to be
converted solely into shares or other securities of the surviving or
resulting corporation or to be canceled, the cash, property, rights,
or securities of any other corporation or entity which the holder of
the shares is to receive in exchange for, or upon conversion of, the
shares and the surrender of any certificates evidencing them, which
cash, property, rights, or securities of any other corporation or
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entity may be in addition to or in lieu of the shares or other
securities of the surviving or resulting corporation;
4. Other details or provisions as are deemed desirable,
including, without limiting the generality of the foregoing, a
provision for the payment of cash in lieu of the issuance or
recognition of fractional shares of the surviving or resulting
corporation or of any other corporation the securities of which are
to be received in the merger or consolidation, or for some other
arrangement with respect thereto consistent with the provisions of
Section 1036 of this title; and
5. Other provisions or facts as shall be required to be set
forth in the certificate of incorporation by the laws of the state
which are stated in the agreement to be the laws that shall govern
the surviving or resulting corporation and that can be stated in the
case of a merger or consolidation. Any of the terms of the agreement
of merger or consolidation may be made dependent upon facts
ascertainable outside of the agreement; provided, that the manner in
which the facts shall operate upon the terms of the agreement is
clearly and expressly set forth in the agreement of merger or
consolidation. The term "facts" as used in this paragraph, includes,
but is not limited to, the occurrence of any event, including a
determination or action by any person or body, including the
corporation.
C. The agreement shall be adopted, approved, executed, and
acknowledged by each of the constituent corporations in accordance
with the laws under which it is formed, and, in the case of an
Oklahoma corporation, in the same manner as is provided for in
Section 1081 of this title. The agreement shall be filed and shall
become effective for all purposes of the laws of this state when and
as provided for in Section 1081 of this title with respect to the
merger or consolidation of corporations of this state. In lieu of
filing the agreement of merger or consolidation, the surviving or
resulting corporation may file a certificate of merger or
consolidation executed in accordance with the provisions of Section
1007 of this title, which states:
1. The name and state of incorporation of each of the
constituent corporations;
2. That an agreement of merger or consolidation has been
approved, adopted, executed, and acknowledged by each of the
constituent corporations in accordance with the provisions of this
subsection;
3. The name of the surviving or resulting corporation;
4. In the case of a merger, the amendments or changes in the
certificate of incorporation of the surviving corporation, which may
be amended and restated, that are effected by the merger, which
amendments or changes may amend and restate the certificate of
incorporation of the surviving corporation in its entirety, or, if no
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amendments or changes are desired, a statement that the certificate
of incorporation of the surviving corporation shall be its
certificate of incorporation;
5. In the case of a consolidation, that the certificate of
incorporation of the resulting corporation shall be as is set forth
in an attachment to the certificate;
6. That the executed agreement of consolidation or merger is on
file at the principal place of business of the surviving corporation,
and the address thereof;
7. That a copy of the agreement of consolidation or merger will
be furnished by the surviving corporation, on request and without
cost, to any shareholder of any constituent corporation;
8. If the corporation surviving or resulting from the merger or
consolidation is to be a domestic corporation, the authorized capital
stock of each constituent corporation which is not a domestic
corporation; and
9. The agreement, if any, required by the provisions of
subsection D of this section. For purposes of Section 1085 of this
title, the term "shareholder" in subsection D of this section shall
be deemed to include "member".
D. If the corporation surviving or resulting from the merger or
consolidation is to be governed by the laws of the District of
Columbia or any state other than this state, it shall agree that it
may be served with process in this state in any proceeding for
enforcement of any obligation of any constituent corporation of this
state, as well as for enforcement of any obligation of the surviving
or resulting corporation arising from the merger or consolidation,
including any suit or other proceeding to enforce the right of any
shareholders as determined in appraisal proceedings pursuant to the
provisions of Section 1091 of this title, and shall irrevocably
appoint the Secretary of State as its agent to accept service of
process in any suit or other proceedings and shall specify the
address to which a copy of process shall be mailed by the Secretary
of State. In the event of service upon the Secretary of State in
accordance with the provisions of Section 2004 of Title 12 of the
Oklahoma Statutes, the Secretary of State shall immediately notify
the surviving or resulting corporation thereof by letter, certified
mail, return receipt requested, directed to the surviving or
resulting corporation at the address specified unless the surviving
or resulting corporation shall have designated in writing to the
Secretary of State a different address for this purpose, in which
case it shall be mailed to the last address so designated. The
notice shall include a copy of the process and any other papers
served on the Secretary of State pursuant to the provisions of this
subsection. It shall be the duty of the plaintiff in the event of
such service to serve process and any other papers in duplicate, to
notify the Secretary of State that service is being effected pursuant
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to the provisions of this subsection, and to pay the Secretary of
State the fee provided for in paragraph 7 of subsection A of Section
1142 of this title, which fee shall be taxed as part of the costs in
the proceeding. The Secretary of State shall maintain an
alphabetical record of any such service setting forth the name of the
plaintiff and the defendant, the title, docket number, and nature of
the proceeding in which process has been served upon the Secretary of
State, the fact that service has been effected pursuant to the
provisions of this subsection, the return date thereof, and the date
service was made. The Secretary of State shall not be required to
retain such information longer than five (5) years from receipt of
the service of process by the Secretary of State.
E. The provisions of subsection D of Section 1081 of this title
shall apply to any merger or consolidation pursuant to the provisions
of this section. The provisions of subsection E of Section 1081 of
this title shall apply to a merger pursuant to the provisions of this
section in which the surviving corporation is a corporation of this
state. The provisions of subsections F and H of Section 1081 of this
title shall apply to any merger pursuant to the provisions of this
section.
Added by Laws 1986, c. 292, § 82, eff. Nov. 1, 1986. Amended by Laws
1987, c. 146, § 6, operative Nov. 1, 1987; Laws 1988, c. 323, § 15,
eff. Nov. 1, 1988; Laws 1998, c. 422, § 16, eff. Nov. 1, 1998; Laws
1999, c. 421, § 14, eff. Nov. 1, 1999; Laws 2004, c. 255, § 21, eff.
Nov. 1, 2004; Laws 2008, c. 253, § 10; Laws 2017, c. 323, § 23, eff.
Nov. 1, 2017.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-1083. Merger of parent corporation and subsidiary corporation or
corporations.
MERGER OF PARENT CORPORATION AND SUBSIDIARY
CORPORATION OR CORPORATIONS
A. In any case in which at least ninety percent (90%) of the
outstanding shares of each class of stock of a corporation or
corporations, other than a corporation which has in its certificate
of incorporation the provision required by division (1) of
subparagraph g of paragraph 1 of subsection G of Section 1081 of this
title of which class there are outstanding shares that, absent this
subsection, would be entitled to vote on such merger, is owned by a
domestic corporation or a foreign corporation, and one or more of
such corporations is a domestic corporation, unless the laws of the
jurisdiction or jurisdictions under which the foreign corporation or
corporations are organized prohibit such merger, the parent
corporation may either merge the subsidiary corporation or
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corporations into itself and assume all of its or their obligations,
or merge itself, or itself and one or more of the other subsidiary
corporations, into one of the other subsidiary corporations by
executing, acknowledging, and filing, in accordance with the
provisions of Section 1007 of this title, a certificate of ownership
and merger setting forth a copy of the resolution of its board of
directors to merge and the date of its adoption; provided, however,
that in case the parent corporation shall not own all the outstanding
stock of all the subsidiary corporations which are parties to the
merger, the resolution of the board of directors of the parent
corporation shall state the terms and conditions of the merger,
including the securities, cash, property, or rights to be issued,
paid, delivered, or granted by the surviving corporation upon
surrender of each share of the subsidiary corporation or corporations
not owned by the parent corporation or the cancellation of some or
all of the shares. Any of the terms of the resolution of the board
of directors to so merge may be made dependent upon facts
ascertainable outside of such resolution, provided that the manner in
which such facts shall operate upon the terms of the resolution is
clearly and expressly set forth in the resolution. The term "facts",
as used in the preceding sentence includes, but is not limited to,
the occurrence of any event including a determination or action by
any person or body, including the corporation. If the parent
corporation is not the surviving corporation, the resolution shall
include provision for the pro rata issuance of stock of the surviving
corporation to the holders of the stock of the parent corporation on
surrender of any certificates therefor, and the certificate of
ownership and merger shall state that the proposed merger has been
approved by a majority of the outstanding stock of the parent
corporation entitled to vote thereon at a meeting thereof duly called
and held after twenty (20) days' notice of the purpose of the meeting
is mailed to each shareholder at the shareholder's address as it
appears on the records of the corporation if the parent corporation
is a domestic corporation or shall state that the proposed merger has
been adopted, approved, certified, executed, and acknowledged by the
parent corporation in accordance with the laws under which it is
organized if the parent corporation is a foreign corporation. If the
surviving corporation is a foreign corporation, the provisions of
subsection D of Section 1082 of this title or subsection C of Section
1087 of this title, as applicable, shall also apply to a merger
pursuant to the provisions of this section, and the terms and
conditions of the merger shall obligate the surviving corporation to
provide the agreement, and take the actions, required by subsection D
of Section 1082 of this title or subsection C of Section 1087 of this
title, as applicable.
B. Subject to the provisions of paragraph 1 of subsection A of
Section 1006 of this title, if the surviving corporation is an
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Oklahoma corporation, it may change its corporate name by the
inclusion of a provision to that effect in the resolution of merger
adopted by the directors of the parent corporation and set forth in
the certificate of ownership and merger, and upon the effective date
of the merger, the name of the corporation shall be changed.
C. The provisions of subsection D of Section 1081 of this title
shall apply to a merger pursuant to the provisions of this section,
and the provisions of subsection E of Section 1081 of this title
shall apply to a merger pursuant to the provisions of this section in
which the surviving corporation is the subsidiary corporation and is
a domestic corporation. For purposes of this subsection, references
to "agreement of merger" in subsections D and E of Section 1081 of
this title shall mean the resolution of merger adopted by the board
of directors of the parent corporation. Any merger which effects any
changes other than those authorized by the provisions of this section
or made applicable by this subsection shall be accomplished in
accordance with the provisions of Section 1081, 1082, 1083.1, 1085 or
1087 of this title. The provisions of Section 1091 of this title
shall not apply to any merger effected pursuant to the provisions of
this section, except as provided for in subsection D of this section.
D. In the event all of the stock of a subsidiary Oklahoma
corporation party to a merger effected pursuant to the provisions of
this section is not owned by the parent corporation immediately prior
to the merger, the shareholders of the subsidiary Oklahoma
corporation party to the merger shall have appraisal rights as set
forth in Section 1091 of this title.
E. This section shall apply to nonstock corporations if the
parent corporation is such a corporation and is the surviving
corporation of the merger; provided, however, that references to the
directors of the parent corporation shall be deemed to be references
to members of the governing body of the parent corporation, and
references to the board of directors of the parent corporation shall
be deemed to be references to the governing body of the parent
corporation.
F. Nothing in this section shall be deemed to authorize the
merger of a corporation with a charitable nonstock corporation, if
the charitable status of such charitable nonstock corporation would
thereby be lost or impaired.
Added by Laws 1986, c. 292, § 83, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 16, eff. Nov. 1, 1988; Laws 1998, c. 422, § 17, eff.
Nov. 1, 1998; Laws 2001, c. 405, § 22, eff. Nov. 1, 2001; Laws 2004,
c. 255, § 22, eff. Nov. 1, 2004; Laws 2019, c. 88, § 17, eff. Nov. 1,
2019.
§18-1083.1. Merger of parent entity and subsidiary corporation or
corporations.
MERGER
OF
PARENT ENTITY AND SUBSIDIARY
4(#$0&($"!$"+$ -7
CORPORATION O
R
CORPORATIONS
A. In any case in
which:
1. At least ninety percent ( 90%) of the
outstanding
shares of
each class of the stock of
a
corporation
or
corporations,
other
than a
corporation
which has in its c
ertificate of
incorporation
the
provision
required by division (1) of
subparagraph
g of
paragraph
1
of
subsection
G of Section 1081 of Title 18 of the
Oklahoma Statutes, of which class there are
outstanding
shares
that,
absent this
subsection,
would be entitled to vote on such
merger, is owned by an
entity;
2. One or more of such
corporations
is a
corporation
of this
state;
and
3. Any entity or
corporation
that is not an entity or
corporation
of this state
is
an entity or
corporation
of any
other state or the District of
Columbia,
the laws of
which
do not
forbid such merger, the entity having such stock
ownership
may
either merge
the
corporation
or
corporations
into itself and
assume all of its or their
obligations,
or
merge
itself, or
itself and one or more of such
corporations,
into one of the
other
corporations
by:
a. authorizing
such merger in
accordance
with such
entity's governing
documents and the laws of the
jurisdiction
under which such entity is formed
or
organize
d,
and
b.
acknowledging
and filing with the
Secretary
of
State, in
accordance with
Section 1007 of Title 18
of the Oklahoma Statutes, a
certificate
of such
ownership
and merger
certifying:
(1) that such merger was
authorized
in
accordance
with such
entity's
governing documents
and the
laws of the
jurisdiction
under which
such
entity is formed or
organized,
such
certificate
executed
in
accordance with
such
entity's
governing documents
and in
accordance
with the
laws of
the
jurisdiction
under which such
entity is formed or
organized, and
(2) the type of entity of each
constituent
entity
to the merger;
provided,
however,
that in case
the entity shall not own all the
outstanding
stock
of
all the
corporations,
parties to a
merger as
aforesaid:
(a) the
certificate
of
ownership
and merger
shall state the terms
and
conditions
of
the merger,
including
the
securities,
cash,
property, or
rights to be issued,
paid,
delivered
or granted by the
surviving constituent
party upon
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surrender
of each share of the
corporation or corporations
not owned by
the entity, or the
cancellation
of some or
all
of such shares,
and
(b) such terms and
conditions
of the merger
may not result in a holder
of
stock in a
corporation becoming
a general partner in
a
surviving entity
that is a
partnership,
other than a limited
liability partnership
or
a
limited
liability
limited
partnership.
Any of the terms of the merger may be made dependent upon facts
ascertainable outside of the certificate of ownership and merger,
provided that the manner in which such facts shall operate upon the
terms of the merger is clearly and expressly set forth in the
certificate of ownership and merger. The term "facts", as used in
the preceding sentence, includes, but is not limited to, the
occurrence of any event including a determination or action by any
person or body, including the entity. If the surviving constituent
party exists under the laws of the District of Columbia or any state
or jurisdiction other than this state, subsection D of Section 1082
of Title 18 of the Oklahoma Statutes shall also apply to a merger
under this section; if the surviving constituent party is the entity,
the word "corporation" where applicable, as used in subsection D of
Section 1082 of Title 18 of the Oklahoma Statutes, shall be deemed to
include an entity as defined herein; and the terms and conditions of
the merger shall obligate the surviving constituent party to provide
the agreement, and take the actions required by subsection D of
Section 1082 of Title 18 of the Oklahoma Statutes.
B. Sections 1088, 1090 and 1127 of Title 18 of the Oklahoma
Statutes shall, insofar as they are applicable, apply to a merger
under this section, and Section 1089 and subsection E of Section 1081
of Title 18 of the Oklahoma Statutes shall apply to a merger under
this section in which the surviving constituent party is a
corporation of this state. For purposes of this subsection,
references to "agreement of merger" in subsection F of Section 1081
of Title 18 of the Oklahoma Statutes shall mean the terms and
condition of the merger set forth in the certificate of ownership and
merger, and references to "corporation" in Sections 1088, 1089, and
1090 of Title 18 of the Oklahoma Statutes and Section 1127 of Title
18 of the Oklahoma Statutes shall be deemed to include the entity, as
applicable. Section 1091 of Title 18 of the Oklahoma Statutes shall
not apply to any merger effected under this section, except as
provided in subsection C of this section.
C. In the event all of the stock of an Oklahoma
corporation
party to a
merger
effected
under this section is not owned by the
entity
immediately
prior to the merger,
the
shareholders
of such
4(#$0&($"!$"+$ -7:
Oklahoma
corporation party
to the merger shall have
appraisal
rights as set forth in Section 1091 of
Title 18 of the Oklahoma
Statutes.
D. A merger may be effected under this section although one or
more of
the
constituent
parties is a
corporation organized
under
the laws of a
jurisdiction
other
than
one of the United States,
provided that the laws of such jurisdiction do not forbid such
merger.
E. As used in this section only, the
term:
1.
"Constituent
party" means an entity or
corporation
to be
merged pursuant
to
this
section;
2.
"Entity"
means a
partnership,
whether general or limited,
and
including a
limited liability
partnership
and a limited
liability
limited
partnership,
a limited
liability
company,
and
any
unincorporated
nonprofit or for-profit
association,
trust or
enterprise
having members or having
outstanding
shares of stock
or other
evidences
of
financial,
beneficial or
membership
interest therein, whether formed by
agreement
or
under
statutory
authority or
otherwise; and
3.
"Governing documents"
means a
partnership agreement,
operating agreement,
articles of
association
or any other
instrument containing
the
provisions
by which
an
entity is
formed or
organized.
Added by Laws 2017, c. 323, § 24, eff. Nov. 1, 2017.
§18-1084. Merger or consolidation of domestic nonstock not for
profit corporations.
MERGER OR CONSOLIDATION OF DOMESTIC NONSTOCK
NOT FOR PROFIT CORPORATIONS
A. Any two or more nonstock domestic corporations, whether or
not organized for profit, may merge into a single corporation, which
may be any one of the constituent corporations, or they may
consolidate into a new nonstock corporation, whether or not organized
for profit, formed by the consolidation, pursuant to an agreement of
merger or consolidation, as the case may be, complying and approved
in accordance with the provisions of this section.
B. Subject to subsection D of this section:
1. The governing body of each corporation which desires to merge
or consolidate shall adopt a resolution approving an agreement of
merger or consolidation. The agreement shall state:
a. the terms and conditions of the merger or
consolidation,
b. the mode of carrying the same into effect,
c. in the case of a merger, such amendments or changes in
the certificate of incorporation of the surviving
corporation as are desired to be effected by the
merger, which amendments or changes may amend and
4(#$0&($"!$"+$ -78
restate the certificate of incorporation of the
surviving corporation in its entirety, or, if no such
amendments or changes are desired, a statement that the
certificate of incorporation of the surviving
corporation shall be its certificate of incorporation,
d. in the case of a consolidation, that the certificate of
incorporation of the resulting corporation shall be as
is set forth in an attachment to the agreement,
e. the manner, if any, of converting the memberships or
membership interests of each of the constituent
corporations into memberships or membership interests
of the corporation surviving or resulting from the
merger or consolidation, or of canceling some or all of
the memberships or membership interests if any
memberships or membership interests of any of the
constituent corporations are not to remain outstanding,
to be converted solely into memberships or membership
interests of the surviving or resulting corporation or
to be cancelled, the cash, property, rights or
securities of any other corporation or entity which the
holders of such memberships or membership interests are
to receive in exchange for, or upon conversion of, such
memberships or membership interests, which cash,
property, rights or securities of any other corporation
or entity may be in addition to or in lieu of
memberships or membership interests to the surviving or
resulting corporation, and
f. other details or provisions as are deemed desirable
including, without limiting the generality of the
foregoing, a provision for the payment of cash in lieu
of the issuance or recognition of fractional shares,
rights or other securities of any other corporation or
entity the shares, rights or other securities of which
are to be received in the merger or consolidation or
for some other arrangement with respect thereto,
consistent with Section 1036 of this title; and
2. The agreement so adopted shall be executed and acknowledged
in accordance with Section 1007 of this title. Any of the terms of
the agreement of merger or consolidation may be made dependent upon
facts ascertainable outside of the agreement; provided, that the
manner in which the facts shall operate upon the terms of the
agreement is clearly and expressly set forth in the agreement of
merger or consolidation. The term "facts" as used in this paragraph,
includes, but is not limited to, the occurrence of any event,
including a determination or action by any person or body, including
the corporation.
4(#$0&($"!$"+$ -7
C. Subject to subsection D of this section, the agreement shall
be submitted to the members of each constituent corporation at an
annual or special meeting for the purpose of acting on the agreement.
Due notice of the time, place, and purpose of the meeting shall be
mailed to each member of each corporation who has the right to vote
for the election of the members of the governing body of the
corporation and to each other member who is entitled to vote on the
merger under the certificate of incorporation or the bylaws of such
corporation, at the member's address as it appears on the records of
the corporation at least twenty (20) days prior to the date of the
meeting. The notice shall contain a copy of the agreement or a brief
summary thereof, as the governing body shall deem advisable. At the
meeting, the agreement shall be considered and a vote, in person or
by proxy, taken for the adoption or rejection of the agreement. If
the agreement is adopted by a majority of the members of each
corporation entitled to vote for the election of the members of the
governing body of the corporation and any other members entitled to
vote on the merger under the certificate of incorporation or the
bylaws of such corporation, then that fact shall be certified on the
agreement by the officer of each corporation performing the duties
ordinarily performed by the secretary or assistant secretary of a
corporation; provided that such certification on the agreement shall
not be required if a certificate of merger or consolidation is filed
in lieu of filing the agreement. The agreement shall be adopted and
certified by each constituent corporation in accordance with this
section, and it shall be filed and shall become effective in
accordance with the provisions of Section 1007 of this title. The
provisions of paragraphs 1 through 6 of subsection C of Section 1081
of this title shall apply to a merger or consolidation under this
section, and the reference therein to "shareholder" shall be deemed
to include "member" hereunder.
D. Notwithstanding subsection B or C of this section, if, under
the provisions of the certificate of incorporation or the bylaws of
any one or more of the constituent corporations, there shall be no
members who have the right to vote for the election of the members of
the governing body of the corporation, or for the merger, other than
the members of the governing body themselves, no further action by
the governing body or the members of such corporation shall be
necessary if the resolution approving an agreement of merger or
consolidation has been adopted by a majority of all the members of
the governing body thereof, and that fact shall be certified on the
agreement in the same manner as is provided in the case of the
adoption of the agreement by the vote of the members of a
corporation; provided that such certification on the agreement shall
not be required if a certificate of merger or consolidation is filed
in lieu of filing the agreement, and thereafter the same procedure
shall be followed to consummate the merger or consolidation.
4(#$0&($"!$"+$ -7;
E. The provisions of subsection D of Section 1081 of this title
shall apply to a merger under this section; provided, however, that
references to the board of directors, to shareholders, and to shares
of a constituent corporation shall be deemed to be references to the
governing body of the corporation, to members of the corporation, and
to memberships or membership interests, as applicable, respectively.
F. The provisions of subsection E of Section 1081 of this title
shall apply to a merger pursuant to the provisions of this section.
G. Nothing in this section shall be construed to authorize the
merger of a charitable nonstock corporation into a nonstock
corporation if the charitable nonstock corporation would thereby have
its charitable status lost or impaired; but a nonstock corporation
may be merged into a charitable nonstock corporation which shall
continue as the surviving corporation.
Added by Laws 1986, c. 292, § 84, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 17, eff. Nov. 1, 1988; Laws 1998, c. 422, § 18, eff.
Nov. 1, 1998; Laws 2001, c. 405, § 23, eff. Nov. 1, 2001; Laws 2004,
c. 255, § 23, eff. Nov. 1, 2004; Laws 2019, c. 88, § 18, eff. Nov. 1,
2019.
§18-1085. Merger or consolidation of domestic and foreign nonstock
corporations - Service of process upon surviving or resulting
corporation.
MERGER OR CONSOLIDATION OF DOMESTIC AND FOREIGN NONSTOCK
CORPORATIONS; SERVICE OF PROCESS UPON
SURVIVING OR RESULTING CORPORATION
A. Any one or more nonstock domestic corporations may merge or
consolidate with one or more other foreign nonstock corporations,
unless the laws of the jurisdiction or jurisdictions under which such
foreign nonstock corporation or corporations are organized prohibit
such merger or consolidation. The constituent corporations may merge
into a single surviving corporation, which may be any one of the
constituent corporations, or they may consolidate into a new
resulting nonstock corporation formed by the consolidation, which may
be a corporation of the jurisdiction of organization of any one of
the constituent corporations, pursuant to an agreement of merger or
consolidation, as the case may be, complying and approved in
accordance with the provisions of this section. The term "foreign
nonstock corporation" means a nonstock corporation organized under
the laws of any jurisdiction other than this state.
B. 1. All the constituent corporations shall enter into an
agreement of merger or consolidation. The agreement shall state:
a. the terms and conditions of the merger or
consolidation,
b. the mode of carrying the same into effect,
c. in the case of a merger in which the surviving
corporation is a domestic corporation, such amendments
4(#$0&($"!$"+$ -7
or changes in the certificate of incorporation of the
surviving corporation as are desired to be effected by
the merger, which amendments or changes many amend and
restate the certificate of incorporation of the
surviving corporation in its entirety, or, if no such
amendments or changes are desired, a statement that the
certificate of incorporation of the surviving
corporation shall be its certificate of incorporation,
d. in the case of a consolidation in which the resulting
corporation is a domestic corporation, that the
certificate of incorporation of the resulting
corporation shall be as is set forth in an attachment
to the agreement,
e. the manner, if any, of converting the memberships or
membership interests of each of the constituent
corporations into memberships or membership interests
of the corporation surviving or resulting from such
merger or consolidation, or of canceling some or all of
the memberships or membership interests, and if any
memberships or membership interests of any of the
constituent corporations are not to remain outstanding,
to be converted solely into memberships or membership
interests of the surviving or resulting corporation or
to be cancelled, the cash, property, rights or
securities of any other corporation or entity which the
holders of such memberships or membership interests are
to receive in exchange for, or upon conversion of, such
memberships or membership interests, which cash,
property, rights or securities of any other corporation
or entity may be in addition to or in lieu of
memberships or membership interests of the surviving or
resulting corporation,
f. such other details and provisions as shall be deemed
desirable including, without limiting the generality of
the foregoing, a provision for the payment of cash in
lieu of the issuance or recognition of fractional
shares, rights or other securities of any other
corporation or entity the shares, rights or other
securities of which are to be received in the merger or
consolidation, or for some other arrangement with
respect thereto, consistent with Section 1036 of this
title, and
g. such other provisions or facts as required to set forth
in an agreement of merger or consolidation, including
any provision for amendment of the certificate of
incorporation or equivalent document, or a surviving
foreign nonstock corporation by the laws of each
4(#$0&($"!$"+$ -
jurisdiction under which any of the foreign nonstock
corporation are organized.
2. Any of the terms of the agreement of merger or consolidation
may be made dependent upon facts ascertainable outside of such
agreement, provided that the manner in which such facts shall operate
upon the terms of the agreement is clearly and expressly set forth in
the agreement of merger or consolidation. The term "facts," as used
in the preceding sentence includes, but is not limited to, the
occurrence of any event including a determination or action by any
person or body, including the corporation.
C. The agreement shall be adopted, approved, certified, executed
and acknowledged by each of the constituent corporations in
accordance with the laws under which it is organized and, in the case
of domestic corporation, in the same manner as is provided for in
Section 1084 of this title. The agreement shall be filed and shall
become effective for all purposes of the laws of this state when and
as provided for in Section 1084 of this title with respect to the
merger of nonstock domestic corporations. Insofar as they may be
applicable, the provisions of paragraphs 1 through 9 of subsection C
of Section 1082 of this title shall apply to a merger under this
section, and the reference therein to "shareholder" shall be deemed
to include "member" hereunder.
D. If the corporation surviving or resulting from the merger or
consolidation is a foreign nonstock corporation, it shall agree that
it may be served with process in this state in any proceeding for
enforcement of any obligation of any constituent domestic
corporation, as well as for enforcement of any obligation of the
surviving or resulting corporation arising from the merger or
consolidation and shall irrevocably appoint the Secretary of State as
its agent to accept service of process in any suit or other
proceedings and shall specify the address to which a copy of such
process shall be mailed by the Secretary of State. In the event of
such service upon the Secretary of State in accordance with the
provisions of Section 2004 of Title 12 of the Oklahoma Statutes, the
Secretary of State shall immediately notify such surviving or
resulting corporation thereof by letter, certified mail, return
receipt requested, directed to such corporation at its address so
specified, unless such surviving or resulting corporation shall have
designated in writing to the Secretary of State a different address
for such purpose, in which case it shall be mailed to the last
address so designated. Such letter shall enclose a copy of the
process and any other papers served upon the Secretary of State. It
shall be the duty of the plaintiff in the event of such service to
serve process and any other papers in duplicate, to notify the
Secretary of State that service is being made pursuant to the
provisions of this subsection, and to pay the Secretary of State the
fee prescribed by paragraph 7 of Section 1142 of this title, which
4(#$0&($"!$"+$ -
fee shall be taxed as part of the costs in the proceeding if the
plaintiff shall prevail therein. The Secretary of State shall
maintain an alphabetical record of any such service setting forth the
name of the plaintiff and defendant, the title, docket number and
nature of the proceeding in which process has been served upon him,
the fact that service has been effected pursuant to the provisions of
this subsection, the return date thereof, and the date when the
service was made. The Secretary of State shall not be required to
retain such information for a period longer than five (5) years from
his receipt of service of process.
E. The provisions of subsection E of Section 1081 of this title
shall apply to a merger pursuant to the provisions of this section if
the corporation surviving the merger is a domestic corporation.
F. The provisions of subsection D of Section 1081 of this title
shall apply to a merger under this section; provided, however, that
references to the board of directors, to shareholders, and to shares
of a constituent corporation shall be deemed to be references to the
governing body of the corporation, to members of the corporation, and
to memberships or membership interests, as applicable, respectively.
G. Nothing in this section shall be construed to authorize the
merger of a charitable nonstock corporation into a nonstock
corporation if the charitable nonstock corporation would thereby have
its charitable status lost or impaired; but a nonstock corporation
may be merged into a charitable nonstock corporation which shall
continue as the surviving corporation.
Added by Laws 1986, c. 292, § 85, eff. Nov. 1, 1986. Amended by Laws
2004, c. 255, § 24, eff. Nov. 1, 2004; Laws 2019, c. 88, § 19, eff.
Nov. 1, 2019.
§18-1086. Merger or consolidation of domestic stock and nonstock
corporations.
MERGER OR CONSOLIDATION OF DOMESTIC STOCK
AND NONSTOCK CORPORATIONS
A. Any one or more domestic nonstock corporations, whether or
not organized for profit, may merge or consolidate with one or more
domestic stock corporations, whether or not organized for profit.
The constituent corporations may merge into a single surviving
corporation, which may be any one of the constituent corporations, or
they may consolidate into a new resulting corporation formed by the
consolidation, pursuant to an agreement of merger or consolidation,
as the case may be, complying and approved in accordance with the
provisions of this section. The surviving constituent corporation or
the resulting corporation may be organized for profit or not
organized for profit and may be a stock corporation or a nonstock
corporation.
B. The board of directors of each stock corporation which
desires to merge or consolidate and the governing body of each
4(#$0&($"!$"+$ -*
nonstock corporation which desires to merge or consolidate shall
adopt a resolution approving an agreement of merger or consolidation.
The agreement shall state:
1. The terms and conditions of the merger or consolidation;
2. The mode carrying the same into effect;
3. In the case of a merger, such amendments or changes in the
certificate of incorporation of the surviving corporation as are
desired to be effected by the merger, which amendments or changes may
amend and restate the certificate of incorporation of the surviving
corporation in its entirety, or, if no such amendments or changes are
desired, a statement that the certificate of incorporation of the
surviving corporation shall be its certificate of incorporation;
4. In the case of a consolidation, that the certificate of
incorporation of the resulting corporation shall be as is set forth
in an attachment to the agreement;
5. The manner, if any, of converting the shares of stock of a
stock corporation and the memberships or membership interests of a
nonstock corporation into shares or other securities of a stock
corporation or memberships or membership interests of a nonstock
corporation surviving or resulting from such merger or consolidation,
or of canceling some or all of the shares or memberships or
membership interests, and if any shares of any such stock corporation
or memberships or membership interests of any such nonstock
corporation are not to remain outstanding, to be converted solely
into shares or other securities of the stock corporation or
memberships or membership interests of the nonstock corporation
surviving or resulting from such merger or consolidation, or to be
canceled, the cash, property, rights or securities of any other
corporation or entity which the holders of shares of any such stock
corporation or memberships or membership interests of any such
nonstock corporation are to receive in exchange for, or upon
conversion of such shares or memberships or membership interests, and
the surrender of any certificates evidencing them, which cash,
property, rights or securities of any other corporation or entity may
be in addition to or in lieu of shares or other securities of any
stock corporation or memberships or membership interests of any
nonstock corporation surviving or resulting from such merger or
consolidation; and
6. Such other details or provisions as are deemed desirable
including, without limiting the generality of the foregoing, a
provision for the payment of cash in lieu of the issuance or
recognition of fractional shares, rights or other securities of any
other corporation or entity the shares, rights or other securities of
which are to be received in the merger or consolidation, or for some
other arrangement with respect thereto, consistent with Section 1036
of this title.
4(#$0&($"!$"+$ -
C. Any of the terms of the agreement of merger or consolidation
may be made dependent upon facts ascertainable outside of such
agreement, provided that the manner in which such facts shall operate
upon the terms of the agreement is clearly and expressly set forth in
the agreement of merger or consolidation. The term "facts", as used
in the preceding sentence includes, but is not limited to, the
occurrence of any event, including a determination or action by any
person or body, including the corporation.
D. The agreement, required by subsection B of this section in
the case of each constituent stock corporation, shall be adopted,
approved, certified, executed and acknowledged by each constituent
corporation in the same manner as is provided for in Section 1081 of
this title and, in the case of each constituent nonstock corporation,
shall be adopted, approved, certified, executed and acknowledged by
each of said constituent corporations in the same manner as is
provided for in Section 1084 of this title. The agreement shall be
filed and shall become effective for all purposes of the laws of this
state when and as provided for in Section 1081 of this title with
respect to the merger of stock corporations of this state. Insofar
as they may be applicable, the provisions of paragraphs 1 through 7
of subsection C of Section 1081 of this title shall apply to a merger
under this section, and the reference therein to "shareholder" shall
be deemed to include "member" hereunder.
E. The provisions of subsection E of Section 1081 of this title
shall apply to a merger pursuant to the provisions of this section.
The provisions of subsection D of Section 1081 of this title shall
apply to any constituent stock corporation participating in a merger
or consolidation pursuant to the provisions of this section. The
provisions of subsection F of Section 1081 of this title shall apply
to any constituent stock corporation participating in a merger
pursuant to the provisions of this section.
F. The provisions of subsection D of Section 1081 of this title
shall apply to a merger pursuant to the provisions of this section;
provided, however, that for purposes of a constituent nonstock
corporation, references to the board of directors, to shareholders,
and to shares of a constituent corporation shall be deemed to be
references to the governing body of the corporation, to members of
the corporation, and to memberships or membership interests, as
applicable, respectively.
G. Nothing in this section shall be construed to authorize the
merger of a charitable nonstock corporation into a stock corporation,
if the charitable status of such nonstock corporation would thereby
be lost or impaired; but a stock corporation may be merged into a
charitable nonstock corporation which shall continue as the surviving
corporation.
Added by Laws 1986, c. 292, § 86, eff. Nov. 1, 1986. Amended by Laws
1990, c. 328, § 4, eff. Sept. 1, 1990; Laws 1999, c. 421, § 15, eff.
4(#$0&($"!$"+$ -2
Nov. 1, 1999; Laws 2004, c. 255, § 25, eff. Nov. 1, 2004; Laws 2019,
c. 88, § 20, eff. Nov. 1, 2019.
§18-1087. Merger or consolidation of domestic and foreign stock and
nonstock corporations.
MERGER OR CONSOLIDATION OF DOMESTIC AND FOREIGN
STOCK AND NONSTOCK CORPORATIONS
A. Any one or more domestic corporations, whether stock or
nonstock corporations and whether or not organized for profit, may
merge or consolidate with one or more foreign corporations, unless
the laws of the jurisdiction or jurisdictions under which such
foreign corporation or corporations are organized prohibit such
merger or consolidation. The constituent corporations may merge into
a single surviving corporation, which may be any one of the
constituent corporations, or they may consolidate into a new
resulting corporation formed by the consolidation, which may be a
corporation of the jurisdiction of organization of any one of the
constituent corporations, pursuant to an agreement of merger or
consolidation, as the case may be, complying and approved in
accordance with the provisions of this section. The surviving or
resulting corporation may be either a domestic or foreign stock
corporation or a domestic or foreign nonstock corporation, as shall
be specified in the agreement of merger or consolidation required by
the provisions of subsection B of this section. For purposes of this
section, the term "foreign corporation" includes a nonstock
corporation organized under the laws of any jurisdiction other than
this state.
B. The method and procedure to be followed by the constituent
corporations so merging or consolidating shall be as prescribed in
Section 1086 of this title in the case of domestic corporations. The
agreement of merger or consolidation shall be as provided in Section
1086 of this title and also set forth such other provisions or facts
as required to be set forth in an agreement of merger or
consolidation, including any provision for amendment of the
certificate of incorporation or equivalent document of a surviving
foreign corporation, by the laws of the jurisdiction or jurisdictions
which are stated in the agreement to be the laws under which the
foreign corporation or corporations are organized. The agreement, in
the case of foreign corporations, shall be adopted, approved,
certified, executed and acknowledged by each of the constituent
foreign corporations in accordance with the laws under which each is
organized.
C. The requirements of the provisions of subsection D of Section
1082 of this title as to the appointment of the Secretary of State to
receive process and the manner of serving the same in the event the
surviving or resulting corporation is a foreign corporation shall
also apply to mergers or consolidations effected under this section
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and such appointment, if any, shall be included in the certificate of
merger or consolidation, if any, filed pursuant to subsection B of
this section. The provisions of subsection E of Section 1081 of this
title shall apply to mergers effected pursuant to the provisions of
this section if the surviving corporation is a domestic corporation.
The provisions of subsection D of Section 1081 of this title shall
apply to any constituent stock corporation participating in a merger
or consolidation pursuant to the provisions of this section;
provided, however, that for purposes of a constituent nonstock
corporation, references to the board of directors, to shareholders,
and to shares shall be deemed to be references to the governing body
of the corporation, to members of the corporation, and to memberships
or membership interests of the corporation, as applicable,
respectively. The provisions of subsection F of Section 1081 of this
title shall apply to any constituent stock corporation participating
in a merger pursuant to the provisions of this section.
D. Nothing in this section shall be construed to authorize the
merger of a charitable nonstock corporation into a stock corporation,
if the charitable status of such nonstock corporation would thereby
be lost or impaired but a stock corporation may be merged into a
charitable nonstock corporation which shall continue as the surviving
corporation.
Added by Laws 1986, c. 292, § 87, eff. Nov. 1, 1986. Amended by Laws
2019, c. 88, § 21, eff. Nov. 1, 2019.
§18-1088. Status, Rights, Liabilities, etc. of Constituent and
Surviving or Resulting Corporations Following Merger or
Consolidation.
STATUS, RIGHTS, LIABILITIES, ETC. OF CONSTITUENT AND SURVIVING
OR RESULTING CORPORATIONS FOLLOWING MERGER OR CONSOLIDATION
When any merger or consolidation shall have become effective
pursuant to the provisions of the Oklahoma General Corporation Act,
for all purposes of the laws of this state the separate existence of
all the constituent corporations, or of all such constituent
corporations except the one into which the other or others of such
constituent corporations have been merged, as the case may be, shall
cease and the constituent corporations shall become a new
corporation, or be merged into one of such corporations, as the case
may be, possessing all the rights, privileges, powers and franchises
as well of public as of a private nature, and being subject to all
the restrictions, disabilities and duties of each of such
corporations so merged or consolidated; and all and singular, the
rights, privileges, powers and franchises of each of said
corporations, and all property, real, personal and mixed, and all
debts due to any of said constituent corporations on whatever
account, as well for stock subscriptions as all other things in
action or belonging to each of such corporations shall be vested in
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the corporation surviving or resulting from such merger or
consolidation; and all property, rights, privileges, powers and
franchises, and all and every other interest shall be thereafter as
effectually the property of the surviving or resulting corporation as
they were of the several and respective constituent corporations, and
the title to any real estate vested by deed or otherwise, under the
laws of this state, in any of such constituent corporations, shall
not revert or be in any way impaired by reason of the provisions of
the Oklahoma General Corporation Act; but all rights of creditors and
all liens upon any property of any of said constituent corporations
shall be preserved unimpaired, and all debts, liabilities and duties
of the respective constituent corporations, from that time forward,
shall attach to said surviving or resulting corporation, and may be
enforced against it to the same extent as if said debts, liabilities
and duties had been incurred or contracted by it.
Added by Laws 1986, c. 292, § 88, eff. Nov. 1, 1986.
§18-1089. Powers of Corporation Surviving or Resulting from Merger
or Consolidation - Issuance of Stock, Bonds or Other Indebtedness.
POWERS OF CORPORATION SURVIVING OR RESULTING FROM MERGER
OR CONSOLIDATION; ISSUANCE OF STOCK, BONDS OR OTHER INDEBTEDNESS
When two or more corporations are merged or consolidated, the
corporation surviving or resulting from the merger may issue bonds or
other obligations, negotiable or otherwise, and with or without
coupons or interest certificates thereto attached, to an amount
sufficient with its capital stock to provide for all payments it will
be required to make, or obligations it will be required to assume, in
order to effect the merger or consolidation. For the purpose of
securing the payment of any such bonds and obligations, it shall be
lawful for the surviving or resulting corporation to mortgage its
corporate franchise, rights, privileges and property, real, personal
or mixed. The surviving or resulting corporation may issue
certificates of its capital stock or uncertificated stock if
authorized to do so and other securities to the shareholders of the
constituent corporations in exchange or payment for the original
shares, in such amount as shall be necessary in accordance with the
terms of the agreement of merger or consolidation in order to effect
such merger or consolidation in the manner and on the terms specified
in the agreement.
Added by Laws 1986, c. 292, § 89, eff. Nov. 1, 1986.
§18-1090. Effect of Merger Upon Pending Actions.
EFFECT OF MERGER UPON PENDING ACTIONS
Any action or proceeding, whether civil, criminal or
administrative, pending by or against any corporation which is a
party to a merger or consolidation shall be prosecuted as if such
merger or consolidation had not taken place, or the corporation
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surviving or resulting from such merger or consolidation may be
substituted in such action or proceeding.
Added by Laws 1986, c. 292, § 90, eff. Nov. 1, 1986.
§18-1090.1. Share acquisitions.
SHARE ACQUISITIONS
A. One or more corporations may acquire all or part of the
outstanding shares of one or more other corporations, if the board of
directors of each corporation adopts and its shareholders approve, if
required by subsection C of this section, the agreement of
acquisition.
B. The agreement of acquisition shall set forth:
1. the name or names of the corporation or corporations whose
shares will be acquired and the name or names of the acquiring
corporation or corporations;
2. the terms and conditions of the acquisitions;
3. the manner and basis of exchanging the shares to be acquired
for the consideration proffered;
4. any amendments or changes in the certificate of incorporation
of a corporation which is a party to the agreement; and
5. such other provisions as the directors shall deem advisable.
C. After adopting an agreement of acquisition, the board of
directors of each corporation whose shares are to be acquired, in
whole or in part, or whose certificate of incorporation is to be
amended, shall submit the agreement of acquisition for approval by
the shareholders entitled to vote thereon. Due notice of the meeting
shall be mailed to each holder of stock, whether voting or nonvoting,
of the corporation at his address as it appears on the records of the
corporation, at least twenty (20) days prior to the meeting. The
notice shall contain a copy of the agreement or a brief summary
thereof, as the directors shall deem advisable. At the meeting, the
agreement shall be considered and a vote taken for its adoption or
rejection. If a majority of the outstanding stock of the corporation
entitled to vote thereon shall be voted for the adoption of the
agreement, that fact shall be certified on the agreement by the
secretary or assistant secretary of the corporation. If the
agreement shall be adopted and approved in accordance with the
provisions of this section, it shall then be filed and shall become
effective in accordance with the provisions of Section 1007 of this
title. In lieu of filing an agreement of acquisition required by
this section, the acquiring corporation may file a certificate of
acquisition, executed in accordance with the provisions of Section
1007 of this title, which states:
1. the name and jurisdiction of incorporation of each
corporation which is a party to the agreement;
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2. that the agreement of acquisition has been adopted, approved,
certified, executed, and acknowledged in accordance with the
provisions of this section;
3. whether the corporation is an acquiring corporation or a
corporation whose shares are to be acquired;
4. the amendments or changes, if any, in the certificate of
incorporation that are to be effected by the agreement of
acquisition;
5. that the executed agreement of acquisition is on file at the
principal place of business of each corporation, stating the address
thereof; and
6. that a copy of the agreement of acquisition will be furnished
by each corporation, on request and without cost, to any of its
shareholders.
D. Any agreement of acquisition may contain a provision that at
any time prior to the filing of the agreement with the Secretary of
State, the agreement may be terminated by the board of directors of
any affected corporation notwithstanding approval of the agreement by
the shareholders of one or more of the affected corporations. Any
agreement of acquisition may contain a provision that the board of
directors of the affected corporations may amend the agreement at any
time prior to the filing of the agreement, or a certificate in lieu
thereof, with the Secretary of State, provided that an amendment made
subsequent to the adoption of the agreement by the shareholders of
any affected corporation shall not:
a. alter or change the amount or kind of consideration to
be received in exchange for or on conversion of all or
part of the shares to be acquired;
b. alter or change any term of the certificate of
incorporation of the affected corporations; or
c. alter or change any of the terms and consideration of
the agreement if such alteration or change would
adversely affect the holders of any class or series of
a corporation whose shares are to be acquired.
E. The holders of the outstanding shares of a class shall be
entitled to vote as a class upon an agreement of acquisition, whether
or not entitled to vote thereon by the provisions of the certificate
of incorporation, if the agreement provides for the acquisition of
all or part of the shares of the class.
F. This section shall not limit the power of a corporation to
acquire all or part of the shares of one or more classes or series of
another corporation through a voluntary exchange or otherwise.
G. Any shareholder whose shares are to be acquired pursuant to
an agreement of acquisition adopted and approved in accordance with
this section and who has complied with the procedural steps specified
in subsection D of Section 1091 of this title for mergers and
consolidations and who has neither voted in favor of the share
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acquisition nor consented thereto in writing shall be entitled to an
appraisal by the district court of the fair value of his shares in
compliance with the same provisions and procedures and with the same
rights and limitations as set out in subsections E through K of
Section 1091 of this title.
H. If the entity acquiring shares pursuant to this section is
governed by the laws of the District of Columbia or any state other
than this state, the entity shall agree that it may be served with
process in this state in any proceeding for enforcement of any
obligation of the acquiring corporation arising from the share
acquisition, including any suit or other proceeding to enforce the
right of any shareholders as determined in appraisal proceedings
pursuant to the provisions of Section 1091 of this title, and shall
irrevocably appoint the Secretary of State as its agent to accept
service of process in any such suit or other proceedings and shall
specify the address to which a copy of such process shall be mailed
by the Secretary of State. In the event of such service upon the
Secretary of State in accordance with this subsection, the Secretary
of State shall forthwith notify such acquiring corporation thereof by
letter sent by certified mail, with return receipt requested,
directed to such acquiring corporation at its address so specified,
unless such acquiring corporation shall have designated in writing to
the Secretary of State a different address for such purpose, in which
case it shall be mailed to the last address so designated. Such
letter shall enclose a copy of the process and any other papers
served on the Secretary of State pursuant to this subsection. It
shall be the duty of the plaintiff in the event of such service to
serve process and any other papers in duplicate, to notify the
Secretary of State that service is being effected pursuant to this
subsection and to pay the Secretary of State the fee provided for in
paragraph 7 of Section 1142 of this title, which fee shall be taxed
as part of the costs in the proceeding, if the plaintiff shall
prevail therein. The Secretary of State shall maintain an
alphabetical record of any such service setting forth the name of the
plaintiff and the defendant, the title, docket number and nature of
the proceeding in which process has been served upon the Secretary of
State, the fact that service has been served upon the Secretary of
State, the fact that service has been effected pursuant to this
subsection, the return date thereof, and the date service was made.
The Secretary of State shall not be required to retain such
information longer than five (5) years from receipt of the service of
process by the Secretary of State.
Added by Laws 1988, c. 323, § 18, eff. Nov. 1, 1988. Amended by Laws
1990, c. 328, § 5, eff. Sept. 1, 1990.
§18-1090.2. Merger or consolidation of a domestic corporation and an
entity.
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MERGER OR CONSOLIDATION OF A DOMESTIC
CORPORATION AND AN ENTITY
A. Any one or more domestic corporations may merge or
consolidate with one or more domestic or foreign entities, unless the
laws of the jurisdiction or jurisdictions under which such entity or
entities are formed prohibit the merger or consolidation. A
corporation or corporations and one or more entities may merge with
or into a surviving corporation, which may be any one of the
corporations, or they may merge with or into a surviving entity,
which may be any one of the entities, or they may consolidate into a
new resulting corporation or entity formed by the consolidation,
which shall be a domestic corporation or a domestic or foreign entity
formed, pursuant to an agreement of merger or consolidation, as the
case may be, complying and approved in accordance with this section.
As used in this section, "entity" means a domestic or foreign
partnership whether general or limited, and including a limited
liability partnership and a limited liability limited partnership, a
limited liability company, and any unincorporated nonprofit or for-
profit association, trust or enterprise having members or having
outstanding shares of stock or other evidences of financial,
beneficial or membership interest therein, whether formed by
agreement or under statutory authority or otherwise formed under the
laws of this state or the laws of any other jurisdiction. The
"articles" of an entity mean the articles of organization,
certificate of formation or equivalent document filed with the
jurisdiction to form the entity.
B. Each corporation and entity merging or consolidating shall
enter into a written agreement of merger or consolidation. The
agreement shall state:
1. The terms and conditions of the merger or consolidation;
2. The mode of carrying the consolidation into effect;
3. In the case of a merger in which the surviving entity is a
domestic corporation or entity, such amendments or changes in the
certificate of incorporation of the surviving corporation or articles
of the surviving entity as are desired to be effected by the merger,
which amendments or changes may amend and restate the certificate of
incorporation of the surviving corporation or articles of the
surviving entity in its entirety, or, if no such amendments or
changes are desired, a statement that the certificate of
incorporation of the surviving corporation or articles of the
surviving entity shall be its certificate of incorporation or
articles;
4. In the case of a consolidation in which the resulting entity
is a domestic corporation or entity, that the certificate of
incorporation of the resulting corporation or articles of the
resulting entity shall be as is set forth in an attachment to the
agreement;
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5. The manner, if any, of converting the shares of stock or
memberships or membership interests of each such corporation and the
memberships, or membership, economic or ownership interests of each
entity into shares, memberships, or membership, economic or ownership
interests, or other securities of the entity surviving or resulting
from the merger or consolidation, or of canceling some or all of the
shares or interests, and if any shares, memberships or interests are
not to remain outstanding, to be converted solely into shares,
memberships, interests, or other securities of the entity surviving
or resulting from the merger or consolidation or to be canceled, the
cash, property, rights, or securities of any other rights or
securities of any other corporation or entity which the holders of
such shares, memberships, or interests are to receive in exchange
for, or upon conversion of, the shares, memberships or interests and
the surrender of any certificates evidencing them, which cash,
property, rights, or securities of any other corporation or entity
may be in addition to or in lieu of shares, memberships, interests or
other securities of the entity surviving or resulting from the merger
or consolidation;
6. Other details or provisions as are deemed desirable
including, but not limited to, a provision for the payment of cash in
lieu of the issuance or recognition of fractional shares, rights,
other securities or interests of the surviving or resulting
corporation or entity or of any other corporation or entity the
shares, rights, other securities or interests of which are to be
received in the merger or consolidation, or for some other
arrangement with respect thereto, consistent with Section 1036 of
this title; and
7. Such other provisions or facts as required to be set forth in
an agreement of merger or consolidation by the laws of each
jurisdiction under which any of the entities is formed.
Any of the terms of the agreement of merger or consolidation may
be made dependent upon facts ascertainable outside of the agreement;
provided, that the manner in which such facts shall operate upon the
terms of the agreement is clearly and expressly set forth in the
agreement of merger or consolidation. The term "facts" as used in
this paragraph, includes, but is not limited to, the occurrence of
any event, including a determination or action by any person or body,
including the corporation.
C. The agreement required by subsection B of this section shall
be adopted, approved, certified, executed, and acknowledged by each
of the corporations in the same manner as is provided in Section 1081
of this title and, in the case of the entities, in accordance with
their constituent agreements and in accordance with the laws of the
jurisdiction under which they are formed, as the case may be;
provided that no holder of securities, membership or an interest in a
constituent entity who has not voted for or consented to the merger
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or consolidation shall be required to accept a membership or interest
in the surviving or resulting entity if acceptance would expose the
holder to personal liability for the debts of the surviving entity.
The agreement shall be filed and recorded and shall become effective
for all purposes of the laws of this state when and as provided in
Section 1081 or 1084 of this title with respect to the merger or
consolidation of domestic corporations. In lieu of filing and
recording the agreement of merger or consolidation, the surviving or
resulting corporation or entity may file a certificate of merger or
consolidation, executed in accordance with Section 1007 of this title
if the surviving or resulting entity is a corporation, or by a person
authorized to act for the entity, if the surviving or resulting
entity is an entity, which states:
1. The name, jurisdiction of formation or organization, and type
of entity of each of the constituent entities;
2. That an agreement of merger or consolidation has been
approved, adopted, certified, executed, and acknowledged by each of
the constituent entities in accordance with this subsection;
3. The name of the surviving or resulting corporation or entity;
4. In the case of a merger in which a corporation is the
surviving entity, any amendments or changes in the certificate of
incorporation of the surviving corporation, which may be amended and
restated, that are desired to be effected by the merger, which
amendments or changes may amend and restate the certificate of
incorporation of the surviving corporation in its entirety, or, if no
amendments or changes are desired, a statement that the certificate
of incorporation of the surviving corporation shall be its
certificate of incorporation;
5. In the case of a consolidation in which a corporation is the
resulting entity, that the certificate of incorporation of the
resulting corporation shall be as set forth in an attachment to the
certificate;
6. In the case of a consolidation in which an entity other than
a corporation is the resulting entity, that the articles of the
resulting entity shall be as set forth in an attachment to the
certificate;
7. That the executed agreement of consolidation or merger is on
file at the principal place of business of the surviving or resulting
corporation or entity and the address thereof;
8. That a copy of the agreement of consolidation or merger shall
be furnished by the surviving or resulting entity, on request and
without cost, to any shareholder of any constituent corporation or
any member of any constituent entity; and
9. The agreement, if any, required by subsection D of this
section.
D. If the entity surviving or resulting from the merger or
consolidation is a foreign entity, the entity shall agree that it may
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be served with process in this state in any proceeding for
enforcement of any obligation of any constituent domestic corporation
or domestic entity, as well as for enforcement of any obligation of
the surviving or resulting corporation or entity arising from the
merger or consolidation, including any suit or other proceeding to
enforce the right of any shareholders as determined in appraisal
proceedings pursuant to the provisions of Section 1091 of this title,
and shall irrevocably appoint the Secretary of State as its agent to
accept service of process in any such suit or other proceedings and
shall specify the address to which a copy of any process shall be
mailed by the Secretary of State. In the event of service upon the
Secretary of State pursuant to Section 2004 of Title 12 of the
Oklahoma Statutes, the Secretary of State shall forthwith notify the
surviving or resulting corporation or entity by a letter, sent by
certified mail with return receipt requested, directed to the
surviving or resulting corporation or entity at its specified
address, unless the surviving or resulting corporation or entity
shall have designated in writing to the Secretary of State a
different address for that purpose, in which case it shall be mailed
to the last address designated. Such letter shall enclose a copy of
the process and any other papers served on the Secretary of State
pursuant to this subsection. It shall be the duty of the plaintiff
in the event of any service to serve process and any other papers in
duplicate, to notify the Secretary of State that service is being
effected pursuant to this subsection and to pay the Secretary of
State the fee provided for in paragraph 7 of subsection A of Section
1142 of this title, which fee shall be taxed as part of the costs in
the proceeding, if the plaintiff shall prevail therein. The
Secretary of State shall maintain an alphabetical record of any such
service, setting forth the name of the plaintiff and the defendant,
the title, docket number, and nature of the proceeding in which
process has been served upon the Secretary of State, the fact that
service has been served upon the Secretary of State, the fact that
service has been effected pursuant to this subsection, the return
date thereof, and the date service was made. The Secretary of State
shall not be required to retain this information longer than five (5)
years from the date of receipt of the service of process by the
Secretary of State.
E. Subsections C, D, E and F of Section 1081 of this title,
subsections C, D, E and F of Section 1084 of this title, and Sections
1088 through 1090 and 1127 of this title, insofar as they are
applicable, shall apply to mergers or consolidations between
corporations and entities; provided, however, that for purposes of a
nonstock corporation or entity, references to the board of directors
shall be deemed to be references to the governing body of the
corporation or entity, references to shareholders shall be deemed to
be references to the members or owners of the corporation or entity,
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and references to shares shall be deemed to be references to
memberships or membership, economic or ownership interests in the
corporation or entity, as applicable.
F. Nothing in this section shall be deemed to authorize the
merger of a charitable nonstock corporation into an entity, if the
charitable status of such nonstock corporation would thereby be lost
or impaired; but an entity may be merged into a charitable nonstock
corporation, which shall continue as the surviving corporation.
Added by Laws 1990, c. 328, § 12, eff. Sept. 1, 1990. Amended by
Laws 1998, c. 422, § 19, eff. Nov. 1, 1998; Laws 1999, c. 421, § 16,
eff. Nov. 1, 1999; Laws 2001, c. 405, § 24, eff. Nov. 1, 2001; Laws
2004, c. 255, § 26, eff. Nov. 1, 2004; Laws 2008, c. 253, § 11; Laws
2019, c. 88, § 22, eff. Nov. 1, 2019.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-1090.3. Business combinations with interested shareholders.
BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS
A. Notwithstanding any other provisions of this title, a
corporation shall not engage in any business combination with any
interested shareholder for a period of three (3) years following the
time that the person became an interested shareholder, unless:
1. Prior to that time, the board of directors of the corporation
approved either the business combination or the transaction which
resulted in the person becoming an interested shareholder;
2. Upon consummation of the transaction which resulted in the
person becoming an interested shareholder, the interested shareholder
owned at least eighty-five percent (85%) of the outstanding voting
stock of the corporation at the time the transaction commenced,
excluding for purposes of determining the outstanding voting stock,
but not the outstanding voting stock owned by the interested
shareholder, those shares owned by:
a. persons who are directors and also officers, and
b. employee stock plans in which employee participants do
not have the right to determine confidentially whether
shares held subject to the plan will be tendered in a
tender or exchange offer; or
3. At or subsequent to such time, the business combination is
approved by the board of directors and authorized at an annual or
special meeting of shareholders, and not by written consent, by the
affirmative vote of at least two-thirds (2/3) of the outstanding
voting stock which is not owned by the interested shareholder.
B. The restrictions contained in this section shall not apply
if:
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1. The corporation's original certificate of incorporation
contains a provision expressly electing not to be governed by this
section;
2. The corporation, by action of its board of directors, adopted
an amendment to its bylaws by November 30, 1991, expressly electing
not to be governed by this section, which amendment shall not be
further amended by the board of directors;
3. a. The corporation, with the approval of its shareholders,
adopts an amendment to its certificate of incorporation
or bylaws expressly electing not to be governed by this
section; provided that, in addition to any other vote
required by law, an amendment to the certificate of
incorporation or bylaws must be approved by the
affirmative vote of a majority of the outstanding
voting stock of the corporation.
b. An amendment adopted pursuant to this paragraph shall
be effective immediately in the case of a corporation
that both:
(1) has never had a class of voting stock that falls
within any of the three categories set out in
paragraph 4 of this subsection, and
(2) has not elected by a provision in its original
certificate of incorporation or any amendment
thereto to be governed by this section.
c. In all other cases, an amendment adopted pursuant to
this paragraph shall not be effective until twelve (12)
months after the adoption of the amendment and shall
not apply to any business combination between a
corporation and any person who became an interested
shareholder of the corporation on or prior to the
adoption. A bylaw amendment adopted pursuant to this
paragraph shall not be further amended by the board of
directors;
4. The corporation does not have a class of voting stock that
is:
a. listed on a national securities exchange, or
b. held of record by one thousand or more shareholders,
unless any of the foregoing results from action taken,
directly or indirectly, by an interested shareholder or
from a transaction in which a person becomes an
interested shareholder;
5. A person becomes an interested shareholder inadvertently and:
a. as soon as practicable divests itself of ownership of
sufficient shares so that the person ceases to be an
interested shareholder, and
b. would not, at any time within the three-year period
immediately prior to a business combination between the
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corporation and the person, have been an interested
shareholder but for the inadvertent acquisition;
6. a. The business combination is proposed prior to the
consummation or abandonment of, and subsequent to the
earlier of the public announcement or the notice
required hereunder of, a proposed transaction which:
(1) constitutes one of the transactions described in
subparagraph b of this paragraph,
(2) is with or by a person who:
(a) was not an interested shareholder during the
previous three (3) years, or
(b) became an interested shareholder with the
approval of the corporation's board of
directors or during the period described in
paragraph 7 of this subsection, and
(3) is approved or not opposed by a majority of the
members of the board of directors then in office,
but not less than one, who were directors prior to
any person becoming an interested shareholder
during the previous three (3) years or were
recommended for election or elected to succeed the
directors by a majority of the directors.
b. The proposed transactions referred to in subparagraph a
of this paragraph are limited to:
(1) a share acquisition pursuant to Section 1090.1 of
this title, or a merger or consolidation of the
corporation, except for a merger in respect of
which, pursuant to subsection F or G of Section
1081 of this title, no vote of the shareholders of
the corporation is required,
(2) a sale, lease, exchange, mortgage, pledge,
transfer, or other disposition, in one transaction
or a series of transactions, whether as part of a
dissolution or otherwise, of assets of the
corporation or of any direct or indirect majority-
owned subsidiary of the corporation, other than to
any direct or indirect wholly owned subsidiary or
to the corporation, having an aggregate market
value equal to fifty percent (50%) or more of
either the aggregate market value of all of the
assets of the corporation determined on a
consolidated basis or the aggregate market value
of all the outstanding stock of the corporation,
or
(3) a proposed tender or exchange offer for
outstanding stock of the corporation which
represents fifty percent (50%) or more of the
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outstanding voting stock of the corporation. The
corporation shall give not less than twenty (20)
days' notice to all interested shareholders prior
to the consummation of any of the transactions
described in divisions (1) or (2) of this
subparagraph; or
7. The business combination is with an interested shareholder
who became an interested shareholder at a time when the restriction
contained in this section did not apply by reason of any of
paragraphs 1 through 4 of this subsection; provided, however, that
this paragraph shall not apply if, at the time the interested
shareholder became an interested shareholder, the corporation's
certificate of incorporation contained a provision authorized by
subsection C of this section.
C. Notwithstanding paragraphs 1, 2, 3 and 4 of subsection B of
this section, a corporation may elect by a provision of its original
certificate of incorporation or any amendment thereto to be governed
by this section; provided, that any amendment to the certificate of
incorporation shall not apply to restrict a business combination
between the corporation and an interested shareholder of the
corporation if the interested shareholder became an interested
shareholder prior to the effective date of the amendment.
D. As used in this section:
1. "Affiliate" means a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or
is under common control with, another person;
2. "Associate", when used to indicate a relationship with any
person, means:
a. any corporation, partnership, unincorporated
association, or other entity of which the person is a
director, officer, or partner or is the owner of twenty
percent (20%) or more of any class of voting stock,
b. any trust or other estate in which the person has at
least a twenty-percent beneficial interest or as to
which such person serves as trustee or in a similar
fiduciary capacity, and
c. any relative or spouse of the person, or any relative
of the spouse, who has the same residence as the
person;
3. "Business combination", when used in reference to any
corporation and any interested shareholder of the corporation, means:
a. any merger or consolidation of the corporation or any
direct or indirect majority-owned subsidiary of the
corporation with:
(1) the interested shareholder, or
(2) any other corporation, partnership, unincorporated
association, or other entity if the merger or
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consolidation is caused by the interested
shareholder and, as a result of the merger or
consolidation subsection A of this section is not
applicable to the surviving entity,
b. any sale, lease, exchange, mortgage, pledge, transfer,
or other disposition, in one transaction or a series of
transactions, except proportionately as a shareholder
of the corporation, to or with the interested
shareholder, whether as part of a dissolution or
otherwise, of assets of the corporation or of any
direct or indirect majority-owned subsidiary of the
corporation which assets have an aggregate market value
equal to ten percent (10%) or more of either the
aggregate market value of all the assets of the
corporation determined on a consolidated basis or the
aggregate market value of all the outstanding stock of
the corporation,
c. any transaction which results in the issuance or
transfer by the corporation or by any direct or
indirect majority-owned subsidiary of the corporation
of any stock of the corporation or of the subsidiary to
the interested shareholder, except:
(1) pursuant to the exercise, exchange, or conversion
of securities exercisable for, exchangeable for,
or convertible into stock of the corporation or
any subsidiary which securities were outstanding
prior to the time that the interested shareholder
became an interested shareholder,
(2) pursuant to a merger under subsection G of Section
1081 of this title,
(3) pursuant to a dividend or distribution paid or
made, or the exercise, exchange, or conversion of
securities exercisable for, exchangeable for, or
convertible into stock of the corporation or any
subsidiary which security is distributed, pro
rata, to all holders of a class or series of stock
of the corporation subsequent to the time the
interested shareholder became an interested
shareholder,
(4) pursuant to an exchange offer by the corporation
to purchase stock made on the same terms to all
holders of the stock, or
(5) any issuance or transfer of stock by the
corporation; provided, however, that in no case
under divisions (3) through (5) of this
subparagraph shall there be an increase in the
interested shareholder's proportionate share of
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the stock of any class or series of the
corporation or of the voting stock of the
corporation,
d. any transaction involving the corporation or any direct
or indirect majority-owned subsidiary of the
corporation which has the effect, directly or
indirectly, of increasing the proportionate share of
the stock of any class or series, or securities
convertible into the stock of any class or series, or
the outstanding voting stock, of the corporation or of
any subsidiary which is owned by the interested
shareholder, except as a result of immaterial changes
due to fractional share adjustments or as a result of
any purchase or redemption of any shares of stock not
caused, directly or indirectly, by the interested
shareholder,
e. any receipt by the interested shareholder of the
benefit, directly or indirectly, except proportionately
as a shareholder of the corporation, of any loans,
advances, guarantees, pledges, or other financial
benefits, other than those expressly permitted in
subparagraphs a through d of this paragraph, provided
by or through the corporation or any direct or indirect
majority-owned subsidiary, or
f. any share acquisition by the interested shareholder
from the corporation or any direct or indirect
majority-owned subsidiary of the corporation pursuant
to Section 1090.1 of this title;
4. "Control", including the terms "controlling", "controlled by"
and "under common control with", means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting stock, by contract, or otherwise. A person who is the owner
of twenty percent (20%) or more of the outstanding voting stock of
any corporation, partnership, unincorporated association or other
entity shall be presumed to have control of the entity, in the
absence of proof by a preponderance of the evidence to the contrary.
Notwithstanding the foregoing, a presumption of control shall not
apply where the person holds stock, in good faith and not for the
purpose of circumventing this section, as an agent, bank, broker,
nominee, custodian, or trustee for one or more owners who do not
individually or as a group have control of the entity;
5. a. "Interested shareholder" means:
(1) any person, other than the corporation and any
direct or indirect majority-owned subsidiary of
the corporation, that:
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(a) is the owner of fifteen percent (15%) or more
of the outstanding voting stock of the
corporation, or
(b) is an affiliate or associate of the
corporation and was the owner of fifteen
percent (15%) or more of the outstanding
voting stock of the corporation at any time
within the three-year period immediately
prior to the date on which it is sought to be
determined whether the person is an
interested shareholder, and
(2) the affiliates and associates of the person.
b. "Interested shareholder" shall not mean:
(1) any person who:
(a) owned shares in excess of the fifteen percent
(15%) limitation set forth herein as of, or
acquired such shares pursuant to a tender
offer commenced prior to, September 1, 1991,
or pursuant to an exchange offer announced
prior to September 1, 1991, and commenced
within ninety (90) days thereafter and
either:
i. continued to own shares in excess of the
fifteen percent (15%) limitation or
would have but for action by the
corporation, or
ii. is an affiliate or associate of the
corporation and so continued, or so
would have continued but for action by
the corporation, to be the owner of
fifteen percent (15%) or more of the
outstanding voting stock of the
corporation at any time within the
three-year period immediately prior to
the date on which it is sought to be
determined whether the person is an
interested shareholder, or
(b) acquired the shares from a person described
in subdivision (a) of this division by gift,
inheritance, or in a transaction in which no
consideration was exchanged, or
(2) any person whose ownership of shares in excess of
the fifteen percent (15%) limitation set forth
herein is the result of action taken solely by the
corporation; provided, that the person shall be an
interested shareholder if thereafter the person
acquires additional shares of voting stock of the
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corporation, except as a result of further
corporate action not caused, directly or
indirectly, by the person.
c. For the purpose of determining whether a person is an
interested shareholder, the stock of the corporation
deemed to be outstanding shall include stock deemed to
be owned by the person through application of paragraph
9 of this subsection, but shall not include any other
unissued stock of the corporation which may be issuable
pursuant to any agreement, arrangement, or
understanding, or upon exercise of conversion rights,
warrants, or options, or otherwise;
6. "Person" means any individual, corporation, partnership,
unincorporated association, any other entity, any group and any
member of a group;
7. "Stock" means, with respect to any corporation, capital stock
and, with respect to any other entity, any equity interest;
8. "Voting stock" means, with respect to any corporation, stock
of any class or series entitled to vote generally in the election of
directors and, with respect to any entity that is not a corporation,
any equity interest entitled to vote generally in the election of the
governing body of the entity. Every reference to a percentage of
voting stock refers to the percentage of the votes of the voting
stock; and
9. "Owner", including the terms "own" and "owned", when used
with respect to any stock, means a person who individually or with or
through any of its affiliates or associates:
a. beneficially owns the stock, directly or indirectly, or
b. has:
(1) the right to acquire the stock, whether the right
is exercisable immediately or only after the
passage of time, pursuant to any agreement,
arrangement, or understanding, or upon the
exercise of conversion rights, exchange rights,
warrants, or options, or otherwise; provided,
however, that a person shall not be deemed the
owner of stock tendered pursuant to a tender or
exchange offer made by the person or any of the
person's affiliates or associates until the
tendered stock is accepted for purchase or
exchange, or
(2) the right to vote the stock pursuant to any
agreement, arrangement, or understanding;
provided, however, that a person shall not be
deemed the owner of any stock because of the
person's right to vote the stock if the agreement,
arrangement, or understanding to vote the stock
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arises solely from a revocable proxy or consent
given in response to a proxy or consent
solicitation made to ten or more persons, or
c. has any agreement, arrangement, or understanding for
the purpose of acquiring, holding, or voting, except
voting pursuant to a revocable proxy or consent as
described in division (2) of subparagraph b of this
paragraph, or disposing of the stock with any other
person that beneficially owns, or whose affiliates or
associates beneficially own, directly or indirectly,
the stock.
E. No provisions of a certificate of incorporation or bylaw
shall require, for any vote of shareholders required by this section,
a greater vote of shareholders than that specified in this section.
Added by Laws 1991, c. 53, § 2, eff. Sept. 1, 1991. Amended by Laws
1998, c. 422, § 20, eff. Nov. 1, 1998; Laws 1999, c. 421, § 17, eff.
Nov. 1, 1999; Laws 2001, c. 405, § 25, eff. Nov. 1, 2001; Laws 2004,
c. 255, § 27, eff. Nov. 1, 2004; Laws 2017, c. 323, § 25, eff. Nov.
1, 2017.
§18-1090.4. Conversion of an entity to a domestic corporation.
CONVERSION OF AN ENTITY TO A DOMESTIC CORPORATION
A. As used in this section, the term "entity" means a domestic
or foreign partnership, whether general or limited, and including a
limited liability partnership and a limited liability limited
partnership, a limited liability company, and any unincorporated
nonprofit or for-profit association, trust or enterprise having
members or having outstanding shares of stock or other evidences of
financial, beneficial or membership interest therein, whether formed
by agreement or under statutory authority or otherwise and whether
formed or organized under the laws of this state or the laws of any
other jurisdiction.
B. Any entity may convert to a domestic corporation by complying
with subsection G of this section and filing in the office of the
Secretary of State a certificate of conversion that has been executed
in accordance with subsection H of this section and filed in
accordance with Section 1007 of this title, to which shall be
attached, a certificate of incorporation that has been prepared,
executed and acknowledged in accordance with Section 1007 of this
title. Each of the certificates required by this subsection shall be
filed simultaneously in the office of the Secretary of State.
C. The certificate of conversion to a corporation shall state:
1. The date on which the entity was first formed;
2. The name, jurisdiction of formation or organization, and type
of entity of the entity when formed and, if changed, its name,
jurisdiction and type of entity immediately before the filing of the
certificate of conversion;
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3. The name of the corporation as set forth in its certificate
of incorporation filed in accordance with subsection B of this
section; and
4. The future effective date or time, which shall be a date or
time certain not later than ninety (90) days after the filing, of the
conversion to a corporation if the conversion is not to be effective
upon the filing of the certificate of conversion and the certificate
of incorporation provides for the same future effective date as
authorized in subsection D of Section 1007 of this title.
D. Upon the effective date or time of the certificate of
conversion and the certificate of incorporation, the entity shall be
converted to a domestic corporation and the corporation shall
thereafter be subject to all of the provisions of this title, except
that notwithstanding Section 1007 of this title, the existence of the
corporation shall be deemed to have commenced on the date the entity
commenced its existence.
E. The conversion of any entity to a domestic corporation shall
not be deemed to affect any obligations or liabilities of the entity
incurred before its conversion to a domestic corporation or the
personal liability of any person incurred before such conversion.
F. When an entity has converted to a domestic corporation under
this section, the domestic corporation shall be deemed to be the same
entity as the converting entity. All of the rights, privileges and
powers of the entity that has converted, and all property, real,
personal and mixed, and all debts due to the entity, as well as all
other things and causes of action belonging to the entity, shall
remain vested in the domestic corporation to which the entity has
converted and shall be the property of the domestic corporation and
the title to any real property vested by deed or otherwise in the
entity shall not revert or be in any way impaired by reason of the
conversion; but all rights of creditors and all liens upon any
property of the entity shall be preserved unimpaired, and all debts,
liabilities and duties of the entity that has converted shall remain
attached to the domestic corporation to which the entity has
converted, and may be enforced against it to the same extent as if
said debts, liabilities and duties had originally been incurred or
contracted by it in its capacity as a domestic corporation. The
rights, privileges, powers and interests in property of the entity,
as well as the debts, liabilities and duties of the entity, shall not
be deemed, as a consequence of the conversion, to have been
transferred to the domestic corporation to which the entity has
converted for any purpose of the laws of this state.
G. Unless otherwise agreed or otherwise provided by any laws of
this state applicable to the converting entity, the converting entity
shall not be required to wind up its affairs or pay its liabilities
and distribute its assets, and the conversion shall not be deemed to
constitute a dissolution of such entity and shall constitute a
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continuation of the existence of the converting entity in the form of
a domestic corporation.
H. Before filing a certificate of conversion with the Secretary
of State, the conversion shall be approved in the manner provided for
by the document, instrument, agreement or other writing, as the case
may be, governing the internal affairs of the entity and the conduct
of its business or by applicable law, as appropriate, and a
certificate of incorporation shall be approved by the same
authorization required to approve the conversion.
I. The certificate of conversion to a corporation shall be
signed by an officer, director, trustee, manager, partner, or other
person performing functions equivalent to those of an officer or
director of a domestic corporation, however named or described, and
who is authorized to sign the certificate of conversion on behalf of
the entity.
J. In a conversion of an entity to a domestic corporation under
this section, rights or securities of, or memberships or membership,
economic or ownership interests in, the entity which is to be
converted to a domestic corporation may be exchanged for or converted
into cash, property, or shares of stock, rights or securities of the
domestic corporation or, in addition to or in lieu thereof, may be
exchanged for or converted into cash, property, or shares of stock,
rights or securities of or interests in another domestic corporation
or entity or may be canceled.
Added by Laws 2001, c. 405, § 26, eff. Nov. 1, 2001. Amended by Laws
2008, c. 253, § 12; Laws 2019, c. 88, § 23, eff. Nov. 1, 2019.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-1090.5. Conversion of domestic corporation to an entity.
CONVERSION OF DOMESTIC CORPORATION TO AN ENTITY
A. A domestic corporation may, upon the authorization of such
conversion in accordance with this section, convert to an entity. As
used in this section, the term "entity" means a domestic or foreign
partnership, whether general or limited, and including a limited
liability partnership and a limited liability limited partnership, a
limited liability company, and any unincorporated nonprofit or for-
profit association, trust or enterprise having members or having
outstanding shares of stock or other evidences of financial,
beneficial or membership interest therein, whether formed by
agreement or under statutory authority or otherwise and whether
formed or organized under the laws of this state or the laws of any
other jurisdiction.
B. The board of directors of the corporation which desires to
convert under this section shall adopt a resolution approving such
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conversion, specifying the type of entity into which the corporation
shall be converted and recommending the approval of the conversion by
the shareholders of the corporation. The resolution shall be
submitted to the shareholders of the corporation at an annual or
special meeting. Due notice of the time, and purpose of the meeting
shall be mailed to each holder of shares, whether voting or
nonvoting, of the corporation at the address of the shareholder as it
appears on the records of the corporation, at least twenty (20) days
prior to the date of the meeting. At the meeting, the resolution
shall be considered and a vote taken for its adoption or rejection.
The corporation adopts the conversion if all outstanding shares of
stock of the corporation, whether voting or nonvoting, are voted for
the resolution.
C. If the governing act of the domestic entity to which the
corporation is converting does not provide for the filing of a
conversion notice with the Secretary of State or the corporation is
converting to a foreign entity, the corporation shall file with the
Secretary of State a certificate of conversion executed in accordance
with Section 1007 of this title which certifies:
1. The name of the corporation and, if it has been changed, the
name under which it was originally incorporated;
2. The date of filing of its original certificate of
incorporation with the Secretary of State;
3. The name of the entity to which the corporation shall be
converted, its jurisdiction of formation if a foreign entity, and the
type of entity;
4. That the conversion has been approved in accordance with the
provisions of this section;
5. The future effective date or time of the conversion to an
entity, which shall be a date or time certain not later than ninety
(90) days after the filing, if it is not to be effective upon the
filing of the certificate of conversion;
6. The agreement of the foreign entity that it may be served
with process in this state in any action, suit or proceeding for
enforcement of any obligation of the foreign entity arising while it
was a domestic corporation and that it irrevocably appoints the
Secretary of State as its agent to accept service of process in any
such action, suit or proceeding;
7. The address to which a copy of the process referred to in
this subsection shall be mailed by the Secretary of State. In the
event of such service upon the Secretary of State in accordance with
the provisions of Section 2004 of Title 12 of the Oklahoma Statutes,
the Secretary of State shall immediately notify such corporation that
has converted out of the State of Oklahoma by letter, certified mail,
return receipt requested, directed to the corporation at the address
specified unless the corporation shall have designated in writing to
the Secretary of State a different address for this purpose, in which
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case it shall be mailed to the last address so designated. The
notice shall include a copy of the process and any other papers
served on the Secretary of State pursuant to the provisions of this
subsection. It shall be the duty of the plaintiff in the event of
such service to serve process and any other papers in duplicate, to
notify the Secretary of State that service is being effected pursuant
to the provisions of this subsection, and to pay the Secretary of
State the fee provided for in paragraph 7 of Section 1142 of this
title, which fee shall be taxed as part of the costs in the
proceeding. The Secretary of State shall maintain an alphabetical
record of any such service setting forth the name of the plaintiff
and the defendant, the title, docket number, and nature of the
proceeding in which process has been served upon the Secretary of
State, the fact that service has been effected pursuant to the
provisions of this subsection, the return date thereof, and the date
service was made. The Secretary of State shall not be required to
retain such information longer than five (5) years from receipt of
the service of process by the Secretary of State; and
8. If the entity to which the corporation is converting was
required to make a filing with the Secretary of State as a condition
of its formation, the type and date of such filing.
D. Upon the filing of a conversion notice with the Secretary of
State, whether under subsection C of this section or under the
governing act of the domestic entity to which the corporation is
converting, the filing of any formation document required by the
governing act of the domestic entity to which the corporation is
converting, and payment to the Secretary of State of all prescribed
fees, the Secretary of State shall certify that the corporation has
filed all documents and paid all required fees, and thereupon the
corporation shall cease to exist as a domestic corporation at the
time the certificate of conversion becomes effective in accordance
with Section 1007 of this title. The certificate of the Secretary of
State shall be prima facie evidence of the conversion by the
corporation.
E. The conversion of a corporation under this section and the
resulting cessation of its existence as a domestic corporation shall
not be deemed to affect any obligations or liabilities of the
corporation incurred before such conversion or the personal liability
of any person incurred before the conversion, nor shall it be deemed
to affect the choice of law applicable to the corporation with
respect to matters arising before the conversion.
F. Unless otherwise provided in a resolution of conversion
adopted in accordance with this section, the converting corporation
shall not be required to wind up its affairs or pay its liabilities
and distribute its assets, and the conversion shall not constitute a
dissolution of such corporation.
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G. In a conversion of a domestic corporation to an entity under
this section, shares of stock of the converting domestic corporation
may be exchanged for or converted into cash, property, rights or
securities of, or memberships or membership, economic or ownership
interests in, the entity to which the domestic corporation is being
converted or, in addition to or in lieu thereof, may be exchanged for
or converted into cash, property, shares of stock, rights or
securities of, or interests in, another corporation or entity or may
be canceled.
H. When a corporation has converted to an entity under this
section, the entity shall be deemed to be the same entity as the
corporation. All of the rights, privileges and powers of the
corporation that has converted, and all property, real, personal and
mixed, and all debts due to the corporation, as well as all other
things and causes of action belonging to the corporation, shall
remain vested in the entity to which the corporation has converted
and shall be the property of the entity, and the title to any real
property vested by deed or otherwise in the corporation shall not
revert or be in any way impaired by reason of the conversion; but all
rights of creditors and all liens upon any property of the
corporation shall be preserved unimpaired, and all debts, liabilities
and duties of the corporation that has converted shall remain
attached to the entity to which the corporation has converted, and
may be enforced against it to the same extent as if said debts,
liabilities and duties had originally been incurred or contracted by
it in its capacity as the entity. The rights, privileges, powers and
interest in property of the corporation that has converted, as well
as the debts, liabilities and duties of the corporation, shall not be
deemed, as a consequence of the conversion, to have been transferred
to the entity to which the corporation has converted for any purpose
of the laws of this state.
I. No vote of shareholders of a corporation shall be necessary
to authorize a conversion if no shares of the stock of the
corporation shall have been issued before the adoption by the board
of directors of the resolution approving the conversion.
J. Nothing in this section shall be deemed to authorize the
conversion of a charitable nonstock corporation into another entity,
if the charitable status of such charitable nonstock corporation
would thereby be lost or impaired.
Added by Laws 2001, c. 405, § 27, eff. Nov. 1, 2001. Amended by Laws
2004, c. 255, § 28, eff. Nov. 1, 2004; Laws 2008, c. 253, § 13; Laws
2019, c. 88, § 24, eff. Nov. 1, 2019.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
4(#$0&($"!$"+$ -*;
§18-1091. Appraisal rights.
APPRAISAL RIGHTS
A. Any shareholder of a corporation of this state who holds
shares of stock on the date of the making of a demand pursuant to the
provisions of subsection D of this section with respect to the
shares, who continuously holds the shares through the effective date
of the merger or consolidation, who has otherwise complied with the
provisions of subsection D of this section and who has neither voted
in favor of the merger or consolidation nor consented thereto in
writing pursuant to the provisions of Section 1073 of this title
shall be entitled to an appraisal by the district court of the fair
value of the shares of stock under the circumstances described in
subsections B and C of this section. As used in this section, the
word "shareholder" means a holder of record of stock in a stock
corporation; the words "stock" and "share" mean and include what is
ordinarily meant by those words; and "depository receipt" means an
instrument issued by a depository representing an interest in one or
more shares, or fractions thereof, solely of stock of a corporation,
which stock is deposited with the depository.
B. 1. Except as otherwise provided for in this subsection,
appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or
consolidation, or of the acquired corporation in a share acquisition,
to be effected pursuant to the provisions of Section 1081, other than
a merger effected pursuant to subsection G of Section 1081, or,
subject to paragraph 3 of this subsection, subsection H of Section
1081, and Section 1082, 1084, 1085, 1086, 1087, 1090.1 or 1090.2 of
this title.
2. a. No appraisal rights under this section shall be
available for the shares of any class or series of
stock which stock, or depository receipts in respect
thereof, at the record date fixed to determine the
shareholders entitled to receive notice of the meeting
of shareholders to act upon the agreement of merger or
consolidation, were either:
(1) listed on a national securities exchange; or
(2) held of record by more than two thousand holders.
No appraisal rights shall be available for any shares of stock of
the constituent corporation surviving a merger if the merger did not
require for its approval the vote of the shareholders of the
surviving corporation as provided in subsection G of Section 1081 of
this title.
b. in addition, no appraisal rights shall be available for
any shares of stock, or depository receipts in respect
thereof, of the constituent corporation surviving a
merger if the merger did not require for its approval
the vote of the shareholders of the surviving
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corporation as provided for in subsection F of Section
1081 of this title.
3. Notwithstanding the provisions of paragraph 2 of this
subsection, appraisal rights provided for in this section shall be
available for the shares of any class or series of stock of a
constituent corporation if the holders thereof are required by the
terms of an agreement of merger or consolidation pursuant to the
provisions of Section 1081, 1082, 1084, 1085, 1086, 1087, 1090.1 or
1090.2 of this title to accept for the stock anything except:
a. shares of stock of the corporation surviving or
resulting from the merger or consolidation or
depository receipts thereof, or
b. shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock or
depository receipts at the effective date of the merger
or consolidation will be either listed on a national
securities exchange or held of record by more than two
thousand holders, or
c. cash in lieu of fractional shares or fractional
depository receipts described in subparagraphs a and b
of this paragraph, or
d. any combination of the shares of stock, depository
receipts, and cash in lieu of the fractional shares or
depository receipts described in subparagraphs a, b,
and c of this paragraph.
4. In the event all of the stock of a subsidiary Oklahoma
corporation party to a merger effected pursuant to the provisions of
subsection H of Section 1081 or Section 1083 or 1083.1 of this title
is not owned by the parent corporation immediately prior to the
merger, appraisal rights shall be available for the shares of the
subsidiary Oklahoma corporation.
C. Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be
available for the shares of any class or series of its stock as a
result of an amendment to its certificate of incorporation, any
merger or consolidation in which the corporation is a constituent
corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a
provision, the procedures of this section, including those set forth
in subsections D and E of this section, shall apply as nearly as is
practicable.
D. Appraisal rights shall be perfected as follows:
1. If a proposed merger or consolidation for which appraisal
rights are provided under this section is to be submitted for
approval at a meeting of shareholders, the corporation, not less than
twenty (20) days prior to the meeting, shall notify each of its
shareholders who was such on the record date for notice of such
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meeting, or such members who received notice in accordance with
subsection C of Section 1081 of this title, with respect to shares
for which appraisal rights are available pursuant to subsection B or
C of this section that appraisal rights are available for any or all
of the shares of the constituent corporations, and shall include in
the notice a copy of this section and, if one of the constituent
corporations is a nonstock corporation, a copy of Section 1004.1 of
this title. Each shareholder electing to demand the appraisal of the
shares of the shareholder shall deliver to the corporation, before
the taking of the vote on the merger or consolidation, a written
demand for appraisal of the shares of the shareholder. The demand
will be sufficient if it reasonably informs the corporation of the
identity of the shareholder and that the shareholder intends thereby
to demand the appraisal of the shares of the shareholder. A proxy or
vote against the merger or consolidation shall not constitute such a
demand. A shareholder electing to take such action must do so by a
separate written demand as herein provided. Within ten (10) days
after the effective date of the merger or consolidation, the
surviving or resulting corporation shall notify each shareholder of
each constituent corporation who has complied with the provisions of
this subsection and has not voted in favor of or consented to the
merger or consolidation as of the date that the merger or
consolidation has become effective; or
2. If the merger or consolidation is approved pursuant to the
provisions of Section 1073, subsection H of Section 1081, Section
1083 or Section 1083.1 of this title, either a constituent
corporation before the effective date of the merger or consolidation
or the surviving or resulting corporation within ten (10) days
thereafter shall notify each of the holders of any class or series of
stock of the constituent corporation who are entitled to appraisal
rights of the approval of the merger or consolidation and that
appraisal rights are available for any or all shares of such class or
series of stock of the constituent corporation, and shall include in
the notice a copy of this section and, if one of the constituent
corporations is a nonstock corporation, a copy of Section 1004.1 of
this title. The notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify the
shareholders of the effective date of the merger or consolidation.
Any shareholder entitled to appraisal rights may, within twenty (20)
days after the date of mailing of the notice or, in the case of a
merger approved pursuant to subsection H of Section 1081 of this
title, within the later of the consummation of an offer contemplated
by subsection H of Section 1081 of this title and twenty (20) days
after the date of mailing of such notice, demand in writing from the
surviving or resulting corporation the appraisal of the holder's
shares. The demand will be sufficient if it reasonably informs the
corporation of the identity of the shareholder and that the
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shareholder intends to demand the appraisal of the holder's shares.
If the notice does not notify shareholders of the effective date of
the merger or consolidation either:
a. each constituent corporation shall send a second notice
before the effective date of the merger or
consolidation notifying each of the holders of any
class or series of stock of the constituent corporation
that are entitled to appraisal rights of the effective
date of the merger or consolidation, or
b. the surviving or resulting corporation shall send a
second notice to all holders on or within ten (10) days
after the effective date of the merger or
consolidation; provided, however, that if the second
notice is sent more than twenty (20) days following the
mailing of the first notice or, in the case of a merger
approved pursuant to subsection H of Section 1081 of
this title, later than the later of the consummation of
the offer contemplated by subsection H of Section 1081
of this title and twenty (20) days following the
sending of the first notice, the second notice need
only be sent to each shareholder who is entitled to
appraisal rights and who has demanded appraisal of the
holder's shares in accordance with this subsection. An
affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required
to give either notice that the notice has been given
shall, in the absence of fraud, be prima facie evidence
of the facts stated therein. For purposes of
determining the shareholders entitled to receive either
notice, each constituent corporation may fix, in
advance, a record date that shall be not more than ten
(10) days prior to the date the notice is given;
provided, if the notice is given on or after the
effective date of the merger or consolidation, the
record date shall be the effective date. If no record
date is fixed and the notice is given prior to the
effective date, the record date shall be the close of
business on the day next preceding the day on which the
notice is given.
E. Within one hundred twenty (120) days after the effective date
of the merger or consolidation, the surviving or resulting
corporation or any shareholder who has complied with the provisions
of subsections A and D of this section and who is otherwise entitled
to appraisal rights, may file a petition in district court demanding
a determination of the value of the stock of all such shareholders.
Notwithstanding the foregoing, at any time within sixty (60) days
after the effective date of the merger or consolidation, any
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shareholder who has not commenced an appraisal proceeding or joined
that proceeding as a named party shall have the right to withdraw the
demand of the shareholder for appraisal and to accept the terms
offered upon the merger or consolidation. Within one hundred twenty
(120) days after the effective date of the merger or consolidation,
any shareholder who has complied with the requirements of subsections
A and D of this section, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from
the consolidation a statement setting forth the aggregate number of
shares not voted in favor of the merger or consolidation and with
respect to which demands for appraisal have been received and the
aggregate number of holders of the shares. The written statement
shall be mailed to the shareholder within ten (10) days after the
shareholder's written request for a statement is received by the
surviving or resulting corporation or within ten (10) days after
expiration of the period for delivery of demands for appraisal
pursuant to the provisions of subsection D of this section, whichever
is later. Notwithstanding subsection A of this section, a person who
is the beneficial owner of shares of such stock held either in a
voting trust or by a nominee on behalf of such person may, in such
person's own name, file a petition or request from the corporation
the statement described in this section.
F. Upon the filing of any such petition by a shareholder,
service of a copy thereof shall be made upon the surviving or
resulting corporation, which, within twenty (20) days after service,
shall file, in the office of the court clerk of the district court in
which the petition was filed, a duly verified list containing the
names and addresses of all shareholders who have demanded payment for
their shares and with whom agreements regarding the value of their
shares have not been reached by the surviving or resulting
corporation. If the petition shall be filed by the surviving or
resulting corporation, the petition shall be accompanied by such duly
verified list. The court clerk, if so ordered by the court, shall
give notice of the time and place fixed for the hearing on the
petition by registered or certified mail to the surviving or
resulting corporation and to the shareholders shown on the list at
the addresses therein stated. Notice shall also be given by one or
more publications at least one (1) week before the day of the
hearing, in a newspaper of general circulation published in the City
of Oklahoma City, Oklahoma, or other publication as the court deems
advisable. The forms of the notices by mail and by publication shall
be approved by the court, and the costs thereof shall be borne by the
surviving or resulting corporation.
G. At the hearing on the petition, the court shall determine the
shareholders who have complied with the provisions of this section
and who have become entitled to appraisal rights. The court may
require the shareholders who have demanded an appraisal of their
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shares and who hold stock represented by certificates to submit their
certificates of stock to the court clerk for notation thereon of the
pendency of the appraisal proceedings; and if any shareholder fails
to comply with this direction, the court may dismiss the proceedings
as to that shareholder. If immediately before the merger or
consolidation the shares of the class or series of stock of the
constituent corporation as to which appraisal rights are available
were listed on a national securities exchange, the court shall
dismiss the proceedings as to all holders of such shares who are
otherwise entitled to appraisal rights unless (1) the total number of
shares entitled to appraisal exceeds one percent (1%) of the
outstanding shares of the class or series eligible for appraisal, (2)
the value of the consideration provided in the merger or
consolidation for such total number of shares exceeds One Million
Dollars ($1,000,000.00), or (3) the merger was approved pursuant to
Section 1083 or Section 1083.1 of this title.
H. After determining the shareholders entitled to an appraisal,
the court shall appraise the shares, determining their fair value
exclusive of any element of value arising from the accomplishment or
expectation of the merger or consolidation, together with interest,
if any, to be paid upon the amount determined to be the fair value.
In determining the fair value, the court shall take into account all
relevant factors. In determining the fair rate of interest, the
court may consider all relevant factors. Unless the court in its
discretion determines otherwise for good cause shown, and except as
provided in this subsection, interest from the effective date of the
merger through the date of payment of the judgment shall be
compounded quarterly and shall accrue at five percent (5%) over the
Federal Reserve discount rate, including any surcharge, as
established from time to time during the period between the effective
date of the merger and the date of payment of judgment. At any time
before the entry of judgment in the proceedings, the surviving
corporation may pay to each shareholder entitled to appraisal an
amount in cash, in which case interest shall accrue thereafter as
provided herein only upon the sum of (1) the difference, if any,
between the amount so paid and the fair value of the shares as
determined by the court, and (2) interest theretofore accrued, unless
paid at that time. Upon application by the surviving or resulting
corporation or by any shareholder entitled to participate in the
appraisal proceeding, the court may, in its discretion, proceed to
trial upon the appraisal prior to the final determination of the
shareholder entitled to an appraisal. Any shareholder whose name
appears on the list filed by the surviving or resulting corporation
pursuant to the provisions of subsection F of this section and who
has submitted the certificates of stock of the shareholder to the
court clerk, if required, may participate fully in all proceedings
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until it is finally determined that the shareholder is not entitled
to appraisal rights pursuant to the provisions of this section.
I. The court shall direct the payment of the fair value of the
shares, together with interest, if any, by the surviving or resulting
corporation to the shareholders entitled thereto. Payment shall be
made to each shareholder, in the case of holders of uncertificated
stock immediately, and in the case of holders of shares represented
by certificates upon the surrender to the corporation of the
certificates representing the stock. The court's decree may be
enforced as other decrees in the district court may be enforced,
whether the surviving or resulting corporation be a corporation of
this state or of any other state.
J. The costs of the proceeding may be determined by the court
and taxed upon the parties as the court deems equitable in the
circumstances. Upon application of a shareholder, the court may
order all or a portion of the expenses incurred by any shareholder in
connection with the appraisal proceeding, including, without
limitation, reasonable attorney's fees and the fees and expenses of
experts, to be charged pro rata against the value of all of the
shares entitled to an appraisal.
K. From and after the effective date of the merger or
consolidation, no shareholder who has demanded appraisal rights as
provided for in subsection D of this section shall be entitled to
vote the stock for any purpose or to receive payment of dividends or
other distributions on the stock, except dividends or other
distributions payable to shareholders of record at a date which is
prior to the effective date of the merger or consolidation; provided,
however, that if no petition for an appraisal shall be filed within
the time provided for in subsection E of this section, or if the
shareholder shall deliver to the surviving or resulting corporation a
written withdrawal of the shareholder's demand for an appraisal and
an acceptance of the merger or consolidation, either within sixty
(60) days after the effective date of the merger or consolidation as
provided for in subsection E of this section or thereafter with the
written approval of the corporation, then the right of the
shareholder to an appraisal shall cease; provided further, no
appraisal proceeding in the district court shall be dismissed as to
any shareholder without the approval of the court, and approval may
be conditioned upon terms as the court deems just; provided, however,
that this provision shall not affect the right of any shareholder who
has not commenced an appraisal proceeding or joined that proceeding
as a named party to withdraw such shareholder's demand for appraisal
and to accept the terms offered upon the merger or consolidation
within sixty (60) days after the effective date of the merger or
consolidation, as set forth in subsection E of this section.
L. The shares of the surviving or resulting corporation into
which the shares of any objecting shareholders would have been
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converted had they assented to the merger or consolidation shall have
the status of authorized and unissued shares of the surviving or
resulting corporation.
Added by Laws 1986, c. 292, § 91, eff. Nov. 1, 1986. Amended by Laws
1987, c. 146, § 7, operative Nov. 1, 1987; Laws 1988, c. 323, § 19,
eff. Nov. 1, 1988; Laws 1990, c. 328, § 6, eff. Sept. 1, 1990; Laws
1998, c. 422, § 21, eff. Nov. 1, 1998; Laws 2004, c. 255, § 29, eff.
Nov. 1, 2004; Laws 2017, c. 323, § 26, eff. Nov. 1, 2017.
§18-1092. Sale, lease or exchange of assets; consideration -
Procedure.
SALE, LEASE OR EXCHANGE OF ASSETS; CONSIDERATION; PROCEDURE
A. Every corporation, at any meeting of its board of directors
or governing body, may sell, lease, or exchange all or substantially
all of its property and assets, including its goodwill and its
corporate franchises, upon such terms and conditions and for such
consideration, which may consist in whole or in part of money or
other property, including shares of stock in, and/or other securities
of, any other corporation or corporations, as its board of directors
or governing body deems expedient and for the best interests of the
corporation, when and as authorized by a resolution adopted by the
holders of a majority of the outstanding stock of the corporation
entitled to vote thereon or, if the corporation is a nonstock
corporation, by a majority of the members having the right to vote
for the election of the members of the governing body and any other
members entitled to vote thereon under the certificate of
incorporation or the bylaws of such corporation, at a meeting duly
called upon at least twenty (20) days' notice. The notice of the
meeting shall state that such a resolution will be considered.
B. Notwithstanding authorization or consent to a proposed sale,
lease or exchange of a corporation's property and assets by the
shareholders or members, the board of directors or governing body may
abandon such proposed sale, lease or exchange without further action
by the shareholders or members, subject to the rights, if any, of
third parties under any contract relating thereto.
C. For purposes of this section only, the property and assets of
the corporation include the property and assets of any subsidiary of
the corporation. As used in this subsection, "subsidiary" means any
entity wholly owned and controlled, directly or indirectly, by the
corporation and includes, without limitation, corporations,
partnerships, limited partnerships, limited liability partnerships,
limited liability companies, and statutory trusts. Notwithstanding
subsection A of this section, except to the extent the certificate of
incorporation otherwise provides, no resolution by shareholders or
members shall be required for a sale, lease or exchange of property
and assets of the corporation to a subsidiary.
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Added by Laws 1986, c. 292, § 92, eff. Nov. 1, 1986. Amended by Laws
2008, c. 253, § 14; Laws 2019, c. 88, § 25, eff. Nov. 1, 2019.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-1093. Mortgage or Pledge of Assets.
MORTGAGE OR PLEDGE OF ASSETS
The authorization or consent of shareholders to the mortgage or
pledge of a corporation's property and assets shall not be necessary,
except to the extent that the certificate of incorporation otherwise
provides.
Added by Laws 1986, c. 292, § 93, eff. Nov. 1, 1986.
§18-1094. Dissolution of Joint Venture Corporation Having Two
Shareholders.
DISSOLUTION OF JOINT VENTURE CORPORATION HAVING TWO SHAREHOLDERS
A. If the shareholders of a corporation of this state, having
only two shareholders each of which owns fifty percent (50%) of the
stock therein, shall be engaged in the prosecution of a joint venture
and if the shareholders shall be unable to agree upon the
desirability of discontinuing the joint venture and disposing of the
assets used in the venture, either shareholder may, unless otherwise
provided in the certificate of incorporation of the corporation or in
a written agreement between the shareholders, file with the district
court a petition stating that it desires to discontinue the joint
venture and to dispose of the assets used in the venture in
accordance with a plan to be agreed upon by both shareholders or
that, if no plan shall be agreed upon by both shareholders, the
corporation be dissolved. The petition shall have attached thereto a
copy of the proposed plan of discontinuance and distribution and a
certificate stating that copies of the petition and plan have been
transmitted in writing to the other shareholder and to the directors
and officers of the corporation. The petition and certificate shall
be executed and acknowledged in accordance with the provisions of
Section 1007 of this title.
B. 1. Unless both shareholders file with the district court,
the district court may dissolve the corporation and may by
appointment of one or more trustees or receivers with all the powers
and title of a trustee or receiver appointed pursuant to the
provisions of Section 1100 of this title, administer and wind up its
affairs:
a. within three (3) months of the date of the filing of
the petition, a certificate similarly executed and
acknowledged stating that they have agreed on the plan,
or a modification thereof, and
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b. within one (1) year from the date of the filing of the
petition, a certificate similarly executed and
acknowledged stating that the distribution provided by
the plan has been completed.
2. Either or both of the periods provided for in paragraph 1 of
this subsection may be extended by agreement of the shareholders,
evidenced by a certificate similarly executed, acknowledged and filed
with the district court prior to the expiration of the period.
Added by Laws 1986, c. 292, § 94, eff. Nov. 1, 1986. Amended by Laws
1998, c. 422, § 22, eff. Nov. 1, 1998.
§18-1095. Dissolution before the issuance of shares or beginning
business – Procedure.
DISSOLUTION BEFORE THE ISSUANCE OF SHARES OR
BEGINNING BUSINESS; PROCEDURE
If a corporation has not issued shares or has not commenced the
business for which the corporation was organized, a majority of the
incorporators, or, if directors were named in the certificate of
incorporation or have been elected, a majority of the directors, may
surrender all of the corporation's rights and franchises by filing in
the Office of the Secretary of State a certificate, executed and
acknowledged by a majority of the incorporators or directors, stating
:
1. That no shares of stock have been issued or that the business
of activity for which the corporation was organized has not begun;
2. The date of filing of the corporation's original certificate
of incorporation with the Secretary of State;
3. That no part of the capital of the corporation has been paid,
or, if some capital has been paid, that the amount actually paid in
for the corporation's shares, less any part thereof disbursed for
necessary expenses, has been returned to those entitled thereto;
4. That if the corporation has begun business but it has not
issued shares, all debts of the corporation have been paid;
5. That if the corporation has not begun business but has issued
stock certificates, all issued stock certificates, if any, have been
surrendered and canceled; and
6. That all rights and franchises of the corporation are
surrendered. Upon such certificate becoming effective in accordance
with the provisions of Section 1007 of this title, the corporation
shall be dissolved.
Added by Laws 1986, c. 292, § 95, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 20, eff. Nov. 1, 1988; Laws 2017, c. 323, § 27, eff.
Nov. 1, 2017.
§18-1096. Dissolution – Procedure.
DISSOLUTION; PROCEDURE
4(#$0&($"!$"+$ -;
A. If it should be deemed advisable in the judgment of the board
of directors of any corporation that it should be dissolved, the
board, after the adoption of a resolution to that effect by a
majority of the whole board at any meeting called for that purpose,
shall cause notice to be mailed to each shareholder entitled to vote
thereon as of the record date for determining the shareholders
entitled to notice of the meeting of the adoption of the resolution
and of a meeting of shareholders to take action upon the resolution.
B. At the meeting a vote shall be taken upon the proposed
dissolution. If a majority of the outstanding stock of the
corporation entitled to vote thereon shall vote for the proposed
dissolution, a certificate of dissolution shall be filed with the
Secretary of State pursuant to subsection D of this section.
C. Dissolution of a corporation may also be authorized without
action of the directors if all the shareholders entitled to vote
thereon shall consent in writing and a certificate of dissolution
shall be filed with the Secretary of State pursuant to subsection D
of this section.
D. If dissolution is authorized in accordance with this section,
a certificate of dissolution shall be executed, acknowledged and
filed, and shall become effective, in accordance with Section 1007 of
this title. Such certificate of dissolution shall set forth:
1. The name of the corporation;
2. The date dissolution was authorized;
3. That the dissolution has been authorized by the board of
directors and shareholders of the corporation, in accordance with
subsections A and B of this section, or that the dissolution has been
authorized by all of the shareholders of the corporation entitled to
vote on a dissolution, in accordance with subsection C of this
section;
4. The names and addresses of the directors and officers of the
corporation; and
5. The date of filing of the corporation's original certificate
of incorporation with the Secretary of State.
E. The resolution authorizing a proposed dissolution may provide
that notwithstanding authorization or consent to the proposed
dissolution by the shareholders, or the members of a nonstock
corporation pursuant to Section 1097 of this title, the board of
directors or governing body may abandon such proposed dissolution
without further action by the shareholders or members.
F. Upon a certificate of dissolution becoming effective in
accordance with Section 1007 of this title, the corporation shall be
dissolved.
Added by Laws 1986, c. 292, § 96, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 21, eff. Nov. 1, 1988; Laws 2017, c. 323, § 28, eff.
Nov. 1, 2017.
4(#$0&($"!$"+$ -27
§18-1097. Dissolution of nonstock corporation - Procedure.
DISSOLUTION OF NONSTOCK CORPORATION; PROCEDURE
A. Whenever it shall be desired to dissolve any nonstock
corporation, the governing body shall perform all the acts necessary
for dissolution which are required by the provisions of Section 1096
of this title to be performed by the board of directors of a
corporation having capital stock. If the members of a corporation
having no capital stock are entitled to vote for the election of
members of its governing body or are entitled to vote for dissolution
under the certificate of incorporation or the bylaws of such
corporation, they shall perform all the acts necessary for
dissolution which are required by the provisions of Section 1096 of
this title to be performed by the shareholders of a corporation
having capital stock, including dissolution without action of the
members of the governing body if all the members of the corporation
entitled to vote thereon shall consent in writing and a certificate
of dissolution shall be filed with the Secretary of State pursuant to
subsection D of Section 1096 of this title. If there is no member
entitled to vote thereon, the dissolution of the corporation shall be
authorized at a meeting of the governing body, upon the adoption of a
resolution to dissolve by the vote of a majority of members of its
governing body then in office. In all other respects, the method and
proceedings for the dissolution of a nonstock corporation shall
conform as nearly as may be to the proceedings prescribed by the
provisions of Section 1096 of this title for the dissolution of
corporations having capital stock.
B. If a nonstock corporation has not commenced the business for
which the corporation was organized, a majority of the governing body
or, if none, a majority of the incorporators may surrender all of the
corporation rights and franchises by filing in the Office of the
Secretary of State a certificate, executed and acknowledged by a
majority of the incorporators or governing body, conforming as nearly
as may be to the certificate prescribed by Section 1095 of this
title.
Added by Laws 1986, c. 292, § 97, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 22, eff. Nov. 1, 1988; Laws 1999, c. 421, § 18, eff.
Nov. 1, 1999; Laws 2019, c. 88, § 26, eff. Nov. 1, 2019.
§18-1098. Repealed by Laws 1998, c. 432, § 39, eff. Nov. 1, 1998.
§18-1099. Continuation of corporation after dissolution for purposes
of suit and winding up affairs.
CONTINUATION OF CORPORATION AFTER DISSOLUTION FOR PURPOSES OF SUIT
AND WINDING UP AFFAIRS
All corporations, whether they expire by their own limitation or
are otherwise dissolved, nevertheless shall be continued, for the
term of three (3) years from such expiration or dissolution or for
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such longer period as the district court shall in its discretion
direct, bodies corporate for the purpose of prosecuting and defending
suits, whether civil, criminal or administrative, by or against them,
and of enabling them gradually to settle and close their business, to
dispose of and convey their property, to discharge their liabilities,
and to distribute to their shareholders any remaining assets, but not
for the purpose of continuing the business for which the corporation
was organized. With respect to any action, suit, or proceeding begun
by or against the corporation either prior to or within three (3)
years after the date of its expiration or dissolution, the action
shall not abate by reason of the expiration or dissolution of the
corporation. The corporation, solely for the purpose of such action,
suit or proceeding, shall be continued as a body corporate beyond the
three-year period and until any judgments, orders or decrees therein
shall be fully executed, without the necessity for any special
direction to that effect by the district court. Sections 1100
through 1100.3 of this title shall apply to any corporation that has
expired by its own limitation, and when so applied, all references in
those sections to a dissolved corporation or dissolution shall
include a corporation that has expired by its own limitation and to
such expiration respectively.
Added by Laws 1986, c. 292, § 99, eff. Nov. 1, 1986. Amended by Laws
1988, c. 323, § 23, eff. Nov. 1, 1988; Laws 2017, c. 323, § 29, eff.
Nov. 1, 2017.
§18-1100. Trustees or receivers for dissolved corporations;
appointment; powers; duties.
TRUSTEES OR RECEIVERS FOR DISSOLVED CORPORATIONS;
APPOINTMENT; POWERS; DUTIES
When any corporation organized in accordance with the provisions
of the Oklahoma General Corporation Act shall be dissolved in any
manner whatever, the district court, on application of any creditor,
shareholder or director of the corporation, or any other person who
shows good cause therefor, at any time, may either appoint one or
more of the directors of the corporation to be trustees, or appoint
one or more persons to be receivers, of and for the corporation, to
take charge of the corporation's property, and to collect the debts
and property due and belonging to the corporation, with power to
prosecute and defend, in the name of the corporation, or otherwise,
all such suits as may be necessary or proper for the purposes
aforesaid, and to appoint an agent or agents under them, and to do
all other acts which might be done by the corporation, if in being,
that may be necessary for the final settlement of the unfinished
business of the corporation. The powers of the trustees or receivers
may be continued as long as the district court shall think necessary
for the purposes provided for in this section.
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Added by Laws 1986, c. 292, § 100, eff. Nov. 1, 1986. Amended by
Laws 1988, c. 323, § 24, eff. Nov. 1, 1988.
§18-1100.1. Notice to claimants - Filing of claims.
NOTICE TO CLAIMANTS; FILING OF CLAIMS
A. 1. After a corporation has been dissolved in accordance with
the procedures set forth in the Oklahoma General Corporation Act, the
corporation or any successor entity may give notice of the
dissolution requiring all persons having a claim against the
corporation other than a claim against the corporation in a pending
action, suit, or proceeding to which the corporation is a party to
present their claims against the corporation in accordance with the
notice. The notice shall state:
a. that all such claims must be presented in writing and
must contain sufficient information reasonably to
inform the corporation or successor entity of the
identity of the claimant and the substance of the
claim,
b. the mailing address to which a claim must be sent,
c. the date by which a claim must be received by the
corporation or successor entity, which date shall be no
earlier than sixty (60) days from the date of the
notice,
d. that the claim will be barred if not received by the
date referred to in subparagraph c of this paragraph,
e. that the corporation or a successor entity may make
distributions to other claimants and the corporation's
shareholders or persons interested as having been such
without further notice to the claimant, and
f. the aggregate amount, on an annual basis, of all
distributions made by the corporation to its
shareholders for each of the three (3) years prior to
the date the corporation dissolved.
2. The notice shall also be published at least once a week for
two (2) consecutive weeks in a newspaper of general circulation in
the county in which the office of the corporation's last registered
agent in this state is located and in the corporation's principal
place of business and, in the case of a corporation having Ten
Million Dollars ($10,000,000.00) or more in total assets at the time
of its dissolution, at least once in an Oklahoma newspaper having a
circulation of at least two hundred fifty thousand (250,000). On or
before the date of the first publication of the notice, the
corporation or successor entity shall mail a copy of the notice by
certified or registered mail, return receipt requested, to each known
claimant of the corporation, including persons with claims asserted
against the corporation in a pending action, suit, or proceeding to
which the corporation is a party.
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3. Any claim against the corporation required to be presented
pursuant to this subsection is barred if a claimant who was given
actual notice under this subsection does not present the claim to the
dissolved corporation or successor entity by the date referred to in
subparagraph c of paragraph 1 of this subsection.
4. A corporation or successor entity may reject, in whole or in
part, any claim made by a claimant pursuant to this subsection by
mailing notice of rejection by certified or registered mail return
receipt requested to the claimant within ninety (90) days after
receipt of the claim and, in all events, at least one hundred fifty
(150) days before the expiration of the period described in Section
1099 of this title; provided, however, that in the case of a claim
filed pursuant to Section 1110 of this title against a corporation or
successor entity for which a receiver or trustee has been appointed
by the district court, the time period shall be as provided in
Section 1111 of this title, and the thirty-day appeal period provided
for in Section 1111 of this title shall be applicable. A notice sent
by a corporation or successor entity pursuant to this subsection
shall state that any claim rejected will be barred if an action,
suit, or proceeding with respect to the claim is not commenced within
one hundred twenty (120) days of the date thereof, and shall be
accompanied by a copy of Sections 1099 through 1100.3 of this title,
and, in the case of a notice sent by a court-appointed receiver or
trustee for a claim filed pursuant to Section 1110 of this title, the
notice shall be accompanied by copies of Sections 1110 and 1111 of
this title.
5. A claim against a corporation is barred if a claimant whose
claim is rejected pursuant to paragraph 4 of this subsection does not
commence an action, suit, or proceeding with respect to the claim
within one hundred twenty (120) days after the mailing of the
rejection notice.
B. 1. A corporation or successor entity electing to follow the
procedures described in subsection A of this section shall also give
notice of the dissolution of the corporation to persons with
contractual claims contingent upon the occurrence or nonoccurrence of
future events or otherwise conditional or unmatured, and request that
those persons present their claims in accordance with the terms of
the notice. As used in this section and Section 1100.2 of this
title, the term "contractual claims" shall not include any implied
warranty as to any product manufactured, sold, distributed, or
handled by the dissolved corporation. The notice shall be in
substantially the form, and sent and published in the same manner, as
described in paragraph 1 of subsection A of this section.
2. The corporation or successor entity shall offer any claimant
on a contract whose claim is contingent, conditional, or unmatured,
the security that the corporation or successor entity determines is
sufficient to provide compensation to the claimant if the claim
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matures. The corporation or successor entity shall mail the offer to
the claimant by certified or registered mail, return receipt
requested, within ninety (90) days of receipt of the claim and, in
all events, at least one hundred fifty (150) days before the
expiration of the period described in Section 1099 of this title. If
the claimant offered the security does not deliver in writing to the
corporation or successor entity a notice rejecting the offer within
one hundred twenty (120) days after receipt of the offer for
security, the claimant shall be deemed to have accepted the security
as the sole source from which to satisfy his or her claim against the
corporation.
C. 1. A corporation or successor entity which has given notice
in accordance with subsection A of this section shall petition the
district court to determine the amount and form of security that will
be reasonable likely to be sufficient to provide compensation for any
claim against the corporation which is the subject of a pending
action, suit, or proceeding to which the corporation is a party other
than a claim barred pursuant to subsection A of this section.
2. A corporation or successor entity which has given notice in
accordance with subsections A and B of this section shall petition
the district court to determine the amount and form of security that
will be sufficient to provide compensation to any claimant who has
rejected the offer for security made pursuant to paragraph 2 of
subsection B of this section.
3. A corporation or successor entity which has given notice in
accordance with subsection A of this section shall petition the
district court to determine the amount and form of security which
will be reasonably likely to be sufficient to provide compensation
for claims that have not been made known to the corporation or that
have not arisen but that, based on facts known to the corporation or
successor entity, are likely to arise or to become known to the
corporation or successor entity within five (5) years after the date
of dissolution or a longer period of time as the district court may
determine not to exceed ten (10) years after the date of dissolution.
The district court may appoint a guardian ad litem in respect of any
such proceeding brought under this subsection. The reasonable fees
and expenses of the guardian, including all reasonable expert witness
fees, shall be paid by the petitioner in the proceeding.
D. The giving of any notice or making of any offer pursuant to
the provisions of this section shall not revive any claim then barred
or constitute acknowledgment by the corporation or successor entity
that any person to whom the notice is sent is a proper claimant and
shall not operate as a waiver of any defense or counterclaim in
respect of any claim asserted by any person to whom the notice is
sent.
E. As used in this section, the term "successor entity" shall
include any trust, receivership, or other legal entity governed by
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the laws of this state to which the remaining assets and liabilities
of a dissolved corporation are transferred and which exists solely
for the purposes of prosecuting and defending suits, by or against
the dissolved corporation, enabling the dissolved corporation to
settle and close the business of the dissolved corporation, to
dispose of and convey the property of the dissolved corporation, to
discharge the liabilities of the dissolved corporation, and to
distribute to the dissolved corporation's shareholders any remaining
assets, but not for the purpose of continuing the business for which
the dissolved corporation was organized.
F. In the case of a nonstock corporation, any notice referred to
in the last sentence of paragraph 4 of subsection A of this section
shall include a copy of Section 1 of this act. In the case of a
nonprofit nonstock corporation, provisions of this section regarding
distributions to members shall not apply to the extent that those
provisions conflict with any other applicable law or with that
corporation's certificate of incorporation or bylaws.
Added by Laws 1988, c. 323, § 25, eff. Nov. 1, 1988. Amended by Laws
1998, c. 422, § 23, eff. Nov. 1, 1998; Laws 2019, c. 88, § 27, eff.
Nov. 1, 2019.
§18-1100.2. Payment and distribution to claimants and shareholders.
PAYMENT AND DISTRIBUTION TO CLAIMANTS AND SHAREHOLDERS
A. 1. A dissolved corporation or successor entity which has
followed the procedures described in Section 1100.1 of this title
shall:
a. pay the claims made and not rejected in accordance with
subsection A of Section 1100.1 of this title,
b. post the security offered and not rejected pursuant to
paragraph 2 of subsection B of Section 1100.1 of this
title,
c. post any security ordered by the district court in any
proceeding under subsection C of Section 1100.1 of this
title, and
d. pay or make provision for all other claims that are
mature, known, and uncontested or that have been
finally determined to be owing by the corporation or
successor entity.
2. Claims or obligations shall be paid in full and any provision
for payment shall be made in full if there are sufficient assets. If
there are insufficient assets, the claims and obligations shall be
paid or provided for according to their priority, and, among claims
of equal priority, ratably to the extent of assets legally available
therefor. Any remaining assets shall be distributed to the
shareholders of the dissolved corporation; provided, however, that
distribution shall not be made before the expiration of one hundred
fifty (150) days from the date of the last notice of rejections given
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pursuant to paragraph 3 of subsection A of Section 1100.1 of this
title. In the absence of actual fraud, the judgment of the directors
of the dissolved corporation or the governing persons of the
successor entity as to the provision made for the payment of all
obligations under subparagraph d of paragraph 1 of this subsection
shall be conclusive.
B. A dissolved corporation or successor entity which has not
followed the procedures described in Section 1100.1 of this title
shall, prior to the expiration of the period described in Section
1099 of this title, adopt a plan of distribution pursuant to which
the dissolved corporation or successor entity:
1. Shall pay or make reasonable provision to pay all claims and
obligations, including all contingent, conditional, or unmatured
contractual claims known to the corporation or the successor entity;
2. Shall make provision as will be reasonably likely to be
sufficient to provide compensation for any claim against the
corporation which is the subject of a pending action, suit, or
proceeding to which the corporation is a party; and
3. Shall make provision as will be reasonably likely to be
sufficient to provide compensation for claims that have not been made
known to the corporation or successor entity or that have not arisen
but that, based on facts known to the corporation or successor
entity, are likely to arise or to become known to the corporation or
successor entity within ten (10) years after the date of dissolution.
The plan of distribution shall provide that the claims shall be paid
in full and any provision for payment made shall be made in full if
there are sufficient assets. If there are insufficient assets, the
plan shall provide that the claims and obligations shall be paid or
provided for according to their priority and, among claims of equal
priority, ratably to the extent of assets legally available therefor.
Any remaining assets shall be distributed to the shareholders of the
dissolved corporation.
C. Directors of a dissolved corporation or governing persons of
a successor entity which has complied with subsection A or B of this
section shall not be personally liable to the claimants of the
dissolved corporation.
D. As used in this section, the term "successor entity" has the
meaning set forth in subsection E of Section 1100.1 of this title.
E. As used in this section, the term "priority" does not refer
either to the order of payments set forth in subparagraphs a through
d of paragraph 1 of subsection A of this section or to the relative
times at which any claims mature or are reduced to judgment.
F. In the case of a nonprofit nonstock corporation, provisions
of this section regarding distributions to members shall not apply to
the extent that those provisions conflict with any other applicable
law or with that corporation's certificate of incorporation or
bylaws.
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Added by Laws 1988, c. 323, § 26, eff. Nov. 1, 1988. Amended by Laws
1998, c. 422, § 24, eff. Nov. 1, 1998; Laws 1999, c. 421, § 19, eff.
Nov. 1, 1999; Laws 2019, c. 88, § 28, eff. Nov. 1, 2019.
§18-1100.3. Foreign corporations; definition; qualification to do
business in state; procedure.
LIABILITY OF SHAREHOLDERS OF DISSOLVED CORPORATIONS
A. A shareholder of a dissolved corporation the assets of which
were distributed pursuant to subsection A or B of Section 1100.2 of
this title shall not be liable for any claim against the corporation
in an amount in excess of the shareholder's pro rata share of the
claim or the amount distributed to the shareholder, whichever is
less.
B. A shareholder of a dissolved corporation the assets of which
were distributed pursuant to subsection A of Section 1100.2 of this
title shall not be liable for any claim against the corporation on
which an action, suit, or proceeding is not begun prior to the
expiration of the period described in Section 1099 of this title.
C. The aggregate liability of any shareholder of a dissolved
corporation for claims against the dissolved corporation shall not
exceed the amount distributed to the shareholder in dissolution.
Added by Laws 1986, c. 292, § 130, eff. Nov. 1, 1986. Amended by
Laws 1987, c. 146, § 9, operative Nov. 1, 1987; Laws 1991, c. 331, §
56, eff. Sept. 1, 1991; Laws 1998, c. 422, § 25, eff. Nov. 1, 1998.
§18-1101. Jurisdiction of Court.
JURISDICTION OF COURT
The district court shall have jurisdiction of the application
prescribed in Section 100 of this act and of all questions arising in
the proceedings thereon, and may make such orders and decrees and
issue injunctions therein as justice and equity shall require.
Added by Laws 1986, c. 292, § 101, eff. Nov. 1, 1986.
§18-1104. Revocation or forfeiture of charter - proceedings.
REVOCATION OR FORFEITURE OF CHARTER; PROCEEDINGS
A. The district court shall have jurisdiction to revoke or
forfeit the charter of any corporation for abuse, misuse or nonuse of
its corporate powers, privileges or franchises. The Attorney General,
upon his own motion or upon the relation of a proper party, shall
proceed for this purpose by complaint in the county in which the
registered office of the corporation is located.
B. The district court shall have power, by appointment of
receivers or otherwise, to administer and wind up the affairs of any
corporation whose charter shall be revoked or forfeited by any court
pursuant to the provisions of the Oklahoma General Corporation Act or
otherwise, and to make such orders and decrees with respect thereto
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as shall be just and equitable respecting its affairs and assets and
the rights of its shareholders and creditors.
C. No proceeding shall be instituted pursuant to the provisions
of this section for nonuse of any corporation's powers, privileges or
franchises during the first two (2) years after its incorporation.
Added by Laws 1986, c. 292, § 104, eff. Nov. 1, 1986.
§18-1105. Dissolution or Forfeiture of Charter by Decree of Court -
Filing.
DISSOLUTION OR FORFEITURE OF CHARTER BY DECREE OF COURT; FILING
Whenever any corporation is dissolved or its charter forfeited by
decree or judgment of the district court, the decree or judgment
shall be immediately filed by the clerk in the court of the county in
which the decree or judgment was entered, in the Office of the
Secretary of State, and a note thereof shall be made by the Secretary
of State on the corporation's charter or certificate of incorporation
and on the index thereof.
Added by Laws 1986, c. 292, § 105, eff. Nov. 1, 1986.
§18-1106. Receivers for insolvent corporations - Appointment and
powers.
RECEIVERS FOR INSOLVENT CORPORATIONS; APPOINTMENT AND POWERS
Whenever a corporation shall be insolvent, the district court of
the county in which the registered office is located may at any time
upon the application of a shareholder or shareholders, severally or
jointly, who have been registered owners for a period of not less
than six (6) months, of not less than ten percent (10%) of the entire
outstanding stock of the corporation or a creditor whose claim has
been reduced to judgment and execution thereon has been issued,
appoint one or more persons to be receivers of and for the
corporation, to take charge of its assets, estate, effects, business
and affairs, and to collect the outstanding debts, claims, and
property due and belonging to the corporation, with power to
prosecute and defend, in the name of the corporation or otherwise,
all claims or suits, to appoint an agent or agents under them, and to
do all other acts which might be done by the corporation and which
may be necessary or proper. The powers of the receivers shall be
such and shall continue so long as the court shall deem necessary.
Added by Laws 1986, c. 292, § 106, eff. Nov. 1, 1986.
§18-1107. Title to Property - Filing Order of Appointment -
Exception.
TITLE TO PROPERTY; FILING ORDER OF APPOINTMENT; EXCEPTION
A. Trustees of or receivers for any corporation, appointed by
the district court, and their respective survivors and successors,
upon their appointment and qualification or upon the death,
resignation or discharge of any co-trustee or co-receiver, shall be
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vested by operation of law and without any act or deed, with the
title of the corporation to all of its property, real, personal, or
mixed of whatsoever nature, kind, class or description, and
wheresoever situated, except real estate situated outside this state.
B. Trustees or receivers appointed by the district court, within
twenty (20) days from the date of their qualification, shall file in
the office of the county clerk in each county in this state in which
any real estate belonging to the corporation may be situated, a
certified copy of the order of their appointment and evidence of
their qualification.
C. This section shall not apply to receivers appointed pendente
lite.
Added by Laws 1986, c. 292, § 107, eff. Nov. 1, 1986.
§18-1108. Notices to Shareholders and Creditors.
NOTICES TO SHAREHOLDERS AND CREDITORS
All notices required to be given to shareholders and creditors in
any action in which a receiver or trustee for a corporation was
appointed shall be given by the district court, unless otherwise
ordered by the court.
Added by Laws 1986, c. 292, § 108, eff. Nov. 1, 1986.
§18-1109. Receivers or Trustees - Inventory - List of Debts and
Reports.
RECEIVERS OR TRUSTEES; INVENTORY; LIST OF DEBTS AND REPORTS
Trustees or receivers, as soon as convenient, shall file in the
district court of the county in which the proceeding is pending, a
full and complete itemized inventory of all the assets of the
corporation which shall show their nature and probable value, and an
account of all debts due from and to it, as nearly as the same can be
ascertained. Trustees or receivers shall make a report to the
district court of their proceedings, whenever and as often as the
court shall direct.
Added by Laws 1986, c. 292, § 109, eff. Nov. 1, 1986.
§18-1110. Creditors' Proofs of Claims - When Barred - Notice.
CREDITORS' PROOFS OF CLAIMS; WHEN BARRED; NOTICE
All creditors shall make proof under oath of their respective
claims against the corporation, and cause the same to be filed in the
district court of the county in which the proceeding is pending
within the time fixed by the order of the district court. All
creditors and claimants failing to do so, within the time limited by
the provisions of this section, or the time prescribed by the order
of the district court, by direction of the district court, may be
barred from participating in the distribution of the assets of the
corporation. The district court may also prescribe what notice, by
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publication or otherwise, shall be given to the creditors of the time
fixed for the filing and making proof of claims.
Added by Laws 1986, c. 292, § 110, eff. Nov. 1, 1986.
§18-1111. Adjudication of Claims - Appeal.
ADJUDICATION OF CLAIMS; APPEAL
A. The district court immediately upon the expiration of the
time fixed for the filing of claims, in compliance with the
provisions of Section 110 of this act, shall notify the trustee or
receiver of the filing of the claims, and the trustee or receiver,
within thirty (30) days after receiving the notice, shall inspect the
claims, and if the trustee or receiver or any creditor shall not be
satisfied with the validity or correctness of the same, or any of
them, the trustee or receiver shall immediately notify the creditors
whose claims are disputed of his decision. The trustee or receiver
shall require all creditors whose claims are disputed to submit
themselves to such examination in relation to their claims as the
trustee or receiver shall direct, and the creditors shall produce
such books and papers relating to their claims as shall be required.
The trustee or receiver shall have power to examine, under oath or
affirmation, all witnesses produced before him touching the claims,
and shall pass upon and allow or disallow the claims, or any part
thereof, and notify the claimants of his determination.
B. Every creditor or claimant who shall have received notice
from the receiver or trustee that his claim has been disallowed in
whole or in part may appeal to the district court within thirty (30)
days thereafter. The district court, after hearing, shall determine
the rights of the parties.
Added by Laws 1986, c. 292, § 111, eff. Nov. 1, 1986.
§18-1112. Sale of Perishable or Deteriorating Property.
SALE OF PERISHABLE OR DETERIORATING PROPERTY
Whenever the property of a corporation is at the time of the
appointment of a receiver or trustee encumbered with liens of any
character, and the validity, extent or legality of any lien is
disputed or brought in question, and the property of the corporation
is of a character which will deteriorate in value pending the
litigation respecting the lien, the district court may order the
receiver or trustee to sell the property of the corporation, clear of
all encumbrances, at public or private sale, for the best price that
can be obtained therefor, and pay the net proceeds arising from the
sale thereof after deducting the costs of the sale into the district
court, there to remain subject to the order of the district court,
and to be disposed of as the district court shall direct.
Added by Laws 1986, c. 292, § 112, eff. Nov. 1, 1986.
§18-1113. Compensation, Costs and Expenses of Receiver or Trustee.
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COMPENSATION, COSTS AND EXPENSES OF RECEIVER OR TRUSTEE
The district court, before making distribution of the assets of a
corporation among the creditors or shareholders thereof, shall allow
a reasonable compensation to the receiver or trustee for his
services, and the costs and expenses incurred in and about the
execution of his trust, and the costs of the proceedings in the
district court, to be first paid out of the assets.
Added by Laws 1986, c. 292, § 113, eff. Nov. 1, 1986.
§18-1114. Substitution of Trustee or Receiver as Party - Abatement
of Actions.
SUBSTITUTION OF TRUSTEE OR RECEIVER
AS PARTY; ABATEMENT OF ACTIONS
A trustee or receiver, upon application by him in the court in
which any suit is pending, shall be substituted as party plaintiff in
the place of the corporation in any suit or proceeding which was so
pending at the time of his appointment. No action against a trustee
or receiver of a corporation shall abate by reason of his death, but,
upon suggestion of the facts of the record, shall be continued
against his successor or against the corporation in case no new
trustee or receiver is appointed.
Added by Laws 1986, c. 292, § 114, eff. Nov. 1, 1986.
§18-1115. Liens for Wages or Products When Corporation is Insolvent.
LIENS FOR WAGES OR PRODUCTS WHEN CORPORATION IS INSOLVENT
A. Whenever any corporation of this state, or any foreign
corporation doing business in this state, shall become insolvent, the
employees performing labor or services of whatever character in the
regular employ of the corporation, and the producers of agricultural
and dairy products, including cooperative marketing associations of
such producers, shall have a lien upon the assets of such corporation
for the amount of the wages or payments for agricultural and dairy
products due to them, not exceeding four months' wages or payments
for such products which shall have accrued prior to the adjudication
of the insolvency of such corporation, which lien shall be paid prior
to any other debts, charges or claims against said corporation,
except taxes due the United States government or the State of
Oklahoma. The word "employee" shall not be construed to include any
of the officers of the corporation.
B. The lien provided for in this section shall be enforced in
the manner provided for by law for the enforcement of other liens for
labor.
Added by Laws 1986, c. 292, § 115, eff. Nov. 1, 1986.
§18-1116. Discontinuance of Liquidation.
DISCONTINUANCE OF LIQUIDATION
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The liquidation of the assets and business of an insolvent
corporation may be discontinued at any time during the liquidation
proceedings when it is established that cause for liquidation no
longer exists. In such event the district court in its discretion,
and subject to such condition as it may deem appropriate, may dismiss
the proceedings and direct the receiver or trustee to redeliver to
the corporation all of its remaining property and assets.
Added by Laws 1986, c. 292, § 116, eff. Nov. 1, 1986.
§18-1117. Compromise or arrangement between corporation and
creditors or shareholders.
COMPROMISE OR ARRANGEMENT BETWEEN CORPORATION AND CREDITORS
OR SHAREHOLDERS
A. Whenever the provision provided for in paragraph 2 of
subsection B of Section 1006 of this title is included in the
original certificate of incorporation of any corporation, all persons
who become creditors or shareholders thereof shall be deemed to have
become such creditors or shareholders subject in all respects to that
provision and the same shall be absolutely binding upon them.
Whenever that provision is inserted in the certificate of
incorporation of any such corporation by an amendment of its
certificate all persons who become creditors or shareholders of such
corporation after such amendment shall be deemed to have become such
creditors or shareholders subject in all respects to that provision
and the same shall be absolutely binding upon them.
B. The district court may administer and enforce any compromise
or arrangement made pursuant to the provision provided for in
paragraph 2 of subsection B of Section 1006 of this title and may
restrain, pendente lite, all actions and proceedings against any
corporation with respect to which the district court shall have begun
the administration and enforcement of that provision and may appoint
a temporary receiver for such corporation and may grant the receiver
such powers as it deems proper, and may make and enforce such rules
as it deems necessary for the exercise of such jurisdiction.
Added by Laws 1986, c. 292, § 117, eff. Nov. 1, 1986. Amended by
Laws 1987, c. 146, § 8, operative Nov. 1, 1987.
§18-1118. Proceedings under Federal Bankruptcy Code; Effectuation.
PROCEEDINGS UNDER THE FEDERAL
BANKRUPTCY CODE; EFFECTUATION
A. Any domestic corporation, an order for relief with respect to
which has been entered under the Federal Bankruptcy Code, 11 U.S.C.,
Section 101 et seq., or any successor statute, may put into effect
and carry out any decrees and orders of the court or judge in the
bankruptcy proceeding and may take any corporate action provided or
directed by such decrees and orders, without further action by its
directors or shareholders. Such power and authority may be
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exercised, and such corporate action may be taken, as may be directed
by such decrees or orders, by the trustee or trustees of such
corporation appointed or elected in the bankruptcy proceedings, or a
majority thereof, or if none be appointed or elected and acting, by
designated officers of the corporation, or by a representative
appointed by the court or judge, with like effect as if exercised and
taken by unanimous action of the directors and shareholders of the
corporation.
B. Such corporation, in the manner provided for in subsection A
of this section, but without limiting the generality or effect of the
foregoing, may alter, amend, or repeal its bylaws; constitute or
reconstitute and classify or reclassify its board of directors, and
name, constitute or appoint directors and officers in place of or in
addition to all or some of the directors or officers then in office;
amend its certificate of incorporation, and make any change in its
capital or capital stock, or any other amendment, change, or
alteration, or provision, authorized by the provisions of this act;
be dissolved, transfer all or part of its assets, merge, consolidate
or convert as permitted by the provisions of this act, in which case,
however, no shareholder shall have any statutory right of appraisal
of his stock; change the location of its registered office, change
its registered agent, and remove or appoint any agent to receive
service of process; authorize and fix the terms, manner and
conditions of, the issuance of bonds, debentures or other
obligations, whether or not convertible into stock of any class, or
bearing warrants or other evidences of optional rights to purchase or
subscribe for stock of any class; or lease its property and
franchises to any corporation, if permitted by law.
C. A certificate of any amendment, change or alteration, or of
dissolution, or any agreement of merger, consolidation or conversion
made by such corporation pursuant to the provisions of this section,
shall be filed with the Secretary of State in accordance with the
provisions of Section 1007 of this title, and, subject to the
provisions of subsection D of Section 1007 of this title, shall
thereupon become effective in accordance with its terms and the
provisions of this section. Such certificate, agreement of merger or
other instrument shall be made, executed and acknowledged, as may be
directed by such decrees or orders, by the trustee or trustees
appointed or elected in the reorganization or debtor in possession in
the bankruptcy proceedings, or a majority thereof, or, if none be
appointed or elected and acting, by the officers of the corporation,
or by a representative appointed by the court or judge, and shall
certify that provision for the making of such certificate, agreement
or instrument is contained in a decree or order of a court or judge
having jurisdiction of a proceeding under such Federal Bankruptcy
Code or successor statute.
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D. The provisions of this section shall cease to apply to such
corporation upon the entry of a final decree in the bankruptcy
proceedings closing the case and discharging the trustee or trustees,
if any; provided, however, that the closing of a case and discharge
of trustee or trustees, if any, will not affect the validity of any
act previously performed under subsections A through C of this
section.
E. On filing any certificate, agreement, report or other paper
made or executed pursuant to this section, there shall be paid to the
Secretary of State, for the use of the state, the same fees as are
payable by corporations not in bankruptcy proceedings upon the filing
of like certificates, agreements, reports or other papers.
Added by Laws 1986, c. 292, § 118, eff. Nov. 1, 1986. Amended by
Laws 2008, c. 253, § 15.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-1119. Revocation of voluntary dissolution - Restoration of
expired certificate of incorporation.
REVOCATION OF VOLUNTARY DISSOLUTION; RESTORATION OF EXPIRED
CERTIFICATE OF INCORPORATION
A. At any time prior to the expiration of three (3) years
following the dissolution of a corporation pursuant to the provisions
of Section 1096 of this title or such longer period as the district
court may have directed pursuant to Section 1099 of this title, or,
at any time prior to the expiration of three (3) years following the
expiration of the time limited for the corporation's existence as
provided in its certificate of incorporation or such longer period as
the district court may have directed pursuant to the provisions of
Section 1099 of this title, a corporation may revoke the dissolution
up to that time effected by it or restore its certificate of
incorporation after it has expired by its own limitation in the
following manner:
1. For purposes of this section, "shareholders" means the
shareholders of record on the date the dissolution becomes effective
or the date of expiration by limitation;
2. The board of directors shall adopt a resolution recommending
that the dissolution be revoked in the case of a dissolution or that
the certificate of incorporation be restored in the case of an
expiration by limitation and directing that the question of the
revocation or restoration be submitted to a vote at a special meeting
of shareholders;
3. Notice of the special meeting of shareholders shall be given
in accordance with the provisions of Section 1067 of this title to
each of the shareholders; and
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4. At the meeting a vote of the shareholders shall be taken on a
resolution to revoke the dissolution in the case of a dissolution or
to restore the certificate of incorporation in the case of an
expiration by limitation. If a majority of the stock of the
corporation which was outstanding and entitled to vote upon a
dissolution at the time of its dissolution, in the case of a
revocation of dissolution, or which was outstanding and entitled to
vote upon an amendment to the certificate of incorporation to change
the period of the corporation's duration at the time of its
expiration by limitation, in the case of a restoration, shall be
voted for the resolution, a certificate of revocation of dissolution
or a certificate of restoration shall be executed, and acknowledged
and filed in accordance with the provisions of Section 1007 of this
title which shall be specifically designated as a certificate of
revocation of dissolution or a certificate of restoration in its
heading and shall state:
a. the name of the corporation,
b. the address of the corporation's registered office in
this state, which shall be stated in accordance with
subsection C of Section 1021 of this title, and the
name of its registered agent at such address,
c. the names and respective addresses of its officers,
d. the names and respective addresses of its directors,
e. that a majority of the stock of the corporation which
was outstanding and entitled to vote upon a dissolution
at the time of its dissolution have voted in favor of a
resolution to revoke the dissolution, in the case of a
revocation of dissolution, or that a majority of the
stock of the corporation which was outstanding and
entitled to vote upon an amendment to the certificate
of incorporation to change the period of the
corporation's duration at the time of its expiration by
limitation, in the case of a restoration, have voted in
favor of a resolution to restore the certificate of
incorporation; or, if it be the fact, that, in lieu of
a meeting and vote of shareholders, the shareholders
have given their written consent to the revocation or
restoration in accordance with the provisions of
Section 1073 of this title, and
f. in the case of a restoration, the new specified date
limiting the duration of the corporation's existence or
that the corporation shall have perpetual existence.
B. Upon the effective time of the filing in the Office of the
Secretary of State of the certificate of revocation of dissolution or
the certificate of restoration, the revocation of the dissolution or
the restoration of the corporation shall become effective and the
corporation may again carry on its business.
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C. Upon the effectiveness of the revocation of the dissolution
or the restoration of the corporation as provided in subsection B of
this section , the provisions of Section 1056 of this title shall
govern, and the period of time the corporation was in dissolution or
was expired by limitation shall be included within the calculation of
the thirty-day and thirteen-month periods to which subsection C of
Section 1056 of this title refers. An election of directors,
however, may be held at the special meeting of shareholders to which
subsection A of this section refers, and in that event, that meeting
of shareholders shall be deemed an annual meeting of shareholders for
purposes of subsection C of Section 1056 of this title.
D. If, after three (3) years from the date upon which the
dissolution became effective or after the expiration by limitation,
the name of the corporation is unavailable upon the records of the
Secretary of State, then, in such case, the corporation shall not be
reinstated under the same name which it bore when its dissolution
became effective or it expired by limitation, but shall adopt and be
reinstated or restored under some other name, and in such case the
certificate to be filed pursuant to the provisions of this section
shall set forth the name borne by the corporation at the time its
dissolution became effective or it expired by limitation and the new
name under which the corporation is to be reinstated or restored.
E. Nothing in this section shall be construed to affect the
jurisdiction or power of the district court pursuant to the
provisions of Section 1100 or 1101 of this title.
F. At any time prior to the expiration of three (3) years
following the dissolution of a nonstock corporation pursuant to
Section 1097 of this title, or such longer period as the district
court may have directed pursuant to Section 1099 of this title, or at
any time prior to the expiration of three (3) years following the
expiration of the time limited for a nonstock corporation's existence
as provided in its certificate of incorporation or such longer period
as the district court may have directed pursuant to Section 1099 of
this title, a nonstock corporation may revoke the dissolution
theretofore effected by it or restore its certificate of
incorporation after it has expired by limitation in a manner
analogous to that by which the dissolution was authorized or, in the
case of a restoration, in the manner in which an amendment to the
certificate of incorporation to change the period of the
corporation's duration would have been authorized at the time of its
expiration by limitation, including:
1. If applicable, a vote of the members entitled to vote, if
any, on the dissolution or the amendment; and
2. The filing of a certificate of revocation of dissolution or a
certificate of restoration containing information comparable to that
required by paragraph 4 of subsection A of this section.
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Notwithstanding the foregoing, only this subsection and subsections
B, D and E of this section shall apply to nonstock corporations.
G. Any corporation that revokes its dissolution or restores its
certificate of incorporation pursuant to this section shall file all
annual franchise tax reports that the corporation would have had to
file if it had not dissolved or expired and shall pay all franchise
taxes that the corporation would have had to pay if it had not
dissolved or expired. No payment made pursuant to this subsection
shall reduce the amount of franchise tax due for the year in which
such revocation or restoration is effected.
Added by Laws 1986, c. 292, § 119, eff. Nov. 1, 1986. Amended by
Laws 2004, c. 255, § 30, eff. Nov. 1, 2004; Laws 2017, c. 323, § 30,
eff. Nov. 1, 2017.
§18-1120. Revival of certificate of incorporation.
REVIVAL OF CERTIFICATE OF INCORPORATION
A. As used in this section, the term certificate of
incorporation includes the charter of a corporation organized
pursuant to the provisions of any law of this state.
B. Any corporation whose certificate of incorporation has become
forfeited by law for nonpayment of taxes or whose certificate of
incorporation has been revived, but, through failure to comply
strictly with the provisions of the Oklahoma General Corporation Act,
the validity of whose revival has been brought into question, may at
any time procure a revival of its certificate of incorporation,
together with all the rights, franchises, privileges and immunities
and subject to all of its duties, debts and liabilities which had
been secured or imposed by its original certificate of incorporation
and all amendments thereto. Notwithstanding the foregoing, this
section shall not be applicable to a corporation whose certificate of
incorporation has been revoked or forfeited pursuant to Section 1104
of this title.
C. The revival of the certificate of incorporation may be
procured as authorized by the board of directors or members of the
governing body of the corporation in accordance with subsection H and
by executing, acknowledging and filing a certificate of revival in
accordance with the provisions of Section 1007 of this title.
D. The certificate required by the provisions of subsection C of
this section shall state:
1. The date of filing of the corporation's original certificate
of incorporation; the name under which the corporation was originally
incorporated; the name of the corporation at the time its certificate
of incorporation became forfeited or void pursuant to this title; and
the new name under which the corporation is to be revived to the
extent required by subsection F of this section;
2. The address of the corporation's registered office in this
state, which shall be stated in accordance with subsection C of
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Section 1021 of this title, and the name of its registered agent at
such address;
3. That the corporation desiring to be revived and so reviving
its certificate of incorporation was organized pursuant to the laws
of this state;
4. The date when the certificate of incorporation became
forfeited or that the validity of any revival has been brought into
question; and
5. That the certificate of revival is filed by authority of the
board of directors or members of the governing body of the
corporation as provided for in subsection H of this section.
E. Upon the filing of the certificate in accordance with the
provisions of Section 1007 of this title, the corporation shall be
revived with the same force and effect as if its certificate of
incorporation had not become forfeited. Such revival shall validate
all contracts, acts, matters and things made, done and performed
within the scope of its certificate of incorporation by the
corporation, its directors or members of its governing body, officers
, agents and shareholders or members during the time when its
certificate of incorporation was forfeited , with the same force and
effect and to all intents and purposes as if the certificate of
incorporation had at all times remained in full force and effect.
All real and personal property, rights and credits, which belonged to
the corporation at the time its certificate of incorporation became
forfeited and which were not disposed of prior to the time of its
revival and all real and personal property, rights and credits
acquired by the corporation after its certificate of incorporation
became forfeited pursuant to this title shall be vested in the
corporation, after its revival, as if its certificate of
incorporation had at all times remained in full force and effect, and
the corporation after its revival shall be as exclusively liable for
all contracts, acts, matters and things made, done or performed in
its name and on its behalf by its directors or members of its
governing body, officers, agents and shareholders or members prior to
its revival, as if its certificate of incorporation had at all times
remained in full force and effect.
F. If, after three (3) years from the date upon which the
certificate of incorporation became forfeited for nonpayment of
taxes, the name of the corporation is unavailable upon the records of
the Secretary of State, then in such case the corporation to be
revived shall not be revived under the same name which it bore when
its certificate of incorporation became forfeited, or expired but
shall be revived under some other name as set forth in the
certificate to be filed pursuant to subsection C of this section.
G. Any corporation that revives its certificate of incorporation
pursuant to the provisions of this section shall pay to this state
the amounts provided in Sections 1201 through 1214 of Title 68 of the
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Oklahoma Statutes. No payment made pursuant to this subsection shall
reduce the amount of franchise tax due pursuant to the provisions of
Sections 1201 through 1214 of Title 68 of the Oklahoma Statutes for
the year in which the revival is effected.
H. For purposes of this section, the board of directors or
governing body of the corporation shall be comprised of the persons,
who, but for the certificate of incorporation having become forfeited
pursuant to this title, would be the duly elected or appointed
directors or members of the governing body of the corporation. The
requirement for authorization by the board of directors under
subsection C of this section shall be satisfied if a majority of the
directors or members of the governing body then in office, even
though less than a quorum, or the sole director or member of the
governing body then in office, authorizes the revival of the
certificate of incorporation of the corporation and the filing of the
certificate required by subsection C of this section. In any case
where there shall be no directors of the corporation available to
revive the certificate of incorporation of the corporation, the
shareholders may elect a full board of directors, as provided by the
bylaws of the corporation, and the board so elected may then
authorize the revival of the certificate of incorporation of the
corporation and the filing of the certificate required by subsection
C of this section. A special meeting of the shareholders for the
purpose of electing directors may be called by any officer or
shareholder upon notice given in accordance with the provisions of
Section 1067 of this title. For purposes of this section, the bylaws
shall be the bylaws of the corporation that, but for the certificate
of incorporation having become forfeited, would be the duly adopted
bylaws of the corporation.
I. After a revival of the certificate of incorporation of the
corporation shall have been effected, the provisions of subsection C
of Section 1056 of this title shall govern and the period of time
during which the certificate of incorporation of the corporation was
forfeited shall be included within the calculation of the thirty-day
and thirteen-month periods to which subsection C of Section 1056 of
this title refers. A special meeting of shareholders held in
accordance with subsection H of this section shall be deemed an
annual meeting of shareholders for purposes of subsection C of
Section 1056 of this title.
J. Whenever it shall be desired to revive the certificate of
incorporation of any nonstock corporation, the governing body shall
perform all the acts necessary for the revival of the charter of the
corporation which are performed by the board of directors in the case
of a corporation having capital stock. In addition, the members of
any nonstock corporation who are entitled to vote for the election of
members of its governing body and any other members entitled to vote
for dissolution under the certificate of incorporation or the bylaws
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of such corporation, shall perform all the acts necessary for the
revival of the certificate of incorporation of the corporation which
are performed by the shareholders in the case of a corporation having
capital stock. In all other respects, the procedure for the revival
of the certificate of incorporation of a nonstock corporation shall
conform, as nearly as may be applicable, to the procedure prescribed
in this section for the revival of the certificate of incorporation
of a corporation having capital stock; provided, however, subsection
I of this section shall not apply to nonstock corporations.
Added by Laws 1986, c. 292, § 120, eff. Nov. 1, 1986. Amended by
Laws 2004, c. 255, § 31, eff. Nov. 1, 2004; Laws 2017, c. 323, § 31,
eff. Nov. 1, 2017.
§18-1121. Status of corporation.
STATUS OF CORPORATION
Any corporation desiring to renew, extend and continue its
corporate existence, upon complying with the provisions of Section
1120 of this title, shall be and continue as provided in its
certificate effecting the renewal, extension or continuation as a
corporation and, in addition to the rights, privileges and immunities
conferred by its charter, shall possess and enjoy all the benefits of
the provisions of the Oklahoma General Corporation Act, which are
applicable to the nature of its business, and shall be subject to the
restrictions and liabilities prescribed by the provisions of the
Oklahoma General Corporation Act imposed on such corporations.
Added by Laws 1986, c. 292, § 121, eff. Nov. 1, 1986. Amended by
Laws 2017, c. 323, § 32, eff. Nov. 1, 2017.
§18-1122. Failure of Corporation to Obey Order of Court -
Appointment of Receiver.
FAILURE OF CORPORATION TO OBEY ORDER OF COURT;
APPOINTMENT OF RECEIVER
Whenever any corporation shall refuse, fail or neglect to obey
any order or decree of any court of this state within the time fixed
by the court for its observance, such refusal, failure or neglect
shall be a sufficient ground for the appointment of a receiver of the
corporation by a court of competent jurisdiction. If the corporation
is a foreign corporation, such refusal, failure, or neglect shall be
a sufficient ground for the appointment of a receiver of the assets
of the corporation within this state.
Added by Laws 1986, c. 292, § 122, eff. Nov. 1, 1986.
§18-1123. Failure of Corporation to Obey Writ of Mandamus - Quo
Warranto Proceedings for Forfeiture of Charter.
FAILURE OF CORPORATION TO OBEY WRIT OF MANDAMUS; QUO WARRANTO
PROCEEDINGS FOR FORFEITURE OF CHARTER
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If any corporation fails to obey the mandate of any peremptory
writ of mandamus issued by a court of competent jurisdiction of this
state for a period of thirty (30) days after the serving of the writ
upon the corporation in any manner as provided by the laws of this
state for the service of writs, any party in interest in the
proceeding in which the writ of mandamus issued, either himself or
through his or its attorney, may file a statement of such fact with
the Attorney General of this state, and it shall thereupon be the
duty of the Attorney General to immediately commence proceedings in
the nature of quo warranto against the corporation in a court of
competent jurisdiction, and the court, upon competent proof of such
state of facts and proper proceedings had in such proceeding in the
nature of quo warranto, shall decree the charter of the corporation
forfeited.
Added by Laws 1986, c. 292, § 123, eff. Nov. 1, 1986.
§18-1124. Actions Against Officers, Directors or Shareholders to
Enforce Liability of Corporation - Unsatisfied Judgment Against
Corporation.
ACTIONS AGAINST OFFICERS, DIRECTORS OR SHAREHOLDERS TO ENFORCE
LIABILITY OF CORPORATION; UNSATISFIED JUDGMENT AGAINST CORPORATION
A. When the officers, directors or shareholders of any
corporation shall be liable by the provisions of the Oklahoma General
Corporation Act to pay the debts of the corporation, or any part
thereof, any person to whom they are liable may have an action, at
law or in equity, against any one or more of them, and the petition
shall state the claim against the corporation, and the ground on
which the plaintiff expects to charge the defendants personally.
B. No suit shall be brought against any officer, director or
shareholder for any debt of a corporation of which he is an officer,
director or shareholder, until judgment is obtained therefor against
the corporation and execution thereon returned unsatisfied.
Added by Laws 1986, c. 292, § 124, eff. Nov. 1, 1986.
§18-1125. Action by Officer, Director or Shareholder Against
Corporation for Corporate Debt Paid.
ACTION BY OFFICER, DIRECTOR OR SHAREHOLDER AGAINST
CORPORATION FOR CORPORATE DEBT PAID
When any officer, director or shareholder shall pay any debt of a
corporation for which he is made liable by the provisions of the
Oklahoma General Corporation Act, he may recover the amount so paid
in an action against the corporation for money paid for its use, and
in such action only the property of a corporation shall be liable to
be taken, and not the property of any shareholder.
Added by Laws 1986, c. 292, § 124, eff. Nov. 1, 1986.
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§18-1126. Shareholder's derivative action - Allegation of stock
ownership - Award of costs and attorney fees.
SHAREHOLDER'S DERIVATIVE ACTION; ALLEGATION OF STOCK OWNERSHIP
A. In any derivative suit instituted by a shareholder of a
corporation, it shall be averred in the petition that the plaintiff
was a shareholder of the corporation at the time of the transaction
of which the plaintiff complains or that the plaintiff's stock
thereafter devolved upon him or her by operation of law.
B. If a derivative action confers a substantial benefit upon the
corporation as a result of a compromise or settlement of an action or
claim, the court may award the plaintiff reasonable costs, including
reasonable attorney fees, and shall direct the plaintiff to remit to
the corporation the remainder of all proceeds received.
C. In any derivative action instituted by a shareholder of a
domestic or foreign corporation, the court having jurisdiction, upon
final judgment, shall require the nonprevailing party or parties to
pay the prevailing party or parties the reasonable expenses,
including attorney fees, taxable as costs, incurred as a result of
such action.
Added by Laws 1986, c. 292, § 126, eff. Nov. 1, 1986. Amended by
Laws 2014, c. 330, § 1, eff. Nov. 1, 2014.
§18-1127. Liability of corporation, etc. - Impairment by certain
transactions.
LIABILITY OF CORPORATION, ETC.;
IMPAIRMENT BY CERTAIN TRANSACTIONS
The liability of a corporation of this state, or of the
shareholders, directors or officers thereof, or the rights or
remedies of the creditors thereof, or persons doing or transacting
business with the corporation, shall not in any way be lessened or
impaired by the sale of its assets, or by the increase or decrease in
the capital stock of the corporation, or by its merger or
consolidation with one or more corporations or by any change or
amendment in its certificates of incorporation.
Added by Laws 1986, c. 292, § 127, eff. Nov. 1, 1986.
§18-1128. Defective Organization of Corporation as Defense.
DEFECTIVE ORGANIZATION OF CORPORATION AS DEFENSE
A. No corporation of this state and no person sued by any such
organization shall be permitted to assert the want of legal
organization as a defense to any claim.
B. This section shall not be construed to prevent judicial
inquiry into the regularity or validity of the organization of a
corporation, or its lawful possession of any corporate power it may
assert in any other suit or proceeding where its corporate existence
or the power to exercise the corporate rights it asserts is
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challenged, and evidence tending to sustain the challenge shall be
admissible in any such suit or proceeding.
Added by Laws 1986, c. 292, § 128, eff. Nov. 1, 1986.
§18-1129. Usury - Pleading by Corporation.
USURY; PLEADING BY CORPORATION
No corporation shall plead any statute against usury in any court
of law or equity in any suit instituted to enforce the payment of any
bond, note or other evidence of indebtedness issued or assumed by it.
Added by Laws 1986, c. 292, § 129, eff. Nov. 1, 1986.
§18-1130. Foreign corporations - Definition - Qualification to do
business in state - Procedure
FOREIGN CORPORATIONS; DEFINITION; QUALIFICATION TO DO BUSINESS IN
STATE; PROCEDURE
A. As used in the Oklahoma General Corporation Act, the words
"foreign corporation" mean a corporation organized pursuant to the
laws of any jurisdiction other than this state.
B. No foreign corporation shall do any business in this state,
through or by branch offices, agents or representatives located in
this state, until it shall have paid to the Secretary of State of
this state the fees prescribed in Section 1142 of this title and
shall have filed with the Secretary of State:
1. A certificate as of a date not earlier than six (6) months
prior to the filing date issued by an authorized officer of the
jurisdiction of its incorporation evidencing its corporate existence.
If such certificate is in a foreign language, a translation thereof,
under oath of the translator, shall be attached thereto;
2. A statement executed by an authorized officer of the
corporation and acknowledged in accordance with the provisions of
Section 1007 of this title, setting forth:
a. the mailing address of the corporation's principal
place of business, wherever located,
b. the name and street address of its additional
registered agent in this state, if any, which agent may
be an individual resident in this state, a domestic
corporation, a domestic partnership whether general or
limited and including a limited liability partnership
or a limited liability limited partnership, a domestic
limited liability company, a domestic statutory trust,
a foreign corporation other than a foreign partnership
whether general or limited and including a limited
liability partnership or a limited liability limited
partnership, a foreign limited liability company or a
foreign statutory trust, if authorized to transact
business in this state,
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c. the aggregate number of its authorized shares itemized
by classes, par value of shares, shares without par
value, and series, if any, within any classes
authorized, unless it has no authorized capital,
d. a statement, as of a date not earlier than six (6)
months prior to the filing date, of the assets and
liabilities of the corporation,
e. the business it proposes to do in this state and a
statement that it is authorized to do that business in
the jurisdiction of its incorporation, and
f. a statement of the maximum amount of capital such
corporation intends and expects to invest in the state
at any time during the current fiscal year. "Invested
capital" is defined as the value of the maximum amount
of funds, credits, securities and property of whatever
kind existing at any time during the fiscal year in the
State of Oklahoma and used or employed by such
corporation in its business carried on in this state.
C. The Secretary of State, upon payment to the Secretary of
State of the fees prescribed in Section 1142 of this title, shall
issue a sufficient number of certificates under the hand and official
seal of the Secretary of State, evidencing the filing of the
statement required by the provisions of subsection B of this section.
The certificate of the Secretary of State shall be prima facie
evidence of the right of the corporation to do business in this
state; provided that the Secretary of State shall not issue such
certificate unless the name of the corporation is such as to
distinguish it upon the records of the Office of the Secretary of
State in accordance with the provisions of Section 1141 of this
title.
D. A foreign corporation, upon receiving a certificate from the
Secretary of State, shall enjoy the same rights and privileges as,
but not greater than, a corporation organized under the laws of this
state for the purposes set forth in the statement filed by the
corporation with the Secretary of State pursuant to which such
certificate is issued and, except as otherwise provided in the
Oklahoma General Corporation Act, shall be subject to the same
duties, restrictions, penalties and liabilities now or hereafter
imposed upon a corporation organized under the laws of this state
with like purpose and of like character.
Added by Laws 1986, c. 292, § 130, eff. Nov. 1, 1986. Amended by
Laws 1987, c. 146, § 9, operative Nov. 1, 1987; Laws 1991, c. 331, §
56, eff. Sept. 1, 1991; Laws 1998, c. 422, § 26, eff. Nov. 1, 1998;
Laws 1999, c. 421, § 20, eff. Nov. 1, 1999; Laws 2017, c. 323, § 33,
eff. Nov. 1, 2017.
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§18-1131. Additional requirements in case of change of name, mailing
address, authorized capital or business purpose, or merger,
consolidation or conversion.
ADDITIONAL REQUIREMENTS IN CASE OF CHANGE OF NAME, MAILING
ADDRESS, AUTHORIZED CAPITAL OR BUSINESS PURPOSE,
OR MERGER, CONSOLIDATION OR CONVERSION
A. Every foreign corporation admitted to do business in this
state which shall change its corporate name, the mailing address of
its principal office, or its authorized capital, or shall enlarge,
limit or otherwise change the business which it proposes to do in
this state, within thirty (30) days after the time the change becomes
effective, shall file with the Secretary of State a statement
executed by an authorized officer of the corporation and acknowledged
in accordance with the provisions of Section 1007 of this title,
setting forth:
1. The name of the foreign corporation as it appears on the
records of the Secretary of State of this state;
2. The jurisdiction of its incorporation;
3. The date it was authorized to do business in this state;
4. If the name of the foreign corporation has been changed, a
statement of the name relinquished, a statement of the new name and a
statement that the change of name has been effected pursuant to the
laws of the jurisdiction of its incorporation and the date the change
was effected;
5. If the mailing address of its principal office has been
changed, a statement of the mailing address relinquished and a
statement of the new mailing address;
6. If the authorized capital of the corporation has been
changed, a restatement of the corporate article which states its
amended capitalization, a statement that the change has been effected
pursuant to the laws of the jurisdiction of its incorporation and the
date the change was effected;
7. If the business it proposes to do in this state is to be
enlarged, limited or otherwise changed, a statement reflecting such
change and a statement that it is authorized to do such business in
the jurisdiction of its incorporation; and
8. If the name and/or address of the additional agent has
changed, a statement of the new name and address.
B. Whenever a foreign corporation authorized to transact
business in this state shall merge with, consolidate into or convert
to another corporation or business entity, within thirty (30) days
after the merger, consolidation or conversion becomes effective, it
shall file a certificate, issued by the proper officer of the state
or country of its incorporation, attesting to the occurrence of the
event. If the merger, consolidation or conversion has changed the
corporate name, mailing address, or authorized capital of the foreign
corporation or has enlarged, limited or otherwise changed the
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business it proposes to do in this state, it shall also comply with
the provisions of subsection A of this section.
C. Whenever a foreign corporation authorized to transact
business in this state ceases to do business in this state because of
a merger, consolidation or conversion, it shall comply with the
provisions of Section 1135 of this title.
D. The Secretary of State shall be paid the fee prescribed in
Section 1142 of this title for filing and indexing each statement or
certificate required by the provisions of subsection A or B of this
section.
Added by Laws 1986, c. 292, § 131, eff. Nov. 1, 1986. Amended by
Laws 1987, c. 146, § 10, emerg. eff. June 24, 1987; Laws 1996, c. 69,
§ 6, eff. Nov. 1, 1996; Laws 2004, c. 255, § 32, eff. Nov. 1, 2004.
§18-1132. Exceptions to Requirements.
EXCEPTIONS TO REQUIREMENTS
A. No foreign corporation shall be required to comply with the
provisions of Sections 130 and 131 of this act, if:
1. it is the mail order or a similar business, merely receiving
orders by mail or otherwise in pursuance of letters, circulars,
catalogs, or other forms of advertising, or solicitation, accepting
the orders outside this state, and filing them with goods shipped
into this state; or
2. it employs salesmen, either resident or traveling, to solicit
orders in this state, either by display of samples or otherwise,
whether or not maintaining sales offices in this state, all orders
being subject to approval at the offices of the corporation without
this state, and all goods applicable to the orders being shipped in
pursuance thereof from without this state to the vendee or to the
seller or his agent for delivery to the vendee, and if any samples
kept within this state are for display or advertising purposes only,
and no sales, repairs, or replacements are made from stock on hand in
this state; or
3. it sells, by contract consummated outside this state, and
agrees by the contract, to deliver into this state, machinery, plants
or equipment, the construction, erection or installation of which
within this state requires the supervision of technical engineers or
skilled employees performing services not generally available, and as
a part of the contract of sale agrees to furnish such services, and
such services only, to the vendee at the time of construction,
erection or installation; or
4. its business operations within this state are wholly
interstate in character; or
5. it is an insurance company doing business in this state; or
6. it creates, as borrower or lender, or acquires, evidences of
debt, mortgages or liens on real or personal property; or
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7. it secures or collects debts or enforces any rights in
property securing the same.
B. The provisions of this section shall have no application to
the question of whether any foreign corporation is:
1. subject to service of process and suit in this state pursuant
to the provisions of Section 136 of this act or any other law of this
state; or
2. subject to the taxation laws of this state.
Added by Laws 1986, c. 292, § 132, eff. Nov. 1, 1986.
§18-1133. Change of registered agent upon whom process may be
served.
CHANGE OF REGISTERED AGENT UPON WHOM PROCESS MAY BE SERVED
A. 1. Any foreign corporation which has qualified to do
business in this state may change its registered agent and substitute
another registered agent by filing a certificate with the Secretary
of State, acknowledged in accordance with the provisions of Section
1007 of this title, setting forth:
a. the name and street address of its registered agent
designated in this state upon whom process directed to
the corporation may be served, and
b. a revocation of all previous appointments of agent for
such purposes.
2. Such registered agent shall be either an individual residing
in this state when appointed or a corporation, limited liability
company, or limited partnership authorized to transact business in
this state and in compliance with subparagraph b of paragraph 2 of
subsection B of Section 1130 of this title.
B. Any individual or entity designated by a foreign corporation
as its registered agent for service of process may resign by filing
with the Secretary of State a signed statement that the agent is
unwilling to continue to act as the registered agent of the
corporation for service of process, including in the statement the
post office address of the main or headquarters office of the foreign
corporation, but the resignation shall not become effective until
thirty (30) days after the statement is filed. The statement shall
be acknowledged by the registered agent and shall contain a
representation that written notice of resignation was given to the
corporation at least thirty (30) days prior to the filing of the
statement by mailing or delivering the notice to the corporation at
its address given in the statement.
C. If any agent designated and certified as required by the
provisions of Section 1130 of this title shall die, remove himself or
herself from this state or resign, then the foreign corporation for
which the agent had been so designated and certified, within ten (10)
days after the death, removal or resignation of its agent, shall
substitute, designate and certify to the Secretary of State, the name
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of another registered agent for the purposes of the Oklahoma General
Corporation Act, and all process, orders, rules and notices may be
served on or given to the substituted agent with like effect.
D. Any individual or entity designated by a foreign corporation
as its registered agent for service of process may change the address
of the registered office of the corporation or corporations for which
he or she is the registered agent to another address in this state by
filing with the Secretary of State a certificate in the name of each
affected corporation, executed and acknowledged by the registered
agent, setting forth the address at which the registered agent has
maintained the registered office, and further certifying to the new
address to which the registered office will be changed on a given
day, and at which new address the registered agent will thereafter
maintain the registered office. Thereafter, or until further change
of address, as authorized by law, the registered office in this state
shall be located at the new address of the registered agent thereof
as given in the certificate.
E. In the event of a change of name of any individual or entity
designated by a foreign corporation as its registered agent for
service of process, the registered agent shall file with the
Secretary of State a certificate in the name of each affected
corporation, executed and acknowledged by the registered agent,
setting forth the new name of the registered agent, the name of the
registered agent before it was changed, and the address at which the
registered agent has maintained the registered office for the
affected corporation. A change of name of any person or entity
acting as registered agent as a result of a merger or consolidation
of the registered agent, with or into another person or corporation
which succeeds to its assets by operation of law, shall be deemed a
change of name for purposes of this section.
Added by Laws 1986, c. 292, § 133, eff. Nov. 1, 1986. Amended by
Laws 1996, c. 69, § 7, eff. Nov. 1, 1996; Laws 1998, c. 422, § 27,
eff. Nov. 1, 1998; Laws 1999, c. 421, § 21, eff. Nov. 1, 1999; Laws
2009, c. 447, § 1, eff. Jan. 1, 2010; Laws 2017, c. 323, § 34, eff.
Nov. 1, 2017.
§18-1134. Violations and penalties.
VIOLATIONS AND PENALTIES
A. Any foreign corporation doing business of any kind in this
state without first having complied with any provision of the
Oklahoma General Corporation Act applicable to it, shall be fined not
less than Two Hundred Dollars ($200.00) nor more than Five Hundred
Dollars ($500.00) for each such offense. Any agent of any foreign
corporation that shall do any business in this state for any foreign
corporation before the foreign corporation has complied with any
provision of the Oklahoma General Corporation Act applicable to it,
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shall be fined not less than One Hundred Dollars ($100.00) nor more
than Five Hundred Dollars ($500.00) for each such offense.
B. If any foreign corporation fails to file or cause to be filed
a certificate as provided for in paragraphs 11 and 13 of subsection A
of Section 1142 of this title or fails to pay to the Secretary of
State any additional fees shown to be due by the certificate provided
for in paragraph 13 of subsection A of Section 1142 of this title,
the corporation:
1. may be ousted from this state by the Secretary of State and
its certificate of authority to do business in this state revoked and
canceled. Before such revocation the Secretary of State shall give
not less than thirty (30) days' notice sent by mail duly addressed to
such corporation at its principal place of business or last address
shown on the records of the Secretary of State of the Secretary of
State's intent to revoke the corporation's authority to transact
business in this state; and
2. after notice required in paragraph 1 above, shall be subject
to a penalty and shall forfeit to the state for each day it fails to
comply with the provisions of this subsection, the sum of Twenty-five
Dollars ($25.00) per day but not more than Five Hundred Dollars
($500.00) for each such offense.
C. All fines and penalties provided for by this section may be
recovered in a suit brought therefor by the Attorney General, in the
name of the state, against the corporation, in any district court of
the state. Fines and penalties received or collected pursuant to
this section by the Attorney General as a result of an action brought
in the name of the state by the Attorney General, shall be paid into
the State Treasury provided that twenty-five percent (25%) thereof
shall be deposited in the Attorney General's Evidence Fund. Such
fines and penalties shall be properly accounted for and paid monthly
by the Secretary of State to the State Treasurer for deposit into the
General Revenue Fund.
Added by Laws 1986, c. 292, § 134, eff. Nov. 1, 1986. Amended by
Laws 1987, c. 146, § 11, emerg. eff. June 24, 1987; Laws 1989, c.
169, § 1, eff. Nov. 1, 1989; Laws 1991, c. 331, § 57, eff. Sept. 1,
1991.
§18-1135. Withdrawal of foreign corporation from state - Procedure -
Service of process on Secretary of State.
WITHDRAWAL OF FOREIGN CORPORATION FROM STATE; PROCEDURE; SERVICE OF
PROCESS ON SECRETARY OF STATE
A. Any foreign corporation which shall have qualified to do
business in this state pursuant to the provisions of Section 1130 of
this title may surrender its authority to do business in this state
and may withdraw by filing with the Secretary of State:
1. A certificate, executed by an authorized officer of the
corporation and acknowledged in accordance with the provisions of
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Section 1007 of this title, stating that it surrenders its authority
to transact business in Oklahoma and withdraws; and stating the
address to which the Secretary of State may mail any process against
the corporation that may be served upon the Secretary of State; or
2. A copy of a certificate of dissolution issued by the proper
official of the state or other jurisdiction of its incorporation,
together with a certificate, which shall be executed in accordance
with the provisions of paragraph 1 of this subsection, stating the
address to which the Secretary of State may mail any process against
the corporation that may be served upon the Secretary of State or a
copy of an order or decree of dissolution made by any court of
competent jurisdiction or other competent authority of the state or
other jurisdiction of its incorporation, certified to be a true copy
under the hand of the clerk of the court or other official body, and
the official seal of the court or official body or clerk thereof,
together with a certificate executed in accordance with the
provisions of paragraph 1 of this subsection, stating the address to
which the Secretary of State may mail any process against the
corporation that may be served upon the Secretary of State.
B. The Secretary of State, upon payment to the Secretary of
State of the fees prescribed in Section 1142 of this title, shall
issue a sufficient number of certificates, under the hand and
official seal of the Secretary of State, evidencing the surrender of
the authority of the corporation to do business in this state and its
withdrawal therefrom.
C. Upon the issuance of the certificates by the Secretary of
State, the appointment of the registered agent of the corporation in
this state, upon whom process against the corporation may be served,
shall be revoked, and service on the corporation may be made by
serving the Secretary of State as its agent as provided in Section
2004 of Title 12 of the Oklahoma Statutes.
D. In the event of service upon the Secretary of State in
accordance with the provisions of Section 2004 of Title 12 of the
Oklahoma Statutes, the Secretary of State shall immediately notify
the corporation by letter, certified mail or return receipt requested
at the address stated in the certificate which was filed by the
corporation with the Secretary of State pursuant to subsection A of
this section. The letter shall include a copy of the process and any
other papers served on the Secretary of State pursuant to the
provisions of this subsection. It shall be the duty of the plaintiff
in the event of such service to serve process and any other papers in
duplicate, to notify the Secretary of State that service is being
effected pursuant to the provisions of this subsection, and to pay
the Secretary of State the fee provided for in paragraph 7 of Section
1142 of this title, which fee shall be taxed as part of the costs in
the proceeding. The Secretary of State shall maintain an
alphabetical record of any such service, setting forth the names of
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the plaintiff and the defendant, the title, docket number, and nature
of the proceeding in which process has been served upon the Secretary
of State, the fact that service has been effected pursuant to the
provisions of this subsection, the return date thereof, and the date
service was made. The Secretary of State shall not be required to
retain such information longer than five (5) years from receipt of
the service of process by the Secretary of State.
Added by Laws 1986, c. 292, § 135, eff. Nov. 1, 1986. Amended by
Laws 1987, c. 146, § 12, operative Nov. 1, 1987; Laws 1988, c. 323, §
28, eff. Nov. 1, 1988; Laws 1996, c. 69, § 8, eff. Nov. 1, 1996; Laws
2017, c. 323, § 35, eff. Nov. 1, 2017.
§18-1136. Service of process on nonqualifying foreign corporations.
SERVICE OF PROCESS ON NONQUALIFYING FOREIGN CORPORATIONS
A. If any foreign corporation shall transact business in this
state without having qualified to do business in accordance with the
provisions of Section 1130 of this title, service on the corporation
may be made by serving the Secretary of State as its agent as
provided in Section 2004 of Title 12 of the Oklahoma Statutes.
B. If any foreign corporation consents in writing to be subject
to the jurisdiction of any state or federal court in this state for
any civil action, suit or proceeding against it arising or growing
out of any business or matter, and if the agreement or instrument
setting forth such consent does not otherwise provide a manner of
service of legal process in any such civil action, suit or proceeding
against it, such foreign corporation shall be deemed to have thereby
appointed and constituted the Secretary of State of this state its
agent for the acceptance of legal process in any such civil action,
suit or proceeding against it. The transaction of business in this
state by such corporation or such consent by such corporation to the
jurisdiction of any state or federal court in this state without
provision for a manner of service of legal process shall be a
signification of the agreement of such corporation that any process
served upon the Secretary of State when so served shall be of the
same legal force and validity as if served upon an authorized officer
or agent personally within this state.
C. The provisions of Section 1132 of this title shall not apply
in determining whether any foreign corporation is transacting
business in this state within the meaning of this section; and "the
transaction of business" or "business transacted in this state", by
any such foreign corporation, whenever those words are used in this
section, shall mean the course or practice of carrying on any
business activities in this state, including, without limiting the
generality of the foregoing, the solicitation of business or orders
in this state. The provisions of this section shall not apply to any
insurance company doing business in this state.
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Added by Laws 1986, c. 292, § 136, eff. Nov. 1, 1986. Amended by
Laws 1988, c. 323, § 29, eff. Nov. 1, 1988; Laws 2017, c. 323, § 36,
eff. Nov. 1, 2017.
§18-1137. Actions By and Against Unqualified Foreign Corporations.
ACTIONS BY AND AGAINST UNQUALIFIED FOREIGN CORPORATIONS
A. A foreign corporation which is required to comply with the
provisions of Sections 130 and 131 of this act and which has done
business in this state without authority shall not maintain any
action or special proceeding in this state unless and until such
corporation has been authorized to do business in this state and has
paid to the state all fees, penalties and franchise taxes for the
years or parts thereof during which it did business in this state
without authority. This prohibition shall not apply to any successor
in interest of such foreign corporation.
B. The failure of a foreign corporation to obtain authority to
do business in this state shall not impair the validity of any
contract or act of the foreign corporation or the right of any other
party to the contract to maintain any action or special proceeding
thereon, and shall not prevent the foreign corporation from defending
any action or special proceeding in this state.
Added by Laws 1986, c. 292, § 137, eff. Nov. 1, 1986.
§18-1138. Foreign Corporations Doing Business Without Having
Qualified - Injunctions.
FOREIGN CORPORATIONS DOING BUSINESS
WITHOUT HAVING QUALIFIED; INJUNCTIONS
The district court shall have jurisdiction to enjoin any foreign
corporation, or any agent thereof, from transacting any business in
this state if such corporation has failed to comply with any
provision of the Oklahoma General Corporation Act applicable to it or
if such corporation has secured a certificate of the Secretary of
State pursuant to the provisions of Section 130 of this act on the
basis of false or misleading representations. The Attorney General,
upon his own motion or upon the relation of proper parties, shall
proceed for this purpose by petition in any county in which such
corporation is doing business.
Added by Laws 1986, c. 292, § 138, eff. Nov. 1, 1986.
§18-1139. Reservation of Corporate Name.
RESERVATION OF CORPORATE NAME
A. The exclusive right to the use of a corporate name, in good
faith, may be reserved by:
1. Any person intending to form a corporation under Title 18 of
the Oklahoma Statutes; or
2. Any corporation organized under the laws of this state
intending to change its name; or
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3. Any foreign corporation intending to qualify to transact
business in this state under Title 18 of the Oklahoma Statutes; or
4. Any foreign corporation qualified to transact business in
this state intending to change its name; or
5. Any person intending to organize a foreign corporation and
intending to have such corporation qualified to transact business in
this state under the laws of this state; or
6. Any corporation whose charter has expired or has been
forfeited intending to renew or revive the corporation under Title 18
of the Oklahoma Statutes.
B. Such reservation shall be made by filing in the Office of the
Secretary of State an application to reserve a specified corporate
name. If the Secretary of State finds that such name is available
for corporate use, he shall reserve the same for the exclusive use of
such applicant for a period of sixty (60) days.
C. The right to the exclusive use of a specified corporate name
so reserved may be transferred to any other person by filing in the
Office of the Secretary of State a notice of such transfer, executed
by the person for whom such name was reserved and specifying the name
and address of the transferee.
Added by Laws 1986, c. 292, § 139, eff. Nov. 1, 1986.
§18-1140. Trade names.
TRADE NAMES
A. A corporation or other business entity doing business in this
state under any name other than its legal name shall file a report
with the Secretary of State setting forth the legal name of the
corporation or business entity, the jurisdiction of organization of
the corporation or business entity, the trade name under which the
business is carried on, a brief description of the kind of business
transacted under the name, and the address wherein the business is to
be carried on. The report shall be executed by a representative of
the business entity authorized to sign on its behalf. In the case of
a corporation, the report shall be signed and filed in accordance
with Section 1007 of this title. The trade name adopted shall be
such as to be distinguishable upon the records in the Office of the
Secretary of State from:
1. Names of other business entities organized under the laws of
this state and filed with the Secretary of State then existing or
which existed at any time during the preceding three (3) years; or
2. Names of foreign business entities qualified to do business
in this state and filed with the Secretary of State then existing or
which existed at any time during the preceding three (3) years; or
3. Trade names or fictitious names filed with the Secretary of
State; or
4. Names reserved with the Secretary of State.
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B. As used in this section, "business entity" means a
corporation, a business trust, a common law trust, a limited
liability company, or any unincorporated business, including any form
of partnership.
Added by Laws 1986, c. 292, § 140, eff. Nov. 1, 1986. Amended by
Laws 1995, c. 339, § 15, eff. Nov. 1, 1995; Laws 1996, c. 69, § 9,
eff. Nov. 1, 1996; Laws 1999, c. 421, § 22, eff. Nov. 1, 1999.
§18-1140.1. Withdrawal of trade name.
WITHDRAWAL OF TRADE NAME
In the event a corporation or other business entity elects to
cease doing business in this state under a trade name, it shall file
a report, in duplicate, with the Secretary of State withdrawing such
trade name. The report shall be executed by a party duly authorized
to sign on behalf of the corporation or other business entity. In
the case of a corporation, the report shall be acknowledged and filed
in accordance with Section 1007 of this title.
Added by Laws 1996, c. 69, § 10, eff. Nov. 1, 1996.
§18-1140.2. Transfer of trade name.
TRANSFER OF TRADE NAME
In the event a corporation or other business entity elects to
transfer ownership of a trade name to another corporation or business
entity, it shall file a report, in duplicate, with the Secretary of
State, specifying such transfer. The report shall be executed by a
party duly authorized to sign on behalf of the corporation or other
business entity. In the case of a corporation, the report shall be
acknowledged and filed in accordance with Section 1007 of this title.
The report shall contain the name of the corporation to which the
trade name is being transferred, and the address wherein such
business is to be carried on.
Added by Laws 1996, c. 69, § 11, eff. Nov. 1, 1996.
§18-1140.3. Amendment of trade name report.
AMENDMENT OF TRADE NAME REPORT
A. A trade name report shall be amended when:
1. There is a false or erroneous statement in the trade name
report;
2. There is a change in the kind of business transacted under
the trade name; or
3. There is a change in or an additional address where the
business is to be carried on under the trade name.
B. An amended trade name report shall set forth the trade name
and specify the amendment therein. The report shall be executed by a
party duly authorized to sign on behalf of the corporation or other
business entity. In the case of a corporation, the report shall be
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acknowledged and filed in accordance with Section 1007 of Title 18 of
the Oklahoma Statutes.
Added by Laws 1999, c. 421, § 23, eff. Nov. 1, 1999.
§18-1141. Prohibition on use of same or indistinguishable names;
Exceptions.
PROHIBITION ON USE OF SAME OR INDISTINGUISHABLE NAMES; EXCEPTIONS
The Secretary of State shall not accept for reservation or filing
a statement or certificate containing a name which is the same as or
indistinguishable from the name of any business entity, as defined in
Section 15 of this act, trade name, fictitious name, or reserved name
filed with the Secretary of State unless one of the following is
filed with the Secretary of State:
1. The written consent of the business entity or holder of the
trade name, fictitious name, or reserved name to use the same or
indistinguishable name with the addition of one or more words to make
that name distinguishable upon the records of the Secretary of State,
except that the addition of words to make the name distinguishable
shall not be required where the written consent states that the
consenting entity is about to change its name, cease to do business,
withdraw from the state, or be wound up;
2. A certified copy of a final decree of a court of competent
jurisdiction establishing the prior right of the business entity or
holder of a reserved name, trade name, or fictitious name to the use
of the name in this state;
3. In the case of any foreign business entity having a name
prohibited by this section which intends to qualify to transact
business within this state, a resolution adopting a fictitious name
not prohibited by this section, which shall be used to the exclusion
of its true name when transacting business within this state. Such
resolution shall be executed by a representative or representatives
of the business entity duly authorized to sign on its behalf.
Added by Laws 1986, c. 292, § 141, eff. Nov. 1, 1986. Amended by
Laws 1987, c. 146, § 13, operative Nov. 1, 1987; Laws 1995, c. 339, §
16, eff. Nov. 1, 1995; Laws 1996, c. 69, § 12, eff. Nov. 1, 1996.
§18-1142. Filing and other service fees.
FILING AND OTHER SERVICE FEES
A. The Secretary of State, for services performed in the Office
of the Secretary of State and for expense of mailing, shall charge
and collect the following fees:
1. For any report, document, or other paper required to be filed
in the Office of the Secretary of State, a fee of Twenty-five Dollars
($25.00);
2. For reservation of corporate name, a fee of Ten Dollars
($10.00);
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3. For issuing extra copies of any certificate not requiring any
extra filing of papers or documents of any kind, a fee of Ten Dollars
($10.00);
4. For issuing any other certificate, a fee of Ten Dollars
($10.00);
5. For receiving a filing or indexing the annual certificate of
a foreign corporation doing business in this state, or both when
filed together, a fee of Ten Dollars ($10.00);
6. For preclearance of any document for filing, a fee of Fifty
Dollars ($50.00);
7. For each service of process made upon and accepted by the
Secretary of State, a fee of Twenty-five Dollars ($25.00);
8. For preparing and providing a report of a record search, a
fee of Five Dollars ($5.00);
9. For filing and issuing certificates of incorporation, the fee
shall be one-tenth of one percent (1/10 of 1%) of the authorized
capital stock of such corporation; provided, that the minimum fee for
any such service shall be Fifty Dollars ($50.00); provided further,
that not-for-profit corporations shall only be required to pay a fee
of Twenty-five Dollars ($25.00);
10. For filing and issuing amended certificates of incorporation
or certificates of restatement, reorganization, revival, extension or
dissolution, the fee shall be Fifty Dollars ($50.00); provided,
however, not-for-profit corporations shall only be required to pay a
fee of Twenty-five Dollars ($25.00). If an amendment shall provide
for an increase in authorized capital in excess of Fifty Thousand
Dollars ($50,000.00), the filing fee shall be an amount equal to one-
tenth of one percent (1/10 of 1%) of such increase;
11. For filing and issuing certificates of consolidation, if the
resulting corporation is a domestic corporation, or merger, if the
surviving corporation is a domestic corporation, the fee shall be One
Hundred Dollars ($100.00); provided, however, not-for-profit
corporations shall only be required to pay a fee of Twenty-five
Dollars ($25.00). If the merger or consolidation shall increase the
authorized capital of the surviving or resulting corporation in
excess of Fifty Thousand Dollars ($50,000.00), the filing fee shall
be an amount equal to one-tenth of one percent (1/10 of 1%) of such
increase;
12. For filing and issuing a certificate of conversion, whenever
the resulting corporation is a domestic corporation, the minimum fee
shall be One Hundred Dollars ($100.00); provided, however, if the
certificate of incorporation of the resulting corporation authorizes
capital stock in excess of Fifty Thousand Dollars ($50,000.00), the
filing fee shall be an amount equal to one-tenth of one percent (1/10
of 1%) of such authorized capital. If the resulting domestic
corporation is not for profit, it shall only be required to pay a fee
of Fifty Dollars ($50.00);
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13. For issuing a certificate to a foreign corporation to do
business in this state, and filing a certificate and statement of
such corporation required pursuant to the provisions of Section 1130
of this title, the fee shall be one-tenth of one percent (1/10 of 1%)
of the maximum amount of capital invested by such corporation in the
state at any time during the fiscal year such certificate is issued
to any such foreign corporation; provided, that the minimum fee for
any such service shall be Three Hundred Dollars ($300.00); provided
further, that no such corporation shall be required to pay a fee on
an amount in excess of its authorized capital;
14. For amended certificate of qualification of a foreign
corporation, a fee of Two Hundred Dollars ($200.00); provided,
however, for a certificate solely reflecting a change of mailing
address, a fee of Ten Dollars ($10.00);
15. For filing a certificate of consolidation, if the resulting
corporation is a foreign corporation, or merger, if the surviving
corporation is a foreign corporation, the fee shall be One Hundred
Dollars ($100.00);
16. For filing a certificate of withdrawal of a foreign
corporation doing business in this state, a fee of One Hundred
Dollars ($100.00);
17. Every foreign corporation on the anniversary of its
qualification in this state each year, shall cause to be filed with
the Secretary of State a certificate of its president, vice-president
or other managing officers, in which shall be stated and shown the
maximum amount of capital the corporation had invested in the state
at any time subsequent to the issuance to it of a certificate to do
business in this state and the amount of capital previously paid
upon. If the amount of capital so invested as shown by said
certificate exceeds the amount formerly paid upon, the corporation,
at the time of filing said certificate, shall pay to the Secretary of
State an additional fee equal to one-tenth of one percent (1/10 of
1%) of the amount of such excess capital so invested by the
corporation in the state; provided, that no such corporation shall be
required to pay a filing fee on an amount in excess of its authorized
capital, or to file the certificate provided for in this paragraph
after it shall have paid a filing fee on its total authorized
capitalization;
18. For acting as the registered agent, a fee of One Hundred
Dollars ($100.00) payable on the first day of July each year, and if
not paid before the next ensuing September 1st, the Oklahoma Tax
Commission shall suspend and forfeit the charter of the delinquent
corporation pursuant to the procedures prescribed in Section 1212 of
Title 68 of the Oklahoma Statutes. The Tax Commission shall collect
and audit the registered agent fee authorized pursuant to this
paragraph in conjunction with the collection and audit of franchise
taxes as provided for in Sections 1201 through 1214 of Title 68 of
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the Oklahoma Statutes. All monies received by the Tax Commission
pursuant to the provisions of this paragraph shall be paid to the
State Treasurer for deposit in the General Revenue Fund;
19. For filing a change of address for any individual,
corporation, limited liability company or limited partnership
designated by a corporation as its registered agent for service of
process, or for the change of name or the resignation of a registered
agent, a fee of Twenty-five Dollars ($25.00), for the first forty
corporations and Five Dollars ($5.00) for each additional corporation
within any bulk filing; and
20. For any response by means of telecommunications to inquiries
regarding information required to be maintained by the Secretary of
State, a fee of Five Dollars ($5.00), unless otherwise provided.
Fees collected pursuant to this paragraph shall be deposited in the
Revolving Fund for the Office of the Secretary of State.
B. Except as otherwise provided by law, fees paid to the
Secretary of State in accordance with the provisions of the Oklahoma
General Corporation Act shall be properly accounted for and shall be
paid monthly to the State Treasurer for deposit in the General
Revenue Fund.
C. For any certificate supplied by the county clerk, such clerk
shall receive a fee of One Dollar ($1.00). Such fees shall be
properly accounted for and shall be paid into the county treasury in
the same manner as other fees collected by the county clerk for the
filing and recording of mortgages and deeds.
D. In any court proceeding pursuant to the provisions of the
Oklahoma General Corporation Act requiring the filing of any decree,
order, report or other document in the Office of the Secretary of
State or in the office of any county clerk, in addition to the usual
court costs and the costs for filing in the office of the clerk of
the court, fees equal to the amounts provided for in this section for
such required filing shall be collected as costs in such proceedings
and such amount shall be forwarded to the Secretary of State and the
county clerk with the papers to be filed.
E. The provisions contained in this section relating to the
payment of incorporation fees by foreign corporations are not
intended and shall not be construed to relieve such corporations,
where applicable, of the payment of the annual corporate franchise
tax to the Tax Commission.
F. For the purposes of computing the fees to be collected by the
Secretary of State pursuant to the provisions of this section, each
share without par value shall be treated the same as a share with a
par value of Fifty Dollars ($50.00), and the fees thereon shall be
collected accordingly.
G. Payments for any required fees except as otherwise provided
by law may be made as follows:
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1. By the applicant's personal or company check, cash, or money
order; or
2. By a nationally recognized credit card issued to the
applicant. The Secretary of State may add a convenience fee, not to
exceed four percent (4%) of the amount of such payment for services
provided through telephonic or electronic media. For purposes of
this paragraph, "nationally recognized credit card" means any
instrument or device, whether known as a credit card, credit plate,
charge plate, or by any other name, issued with or without fee by an
issuer for the use of the cardholder in obtaining goods, services, or
anything else of value on credit which is accepted by over one
thousand merchants in this state. The Secretary of State shall
determine which nationally recognized credit cards will be accepted;
provided, however, the Secretary of State must ensure that no loss of
state revenue will occur by the use of such card. The convenience
fee collected pursuant to this paragraph shall be credited to the
Revolving Fund for the Office of the Secretary of State, as
established in Section 276.1 of Title 62 of the Oklahoma Statutes.
Added by Laws 1986, c. 292, § 142, eff. Nov. 1, 1986. Amended by
Laws 1987, c. 146, § 14, operative Nov. 1, 1987; Laws 1988, c. 323, §
30, eff. Nov. 1, 1988; Laws 1989, c. 169, § 2, eff. Nov. 1, 1990;
Laws 1990, c. 264, § 92, eff. Nov. 1, 1990; Laws 1991, c. 331, § 58,
eff. Sept. 1, 1991; Laws 1993, c. 273, § 10, emerg. eff. May 27,
1993; Laws 1994, c. 267, § 1, eff. July 1, 1994; Laws 2001, c. 406, §
5, emerg. eff. June 4, 2001; Laws 2009, c. 447, § 2, eff. Jan. 1,
2010.
§18-1142.1. Fees for telephone assistance.
FEES FOR TELEPHONE ASSISTANCE
The Secretary of State is authorized to charge fees as provided
by law for a telephone assistance service to provide information
concerning records retained by the Secretary of State.
Added by Laws 1990, c. 264, § 95, operative July 1, 1990.
§18-1142.2. Treatment of payment as credit.
Notwithstanding any other provision of law, the payment of the
tax levied pursuant to subsection A of Section 5 of this act for the
years 2011, 2012, and 2013 by any person doing business in this state
who is not subject to the franchise tax levied under the provisions
of Sections 1203, 1204, and 1205 of Title 68 of the Oklahoma Statutes
shall be considered as a credit against the total amount such person
is required to pay or remit annually for certification or
registration fees pursuant to the provisions of Section 2055.2 of
Title 18 or Section 311.1 of Title 54 of the Oklahoma Statutes. In
no event shall the credit be refunded.
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The Oklahoma Tax Commission and the Secretary of State shall
adopt a procedure to verify that a person claims a maximum of one
credit per year pursuant to this section.
Added by Laws 2010, S.J.R. No. 61, § 18.
§18-1143. Duplication of Oklahoma General Corporation Act by
Secretary of State - Distribution.
DUPLICATION OF OKLAHOMA GENERAL CORPORATION ACT BY
SECRETARY OF STATE; DISTRIBUTION
The Secretary of State may have printed, from time to time as he
deems necessary, pamphlet copies of the Oklahoma General Corporation
Act for distribution to persons and corporations desiring the same
for a sum not exceeding the cost of printing. The money received
from the sale of the copies shall be disposed of as are other fees of
the Office of the Secretary of State. Nothing in this section shall
be construed to prevent the free distribution of single pamphlet
copies of the Oklahoma General Corporation Act by the Secretary of
State.
Added by Laws 1986, c. 292, § 143, eff. Nov. 1, 1986.
§18-1144. Required filing with the county clerk following a merger
or consolidation, or a change of corporate name.
REQUIRED FILING WITH THE COUNTY CLERK
FOLLOWING A MERGER OR CONSOLIDATION,
OR A CHANGE OF CORPORATE NAME
A. A certified copy of the following documents, as applicable,
shall be filed with the county clerk of each county in which a
surviving or resulting corporation to a merger or consolidation, or a
corporation whose name was changed, has a recorded interest in real
property:
1. a certificate or agreement of merger or consolidation filed
with the Secretary of State in accordance with the provisions of
Section 1081, 1082, 1084, 1085, 1086 or 1087 of Title 18 of the
Oklahoma Statutes;
2. a certificate of ownership and merger filed with the
Secretary of State as provided in Section 1083 of Title 18 of the
Oklahoma Statutes;
3. an amendment to the certificate of incorporation effecting a
change of name pursuant to Section 1076, 1077 or 1131 of Title 18 of
the Oklahoma Statutes.
B. The provisions of this section shall have prospective
application only.
Added by Laws 1987, c. 31, § 2, eff. Nov. 1, 1987.
§18-1145. Control shares - definition.
CONTROL SHARES; DEFINITION
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As used in Sections 1145 through 1155 of this title, "control
shares" means issued and outstanding shares of an issuing public
corporation that, except for Sections 1145 through 1155 of this
title, would have voting power, when added to all other shares of the
issuing public corporation owned of record or beneficially by an
acquiring person or in respect to which that acquiring person may
exercise or direct the exercise of voting power, that would entitle
the acquiring person, immediately after acquisition of the shares,
directly or indirectly, to exercise or direct the exercise of the
voting power of the issuing public corporation in the election of
directors within any of the following ranges of voting power:
1. One-fifth (1/5) or more but less than one-third (1/3) of all
voting power;
2. One-third (1/3) or more but less than a majority of all
voting power; or
3. A majority or more of all voting power.
Added by Laws 1987, c. 146, § 15, emerg. eff. June 24, 1987. Amended
by Laws 1991, c. 53, § 3, eff. Sept. 1, 1991.
§18-1146. Control share acquisition - definition.
CONTROL SHARE ACQUISITION; DEFINITION
A. As used in Sections 1145 through 1155 of this title, "control
share acquisition" means acquisition by any person of ownership of,
or the power to direct the exercise of voting power with respect to,
control shares.
B. A person who acquires shares in the ordinary course of
business for the benefit of others in good faith and not for the
purpose of circumventing Sections 1145 through 1155 of this title has
not made a control share acquisition of shares in respect of which
that person is able to exercise or direct the exercise of votes only
after requesting further instruction from others.
C. The acquisition of any control shares does not constitute a
control share acquisition if the acquisition is made in good faith
and not for the purpose of circumventing Sections 1145 through 1155
of this title in any of the following circumstances:
1. At a time when the corporation was not subject to Sections
1145 through 1155 of this title;
2. Pursuant to a contract entered into at a time when the
corporation was not subject to Sections 1145 through 1155 of this
title;
3. Pursuant to the laws of descent and distribution;
4. Pursuant to the satisfaction of a pledge or other security
interest;
5. Pursuant to a merger, consolidation, or share acquisition
effected in compliance with Section 1081, 1082, 1083, 1090.1 or
1090.2 of this title, if the issuing public corporation is a party to
the agreement of merger, consolidation, or share acquisition;
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6. By a donee receiving the shares pursuant to an inter vivos
gift;
7. By a person of additional shares within the range of voting
power for which such person has received approval pursuant to Section
1153 of this title or within the range of voting power resulting from
shares acquired in a transaction described in this subsection;
8. An increase in voting power resulting from any action taken
by the issuing public corporation, provided the person whose voting
power is thereby affected is not an affiliate of the corporation;
9. Pursuant to the solicitation of proxies subject to Regulation
14A under the Securities Exchange Act of 1934, 15 U.S.C. Section 78a
et seq., as amended, or in the case of an issuing public corporation
which is not subject to such Regulation 14A, the solicitation of
proxies in accordance with the laws of the State of Oklahoma;
10. Pursuant to a transfer between or among immediate family
members, or between or among persons under direct common control. An
"immediate family member" is any relative or spouse of a person, or
any relative of such spouse, who has the same home as such person; or
11. From any person whose previous acquisition of shares would
have constituted a control share acquisition but for paragraphs 1
through 10 of this subsection, provided the acquisition does not
result in the acquiring person holding voting power within a higher
range of voting power than that of the person from whom the control
shares were acquired.
Added by Laws 1987, c. 146, § 16, emerg. eff. June 24, 1987. Amended
by Laws 1990, c. 328, § 7, eff. Sept. 1, 1990; Laws 1991, c. 53, § 4,
eff. Sept. 1, 1991.
§18-1147. Interested shares - Definition.
INTERESTED SHARES; DEFINITION
As used in Sections 1145 through 1155 of this title "interested
shares" means the shares of an issuing public corporation in respect
of which any of the following persons may exercise or direct the
exercise, as of the applicable record date, of the voting power of
the corporation in the election of directors other than solely by the
authority of a revocable proxy:
1. The acquiring person;
2. Any officer of the issuing public corporation; or
3. Any employee of the issuing public corporation who is also a
director of the corporation.
Added by Laws 1987, c. 146, § 17, emerg. eff. June 24, 1987. Amended
by Laws 1990, c. 328, § 8, eff. Sept. 1, 1990; Laws 1991, c. 53, § 5,
eff. Sept. 1, 1991.
§18-1148. Issuing public corporation - definition.
ISSUING PUBLIC CORPORATION; DEFINITION
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A. As used in Sections 1145 through 1155 of this title, "issuing
public corporation" means a domestic corporation that has:
1. Any class of securities registered pursuant to Section 12 or
is subject to Section 15(d) of the Securities Exchange Act of 1934,
15 U.S.C. Section 78a et seq., as amended;
2. One thousand (1,000) or more shareholders; and
3. Either:
a. more than ten percent (10%) of its shareholders
resident in Oklahoma,
b. more than ten percent (10%) of its shares owned by
Oklahoma residents, or
c. ten thousand (10,000) shareholders resident in
Oklahoma.
B. The residence of a shareholder is presumed to be the address
appearing in the records of the corporation.
C. Shares held by banks except as trustee or guardian, brokers
or nominees shall be disregarded for purposes of calculating the
percentages or numbers described in this section.
D. A domestic corporation that is not an issuing public
corporation but that has one hundred (100) or more shareholders of
record and meets one of the requirements set forth in subsection A of
this section, or an issuing public corporation to which Sections 1145
through 1155 of this title do not apply, may elect to be subject to
Sections 1145 through 1155 of this title as an issuing public
corporation by amending its certificate of incorporation to provide
that Sections 1145 through 1155 of this title shall apply to the
corporation as of a specified date and filing the amendment with the
Secretary of State on or before such date.
E. A corporation which would be an issuing public corporation
under subsection A of this section may elect not to be subject to
Sections 1145 through 1155 of this title before a control share
acquisition occurs or an acquiring person statement is delivered:
1. By amending its certificate of incorporation to provide that
Sections 1145 through 1155 of this title shall not apply to the
corporation as of a specified date and filing the amendment with the
Secretary of State before such date; or
2. By action of its board of directors adopting an amendment to
its bylaws within ninety (90) days of the effective date of this act
expressly providing that Sections 1145 through 1155 of this title
shall not apply to the corporation, which amendment shall not be
further amended by the board of directors.
Added by Laws 1987, c. 146, § 18, emerg. eff. June 24, 1987. Amended
by Laws 1988, c. 323, § 31, eff. Nov. 1, 1988; Laws 1990, c. 328, §
9, eff. Sept. 1, 1990; Laws 1991, c. 53, § 6, eff. Sept. 1, 1991.
§18-1148A. Other definitions.
OTHER DEFINITIONS
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As used in Sections 1145 through 1155 of Title 18 of the Oklahoma
Statutes:
1. "Acquiring person" means a person who makes or proposes to
make, or persons acting as a "group" as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, 15 U.S.C. Section 78a et
seq., as amended, who make or propose to make, a control share
acquisition; provided, "acquiring person" does not include the
issuing public corporation;
2. "Affiliate" means a person who directly or indirectly
controls the corporation. For the purpose of this paragraph,
"control" means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of the
corporation, whether through the ownership of voting securities, by
contract, or otherwise. A person's beneficial ownership of ten
percent (10%) or more of all voting power of a corporation, except a
person holding voting power in good faith as an agent, bank, broker,
nominee, custodian or trustee for one or more beneficial owners who
do not individually or as a group control the corporation, creates a
presumption that the person controls the corporation;
3. "All voting power" means the aggregate voting power that the
shareholders of an issuing public corporation would have in the
election of directors generally, except for Sections 1145 through
1155 of Title 18 of the Oklahoma Statutes;
4. "Beneficial ownership" shall have the same meaning ascribed
to such term by Rule 13d-3 under the Securities Exchange Act of 1934,
15 U.S.C., Section 78a et seq., as amended; and
5. "Person" means any individual, corporation, partnership,
unincorporated association or other entity.
Added by Laws 1991, c. 53, § 7, eff. Sept. 1, 1991.
§18-1149. Law governing control share voting rights.
LAW GOVERNING CONTROL SHARE VOTING RIGHTS
After a control share acquisition occurs, control shares of the
acquiring person have only such voting rights as are conferred by
this section.
1. Subject to the provisions of paragraphs 2 through 4 of this
section, the voting power of control shares having voting power of
one-fifth (1/5) or more of all voting power is reduced to zero unless
the shareholders of the issuing public corporation approve a
resolution pursuant to the procedure set forth in Section 1153 of
this title according the shares the same voting rights as they had
before they became control shares.
2. Except as provided in subsection A of Section 1153 of this
title, the voting power of control shares representing voting power
of less than one-fifth (1/5) of all voting power is not affected by
Sections 1145 through 1155 of this title.
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3. If control shares of the acquiring person previously have
been accorded, pursuant to the procedure set forth in Section 1153 of
this title, the same voting rights they had before they became
control shares, or if such control shares were acquired in a
transaction excluded from the definition of "control share
acquisition", then only the voting power of control shares acquired
in a subsequent control share acquisition by such acquiring person
within a higher range of voting power shall be reduced to zero.
4. The voting rights of control shares are restored to those
accorded such shares prior to the control share acquisition in any of
the following circumstances:
(a) if, by reason of subsequent issuances of shares or
other transactions by the issuing public corporation,
the voting power of those control shares is reduced to
a range of voting power for which approval has been
granted or is not required; or
(b) upon transfer to a person other than an acquiring
person; or
(c) the expiration of three (3) years after the date of a
vote of shareholders, pursuant to Section 1153 of this
title, failing to approve the resolution according
voting rights to those control shares.
Added by Laws 1987, c. 146, § 19, emerg. eff. June 24, 1987. Amended
by Laws 1990, c. 328, § 10, eff. Sept. 1, 1990; Laws 1991, c. 53, §
8, eff. Sept. 1, 1991.
§18-1150. Notice of control share acquisition.
NOTICE OF CONTROL SHARE ACQUISITION
Any acquiring person who proposes to make a control share
acquisition may, at the person's election, and any acquiring person
who has made a control share acquisition shall, deliver an acquiring
person statement to the issuing public corporation at the issuing
public corporation's principal office. The acquiring person
statement must set forth all of the following:
1. The identity of the acquiring person;
2. A statement that the acquiring person statement is given
pursuant to Sections 1145 through 1155 of this title;
3. The number of shares of the issuing public corporation owned,
directly or indirectly, by the acquiring person, the acquisition date
and the prices at which such shares were acquired;
4. The voting power to which the acquiring person, except for
Section 1149 of this title, would be entitled;
5. A form of resolution to be considered by the shareholders
pursuant to Section 1153 of this title; and
6. If the control share acquisition has not yet occurred:
a. a description in reasonable detail of the terms of the
proposed control share acquisition, and
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b. representations of the acquiring person, together with
a statement in reasonable detail of the facts upon
which they are based, that the proposed control share
acquisition, if consummated, will not be contrary to
law, and that the acquiring person has the financial
capacity to make the proposed control share
acquisition.
Added by Laws 1987, c. 146, § 20, emerg. eff. June 24, 1987. Amended
by Laws 1991, c. 53, § 9, eff. Sept. 1, 1991.
§18-1151. Shareholder meeting to determine control share voting
rights.
SHAREHOLDER MEETING TO DETERMINE CONTROL
SHARE VOTING RIGHTS
A. If, at the time of delivery of an acquiring person statement,
the acquiring person requests a special meeting and gives an
undertaking to pay the corporation's expenses of the special meeting,
within ten (10) days thereafter, the directors of the issuing public
corporation shall call a special meeting of shareholders of the
issuing public corporation for the purpose of considering the voting
rights to be accorded the shares acquired or to be acquired in the
control share acquisition.
B. Unless the acquiring person agrees in writing to another
date, the special meeting of shareholders shall be held within fifty
(50) days after receipt by the issuing public corporation of the
request.
C. If no request is made, the voting rights to be accorded the
shares acquired in the control share acquisition shall be presented
to the next special or annual meeting of shareholders.
D. If the acquiring person so requests in writing at the time of
delivery of the acquiring person statement, the special meeting shall
not be held sooner than thirty (30) days after receipt by the issuing
public corporation of the acquiring person statement.
Added by Laws 1987, c. 146, § 21, emerg. eff. June 24, 1987.
§18-1152. Notice of shareholder meeting.
NOTICE OF SHAREHOLDER MEETING
A. If a special meeting is requested as provided in Section 21
of this act, notice of the special meeting of shareholders shall be
given as promptly as reasonably practicable by the issuing public
corporation to all shareholders of record as of the record date set
for the meeting, whether or not entitled to vote at the meeting.
B. Notice of the special or annual shareholder meeting at which
the voting rights are to be considered must include or be accompanied
by both of the following:
1. A copy of the acquiring person statement delivered to the
issuing public corporation pursuant to Section 21 of this act; and
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2. A statement by the board of directors of the corporation,
authorized by its directors, of its position or recommendation, or
that it is taking no position or making no recommendation, with
respect to the proposed control share acquisition.
Added by Laws 1987, c. 146, § 22, emerg. eff. June 24, 1987.
§18-1153. Resolution granting control share voting rights.
RESOLUTION GRANTING CONTROL SHARE VOTING RIGHTS
A. All votes cast at the meeting for or against the resolution
contained in the acquiring person statement must be identified as
noninterested shares. To be approved, the resolution shall receive
the affirmative votes of a majority of all voting power, excluding
all interested shares. If the resolution is not approved, the
acquiring person, not sooner than six (6) months after disapproval of
the resolution, may present a new resolution for a vote of
shareholders in accordance with this section at any subsequent
shareholders meeting.
B. A proxy relating to a meeting of shareholders to be held
pursuant to Section 1151 of this title shall be solicited separately
from the offer to purchase or solicitation of an offer to sell shares
of the issuing public corporation.
C. 1. For purposes of this subsection, "competing control share
acquisition" means a control share acquisition or proposed control
share acquisition that is the subject of an acquiring person
statement delivered to the issuing public corporation pursuant to
Section 1150 of this title not less than twenty-five (25) days prior
to the scheduled annual or special meeting date which has been or is
required to be established pursuant to Section 1151 of this title
with respect to a pending control share acquisition.
2. In the event that a competing control share acquisition is
made or proposed, the issuing public corporation shall, at the option
of the acquiring person making the competing control share
acquisition, call for a vote of shareholders to consider the
resolution relating to the voting rights of the competing control
share acquisition at the same meeting that has been or is to be
called to consider the voting rights of the pending control share
acquisition. In the event the acquiring person making the competing
control share acquisition does not elect in writing to have the
resolution relating to the voting rights of the competing control
share acquisition considered at the same meeting, any vote shall be
held as provided in Section 1153 of this title, except that in such
case no vote shall be called on the competing control share
acquisition prior to the earlier of the vote on the resolution
relating to voting rights of the pending control share acquisition or
fifty-one (51) days after receipt by the issuing public corporation
of the request for a meeting by the acquiring person making the
pending control share acquisition.
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3. If more than one resolution relating to a control share
acquisition is to be considered at any meeting or at meetings
scheduled for or occurring on the same day, all such resolutions
relating to the voting rights of acquiring persons shall be
considered by shareholders in the order in which the initial
acquiring person statements relating to such control share
acquisitions were delivered to the issuing public corporation.
However, no resolution approved by shareholders shall become
effective until midnight of the date on which the respective
shareholder approval occurs.
4. If resolutions relating to two (2) or more control share
acquisitions are subject to shareholder vote pursuant to Section 1153
of this title, shares held by an acquiring person are considered
interested shares only for purposes of a vote on a resolution
relating to a control share acquisition by that same acquiring
person.
Added by Laws 1987, c. 146, § 23, emerg. eff. June 24, 1987. Amended
by Laws 1990, c. 328, § 11, eff. Sept. 1, 1990; Laws 1991, c. 53, §
10, eff. Sept. 1, 1991.
§18-1154. Redemption of control shares.
REDEMPTION OF CONTROL SHARES
A. If authorized in a corporation's certificate of incorporation
or bylaws before a control share acquisition has occurred, control
shares acquired in a control share acquisition with respect to which
no acquiring person statement has been filed with the issuing public
corporation may, at any time during the period ending sixty (60) days
after the last acquisition of control shares by the acquiring person,
be subject to redemption by the corporation at the fair value thereof
pursuant to the procedures adopted by the corporation.
B. Control shares acquired in a control share acquisition are
not subject to redemption after an acquiring person statement has
been filed unless the shares are not accorded full voting rights by
the shareholders as provided in Section 23 of this act.
Added by Laws 1987, c. 146, § 24, emerg. eff. June 24, 1987.
§18-1155. Rights of dissenting shareholders.
RIGHTS OF DISSENTING SHAREHOLDERS
A. Unless otherwise provided in a corporation's certificate of
incorporation or bylaws before a control share acquisition has
occurred, in the event control shares acquired in a control share
acquisition are accorded full voting rights and the acquiring person
has acquired control shares with a majority or more of all voting
power, all shareholders of the issuing public corporation have
dissenters' rights.
B. As soon as practicable after such events have occurred, the
board of directors shall cause a notice to be sent to all
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shareholders of the corporation advising them of the facts and that
they have dissenters' rights to receive the fair value of their
shares pursuant to Section 1091 of Title 18 of the Oklahoma Statutes.
C. As used in this section, "fair value" means a value not less
than the highest price paid per share by the acquiring person in the
control share acquisition.
Added by Laws 1987, c. 146, § 25, emerg. eff. June 24, 1987.
§18-1201. Short title - Oklahoma Benefit Corporation Act -
Applicability.
A. This act shall be known and may be cited as the "Oklahoma
Benefit Corporation Act". This act shall be applicable to all
benefit corporations.
B. The existence of a provision of this act shall not of itself
create an implication that a contrary or different rule is applicable
to a corporation that is not a benefit corporation. This act shall
not affect a statute or rule that is applicable to a corporation that
is not a benefit corporation.
C. Except as otherwise provided in this act, the Oklahoma
General Corporation Act shall be generally applicable to all benefit
corporations that are not state banks or trust companies. A benefit
corporation that is not a state bank or trust company may be subject
simultaneously to this act and the Oklahoma General Corporation Act,
Professional Entity Act and other applicable business formation
statutes; however, the provisions of this act shall control over the
provisions of the Oklahoma General Corporation Act, Professional
Entity Act and other applicable business formation statutes where
there is a conflict.
D. Except as otherwise provided in this act, the Oklahoma
Banking Code shall be generally applicable to all benefit
corporations that are state banks or trust companies. A benefit
corporation that is a state bank or trust company may be subject
simultaneously to this act and the Oklahoma Banking Code; however,
the provisions of this act shall control over the provisions of the
Oklahoma Banking Code where there is a conflict.
E. A provision of the certificate of incorporation or bylaws of
a benefit corporation shall not limit, be inconsistent with or
supersede a provision of this act.
Added by Laws 2019, c. 45, § 1, eff. Nov. 1, 2019.
§18-1202. Definitions.
As used in the Oklahoma Benefit Corporation Act:
1. "Benefit corporation" means:
a. a business corporation incorporated under the Oklahoma
General Corporation Act that is subject to this act, or
b. a state bank or trust company incorporated under Title
6 of the Oklahoma Statutes that is subject to this act;
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2. "Benefit enforcement proceeding" means any claim or action or
proceeding for:
a. failure of a benefit corporation to pursue or create
general public benefit or a specific public benefit
purpose set forth in its certificate of incorporation,
or
b. violation of any obligation, duty or standard of
conduct under this act;
3. "General public benefit" means a material positive impact on
society and the environment, taken as a whole, assessed against a
third-party standard, from the business and operations of a benefit
corporation;
4. "Minimum status vote" means:
a. in the case of a business corporation or a state bank
or trust company, in addition to any other required
approval or vote, the satisfaction of the following
conditions:
(1) the shareholders of every class or series shall be
entitled to vote as a class on the corporate
action regardless of a limitation stated in the
certificate of incorporation or bylaws on the
voting rights of any class or series, and
(2) the corporate action shall be approved by the
affirmative vote of the shareholders of each class
or series entitled to cast at least two-thirds
(2/3) of the votes that all shareholders of the
class or series are entitled to cast on the
action, or
b. in the case of a domestic entity other than a
corporation or state bank or trust company, in addition
to any other required approval, vote or consent, the
satisfaction of the following conditions:
(1) the holders of every class or series of equity
interest in the entity that are entitled to
receive a distribution of any kind from the entity
shall be entitled to vote on or consent to the
action regardless of any otherwise applicable
limitation on the voting or consent rights of any
class or series, and
(2) the action shall be approved by the affirmative
vote or consent of the holders described in
division (1) of this subparagraph entitled to cast
at least two-thirds (2/3) of the votes or consents
that all of those holders are entitled to cast on
the action; and
5. "Specific public benefit" includes:
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a. providing low-income or underserved individuals or
communities with beneficial products or services,
b. promoting economic opportunity for individuals or
communities beyond the creation of jobs in the normal
course of business,
c. protecting or restoring the environment,
d. improving human health,
e. promoting the arts, sciences or advancement of
knowledge,
f. increasing the flow of capital to entities with a
purpose to benefit society or the environment, and
g. conferring any other particular benefit on society or
the environment.
Added by Laws 2019, c. 45, § 2, eff. Nov. 1, 2019.
§18-1203. Incorporation.
A. A benefit corporation that is not a state bank or trust
company shall be incorporated in accordance with the Oklahoma General
Corporation Act, except that its certificate of incorporation shall
also state that it is a benefit corporation.
B. A benefit corporation that is a state bank or trust company
shall be incorporated in accordance with the Oklahoma Banking Code,
except that its certificate of incorporation shall also state that it
is a benefit corporation.
Added by Laws 2019, c. 45, § 3, eff. Nov. 1, 2019.
§18-1204. Amending certificate of incorporation for existing
corporations.
A. An existing business corporation may become a benefit
corporation under the Oklahoma Benefit Corporation Act by amending
its certificate of incorporation so that it contains, in addition to
the requirements of Title 6 or Title 18 of the Oklahoma Statutes, a
statement that the corporation is a benefit corporation. In order to
be effective, the amendment shall be adopted by at least the minimum
status vote.
B. 1. Except as provided in paragraph 2 of this subsection, if
a domestic entity that is not a benefit corporation is a party to a
merger, consolidation or conversion and the surviving, new or
resulting entity in the merger, consolidation or conversion is to be
a benefit corporation, the plan of merger, consolidation or
conversion shall be adopted or approved by the domestic entity by at
least the minimum status vote.
2. Paragraph 1 of this subsection shall not apply in the case of
a corporation that is a party to a merger if the shareholders of the
corporation are not entitled to vote on the merger pursuant to
Section 1083 of Title 18 of the Oklahoma Statutes.
Added by Laws 2019, c. 45, § 4, eff. Nov. 1, 2019.
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§18-1205. Termination of benefit corporation status.
A. A benefit corporation may terminate its status and cease to
be subject to the Oklahoma Benefit Corporation Act by amending its
certificate of incorporation to delete the provision required by
Sections 3 and 4 of this act to be stated in the certificate of a
benefit corporation. In order to be effective, the amendment shall
be adopted by at least the minimum status vote.
B. 1. Except as provided in paragraph 2 of this subsection, if
a plan of merger, consolidation or conversion would have the effect
of terminating the status of a business corporation as a benefit
corporation, the plan shall be adopted by at least the minimum status
vote in order to be effective.
2. Paragraph 1 of this subsection shall not apply in the case of
a corporation that is a party to a merger if the shareholders of the
corporation are not entitled to vote on the merger.
3. Any sale, lease, exchange or other disposition of all or
substantially all of the assets of a benefit corporation, unless the
transaction is in the usual and regular course of business, shall not
be effective unless the transaction is approved by at least the
minimum status vote.
Added by Laws 2019, c. 45, § 5, eff. Nov. 1, 2019.
§18-1206. General public benefit purpose.
A. A benefit corporation shall have a purpose of creating
general public benefit. This purpose is in addition to its purpose
under the Oklahoma General Corporation Act or the Oklahoma Banking
Code.
B. The certificate of incorporation of a benefit corporation may
identify one or more specific public benefits that it is the purpose
of the benefit corporation to create in addition to its purposes
under the Oklahoma General Corporation Act or the Oklahoma Banking
Code and subsection A of this section. The identification of a
specific public benefit under this subsection does not limit the
purpose of a benefit corporation to create general public benefit
under subsection A of this section.
C. The creation of general public benefit and specific public
benefit under subsections A and B of this section shall be in the
best interests of the benefit corporation.
D. A benefit corporation may amend its certificate of
incorporation to add, amend or delete the identification of a
specific public benefit that it is the purpose of the benefit
corporation to create. In order to be effective, the amendment shall
be adopted by at least the minimum status vote.
E. A professional corporation that is a benefit corporation
shall not violate the Professional Entity Act by having the purpose
to create general public benefit or a specific public benefit.
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F. A state bank or trust company that is a benefit corporation
shall not violate the Oklahoma Banking Code by having the purpose to
create general public benefit or a specific public benefit, but
nothing in the Oklahoma Benefit Corporation Act shall eliminate,
diminish or supersede the duties of a benefit corporation that is a
state bank or trust company to operate safely and soundly in
accordance with applicable regulatory requirements.
Added by Laws 2019, c. 45, § 6, eff. Nov. 1, 2019.
§18-1207. Duties of board of directors, committees of the board and
individual directors.
A. In discharging the duties of their respective positions and
in considering the best interests of the benefit corporation, the
board of directors, committees of the board and individual directors
of a benefit corporation:
1. Shall consider the effects of any action or inaction upon:
a. the shareholders of the benefit corporation,
b. the employees and workforce of the benefit corporation,
its subsidiaries and its suppliers,
c. the interests of customers as beneficiaries of the
general public benefit or a specific public benefit
purpose of the benefit corporation,
d. community and societal factors, including those of each
community in which offices or facilities of the benefit
corporation, its subsidiaries or its suppliers are
located,
e. the local and global environment,
f. the short-term and long-term interests of the benefit
corporation, including benefits that may accrue to the
benefit corporation from its long-term plans and the
possibility that these interests may be best served by
the continued independence of the benefit corporation,
and
g. the ability of the benefit corporation to accomplish
its general public benefit purpose and any specific
public benefit purpose; and
2. May consider other pertinent factors or the interests of any
other group that they deem appropriate; but
3. Need not give priority to a particular interest or factor
referred to in paragraph 1 or 2 of this subsection over any other
interest or factor unless the benefit corporation has stated in its
certificate of incorporation its intention to give priority to
certain interests or factors related to the accomplishment of its
general public benefit purpose or of a specific public benefit
purpose identified in its certificate.
B. The consideration of interests and factors in the manner
provided by subsection A of this section shall not constitute a
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violation of the duties of directors under the Oklahoma General
Corporation Act or, except as provided in subsection F of Section 6
of this act, the Oklahoma Banking Code.
C. Except as provided in the certificate of incorporation or
bylaws, a director is not personally liable for monetary damages for:
1. Any action or inaction in the course of performing the duties
of a director under subsection A of this section if the director was
not interested with respect to the action or inaction; or
2. Failure of the benefit corporation to pursue or create
general public benefit or specific public benefit.
D. A director shall not have a duty to a person who is a
beneficiary of the general public benefit purpose or a specific
public benefit purpose of a benefit corporation arising from the
status of the person as a beneficiary.
E. A director who makes a business judgment in good faith
fulfills the duty under this section if the director:
1. Is not interested in the subject of the business judgment;
2. Is informed with respect to the subject of the business
judgment to the extent the director reasonably believes to be
appropriate under the circumstances; and
3. Rationally believes that the business judgment is in the best
interests of the benefit corporation.
Added by Laws 2019, c. 45, § 7, eff. Nov. 1, 2019.
§18-1208. Duties of officers.
A. Each officer of a benefit corporation shall consider the
interests and factors described in paragraph 1 of subsection A of
Section 7 of this act in the manner provided in paragraph 3 of
subsection A of Section 7 of this act if:
1. The officer has discretion to act with respect to a matter;
and
2. It reasonably appears to the officer that the matter may have
a material effect on the creation by the benefit corporation of
general public benefit or a specific public benefit identified in the
certificate of incorporation of the benefit corporation.
B. The consideration of interests and factors in the manner
provided in subsection A of this section shall not constitute a
violation of the duties of an officer, except as provided in
subsection F of Section 6 of this act.
C. Except as provided in the certificate of incorporation or
bylaws, an officer shall not be personally liable for monetary
damages for:
1. An action or inaction as an officer in the course of
performing the duties of an officer under subsection A of this
section if the officer was not interested with respect to the action
or inaction; or
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2. Failure of the benefit corporation to pursue or create
general public benefit or specific public benefit.
D. An officer shall not have a duty to a person that is a
beneficiary of the general public benefit purpose or a specific
public benefit purpose of a benefit corporation arising from the
status of the person as a beneficiary.
E. An officer who makes a business judgment in good faith
fulfills the duty under this section if the officer:
1. Is not interested in the subject of the business judgment;
2. Is informed with respect to the subject of the business
judgment to the extent the officer reasonably believes to be
appropriate under the circumstances; and
3. Rationally believes that the business judgment is in the best
interests of the benefit corporation.
Added by Laws 2019, c. 45, § 8, eff. Nov. 1, 2019.
§18-1209. Liability – Benefit enforcement proceeding.
A. Except in a benefit enforcement proceeding, no person shall
bring an action or assert a claim against a benefit corporation or
its directors or officers with respect to:
1. Failure to pursue or create general public benefit or a
specific public benefit set forth in its certificate of
incorporation; or
2. Violation of an obligation, duty or standard of conduct under
the Oklahoma Benefit Corporation Act or the Oklahoma Banking Code.
B. A benefit corporation shall not be liable for monetary
damages under the Oklahoma Benefit Corporation Act or the Oklahoma
Banking Code for any failure of the benefit corporation to pursue or
create general public benefit or a specific public benefit.
C. A benefit enforcement proceeding may be commenced or
maintained only:
1. Directly by the benefit corporation; or
2. Derivatively in accordance with the Oklahoma General
Corporation Act or the Oklahoma Banking Code, as applicable, by:
a. a person or group of persons that owned beneficially or
of record at least two percent (2%) of the total number
of shares of a class or series outstanding at the time
of the act or omission complained of,
b. a director,
c. a person or group of persons that owned beneficially or
of record five percent (5%) or more of the outstanding
equity interests in an entity of which the benefit
corporation is a subsidiary at the time of the act or
omission complained of, or
d. other persons as specified in the certificate of
incorporation or bylaws of the benefit corporation.
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D. For purposes of this section, a person is the beneficial
owner of shares or equity interests if the shares or equity interests
are held in a voting trust or by a nominee on behalf of the
beneficial owner.
Added by Laws 2019, c. 45, § 9, eff. Nov. 1, 2019.
§18-1210. Annual statement.
A. A benefit corporation shall annually provide its shareholders
with a statement as to the corporation's promotion of general public
benefit and any specific public benefit identified in the certificate
of incorporation. The statement shall include:
1. The objectives the board of directors has established to
promote general public benefit and any specific public benefit;
2. The standards the board of directors has adopted to measure
the corporation's progress in promoting general public benefit and
any specific public benefit;
3. Objective factual information based on those standards
regarding the corporation's success in meeting the objectives for
promoting general public benefit and any specific public benefit; and
4. An assessment of the corporation's success in meeting the
objectives and promoting general public benefit and any specific
public benefit.
B. The certificate of incorporation or bylaws of a benefit
corporation may require that the corporation:
1. Make the statement described in subsection A of this section
available to the public; and
2. Use a third-party standard in connection with or attain a
periodic third-party certification addressing the corporation's
promotion of general public benefit and any specific public benefit
identified in the certificate of incorporation.
C. The benefit statement and the assessment of the performance
of the benefit corporation in the benefit statement required by
subsection A of this section are not required to be audited or
certified by a third party.
D. A benefit corporation shall send its annual benefit statement
to each shareholder on the earlier of:
1. One hundred twenty (120) days following the end of the fiscal
year of the benefit corporation; or
2. The same time that the benefit corporation delivers any other
annual report to its shareholders.
Added by Laws 2019, c. 45, § 10, eff. Nov. 1, 2019.
§18-2000. Short title.
This act shall be known and may be cited as the "Oklahoma Limited
Liability Company Act".
Added by Laws 1992, c. 148, § 1, eff. Sept. 1, 1992.
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§18-2001. Definitions.
DEFINITIONS
As used in the Oklahoma Limited Liability Company Act, unless the
context otherwise requires:
1. "Articles of organization" means documents filed for the
purpose of forming a limited liability company, and the articles as
amended;
2. "Bankrupt" means bankrupt under the United States Bankruptcy
Code, as amended, or insolvent under any state insolvency act;
3. "Business" means any trade, occupation, profession or other
activity regardless of whether engaged in for gain, profit or
livelihood;
4. "Capital contribution" means anything of value that a person
contributes to the limited liability company as a prerequisite for,
or in connection with, membership, including cash, property, services
rendered, or a promissory note or other binding obligation to
contribute cash or property or to perform services;
5. "Capital interest" means the fair market value as of the date
contributed of a member's capital contribution as adjusted for any
additional capital contributions or withdrawals, a person's share of
the profits and losses of a limited liability company and a person's
right to receive distributions of the limited liability company's
assets;
6. "Corporation" means a corporation formed under the laws of
this state or a foreign corporation as defined in this section;
7. "Court" includes every court and judge having jurisdiction in
the case;
8. "Foreign corporation" means a corporation formed under the
laws of any state other than this state, or under the laws of the
District of Columbia or any foreign country;
9. "Foreign limited liability company" means:
a. an unincorporated association,
b. organized under the laws of a state other than the laws
of this state or organized under the laws of any
foreign country, and
c. organized under a statute pursuant to which an
association may be formed that affords to each of its
members limited liability with respect to the
liabilities of the entity, and a limited liability
company formed under the laws of any state other than
this state, or under the laws of the District of
Columbia or any foreign country;
10. "Foreign limited partnership" means a limited partnership
formed under the laws of any state other than this state, or under
the laws of the District of Columbia or any foreign country;
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11. "Limited liability company" or "domestic limited liability
company" means an entity formed under the Oklahoma Limited Liability
Company Act and existing under the laws of this state;
12. "Limited partnership" means a limited partnership formed
under the laws of this state or a foreign limited partnership as
defined in this section;
13. "Manager" or "managers" means a person or persons designated
by the members of a limited liability company to manage the limited
liability company as provided in the articles of organization or an
operating agreement;
14. "Member" means a person with an ownership interest in a
limited liability company, with the rights and obligations specified
under this act;
15. "Membership interest" or "interest" means a member's rights
in the limited liability company, collectively, including the
member's share of the profits and losses of the limited liability
company, the right to receive distributions of the limited liability
company's assets and capital interest, any right to vote or
participate in management, and such other rights accorded to members
under the articles of organization, operating agreement, or the
Oklahoma Limited Liability Company Act;
16. "Operating agreement", regardless of whether referred to as
an operating agreement and whether oral, in a record, implied, or in
any combination thereof, means any agreement of the members,
including a sole member, as to the affairs of a limited liability
company and the conduct of its business, including the agreement as
amended or restated;
17. "Person" means an individual, a general partnership, a
limited partnership, a limited liability company, a trust, an estate,
an association, a corporation or any other legal or commercial
entity;
18. "State" means a state, territory or possession of the United
States, the District of Columbia, or the Commonwealth of Puerto Rico;
and
19. "Charitable entity" means any nonprofit limited liability
company or other entity that is exempt from taxation under Section
501(c)(3) of the United States Internal Revenue Code (26 U.S.C.,
Section 501(c)(3)), or any successor provisions.
Added by Laws 1992, c. 148, § 2, eff. Sept. 1, 1992. Amended by Laws
1993, c. 366, § 2, eff. Sept. 1, 1993; Laws 1997, c. 145, § 1, eff.
Nov. 1, 1997; Laws 2008, c. 253, § 16; Laws 2017, c. 323, § 37, eff.
Nov. 1, 2017.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
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§18-2002. Purposes for formation.
A limited liability company may be formed under this act for the
purpose of carrying on any lawful business, purpose or activity,
whether or not for profit, except that a limited liability company
may not conduct business as a domestic insurer.
Added by Laws 1992, c. 148, § 3, eff. Sept. 1, 1992. Amended by Laws
1997, c. 418, § 1, eff. Nov. 1, 1997; Laws 2001, c. 405, § 28, eff.
Nov. 1, 2001; Laws 2003, c. 180, § 10, eff. Nov. 1, 2003; Laws 2008,
c. 253, § 17.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2003. Powers and authority.
Each limited liability company may:
1. Sue, be sued, complain and defend in all courts;
2. Transact its business, carry on its operations and have and
exercise the powers granted by this section in any state, territory,
district or possession of the United States, and in any foreign
country;
3. Make contracts and guarantees, incur liabilities, and borrow
money;
4. Sell, convey, lease, exchange, transfer, mortgage, pledge,
and otherwise dispose of all or any part of its property and assets;
5. Acquire by purchase or in any other manner, take, receive,
own, hold, improve, and otherwise deal with any interest in real or
personal property, wherever located;
6. Issue notes, bonds and other obligations and secure any of
them by mortgage or deed of trust or security interest of any or all
of its assets;
7. Purchase, take, receive, subscribe for or otherwise acquire,
own, hold, vote, use, employ, sell, mortgage, loan, pledge or
otherwise dispose of and otherwise use and deal in and with stock or
other interests in and obligations of domestic and foreign
corporations, associations, general or limited partnerships, limited
liability companies, business trusts, and individuals;
8. Invest its surplus funds, lend money from time to time in any
manner which may be appropriate to enable it to carry on the
operations or fulfill the purposes set forth in its articles of
organization, and take and hold real property and personal property
as security for the payment of funds so loaned or invested;
9. Elect or appoint agents and define their duties and fix their
compensation;
10. Be a promoter, stockholder, partner, member, associate, or
agent of any corporation, partnership, limited liability company,
joint venture, trust or other enterprise;
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11. Indemnify and hold harmless any member, agent, or employee
from and against any and all claims and demands whatsoever, except in
the case of action or failure to act by the member, agent, or
employee which constitutes willful misconduct or recklessness, and
subject to the standards and restrictions, if any, set forth in the
articles of organization or operating agreement;
12. Make and alter operating agreements, not inconsistent with
its articles of organization or with the laws of this state, for the
administration and regulation of the affairs of the limited liability
company;
13. Cease its activities and dissolve; and
14. Do every other act not inconsistent with law which is
appropriate to promote and attain the purposes set forth in its
articles of organization.
Added by Laws 1992, c. 148, § 4, eff. Sept. 1, 1992.
§18-2004. Filing the articles of organization.
FILING THE ARTICLES OF ORGANIZATION
A. One or more persons may form a limited liability company upon
the filing of executed articles of organization with the Office of
the Secretary of State.
B. 1. When the articles of organization become effective, the
proposed organization becomes a limited liability company under the
name and subject to the purposes, conditions, and provisions stated
in the articles. A limited liability company formed under the
Oklahoma Limited Liability Company Act is a separate legal entity,
the existence of which as a separate legal entity continues until
cancellation of the limited liability company's articles of
organization and completion of its winding up, if any.
2. Filing of the articles by the Office of the Secretary of
State is conclusive evidence of the formation of the limited
liability company.
3. A limited liability company's status for tax purposes shall
not affect its status as a separate legal entity formed under the
Oklahoma Limited Liability Company Act.
Added by Laws 1992, c. 148, § 5, eff. Sept. 1, 1992. Amended by Laws
1997, c. 145, § 2, eff. Nov. 1, 1997; Laws 2004, c. 255, § 33, eff.
Nov. 1, 2004; Laws 2008, c. 253, § 18; Laws 2017, c. 323, § 38, eff.
Nov. 1, 2017.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2005. Articles of organization - Contents.
A. The articles of organization shall set forth:
1. The name of the limited liability company;
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2. The term of the existence of the limited liability company
which may be perpetual; and
3. The street address of its principal place of business,
wherever located, and the name and street address of its registered
agent which shall be identical to its registered office in this
state.
B. If the limited liability company is to establish two or more
series of members, managers or membership interests having separate
rights, powers or duties as provided under Section 2054.4 of this
title and the debts, liabilities and obligations incurred, contracted
for or otherwise existing with respect to a particular series are to
be enforceable against the assets of the series only, the articles of
organization shall set forth a notice of the limitation on
liabilities of the series.
C. The articles of organization may set forth any other matters
the members determine to include. It is not necessary to set out in
the articles of organization any of the powers enumerated in this
act.
Added by Laws 1992, c. 148, § 6, eff. Sept. 1, 1992. Amended by Laws
1993, c. 366, § 3, eff. Sept. 1, 1993; Laws 1997, c. 145, § 3, eff.
Nov. 1, 1997; Laws 1999, c. 421, § 24, eff. Nov. 1, 1999; Laws 2004,
c. 255, § 34, eff. Nov. 1, 2004; Laws 2008, c. 253, § 19.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2006. Execution of articles - Evidence of authority -
Signatures.
A. Articles required by this act to be filed with the Office of
the Secretary of State shall be executed in the following manner:
1. Articles of organization must be signed by at least one
person who need not be a member of the limited liability company; and
2. Articles of amendment, merger, consolidation, conversion or
dissolution must be signed by a manager.
B. Any person may sign any articles by an attorney in fact. A
person who executes articles as an attorney-in-fact, agent or
fiduciary is not required to exhibit evidence of his or her authority
as a prerequisite to filing.
C. The execution of any articles under this act constitutes an
affirmation under the penalties of perjury that the facts stated
therein are true.
D. Any signature on articles or any other instrument authorized
by this act may be a facsimile signature, a conformed signature or an
electronically transmitted signature.
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Added by Laws 1992, c. 148, § 7, eff. Sept. 1, 1992. Amended by Laws
1993, c. 366, § 4, eff. Sept. 1, 1993; Laws 1996, c. 69, § 13, eff.
Nov. 1, 1996; Laws 2004, c. 255, § 35, eff. Nov. 1, 2004.
§18-2007. Delivery of articles to Secretary of State - Filing - Time
when effective.
A. One signed copy of the articles of organization or any other
articles authorized by this act shall be delivered to the Secretary
of State. Unless the Secretary of State finds that any articles do
not conform to law, upon receipt of all filing and other fees
required by law, he or she shall:
1. Endorse on each copy the word “filed” and the day, month and
year, and the time, if applicable, of the filing thereof;
2. File one copy in his or her office; and
3. Return a file-stamped copy to the person who filed it or his
or her representative.
B. Unless a future effective date or time, which shall be a
specified date or time not later than ninety (90) days after the
filing, is provided in the articles, articles of organization are
effective, and the limited liability company is formed, at the time
of the filing of the articles of organization with the Secretary of
State.
C. Unless a future effective date or time, which shall be a
specified date or time not later than ninety (90) days after the
filing, is provided in the articles, articles of amendment, merger,
consolidation, conversion or dissolution are effective at the time of
their filing with the Secretary of State.
Added by Laws 1992, c. 148, § 8, eff. Sept. 1, 1992. Amended by Laws
2004, c. 255, § 36, eff. Nov. 1, 2004; Laws 2008, c. 253, § 20.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2008. Name of company - Restrictions.
The name of each limited liability company as set forth in its
articles of organization:
1. Shall contain either the words "limited liability company" or
"limited company" or the abbreviations “LLC”, “LC”, "L.L.C.", or
"L.C." The word "limited" may be abbreviated as "LTD." and the word
"Company" may be abbreviated as "CO."; and
2. a. May not be the same as or indistinguishable from:
(1) names upon the records in the Office of the
Secretary of State of limited liability companies,
whether organized pursuant to the laws of this
state or licensed or registered as foreign limited
liability companies, then in good standing or
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registered or which were in good standing or
registered at any time during the preceding three
(3) years, or
(2) names upon the records in the Office of the
Secretary of State of corporations organized under
the laws of this state or of foreign corporations
registered in accordance with the laws of this
state then existing or which existed at any time
during the preceding three (3) years, or
(3) names upon the records in the Office of the
Secretary of State of general or limited
partnerships, whether formed under the laws of
this state or registered as foreign general or
limited partnerships, then in good standing or
registered or which were in good standing or
registered at any time during the preceding three
(3) years, or
(4) trade names, fictitious names, or other names
reserved with the Secretary of State.
b. The provisions of subparagraph a of this paragraph
shall not apply if one of the following is filed with
the Secretary of State:
(1) the written consent of the other limited liability
company, corporation, limited partnership, or
holder of the trade name, fictitious name or other
reserved name to use the same or indistinguishable
name with the addition of one or more words,
numerals, numbers or letters to make that name
distinguishable upon the records of the Secretary
of State, except that the addition of words,
numerals, numbers or letters to make the name
distinguishable shall not be required where such
written consent states that the consenting entity
is about to change its name, cease to do business,
withdraw from the state or be wound up, or
(2) a certified copy of a final decree of a court of
competent jurisdiction establishing the prior
right of such limited liability company or holder
of a limited liability company name to the use of
such name in this state.
Added by Laws 1992, c. 148, § 9, eff. Sept. 1, 1992. Amended by Laws
1993, c. 366, § 5, eff. Sept. 1, 1993; Laws 1999, c. 421, § 25, eff.
Nov. 1, 1999; Laws 2008, c. 253, § 21.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
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§18-2009. Reservation and transfer of company name.
A. The exclusive right to use a specified name for a domestic or
foreign limited liability company, in good faith, may be reserved by:
1. A person who intends to organize a domestic limited liability
company or a foreign limited liability company to be registered in
this state and to adopt that name;
2. A domestic limited liability company or a foreign limited
liability company registered in this state which proposes to adopt
that name; or
3. A foreign limited liability company which intends to register
in this state and adopt that name.
B. A person seeking to reserve a specified name shall file an
application executed by the applicant with the Secretary of State and
pay the filing fee required by law. If the Secretary of State finds
that the name is available for use by a domestic or foreign limited
liability company, he shall reserve the name for the exclusive use of
the applicant for a period of sixty (60) days.
C. The right to the exclusive use of a reserved name may be
transferred to any other person by filing in the Office of the
Secretary of State a notice of the transfer, executed by the
applicant for whom the name was reserved and specifying the name and
address of the transferee.
Added by Laws 1992, c. 148, § 10, eff. Sept. 1, 1992.
§18-2010. Registered office and agent.
A. Every domestic limited liability company shall continuously
maintain in this state:
1. A registered office which may be, but need not be, the same
as its principal place of business; and
2. A registered agent for service of process on the limited
liability company that may be the domestic limited liability company
itself, an individual resident of this state, or a domestic or
qualified foreign corporation, limited liability company, or limited
partnership. Each registered agent shall maintain a business office
identical with the registered office which is open during regular
business hours to accept service of process and otherwise perform the
functions of a registered agent.
B. 1. A limited liability company may designate or change its
registered agent, registered office, or principal office by filing
with the Office of the Secretary of State a statement authorizing the
designation or change and signed by any manager.
2. A limited liability company may change the street address of
its registered office by filing with the Office of the Secretary of
State a statement of the change signed by any manager.
3. A designation or change of a principal office or registered
agent or street address of the registered office for a limited
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liability company under this subsection is effective when the Office
of the Secretary of State files the statement, unless a later
effective date or time, which shall be a specified date or time not
later than a time on the ninetieth day after the filing, is provided
in the statement.
C. 1. A registered agent who changes his or her street address
in the state may notify the Office of the Secretary of State of the
change by filing with the Office of the Secretary of State a
statement of the change signed by the agent or on the agent’s behalf.
2. The statement shall include:
a. the name of the limited liability company for which the
change is effective,
b. the new street address of the registered agent, and
c. the date on which the change is effective, if to be
effective after the filing date.
3. If the new address of the registered agent is the same as the
new address of the principal office of the limited liability company,
the statement may include a change of address of the principal office
if:
a. the registered agent notifies the limited liability
company of the change in writing, and
b. the statement recites that the registered agent has
done so.
4. The change of address of the registered agent or principal
office is effective when the Office of the Secretary of State files
the statement, unless a later effective date or time, which shall be
a specified date or time not later than a time on the ninetieth day
after the filing, is provided in the statement.
D. 1. A registered agent may resign by filing with the Office
of the Secretary of State a copy of the resignation, signed and
acknowledged by the registered agent, which contains a statement that
notice of the resignation was given to the limited liability company
at least thirty (30) days before the filing of the resignation by
mailing or delivering the notice to the limited liability company at
its address last known to the registered agent and specifying the
address therein.
2. The resignation is effective thirty (30) days after it is
filed, unless a later effective date or time, which shall be a
specified date or time not later than a time on the ninetieth day
after the filing, is provided in the resignation.
3. If a domestic limited liability company fails to obtain and
designate a new registered agent before the resignation is effective,
the Secretary of State shall be deemed to be the registered agent of
the limited liability company until a new registered agent is
designated.
E. If a limited liability company has no registered agent or the
registered agent cannot be found, then service of process on the
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limited liability company may be made by serving the Secretary of
State as its agent as provided in Section 2004 of Title 12 of the
Oklahoma Statutes.
Added by Laws 1992, c. 148, § 11, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 6, eff. Sept. 1, 1993; Laws 1999, c. 421, § 26,
eff. Nov. 1, 1999; Laws 2001, c. 406, § 11, emerg. eff. June 4, 2001;
Laws 2004, c. 255, § 37, eff. Nov. 1, 2004; Laws 2008, c. 253, § 22.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2011. Articles of organization - Amendment.
A. The articles of organization shall be amended when:
1. There is a change in the name of the limited liability
company;
2. There is a false or erroneous statement in the articles of
organization;
3. There is a change in the time as stated in the articles of
organization for the cancellation of the limited liability company;
or
4. The members desire to restate the articles of organization in
their entirety or to make a change in any other statement or to add a
statement in the articles of organization in order to accurately
represent their agreement.
B. An amendment to the articles of organization of a limited
liability company shall set forth:
1. The name of the limited liability company;
2. The date of filing the articles of organization; and
3. The amendment to the articles of organization.
Added by Laws 1992, c. 148, § 12, eff. Sept. 1, 1992.
§18-2012. Articles of correction.
A. If any document filed with the Office of the Secretary of
State under this act contains any typographical error, error of
transcription, or other technical error or has been defectively
executed, the document may be corrected by the filing of articles of
correction.
B. Articles of correction shall set forth:
1. The title of the document being corrected;
2. The date that the document being corrected was filed; and
3. The provision in the document as previously filed and as
corrected and, if execution of the document was defective, the manner
in which it was defective.
C. Articles of correction may not make any other change or
amendment which would not have complied in all respects with the
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requirements of this act at the time the document being corrected was
filed.
D. Articles of correction shall be executed in the same manner
in which the document being corrected was required to be executed.
E. Articles of correction may not:
1. Change the effective date of the document being corrected; or
2. Affect any right or liability accrued or incurred before its
filing, except that any right or liability accrued or incurred by
reason of the error or defect being corrected shall be extinguished
by the filing if the person having the right has not detrimentally
relied on the original document.
F. Notwithstanding that any instrument authorized to be filed
with the Secretary of State pursuant to the provisions of this act
is, when filed inaccurately, defectively, or erroneously executed,
sealed or acknowledged, or otherwise defective in any respect, the
Secretary of State shall not be liable to any person for the
preclearance for filing, or the filing and indexing of the instrument
by the Secretary of State.
Added by Laws 1992, c. 148, § 13, eff. Sept. 1, 1992. Amended by
Laws 1999, c. 421, § 27, eff. Nov. 1, 1999.
§18-2012.1. Cancellation of articles of organization.
CANCELLATION OF ARTICLES OF ORGANIZATION
A. The articles of organization shall be canceled upon the
dissolution and the completion of winding up of a limited liability
company, or as provided in subsection B of this section, or upon the
filing of a certificate of merger or consolidation if the limited
liability company is not the surviving or resulting entity in a
merger or consolidation, or upon the conversion of a domestic limited
liability company approved in accordance with Section 2054.2 of this
title.
B. The articles of organization of a domestic limited liability
company shall be deemed to be canceled if the domestic limited
liability company fails to file the annual certificate and pay the
annual fee provided in Section 2055.2 of this title or pay the
registered agent fee to the Secretary of State due under Section 2055
of this title within three (3) years from the date the certificate or
fee is due, the cancellation to be effective on the third anniversary
of the due date.
C. A limited liability company whose articles of organization
have been canceled under subsection B of this section may apply for
reinstatement under subsection G of Section 2055.2 of this title.
Added by Laws 2001, c. 405, § 29, eff. Nov. 1, 2001. Amended by Laws
2004, c. 255, § 38, eff. Nov. 1, 2004; Laws 2008, c. 253, § 23.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
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by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2012.2. Operating agreement of LLC.
OPERATING AGREEMENT OF LLC
A. The operating agreement of the limited liability company
governs generally:
1. Relations among the members as members and between the
members and the limited liability company;
2. The rights and duties under the Oklahoma Limited Liability
Company Act of a person in the capacity of manager;
3. The activities of the company and the conduct of those
activities; and
4. The means and conditions for amending the operating
agreement.
If the operating agreement does not otherwise provide, the
Oklahoma Limited Liability Company Act governs the matter. The
operating agreement may not vary the rights, privileges, duties and
obligations imposed specifically under the Oklahoma Limited Liability
Company Act.
B. A limited liability company is bound by its operating
agreement regardless of whether it executes the operating agreement.
A member or manager of a limited liability company or an assignee of
a capital interest is bound by the operating agreement regardless of
whether the member, manager or assignee executes the operating
agreement.
C. An operating agreement of a limited liability company having
only one member is not unenforceable because there is only one person
who is a party to the operating agreement.
D. The obligations of a limited liability company and its
members to an assignee or dissociated member are governed by the
operating agreement. Subject only to any court order to effectuate a
charging order, an amendment to the operating agreement made after a
person becomes an assignee or dissociated member is effective with
regard to any debt, obligation, or other liability of the limited
liability company or its members to the assignee or dissociated
member.
Added by Laws 2008, c. 253, § 24. Amended by Laws 2017, c. 323, §
39, eff. Nov. 1, 2017.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2013. Managers - Qualifications - Powers.
A. Except as otherwise provided in the articles of organization,
operating agreement, or this act, a limited liability company shall
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be managed by or under the authority of one or more managers who may
but need not be members.
B. The articles of organization or operating agreement may
prescribe qualifications for managers.
C. The number of managers shall be specified in or fixed in
accordance with the articles of organization or operating agreement.
D. The articles of organization or operating agreement of a
limited liability company may authorize the manager or managers of
the limited liability company to adopt, amend, and repeal bylaws, or
regulations, not inconsistent with the articles of organization and
the operating agreement, to govern the affairs of the limited
liability company. Unless otherwise provided in the articles of
organization, operating agreement or enabling resolutions, bylaws, or
regulations from the managers shall be considered a part of the
operating agreement.
Added by Laws 1992, c. 148, § 14, eff. Sept. 1, 1992. Amended by
Laws 2004, c. 255, § 39, eff. Nov. 1, 2004.
§18-2014. Managers - Election – Removal - Resignation.
MANAGERS – ELECTION – REMOVAL – RESIGNATION
Unless otherwise provided in the articles of organization or
operating agreement:
1. The election of managers shall be by majority vote of the
members;
2. Any or all managers may be removed, with or without cause, by
the written consent of the members; and
3. A manager may resign in accordance with the operating
agreement or, if the operating agreement does not provide for the
manager’s resignation, upon notice to the limited liability company.
Added by Laws 1992, c. 148, § 15, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 7, eff. Sept. 1, 1993; Laws 2001, c. 405, § 30,
eff. Nov. 1, 2001.
§18-2015. Management of company without designated managers -
Resignation of member.
MANAGEMENT OF COMPANY WITHOUT DESIGNATED MANAGERS;
RESIGNATION OF MEMBER
A. The articles of organization or operating agreement may
provide that the business of the limited liability company shall be
managed without designated managers. So long as such provision
continues in effect:
1. The members shall be deemed to be managers for purposes of
applying provisions of the Oklahoma Limited Liability Company Act,
unless the context clearly requires otherwise;
2. The members shall have and be subject to all duties and
liabilities of managers; and
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3. A member signing on behalf of the limited liability company
shall sign as a manager.
B. A member of a member-managed limited liability company may
resign from the member's management duties in accordance with the
operating agreement or, if the operating agreement does not provide
for the member's resignation, upon notice to the limited liability
company. Unless otherwise provided in the operating agreement, when
a member of a member-managed limited liability company resigns, the
member shall cease to have the rights and duties of a member and
shall become an assignee; provided that the profits and losses of the
limited liability company shall continue to be allocated to the
member and any binding commitments for contributions shall continue
as if the member had not resigned. If the resignation violates the
operating agreement, in addition to any remedies otherwise available
under applicable law, a limited liability company may recover from
the resigning member damages for breach of the operating agreement
and damages for a prohibited withdrawal under either the operating
agreement or Section 2036 of this title and offset the damages
against the amount otherwise distributable to the resigning member.
Added by Laws 1992, c. 148, § 16, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 8, eff. Sept. 1, 1993; Laws 2001, c. 405, § 31,
eff. Nov. 1, 2001; Laws 2008, c. 253, § 25; Laws 2017, c. 323, § 40,
eff. Nov. 1, 2017.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2016. Managers - Duties - Good faith - Liability.
MANAGERS – DUTIES – GOOD FAITH – LIABILITY
Subject to the provisions of Section 2017 of this title:
1. A manager shall discharge the duties as a manager in good
faith, with the care an ordinary prudent person in a like position
could exercise under similar circumstances, and in the manner the
manager reasonably believes to be in the best interests of the
limited liability company;
2. In discharging the duties, a manager may rely on information,
opinions, reports or statements, including financial statements and
other financial data, if prepared or presented by:
a. one or more employees of the limited liability company
whom the manager reasonably believes to be reliable and
competent in the matters presented,
b. legal counsel, public accountants, or other persons as
to matters the manager reasonably believes are within
the person's professional or expert competence, or
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c. a committee of managers of which the manager is not a
member if the manager reasonably believes the committee
merits confidence;
A manager is not acting in good faith if the manager has
knowledge concerning the matter in question that makes reliance
otherwise permitted by this paragraph unwarranted;
3. Unless otherwise provided in the operating agreement, a
manager has the power and authority to delegate to one or more other
persons the manager’s rights and powers to manage and control the
business and affairs of the limited liability company, including to
delegate to the agents, officers and employees of a manager to the
limited liability company, and to delegate by a management agreement
or another agreement with, or otherwise to, other persons. The
delegation by a manager shall not cause the manager to cease to be a
manager of the limited liability company;
4. A manager is not liable for any action taken as a manager, or
any failure to take any action, if the manager performed the duties
of the office in compliance with the business judgment rule as
applied to directors and officers of a corporation; and
5. Except as otherwise provided in the articles of organization
or operating agreement, every manager must account to the limited
liability company and hold as trustee for it any profit or benefit
derived by the manager without the informed consent of the members
from any transaction connected with the conduct or winding up of the
limited liability company or from any personal use by the manager of
its property.
Added by Laws 1992, c. 148, § 17, eff. Sept. 1, 1992. Amended by
Laws 2001, c. 405, § 32, eff. Nov. 1, 2001.
§18-2017. Member or manager - Limitation or elimination of liability
- Indemnification - Creation of series or groups.
MEMBER OR MANAGER – LIMITATION OR ELIMINATION
OF LIABILITY – INDEMNIFICATION –
CREATION OF SERIES OR GROUPS
A. Subject to subsection B of this section, the articles of
organization or operating agreement may:
1. Eliminate or limit the personal liability of a member or
manager for monetary damages for breach of any duty provided for in
Section 2016 of this title; and
2. Provide for indemnification of a member or manager for
judgments, settlements, penalties, fines or expenses incurred in any
proceeding because the person is or was a member or manager.
B. No provision permitted under subsection A of this section
shall limit or eliminate the liability of a manager for:
1. Any breach of the manager’s duty of loyalty to the limited
liability company or its members;
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2. Acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; or
3. Any transaction from which the manager derived an improper
personal benefit.
C. The articles of organization or operating agreement may
define the scope of any duties owned by the members or managers to
the limited liability company, if not manifestly unreasonable. A
definition shall not eliminate the duty of loyalty or the obligation
of good faith and fair dealing.
D. An operating agreement may provide for classes or groups of
members or managers or both having such relative rights, powers and
duties as the operating agreement may provide, and may provide for
the creation in the manner provided in the operating agreement of
additional classes or groups of members or managers or both having
such relative rights, powers and duties as may from time to time be
established, including rights, powers and duties senior to existing
classes and groups of members or managers. An operating agreement
may provide for the taking of an action, including the amendment of
the operating agreement, without the vote or approval of any member
or manager or class or group of members or managers, including an
action to create under the operating agreement a class or group of
membership interests that was not previously outstanding. An
operating agreement may provide that any member or class or group of
members shall have no voting rights.
Added by Laws 1992, c. 148, § 18, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 9, eff. Sept. 1, 1993; Laws 2001, c. 405, § 33,
eff. Nov. 1, 2001; Laws 2004, c. 255, § 40, eff. Nov. 1, 2004.
§18-2018. Managers - Majority vote required.
Voting by managers may be on a per capita, number, financial
interest, class, group or any other basis. Unless otherwise provided
in the articles of organization or operating agreement, if the
limited liability company has more than one manager, all decisions of
the managers shall be made by majority vote of the managers on a per
capita basis. An operating agreement may grant to all or certain
identified managers or a specified class or group of the managers the
right to vote, separately or with all or any class or group of
managers or members, on any matter.
Added by Laws 1992, c. 148, § 19, eff. Sept. 1, 1992. Amended by
Laws 2004, c. 255, § 41, eff. Nov. 1, 2004.
§18-2019. Managers as agents.
MANAGERS AS AGENTS
A. Every manager is an agent of the limited liability company
for the purpose of its business, and the act of every manager,
including the execution in the limited liability company name of any
instrument for apparently carrying on the business of the limited
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liability company of which he is a manager, binds the limited
liability company, unless the manager so acting lacks the authority
to act for the limited liability company in the particular matter,
and the person with whom he is dealing has knowledge of the fact that
he has no such authority. The unauthorized acts of the manager shall
bind the limited liability company as to persons acting in good faith
who have no knowledge of the fact that the manager had no such
authority.
B. Subject to the provisions of subsection A of this section and
Section 2019.1 of this title, instruments and documents providing for
the acquisition, mortgage, or disposition of real or personal
property of the limited liability company shall be valid and binding
upon the limited liability company if executed by one or more of its
managers.
Added by Laws 1992, c. 148, § 20, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 10, eff. Sept. 1, 1993; Laws 2017, c. 323, § 41,
eff. Nov. 1, 2017.
§18-2019.1. Title to property - Transfer.
A. Title to property of the limited liability company that is
held in the name of the limited liability company may be transferred
by an instrument of transfer executed by any manager in the name of
the limited liability company.
B. Title to property of the limited liability company that is
held in the name of one or more members or managers with an
indication in the instrument transferring title to the property to
them of their capacity as members or managers of a limited liability
company or of the existence of a limited liability company, even if
the name of the limited liability company is not indicated, may be
transferred by an instrument of transfer executed by the persons in
whose name title is held.
C. Property transferred under subsections A or B of this section
may be recovered by the limited liability company if it proves that
the act of the person executing the instrument of transfer did not
bind the limited liability company under Section 2019 of Title 18 of
the Oklahoma Statutes, unless the property has been transferred by
the initial transferee or a person claiming through the initial
transferee to a subsequent transferee who gives value without having
notice that the person who executed the instrument of initial
transfer lacked authority to bind the limited liability company.
D. Title to property of the limited liability company that is
held in the name of one or more persons other than the limited
liability company without an indication in the instrument
transferring title to the property to them of their capacity as
members or managers of a limited liability company or of the
existence of a limited liability company, may be transferred free of
any claims of the limited liability company or the members by the
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person in whose name title is held to a transferee who gives value
without having notice that it is property of a limited liability
company.
Added by Laws 1993, c. 366, § 11, eff. Sept. 1, 1993.
§18-2020. Voting rights of members.
VOTING RIGHTS OF MEMBERS
A. Voting by members may be on a per capita, number, financial
interest, class, group or any other basis. Unless otherwise provided
in the articles of organization or operating agreement, the members
of a limited liability company vote in proportion to their respective
interests in the profits of the limited liability company. Except as
otherwise provided in subsection D of this section or unless the
context otherwise requires, references in the Oklahoma Limited
Liability Company Act to a vote or the consent of the members mean a
vote or consent of the members holding a majority of the interests in
the profits of the limited liability company. The vote or consent
may be evidenced in the minutes of a meeting of the members or by a
written consent in lieu of a meeting.
B. Except as otherwise provided in subsection D of this section
or in the articles of organization or operating agreement, a majority
vote of the members shall be required to approve the following
matters:
1. The sale, exchange, lease, mortgage, pledge, or other
transfer of all or substantially all of the assets of the limited
liability company;
2. Merger of the limited liability company with another limited
liability company or other entity; and
3. An amendment to the articles of organization or operating
agreement.
C. The articles of organization or operating agreement may alter
the above voting rights and provide for any other voting rights of
members.
D. Unless otherwise provided in the articles of organization or
a written operating agreement, the unanimous vote or consent of the
members shall be required to approve the following matters:
1. The dissolution of the limited liability company pursuant to
paragraph 3 of subsection A of Section 2037 of this title; or
2. An amendment to the articles of organization or an amendment
to a written operating agreement:
a. which reduces the term of the existence of the limited
liability company,
b. which reduces the required vote of members to approve a
dissolution, merger or sale, exchange, lease, mortgage,
pledge, or other transfer of all or substantially all
of the assets of the limited liability company,
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c. which permits a member to voluntarily withdraw from the
limited liability company, or
d. which reduces the required vote of members to approve
an amendment to the articles of organization or written
operating agreement reducing the vote previously
required on the matters described in this paragraph.
E. An operating agreement may grant to all or certain identified
members or a specified class or group of the members the right to
vote separately or with all or any class or group of the members or
managers, on any matter.
Added by Laws 1992, c. 148, § 21, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 12, eff. Sept. 1, 1993; Laws 1996, c. 226, § 23,
eff. July 1, 1996; Laws 1998, c. 422, § 28, eff. Nov. 1, 1998; Laws
2004, c. 255, § 42, eff. Nov. 1, 2004; Laws 2017, c. 323, § 42, eff.
Nov. 1, 2017.
§18-2021. Records required to be kept - Member access to information
- Managers may inspect and copy records.
A. Unless otherwise provided in a written operating agreement, a
limited liability company shall keep at its principal place of
business the following:
1. A current and a past list of the full name and last-known
mailing address of each member and manager;
2. Copies of records that would enable a member to determine the
relative voting rights of the members;
3. A copy of the articles of organization, together with any
amendments thereto;
4. Copies of the limited liability company's federal, state and
local income tax returns and financial statements, if any, for the
three most recent years or, if such returns and statements were not
prepared for any reason, copies of the information and statements
provided to, or which should have been provided to, the members to
enable them to prepare their federal state and local tax returns for
such period;
5. Copies of any effective written operating agreements and all
amendments thereto and copies of any written operating agreements no
longer in effect; and
6. Unless provided in writing in an operating agreement, a
writing setting out:
a. the amount of cash and a statement of the agreed value
of other property or services contributed by each
member and the times at which or events upon the
happening of which any additional contributions agreed
to be made by each member are to be made, and
b. the events upon the happening of which the limited
liability company is to be dissolved and its affairs
wound up, and
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c. any other information prepared pursuant to a
requirement in an operating agreement.
B. A member, for any purpose reasonably related to the member's
interest, may:
1. At the member's own expense, inspect and copy any limited
liability company record upon reasonable request during ordinary
business hours;
2. Obtain from time to time upon reasonable demand:
a. true and complete information regarding the state of
the business and financial condition of the limited
liability company,
b. promptly after becoming available, a copy of the
limited liability company's state and local income tax
returns for each year, and
c. other information regarding the affairs of the limited
liability company as is just and reasonable; and
3. Have a formal accounting of the limited liability company's
affairs whenever circumstances render it just and reasonable.
C. A manager, for any purpose reasonably related to his
position, may inspect and copy any limited liability company records
upon reasonable request during ordinary business hours.
D. Failure of the limited liability company to keep or maintain
any of the records or information required pursuant to this section
shall not be grounds for imposing liability on any person for the
debts and obligations of the limited liability company.
Added by Laws 1992, c. 148, § 22, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 13, eff. Sept. 1, 1993.
§18-2022. Liability solely as manager or member.
A person who is a member or manager, or both, of a limited
liability company is not liable for the obligations of a limited
liability company solely by reason of being such member or manager or
both.
Added by Laws 1992, c. 148, § 23, eff. Sept. 1, 1992.
§18-2023. Contribution of member - Form.
The contribution of a member to a limited liability company may
be in cash, property, services rendered, or a promissory note or
other binding obligation to contribute cash or property or to perform
services. A person may be admitted to a limited liability company as
a member of the limited liability company and may receive a
membership interest in the limited liability company without making a
contribution or being obligated to make a contribution to the limited
liability company. Unless otherwise provided in the operating
agreement, a person may be admitted to a limited liability company as
a member of the limited liability company without acquiring a
membership interest in the limited liability company. Unless
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otherwise provided in the operating agreement, a person may be
admitted as the sole member of a limited liability company without
making a contribution or being obligated to make a contribution to
the limited liability company or without acquiring a membership
interest in the limited liability company.
Added by Laws 1992, c. 148, § 24, eff. Sept. 1, 1992. Amended by
Laws 2004, c. 255, § 43, eff. Nov. 1, 2004.
§18-2024. Performance of obligations - Compromise - Remedies for
failure to perform.
A. 1. Except as otherwise provided in the articles of
organization or the operating agreement, a member is obligated to the
limited liability company to perform any written promise to
contribute cash or property or to perform services, even if he is
unable to perform because of death, disability or other reason.
2. If a member does not make the required contribution of
property or services, he is obligated, at the option of the limited
liability company, to contribute cash equal to that portion of value,
as stated in the operating agreement, of the stated contribution that
has not been made.
B. 1. The obligation of a member to make a contribution or
return money or other property paid or distributed in violation of
this act may be compromised only upon compliance with the operating
agreement, or, if the operating agreement does not so provide, with
the unanimous consent of the members.
2. A compromise shall not impair the right of any creditor to
enforce the obligation or to require the obligation to be enforced
if:
a. such creditor relied upon the obligation and the
absence in the operating agreement of the limited
liability company's authority to compromise the
obligation, or
b. a duty to the creditor was breached in the making of
the compromise.
C. An operating agreement may provide that the capital interest
of a member who fails to make any contribution or other payment that
the member is required to make shall be subject to specified remedies
for, or specified consequences of, the failure. The remedy or
consequence may take the form of reducing the defaulting member's
capital interest in the limited liability company, subordinating the
defaulting member's capital interest in the limited liability company
to that of the nondefaulting members, a forced sale of the capital
interest in the limited liability company, forfeiture of the capital
interest in the limited liability company, the lending by the
nondefaulting members of the amount necessary to meet the commitment,
a fixing of the value of the member's capital interest in the limited
liability company by appraisal or by formula and redemption and sale
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of the member's capital interest in the limited liability company at
that value, or other remedy or consequences.
Added by Laws 1992, c. 148, § 25, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 14, eff. Sept. 1, 1993.
§18-2025. Profits and losses – Distributions.
PROFITS AND LOSSES; DISTRIBUTIONS
Except as otherwise provided in the operating agreement:
1. The profits and losses of a limited liability company shall
be allocated among the members, and among classes or groups of
members, on the basis of the agreed value, as stated in the records
of the limited liability company, of the contributions made by each
member to the extent they have been received by the limited liability
company and have not been returned; and
2. Distributions of the limited liability company shall be made
to the members, and among classes or groups of members, in proportion
to their right to share in the profits and losses of the limited
liability company.
Added by Laws 1992, c. 148, § 26, eff. Sept. 1, 1992. Amended by
Laws 2004, c. 255, § 44, eff. Nov. 1, 2004; Laws 2017, c. 323, § 43,
eff. Nov. 1, 2017.
§18-2026. Distributions - Time.
Except as otherwise provided in this act, a member is entitled to
receive distributions from a limited liability company before the
dissolution and winding up of the limited liability company to the
extent and at the times upon which the members agree or as provided
in the operating agreement.
Added by Laws 1992, c. 148, § 27, eff. Sept. 1, 1992. Amended by
Laws 1997, c. 145, § 4, eff. Nov. 1, 1997.
§18-2027. Repealed by Laws 1997, c. 145, § 9, eff. Nov. 1, 1997.
§18-2028. Distribution - Cash - Asset in kind.
Except as otherwise provided in the operating agreement:
1. A member, regardless of the nature of the member's
contribution, has no right to demand and receive any distribution
from a limited liability company in any form other than cash; and
2. No member may be compelled to accept from a limited liability
company a distribution of any asset in kind to the extent that the
percentage of the asset distributed to the member exceeds the
percentage which the member's interest in the limited liability
company is of all of the interests in the limited liability company.
Added by Laws 1992, c. 148, § 29, eff. Sept. 1, 1992.
§18-2029. Distribution - Status and rights of member.
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At the time a member becomes entitled to receive a distribution,
the member has the status of and is entitled to all remedies
available to a creditor of the limited liability company with respect
to the distribution.
Added by Laws 1992, c. 148, § 30, eff. Sept. 1, 1992.
§18-2030. Restrictions on distributions - Determination of
prohibited distributions - Effect of distribution – Indebtedness.
RESTRICTIONS ON DISTRIBUTIONS; DETERMINATION OF PROHIBITED
DISTRIBUTIONS; EFFECT OF DISTRIBUTION; INDEBTEDNESS
A. A distribution may not be made if, after giving effect to the
distribution:
1. The limited liability company would not be able to pay its
debts as they become due in the usual course of business; or
2. The limited liability company's total assets would be less
than the sum of its total liabilities plus, unless the operating
agreement permits otherwise, the amount that would be needed, if the
limited liability company were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of
members whose preferential rights are superior to the rights of
members receiving the distribution.
B. The limited liability company may base a determination that a
distribution is not prohibited under subsection A of this section on:
1. Financial statements prepared on the basis of accounting
practices and principles that are reasonable in the circumstances; or
2. A fair valuation or other method that is reasonable in the
circumstances.
C. Except as provided in subsection E of this section, the
effect of a distribution under subsection A of this section is
measured as of:
1. In the case of a distribution by purchase, redemption or
other acquisition of a capital interest in the limited liability
company, the date money or other property is transferred or debt
incurred by the limited liability company; and
2. In all other cases, the date:
a. the distribution is authorized, if the payment occurs
within one hundred twenty (120) days after the date of
authorization, or
b. the payment is made if it occurs more than one hundred
twenty (120) days after the date of authorization.
D. A limited liability company's indebtedness to a member,
incurred by reason of a distribution made in accordance with this
section, is at parity with the limited liability company's
indebtedness to its general, unsecured creditors, except to the
extent subordinated by agreement.
E. 1. If the terms of the indebtedness provide that payment of
principal and interest is to be made only if, and to the extent that,
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payment of a distribution to members could then be made under this
section, indebtedness of a limited liability company, including
indebtedness issued as a distribution, is not a liability for
purposes of determinations made under subsection B of this section.
2. If the indebtedness is issued as a distribution, each payment
of principal or interest on the indebtedness is treated as a
distribution, the effect of which is measured on the date the payment
is actually made.
Added by Laws 1992, c. 148, § 31, eff. Sept. 1, 1992. Amended by
Laws 2017, c. 323, § 44, eff. Nov. 1, 2017.
§18-2031. Wrongful distribution - Liability of member - Action for
recovery.
If a member has received a distribution in violation of the
operating agreement or Section 2030 of this title, the member shall
be liable to the limited liability company for the amount of the
distribution wrongfully made. An action for the recovery of any
wrongful distribution to a member must be brought within three (3)
years from the date of the distribution.
Added by Laws 1992, c. 148, § 32, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 16, eff. Sept. 1, 1993.
§18-2032. Membership interest as personal property.
MEMBERSHIP INTEREST AS PERSONAL PROPERTY
A capital interest is personal property. A member has no
interest in specific limited liability company property.
Added by Laws 1992, c. 148, § 33, eff. Sept. 1, 1992. Amended by
Laws 2017, c. 323, § 45, eff. Nov. 1, 2017.
§18-2033. Assignability of membership interest.
ASSIGNABILITY OF MEMBERSHIP INTEREST
A. Unless otherwise provided in an operating agreement:
1. A membership interest is not transferable; provided, however,
that a member may assign the capital interest associated with a
membership interest in whole or in part;
2. An assignment of the capital interest associated with a
membership interest does not entitle the assignee to participate in
the management and affairs of the limited liability company or to
become or to exercise any rights or powers of a member;
3. An assignment entitles the assignee to share in profits and
losses, to receive any distribution or distributions and to receive
the allocation of income, gain, loss, deduction, or credit or similar
item to which the assignor was entitled to the extent assigned;
4. Unless the assignee of a capital interest in a limited
liability company becomes a member , the assignor continues to be a
member and to have the power to exercise any rights of a member,
unless the assignor is removed as a member either in accordance with
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the operating agreement or, after having assigned all of the capital
interest, by an affirmative vote of the members who have not assigned
their interests. The removal of an assignor shall not, by itself,
cause the assignee to become a member;
5. Until an assignee of a capital interest becomes a member, the
assignee has no liability as a member solely as a result of the
assignment; and
6. The assignor of a capital interest is not released from
liability as a member solely as a result of the assignment.
B. The operating agreement may provide that a member's interest
in a limited liability company may be evidenced by a certificate of
membership interest issued by the limited liability company and also
may provide for the assignment or transfer of any membership interest
represented by such a certificate and may make other provisions with
respect to such certificates.
C. Unless otherwise provided in the operating agreement, the
pledge of, or granting of a security interest, lien, or other
encumbrance in or against any or all of the membership interest of a
member is not an assignment and shall not cause the member to cease
to be a member or cease to have the power to exercise any rights or
powers of a member.
Added by Laws 1992, c. 148, § 34, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 17, eff. Sept. 1, 1993; Laws 1996, c. 226, § 24,
eff. July 1, 1996; Laws 1997, c. 145, § 5, eff. Nov. 1, 1997; Laws
2004, c. 255, § 45, eff. Nov. 1, 2004; Laws 2017, c. 323, § 46, eff.
Nov. 1, 2017.
§18-2034. Judgment creditor - Rights - Exclusive remedy.
JUDGMENT CREDITOR; RIGHTS; EXCLUSIVE REMEDY
On application to a court of competent jurisdiction by any
judgment creditor of a member, the court may charge the capital
interest of the member with payment of the unsatisfied amount of the
judgment with interest. To the extent so charged, the judgment
creditor has only the rights of an assignee of the capital interest.
A charging order entered by a court pursuant to this section shall in
no event be convertible into a membership interest through
foreclosure or other action. The Oklahoma Limited Liability Company
Act does not deprive any member of the benefit of any exemption laws
applicable to his or her membership or capital interest. This
section shall be the sole and exclusive remedy of a judgment creditor
with respect to the judgment debtor's membership and capital
interest, whether the limited liability company has one member or
more than one member.
Added by Laws 1992, c. 148, § 35, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 18, eff. Sept. 1, 1993; Laws 2004, c. 255, § 46,
eff. Nov. 1, 2004; Laws 2017, c. 323, § 47, eff. Nov. 1, 2017.
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§18-2035. Assignee of interest becoming member - Rights and powers,
restrictions and liabilities - Assignor's liabilities- Time of
admission of member.
ASSIGNEE OF INTEREST BECOMING MEMBER; RIGHTS AND POWERS, RESTRICTIONS
AND LIABILITIES; ASSIGNOR'S LIABILITIES; TIME OF ADMISSION OF MEMBER
A. An assignee of a capital interest in a limited liability
company may become a member if and to the extent that:
1. The operating agreement provides; or
2. Unless the operating agreement otherwise provides, the
members representing a majority of the profits which are not the
subject of the assignment consent in writing.
B. An assignee who becomes a member, to the extent assigned, has
the rights and powers, and is subject to the restrictions and
liabilities, of a member under the operating agreement and the
Oklahoma Limited Liability Company Act; however, unless otherwise
provided in writing in the operating agreement or other written
agreement, an assignee who becomes a member also is liable for any
obligations of the assignor to make contributions as provided in
Section 2024 of this title, but shall not be liable for the
obligations of the assignor under Section 2031 of this title;
however, the assignee is not obligated for liabilities of which the
assignee had no knowledge at the time the assignee became a member
and which could not be ascertained from a written operating
agreement.
C. Regardless of whether an assignee of an interest becomes a
member, the assignor is not released from liability to the limited
liability company under Sections 2024, 2031 and 2033 of this title.
D. Except as otherwise provided in writing in the operating
agreement, a member who assigns the member's entire capital interest
in the limited liability company ceases to be a member or to have the
power to exercise any rights of a member when any assignee of the
capital interest becomes a member with respect to the assigned
interest.
E. Subject to subsection F of this section, a person acquiring a
limited liability company interest directly from the limited
liability company may become a member in a limited liability company
upon compliance with the operating agreement or, if the operating
agreement does not so provide in writing, upon the written consent of
the members.
F. The effective time of admission of a member to a limited
liability company shall be the later of:
1. The date the limited liability company is formed; or
2. The time provided in the operating agreement, or if no such
time is provided therein, then when the person's admission is
reflected in the records of the limited liability company.
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Added by Laws 1992, c. 148, § 36, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 19, eff. Sept. 1, 1993; Laws 1996, c. 226, § 25,
eff. July 1, 1996; Laws 2017, c. 323, § 48, eff. Nov. 1, 2017.
§18-2036. Events causing cessation of membership - Withdrawal -
Death or incapacity.
EVENTS CAUSING CESSATION OF MEMBERSHIP; WITHDRAWAL;
DEATH OR INCAPACITY
A. A member has the power to withdraw as a member at any time,
rightfully or wrongfully. A withdrawal is wrongful if the operating
agreement does not specifically grant to the member a right to
withdraw or the member resigns from the member's managerial duties in
a member-managed limited liability company. The wrongful withdrawal
shall constitute a breach of the operating agreement and the limited
liability company may recover from the withdrawing member damages,
including the reasonable cost of replacing the services that the
withdrawn member was obligated to perform. The limited liability
company may offset its damages against the amount otherwise
distributable to the member, in addition to pursuing any remedies
provided for in the operating agreement or otherwise available under
applicable law. The limited liability company shall not, however, be
entitled to any equitable remedy that would prevent a member from
exercising the power to withdraw if such power is permitted in the
operating agreement withdrawing from the limited liability company.
Unless the operating agreement otherwise provides, a member who has
withdrawn shall be deemed an assignee with respect to the interest.
B. If a member who is an individual dies or a court of competent
jurisdiction adjudges the member to be incompetent to manage the
member's person or property, the member's personal representative
shall have all of the rights of an assignee of the member's interest.
If a member is a corporation, trust or other entity and is dissolved
or terminated, the powers of that member may be exercised by its
personal representative.
C. If the sole member of a limited liability company dies or
dissolves, or a court of competent jurisdiction adjudges the member
to be incompetent or otherwise lacking legal capacity, the member's
personal representative accedes to the membership interest and
possesses all rights, powers and duties associated with the interest
for the benefit of the incompetent member or the deceased member's
estate.
D. The operating agreement may provide for the expulsion of a
member, with or without cause, which shall include reasonable
provision for the buyout of the member's capital interest.
Added by Laws 1992, c. 148, § 37, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 20, eff. Sept. 1, 1993; Laws 1996, c. 226, § 26,
eff. July 1, 1996; Laws 1997, c. 145, § 6, eff. Nov. 1, 1997; Laws
4(#$0&($"!$"+$ -2*
2004, c. 255, § 47, eff. Nov. 1, 2004; Laws 2017, c. 323, § 49, eff.
Nov. 1, 2017.
§18-2037. Dissolution - Activities after dissolution.
A. A limited liability company is dissolved upon the earlier of:
1. The occurrence of the latest date on which the limited
liability company is to dissolve set forth in the articles of
organization;
2. The occurrence of events specified in writing in the
operating agreement;
3. The written consent of all of the members or, if there is
more than one class or group of members, then by the written consent
of all of the members of each class or group;
4. At any time there are no members; provided, that the limited
liability company is not dissolved and is not required to be wound up
if:
a. unless otherwise provided in an operating agreement,
within ninety (90) days or such other period as is
provided for in the operating agreement after the
occurrence of the event that terminated the continued
membership of the last remaining member, the personal
representative of the last remaining member agrees in
writing to continue the limited liability company and
to the admission of the personal representative of the
member or its nominee or designee to the limited
liability company as a member, effective as of the
occurrence of the event that terminated the continued
membership of the last remaining member; provided, that
an operating agreement may provide that the personal
representative of the last remaining member shall be
obligated to agree in writing to continue the limited
liability company and to the admission of the personal
representative of the member or its nominee or designee
to the limited liability company as a member, effective
as of the occurrence of the event that terminated the
continued membership of the last remaining member, or
b. a member is admitted to the limited liability company
in the manner provided for in the operating agreement,
effective as of the occurrence of the event that
terminated the continued membership of the last
remaining member, within ninety (90) days or such other
period as is provided for in the operating agreement
after the occurrence of the event that terminated the
continued membership of the last remaining member,
pursuant to a provision of the operating agreement that
specifically provides for the admission of a member to
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the limited liability company after there is no longer
a remaining member of the limited liability company; or
5. Entry of a decree of judicial dissolution under Section 2038
of this title.
B. A limited liability company continues in existence after
dissolution, regardless of whether articles of dissolution are filed,
but may carry on only activities necessary to wind up its business or
affairs and liquidate its assets under Sections 2039 and 2040 of this
title.
Added by Laws 1992, c. 148, § 38, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 21, eff. Sept. 1, 1993; Laws 1996, c. 226, § 27,
eff. July 1, 1996; Laws 1997, c. 145, § 7, eff. Nov. 1, 1997; Laws
2004, c. 255, § 48, eff. Nov. 1, 2004; Laws 2008, c. 253, § 26.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2038. Decree of dissolution.
On application by or for a member, the district court may decree
dissolution of a limited liability company whenever it is not
reasonably practicable to carry on the business in conformity with
the articles of organization or operating agreement.
Added by Laws 1992, c. 148, § 39, eff. Sept. 1, 1992.
§18-2039. Winding up business or affairs - Ways - Acts and
transactions of member or manager - Presumptive notice.
A. Except as otherwise provided in the articles of organization
or operating agreement:
1. The business or affairs of the limited liability company may
be wound up in one of the following ways:
a. by the managers, or
b. if one or more of the members or managers have engaged
in conduct that casts reasonable doubt on their ability
to wind up the business or affairs of the limited
liability company, or upon other cause shown, by the
district court on application of any member, his legal
representative, or assignee; and
2. The persons winding up the business or affairs of the limited
liability company may, in the name of, and for and on behalf of, the
limited liability company:
a. prosecute and defend suits,
b. settle and close the business of the limited liability
company,
c. dispose of and transfer the property of the limited
liability company,
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d. discharge the liabilities of the limited liability
company, and
e. distribute to the members any remaining assets of the
limited liability company.
B. Except as provided in subsections D and E of this section,
after an event causing dissolution of the limited liability company
any manager can bind the limited liability company:
1. By any act appropriate for winding up the limited liability
company's affairs or completing transactions unfinished at
dissolution; and
2. By any transaction that would have bound the limited
liability company if it had not been dissolved, if the other party to
the transaction does not have notice of the dissolution.
C. The filing of the articles of dissolution shall be presumed
to constitute notice of dissolution for purposes of paragraph 2 of
subsection B of this section.
D. An act of a manager or member that is not binding on the
limited liability company pursuant to subsection B of this section is
binding if it is otherwise authorized by the limited liability
company.
E. An act of a manager or member that would be binding under
subsection B or would be otherwise authorized but that is in
contravention of a restriction on authority shall not bind the
limited liability company to persons having knowledge of the
restriction.
Added by Laws 1992, c. 148, § 40, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 22, eff. Sept. 1, 1993.
§18-2040. Distribution of assets upon winding up.
DISTRIBUTION OF ASSETS UPON WINDING UP
A. Upon the winding up of a limited liability company, the
assets shall be distributed as follows:
1. Payment, or adequate provision for payment, shall be made to
creditors, including to the extent permitted by law, members who are
creditors, in satisfaction of liabilities of the limited liability
company;
2. Except as provided in writing in the articles of
organization, operating agreement or other binding agreement, to
members, any assignees, and any former members for the purchase,
redemption or other acquisition of capital interests in satisfaction
of liabilities for distributions authorized but not paid under
Section 2030 of this title; and
3. Except as provided in writing in the articles of organization
or operating agreement or other binding agreement, to members, any
assignees, and any former members for the purchase, redemption or
other acquisition of capital interests first for the return of their
contributions in proportion to their respective contributions, and
4(#$0&($"!$"+$ -2*8
second respecting their capital interests or former capital
interests, in proportions in which the members, assignees and former
members would share in any profits.
B. A member, assignee or former member who receives a
distribution in violation of subsection A of this section, and who
knew or should have known at the time of the distribution that the
distribution violated subsection A of this section, shall be liable
to a limited liability company for the amount of the distribution. A
member, assignee or former member who receives a distribution in
violation of subsection A of this section, and who did not know and
had no reason to know at the time of the distribution that the
distribution violated subsection A of this section, shall not be
liable for the amount of the distribution. Subject to subsection C
of this section, this subsection shall not affect any obligation or
liability of a member, assignee or former member under an agreement
or other applicable law for a distribution.
C. Unless otherwise agreed, a member, assignee or former member
who receives a distribution from a limited liability company shall
have no liability under the Oklahoma Limited Liability Company Act or
other applicable law for the amount of the distribution after the
expiration of three (3) years from the date of the distribution
unless an action to recover the distribution from the member,
assignee or former member is commenced before the expiration of the
three-year period and an adjudication of liability against the
member, assignee or former member is made in the action.
Added by Laws 1992, c. 148, § 41, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 23, eff. Sept. 1, 1993; Laws 2004, c. 255, § 49,
eff. Nov. 1, 2004; Laws 2017, c. 323, § 50, eff. Nov. 1, 2017.
§18-2041. Articles of dissolution.
After the dissolution of the limited liability company, pursuant
to Section 2037 of this title, the limited liability company shall
file articles of dissolution in the Office of the Secretary of State
upon payment of the filing fee required by Section 2055 of this
title, the articles of dissolution shall set forth:
1. The name of the limited liability company;
2. The date of filing of its articles of organization;
3. The reason for filing the articles of dissolution;
4. The effective date of the articles of dissolution if they are
not to be effective upon the filing; and
5. Any other information the members or managers filing the
certificate determine.
Added by Laws 1992, c. 148, § 42, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 24, eff. Sept. 1, 1993.
§18-2042. Foreign limited liability company - Laws governing -
Powers, rights and privileges.
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A. Subject to the Constitution of this state:
1. The laws of the state or other jurisdiction under which a
foreign limited liability company is organized shall govern its
organization and internal affairs and the liability of its managers
and members; and
2. A foreign limited liability company may not be denied
registration by reason of any difference between those laws and the
laws of this state.
B. A foreign limited liability company holding a valid
registration in this state shall have no greater rights and
privileges than a domestic limited liability company. The
registration shall not be deemed to authorize the foreign limited
liability company to exercise any of its powers or purposes that a
domestic limited liability company is forbidden by law to exercise in
this state.
Added by Laws 1992, c. 148, § 43, eff. Sept. 1, 1992.
§18-2043. Foreign limited liability company - Registration
procedure.
Before transacting business in this state, a foreign limited
liability company shall register with the Office of the Secretary of
State. In order to register, a foreign limited liability company
shall:
1. Pay to the Secretary of State a registration fee required by
Section 56 of this act;
2. Provide the Secretary of State with an original certificate
from the certifying officer of the jurisdiction of the foreign
limited liability company's organization attesting to the foreign
limited liability company's organization under the laws of such
jurisdiction; and
3. Submit to the Office of the Secretary of State an application
in duplicate for registration as a foreign limited liability company,
signed by a manager, member, or other person, and setting forth:
a. the name of the foreign limited liability company and,
if different, the name under which it proposes to
transact business in this state,
b. the state or other jurisdiction and date of its
organization,
c. the name and street address of a registered agent in
this state which agent shall be an individual resident
of this state, or a domestic or qualified foreign
corporation, limited liability company, or limited
partnership. Each registered agent shall maintain a
business office identical with the registered office
which is open during regular business hours to accept
service of process and otherwise perform the functions
of a registered agent. If an additional registered
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agent is designated, service of process shall be on
that agent and not on the Secretary of State,
d. a statement that the Office of the Secretary of State
is appointed the agent of the foreign limited liability
company for service of process if no agent has been
appointed under subparagraph c of this paragraph, or if
appointed, the agent's authority has been revoked or if
the agent cannot be found or served with the exercise
of reasonable diligence,
e. the address of the office required to be maintained in
the state of its organization by the laws of that state
or, if not so required, of the principal office of the
foreign limited liability company, and
f. such additional information as may be necessary or
appropriate in order to enable the Office of the
Secretary of State to determine whether such limited
liability company is entitled to transact business in
this state.
Added by Laws 1992, c. 148, § 44, eff. Sept. 1, 1992. Amended by
Laws 1999, c. 421, § 28, eff. Nov. 1, 1999.
§18-2044. Foreign limited liability company - Duties of Secretary of
State.
A. If the Office of the Secretary of State finds that an
application for registration conforms to the provisions of this act
and all requisite fees have been paid, it shall:
1. Endorse on the applications the word "filed", and the month,
day, and year of the filing;
2. File in its office one copy of the application;
3. Issue a certificate of registration to transact business in
this state; and
4. Return the certificate of registration, together with a copy
of the application to the person who filed the application or his
representative.
B. The Secretary of State will not accept an application for
registration from a foreign limited liability company whose
registration was administratively withdrawn. Any such foreign
limited liability company may only register by filing an application
for reinstatement.
Added by Laws 1992, c. 148, § 45, eff. Sept. 1, 1992. Amended by
Laws 2008, c. 253, § 27.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2045. Foreign limited liability company - Name.
4(#$0&($"!$"+$ -27
Subject to the provisions of Section 2008 of this title, a
foreign limited liability company may register with the Secretary of
State under the name which it is registered in its jurisdiction of
organization and that could be registered by a domestic limited
liability company. If the name of a foreign limited liability
company does not satisfy the requirements of Section 2008 of this
title, the foreign limited liability company may file with the
Secretary of State a statement by its manager duly adopting a
fictitious name that is available, and which satisfies the
requirements of Section 2008 of this title, which shall be used to
the exclusion of its true name when transacting business within this
state.
Added by Laws 1992, c. 148, § 46, eff. Sept. 1, 1992. Amended by
Laws 1996, c. 69, § 14, eff. Nov. 1, 1996; Laws 1999, c. 421, § 29,
eff. Nov. 1, 1999.
§18-2046. Foreign limited liability company - Correction certificate
- Recording changes.
A. If any statement in the application for registration of a
foreign limited liability company was false when made or any
arrangements or other facts described have changed, making the
application inaccurate in any respect, the foreign limited liability
company shall promptly file in the Office of the Secretary of State a
certificate, signed by a manager, member, or other person, correcting
the statement and pay the fee provided for in Section 2055 of this
title.
B. A registered foreign limited liability company shall record
any changes in its principal office, its registered agent, or the
registered agent's address, by filing with the Office of the
Secretary of State a statement of the change and paying the fee
provided for in Section 2055 of this title.
C. A foreign limited liability company authorized to transact
business in this state shall promptly file a certificate, issued by
the proper officer of the state or jurisdiction of its organization,
attesting to the occurrence of a merger, in the Office of the
Secretary of State and pay the fee provided for in Section 2055 of
this title, whenever it is the surviving limited liability company
and the merger:
1. Changes any statement in the application of registration of
the foreign limited liability company; or
2. Involves any other foreign business entity authorized to
transact business in this state.
D. If the merger changes any arrangements or other facts
described in the application for registration of the surviving
foreign limited liability company, it shall also comply with the
provisions of this section; provided that it will not be required to
pay an additional fee.
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E. Whenever a foreign limited liability company authorized to
transact business in this state ceases to exist because of a
statutory merger or consolidation with a foreign business entity not
qualified to transact business in this state, it shall comply with
the provisions of Section 2047 of this title.
F. A registered agent of a foreign limited liability company may
resign by filing with the Office of the Secretary of State a copy of
the resignation, signed and acknowledged by the agent, which contains
a statement that notice of the resignation was given to the limited
liability company at least thirty (30) days prior to the filing of
the resignation by mailing or delivering the notice to the limited
liability company at its address last known to the registered agent
and specifying such address therein.
1. Unless a later time is specified in the resignation, it is
effective thirty (30) days after it is filed.
2. If a foreign limited liability company fails to obtain and
designate a new registered agent prior to the expiration of the
thirty (30) days after the filing by the registered agent of a
resignation statement, the Secretary of State shall be deemed to be
the registered agent of such limited liability company.
G. Any individual or domestic or qualified foreign corporation,
limited liability company, or limited partnership designated by a
foreign limited liability company as its registered agent for service
of process may change the address of the registered office of the
limited liability company or limited liability companies for which he
or she is the registered agent to another address in this state by
filing with the Secretary of State a certificate in the name of each
affected limited liability company, executed and acknowledged by the
registered agent, setting forth the address at which the registered
agent has maintained the registered office, and further certifying to
the new address to which the registered office will be changed on a
given day, and at which new address the registered agent will
thereafter maintain the registered office. Thereafter, or until
further change of address, as authorized by law, the registered
office in this state shall be located at the new address of the
registered agent thereof as given in the certificate.
H. In the event of a change of name of any individual or
domestic or qualified foreign corporation, limited liability company,
or limited partnership designated by a foreign limited liability
company as its registered agent for service of process, the
registered agent shall file with the Secretary of State a certificate
in the name of each affected limited liability company, executed and
acknowledged by the registered agent, setting forth the new name of
the registered agent, the name of the registered agent before it was
changed, and the address at which the registered agent has maintained
the registered office for the affected limited liability company, a
change of name of any person or domestic or qualified foreign
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corporation, limited liability company, or limited partnership acting
as registered agent as a result of a merger or consolidation of the
registered agent, with or into another person or domestic or
qualified foreign corporation, limited liability company, or limited
partnership which succeeds to its assets by operation of law, shall
be deemed a change of name for purposes of this section.
I. If a limited liability company has no registered agent or the
registered agent cannot be found, then service of process on the
limited liability company may be made by serving the Secretary of
State as its agent as provided in Section 2004 of Title 12 of the
Oklahoma Statutes.
Added by Laws 1992, c. 148, § 47, eff. Sept. 1, 1992. Amended by
Laws 1999, c. 421, § 30, eff. Nov. 1, 1999; Laws 2001, c. 406, § 12,
emerg. eff. June 4, 2001; Laws 2009, c. 447, § 3, eff. Jan. 1, 2010.
§18-2047. Foreign limited liability company - Certificate of
withdrawal.
A. A foreign limited liability company authorized to transact
business in this state may withdraw from the state upon procuring
from the Office of the Secretary of State a certificate of
withdrawal. In order to procure such certificate, the foreign
limited liability company shall file with the Office of the Secretary
of State an application for withdrawal and pay the fee provided for
in Section 2055 of this title. The application for withdrawal shall
set forth:
1. The name of the foreign limited liability company and the
state or other jurisdiction under the laws of which it is organized;
2. That the foreign limited liability company is not transacting
business in this state;
3. That the foreign limited liability company surrenders its
certificate of registration to transact business in this state;
4. That the foreign limited liability company revokes the
authority of its registered agent for service of process in this
state and consents that service of process in any action, suit, or
proceeding based upon any cause of action arising in this state
during the time the foreign limited liability company was authorized
to transact business in this state may thereafter be made on such
foreign limited liability company by service thereof upon the Office
of the Secretary of State; and
5. An address to which a person may mail a copy of any process
against the foreign limited liability company.
B. The application for withdrawal shall be executed by the
foreign limited liability company by one of its managers, members, or
other persons, or, if the foreign limited liability company is in the
hands of a receiver or trustee, by such receiver or trustee on behalf
of the foreign limited liability company.
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C. The registration of a foreign limited liability company shall
be deemed withdrawn if the foreign limited liability company fails to
file the annual certificate and pay the annual fee provided in
Section 2055.2 of this title or pay a registered agent fee to the
Secretary of State due under Section 2055 of this title within sixty
(60) days after the due date, the withdrawal to be effective on the
sixty-first day after the due date.
Added by Laws 1992, c. 148, § 48, eff. Sept. 1, 1992. Amended by
Laws 2008, c. 253, § 28.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2048. Foreign limited liability company - Necessity of
registration to transact business in state.
A. A foreign limited liability company transacting business in
this state may not maintain an action, suit, or proceeding in a court
of this state until it has registered in this state as provided in
this act.
B. The failure of a foreign limited liability company to
register in this state does not impair the validity of any contract
or act of the foreign limited liability company or prevent the
foreign limited liability company from defending any action, suit, or
proceeding in any court of this state.
C. A foreign limited liability company, by transacting business
in this state without registration, appoints the Office of the
Secretary of State as its agent for service of process with respect
to a cause of action arising out of the transaction of business in
this state.
D. A member of a foreign limited liability company is not liable
for the debts and obligations of the limited liability company solely
by reason of such company's having transacted business in this state
without a valid certificate of registration.
Added by Laws 1992, c. 148, § 49, eff. Sept. 1, 1992.
§18-2049. Foreign limited liability company - Acts not constituting
transacting business in state.
FOREIGN LIMITED LIABILITY COMPANY – ACTS NOT
CONSTITUTING TRANSACTING BUSINESS IN STATE
A. The following activities of a foreign limited liability
company, among others, do not constitute transacting business within
the meaning of this act:
1. Maintaining, defending, or settling any proceeding;
2. Holding meetings of its members or carrying on any other
activities concerning its internal affairs;
3. Maintaining bank accounts;
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4. Maintaining offices or agencies for the transfer, exchange
and registration of the foreign limited liability company’s own
securities or maintaining trustees or depositaries with respect to
those securities;
5. Selling through independent contractors;
6. Soliciting or obtaining orders, whether by mail or through
employees or agents or otherwise, if the orders require acceptance
outside this state before they become contracts;
7. Creating or acquiring indebtedness, mortgages and security
interests in real or personal property;
8. Securing or collecting debts or enforcing mortgages and
security interest in property securing the debts, including the
holding, protecting, renting, maintaining and operating real or
personal property in this state so acquired;
9. Transacting business wholly in interstate commerce;
10. Selling or transferring title to property in this state to
any person;
11. Conducting an isolated transaction that is completed within
thirty (30) days and that is not one in the course of repeated
transactions of a like nature; or
12. Investing in or acquiring royalties or other non-operating
mineral or leasehold interests and the execution of division orders,
contracts for sale, leases and other instruments incidental to the
ownership of the nonoperating interests.
B. For the purposes of this section, any foreign limited
liability company which owns income-producing real or tangible
personal property in this state, other than property exempted by
subsection A of this section, will be considered transacting business
in this state.
C. A person shall not be deemed to be doing business in this
state solely by reason of being a member or manager of a domestic
limited liability company or a foreign limited liability company.
D. This section does not apply in determining the contracts or
activities that may subject a foreign limited liability company to
service of process or taxation in this state or to regulation under
any other law of this state.
Added by Laws 1992, c. 148, § 50, eff. Sept. 1, 1992. Amended by
Laws 2001, c. 405, § 34, eff. Nov. 1, 2001; Laws 2004, c. 255, § 50,
eff. Nov. 1, 2004.
§18-2050. Foreign limited liability company - Action to restrain
transacting business in state.
The Attorney General may maintain an action to restrain a foreign
limited liability company from transacting business in this state in
violation of this act.
Added by Laws 1992, c. 148, § 51, eff. Sept. 1, 1992.
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§18-2051. Action to recover judgment - Conditions.
A member may bring an action in the right of the limited
liability company to recover a judgment in its favor if all of the
following conditions are met:
1. Either:
a. management of the limited liability company is vested
in a manager or managers who have the sole authority to
cause the limited liability company to sue in its own
right, or
b. management of the limited liability company is reserved
to the members but the plaintiff does not have the
authority to cause the limited liability company to sue
in its own right under the provisions of an operating
agreement; and
2. The plaintiff has made demand on those managers or those
members with such authority requesting that such managers or such
members cause the limited liability company to sue in its own right;
and
3. The members or managers with such authority have wrongfully
refused in the exercise of their business judgment to bring the
action or, after adequate time to consider the demand, have failed to
respond to such demand; and
4. The plaintiff:
a. is a member of the limited liability company at the
time of bringing the action, and
b. was a member of the limited liability company at the
time of the transaction of which he complains, or his
status as a member of the limited liability company
thereafter developed upon him pursuant to the terms of
the operating agreement from a person who was a member
at such time; and
5. The plaintiff fairly and adequately represents the interests
of the members in enforcing the rights of the limited liability
company.
Added by Laws 1992, c. 148, § 52, eff. Sept. 1, 1992.
§18-2052. Derivative action - Complaint.
In a derivative action, the complaint shall set forth with
particularity the effort of the plaintiff to secure initiation of the
action by the managers or the members who would otherwise have the
authority to cause the limited liability company to sue in its own
right.
Added by Laws 1992, c. 148, § 53, eff. Sept. 1, 1992.
§18-2053. Derivative action - Expenses - Disposition of proceeds.
A. If a derivative action is successful, in whole or in part, or
if anything is received by the plaintiff as a result of a judgment,
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compromise or settlement of an action or claim, the court may award
the plaintiff reasonable expenses, including reasonable attorneys'
fees, and shall direct him to remit to the limited liability company
the remainder of those proceeds received by him.
B. In any action hereafter instituted in the right of any
domestic or foreign limited liability company by a member or members
thereof, the court having jurisdiction, upon final judgment and a
finding that the action was brought without reasonable cause, may
require the plaintiff or plaintiffs to pay to the parties named as
defendants the reasonable expenses, including attorneys' fees,
incurred by them in the defense of such action.
Added by Laws 1992, c. 148, § 54, eff. Sept. 1, 1992.
§18-2054. Agreement of merger of consolidation.
AGREEMENT OF MERGER OF CONSOLIDATION
A. Pursuant to an agreement of merger or consolidation, a
domestic limited liability company may merge or consolidate with or
into one or more domestic or foreign limited liability companies or
other entities. As used in this section, "entity" means a domestic
or foreign corporation, a domestic or foreign partnership whether
general or limited, and including a limited liability partnership and
a limited liability limited partnership, and any unincorporated
nonprofit or for-profit association, trust or enterprise having
members or having outstanding shares of stock or other evidences of
financial, beneficial or membership interest therein, whether formed
by agreement or under statutory authority or otherwise.
B. Unless otherwise provided in the articles of organization or
the operating agreement, a merger or consolidation shall be approved
by each domestic limited liability company which is to merge or
consolidate by a majority of the membership interest or, if there is
more than one class or group of members, then by a majority of the
membership interest of each class or group. In connection with a
merger or consolidation hereunder, rights or securities of, or
memberships or membership, economic or ownership interests in, a
domestic limited liability company or other entity which is a
constituent party to the merger or consolidation may be exchanged for
or converted into cash, property, rights or securities of, or
memberships or membership, economic or ownership interests in, the
surviving or resulting domestic limited liability company or other
entity or, in addition to or in lieu thereof, may be exchanged for or
converted into cash, property, rights or securities of, or
memberships or membership, economic or ownership interests in, a
domestic limited liability company or other entity which is not the
surviving or resulting limited liability company or other entity in
the merger or consolidation. Notwithstanding prior approval, an
agreement of merger or consolidation may be terminated or amended
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pursuant to a provision for such termination or amendment contained
in the agreement of merger or consolidation.
C. If a domestic limited liability company is merging or
consolidating pursuant to this section, the domestic limited
liability company or other entity surviving or resulting in or from
the merger or consolidation shall file articles of merger or
consolidation with the Office of the Secretary of State. The
articles of merger or consolidation shall state:
1. The name, jurisdiction of formation or organization, and type
of entity of each of the limited liability companies or other
entities which are to merge or consolidate;
2. That an agreement of merger or consolidation has been
approved and executed by each of the domestic limited liability
companies or other entities which is to merge or consolidate;
3. The name of the surviving or resulting domestic limited
liability company or other entity;
4. The future effective date or time, which shall be a specific
date or time not later than a time on the ninetieth day after the
filing, of the merger or consolidation if it is not to be effective
upon the filing of the articles of merger or consolidation;
5. That the agreement of merger or consolidation is on file at a
place of business of the surviving or resulting domestic limited
liability company or other entity, and shall state the street address
thereof;
6. That a copy of the agreement of merger or consolidation shall
be furnished by the surviving or resulting domestic limited liability
company or other entity, upon request and without cost, to any member
of any domestic limited liability company or any person holding a
membership or membership, economic or ownership interest in any other
entity which is to merge or consolidate;
7. In the case of a merger, any amendments or changes in the
articles of organization of the surviving domestic limited liability
company that are to be effected by the merger, which amendments or
changes may amend and restate the articles of organization of the
surviving domestic limited liability company in its entirety;
8. In the case of a consolidation, that the articles of
organization of the resulting domestic limited liability company
shall be as set forth in an attachment to the articles of
consolidation; and
9. If the surviving or resulting entity is not a domestic
limited liability company or entity formed or organized pursuant to
the laws of this state, a statement that the surviving or resulting
other entity agrees to be served with process in this state in any
action, suit, or proceeding for the enforcement of any obligation of
any domestic limited liability company which is to merge or
consolidate; irrevocably appoints the Secretary of State as its agent
to accept service of process in any action, suit, or proceeding; and
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specifies the street address to which process shall be mailed to the
entity by the Secretary of State.
D. Any failure to file the articles of merger or consolidation
in connection with a merger or consolidation which was effective
prior to September 1, 1992, shall not affect the validity or
effectiveness of any such merger or consolidation.
A merger or consolidation shall be effective upon the filing with
the Secretary of State of articles of merger or consolidation, unless
a future effective date or time is provided in the articles of merger
or consolidation.
E. Articles of merger or consolidation terminate the separate
existence of a domestic limited liability company which is not the
surviving or resulting entity in the merger or consolidation.
F. Once any merger or consolidation is effective pursuant to
this section, for all purposes of the laws of this state, all of the
rights, privileges, and powers of each of the domestic limited
liability companies and other entities that have merged or
consolidated and all property, real, personal, and mixed, and all
debts due to each domestic limited liability company or other entity,
as well as all other things and causes of action belonging to each
domestic limited liability company or other entity shall be vested in
the surviving or resulting domestic limited liability company or
other entity, and shall thereafter be the property of the surviving
or resulting domestic limited liability company or other entity as
they were of each domestic limited liability company or other entity
that has merged or consolidated, and the title to any real property
vested by deed or otherwise, under the laws of this state, in any
domestic limited liability company or other entity shall not revert
or be in any way impaired by reason of this section, but all rights
of creditors and all liens upon any property of each domestic limited
liability company or other entity shall be preserved unimpaired. All
debts, liabilities and duties of each domestic limited liability
company or other entity that has merged or consolidated shall
thereafter attach to the surviving or resulting domestic limited
liability company or other entity, and may be enforced against the
surviving or resulting limited liability company or other entity to
the same extent as if the debts, liabilities, and duties had been
incurred or contracted by the surviving or resulting limited
liability company or other entity. Unless otherwise agreed, a merger
or consolidation of a domestic limited liability company, including a
domestic limited liability company which is not the surviving or
resulting entity in the merger or consolidation, shall not require
the domestic limited liability company to wind up its affairs or pay
its liabilities and distribute its assets.
G. Nothing in this section shall be deemed to authorize the
merger of a charitable entity into another entity, if the charitable
status of such entity would thereby be lost or impaired.
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Added by Laws 1992, c. 148, § 55, eff. Sept. 1, 1992. Amended by
Laws 1997, c. 145, § 8, eff. Nov. 1, 1997; Laws 2004, c. 255, § 51,
eff. Nov. 1, 2004; Laws 2017, c. 323, § 51, eff. Nov. 1, 2017.
§18-2054.1. Conversion of an entity to a limited liability company.
CONVERSION OF AN ENTITY TO A LIMITED LIABILITY COMPANY
A. As used in this section, the term " entity" means a domestic
or foreign corporation, a domestic or foreign partnership whether
general or limited, and including a limited liability partnership and
a limited liability limited partnership, and any unincorporated
nonprofit or for-profit association, trust or enterprise having
members or having outstanding shares of stock or other evidences of
financial, beneficial or membership interest therein, whether formed
by agreement or under statutory authority or otherwise.
B. Any entity may convert to a domestic limited liability
company by complying with subsection H of this section and filing
with the Secretary of State in accordance with Section 2007 of this
title articles of conversion to a limited liability company that have
been executed in accordance with Section 2006 of this title, to which
shall be attached articles of organization that comply with Sections
2005 and 2008 of this title and have been executed by one or more
authorized persons in accordance with Section 2006 of this title.
C. The articles of conversion to a limited liability company
shall state:
1. The date on which the entity was first formed;
2. The name, jurisdiction of formation of the entity, and type
of entity when formed and, if changed, its name, jurisdiction, and
type of entity immediately before filing of the articles of
conversion to limited liability company;
3. The name of the limited liability company as set forth in its
articles of organization filed in accordance with subsection B of
this section; and
4. The future effective date or time of the conversion to a
limited liability company, which shall be a date or time certain not
later than ninety (90) days after the filing, if it is not to be
effective upon the filing of the articles of conversion to a limited
liability company and the articles of organization.
D. Upon the effective date or time of the articles of conversion
to limited liability company and the articles of organization, the
entity shall be converted to a domestic limited liability company and
the limited liability company shall thereafter be subject to all of
the provisions of the Oklahoma Limited Liability Company Act, except
that notwithstanding Section 2004 of this title, the existence of the
limited liability company shall be deemed to have commenced on the
date the entity was formed.
E. The conversion of any entity into a domestic limited
liability company shall not be deemed to affect any obligations or
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liabilities of the entity incurred before its conversion to a
domestic limited liability company or the personal liability of any
person incurred before the conversion.
F. When an entity has converted to a domestic limited liability
company under this section, the domestic limited liability company
shall be deemed to be the same entity as the converting entity. All
of the rights, privileges and powers of the entity that has
converted, and all property, real, personal and mixed, and all debts
due to the entity, as well as all other things and causes of action
belonging to the entity, shall remain vested in the domestic limited
liability company and shall be the property of the domestic limited
liability company, and the title to any real property vested by deed
or otherwise in the entity shall not revert or be in any way impaired
by reason of the conversion, but all rights of creditors and all
liens upon any property of the entity shall be preserved unimpaired,
and all debts, liabilities and duties of the entity that has
converted shall remain attached to the domestic limited liability
company and may be enforced against it to the same extent as if the
debts, liabilities and duties had been incurred or contracted by it
in its capacity as a domestic limited liability company. The rights,
privileges, powers and interests in property of the entity, as well
as the debts, liabilities and duties of the entity, shall not be
deemed, as a consequence of the conversion, to have been transferred
to the domestic limited liability company to which the entity has
converted for any purpose of the laws of this state.
G. Unless otherwise agreed or otherwise provided by any laws of
this state applicable to the converting entity, the converting entity
shall not be required to wind up its affairs or pay its liabilities
and distribute its assets, and the conversion shall not be deemed to
constitute a dissolution of the entity and shall constitute a
continuation of the existence of the converting entity in the form of
a domestic limited liability company.
H. Before filing the articles of conversion to a limited
liability company with the Office of the Secretary of State, the
conversion shall be approved in the manner provided for by the
document, instrument, agreement or other writing, as the case may be,
governing the internal affairs of the entity and the conduct of its
business or by applicable law, as appropriate, and articles of
organization shall be approved by the same authorization required to
approve the conversion.
I. In a conversion of an entity to a domestic limited liability
company under this section, rights or securities of or memberships or
membership, economic or ownership interests in the entity that is to
be converted to a domestic limited liability company may be exchanged
for or converted into cash, property, or rights or securities of or
interests in the domestic limited liability company or, in addition
to or in lieu thereof, may be exchanged for or converted into cash,
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property or rights or securities of or memberships or membership,
economic or ownership interests in another domestic limited liability
company or other entity.
J. The provisions of this section shall not be construed to
limit the accomplishment of a change in the law governing, or the
domicile of, an entity to this state by any other means provided for
in an operating agreement or other agreement or as otherwise
permitted by law, including by the amendment of an operating
agreement or other agreement.
K. Nothing in this section shall be deemed to authorize the
conversion of a charitable entity into a domestic limited liability
company, if the charitable status of such entity would thereby be
lost or impaired.
Added by Laws 2001, c. 405, § 35, eff. Nov. 1, 2001. Amended by Laws
2004, c. 255, § 52, eff. Nov. 1, 2004; Laws 2008, c. 253, § 29; Laws
2017, c. 323, § 52, eff. Nov. 1, 2017.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2054.2. Conversion of limited liability company to an entity.
CONVERSION OF A LIMITED LIABILITY COMPANY TO AN ENTITY
A. A domestic limited liability company may convert to an entity
upon the authorization of such conversion in accordance with this
section. As used in this section, the term " entity" means a
domestic or foreign corporation, a domestic or foreign partnership
whether general or limited, and including a limited liability
partnership and a limited liability limited partnership, and any
unincorporated nonprofit or for-profit association, trust or
enterprise having members or having outstanding shares of stock or
other evidences of financial, beneficial or membership interest
therein, whether formed by agreement or under statutory authority or
otherwise.
B. If the operating agreement specifies the manner of
authorizing a conversion of the limited liability company, the
conversion shall be authorized as specified in the operating
agreement.
C. If the operating agreement does not specify the manner of
authorizing a conversion of the limited liability company and does
not prohibit a conversion of the limited liability company, the
conversion shall be authorized in the same manner as is specified in
the operating agreement for authorizing a merger or consolidation
that involves the limited liability company as a constituent party to
a merger or consolidation.
D. If the operating agreement does not specify the manner of
authorizing a conversion of the limited liability company or a merger
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or consolidation that involves the limited liability company as a
constituent party and does not prohibit a conversion of the limited
liability company, the conversion shall be authorized by the approval
of a majority of the membership interest or, if there is more than
one class or group of members, then by a majority of the membership
interest in each class or group of members. Notwithstanding the
foregoing, in addition to any other authorization required by this
section, if the entity into which the limited liability company is to
convert does not afford all of its interest holders protection
against personal liability for the debts of the entity, the
conversion must be authorized by any and all members who would be
exposed to personal liability.
E. Unless otherwise agreed, the conversion of a domestic limited
liability company to another entity pursuant to this section shall
not require the limited liability company to wind up its affairs or
pay its liabilities and distribute its assets, and the conversion
shall not constitute a dissolution of the limited liability company.
F. In a conversion of a domestic limited liability company to an
entity under this section, rights or securities of or interests in
the domestic limited liability company which are to be converted may
be exchanged for or converted into cash, property, rights or
securities of or memberships or membership, economic or ownership
interests in the entity to which the domestic limited liability
company is being converted or, in addition to or in lieu thereof, may
be exchanged for or converted into cash, property, rights or
securities of or memberships or membership, economic or ownership
interests in another entity or may be canceled.
G. If the governing act of the domestic entity to which the
limited liability company is converting does not provide for the
filing of a conversion notice with the Secretary of State or the
limited liability company is converting to a foreign entity, articles
of conversion executed in accordance with Section 2006 of this title,
shall be filed in the Office of the Secretary of State in accordance
with Section 2007 of this title. The articles of conversion shall
state:
1. The name of the limited liability company and, if it has been
changed, the name under which its articles of organization were
originally filed;
2. The date of filing of its original articles of organization
with the Secretary of State;
3. The name and type of entity to which the limited liability
company is converting and its jurisdiction of formation, if a foreign
entity;
4. The future effective date or time of the conversion, which
shall be a date or time certain not later than ninety (90) days after
the filing, if it is not to be effective upon the filing of the
articles of conversion;
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5. That the conversion has been approved in accordance with this
section;
6. The agreement of the foreign entity that it may be served
with process in this state in any action, suit or proceeding for
enforcement of any obligation of the foreign entity arising while it
was a domestic limited liability company, and that it irrevocably
appoints the Secretary of State as its agent to accept service of
process in any such action, suit or proceeding, and its street
address to which a copy of the process shall be mailed to it by the
Secretary of State; and
7. If the domestic entity to which the domestic limited
liability company is converting was required to make a filing with
the Secretary of State as a condition of its formation, the type and
date of such filing.
H. Upon the filing of a conversion notice with the Secretary of
State, whether under subsection G of this section or under the
governing act of the domestic entity to which the limited liability
company is converting, the filing of any formation document required
by the governing act of the domestic entity to which the limited
liability company is converting, and payment to the Secretary of
State of all prescribed fees, the Secretary of State shall certify
that the limited liability company has filed all documents and paid
all required fees, and thereupon the limited liability company shall
cease to exist as a limited liability company of this state. The
Secretary of State's certificate shall be prima facie evidence of the
conversion by the limited liability company.
I. The conversion of a limited liability company to an entity
under this section and the resulting cessation of its existence as a
domestic limited liability company shall not be deemed to affect any
obligations or liabilities of the limited liability company incurred
before the conversion or the personal liability of any person
incurred before the conversion, nor shall it be deemed to affect the
choice of law applicable to the limited liability company with
respect to matters arising before the conversion.
J. When a limited liability company has converted to an entity
under this section, the entity shall be deemed to be the same entity
as the limited liability company. All of the rights, privileges and
powers of the limited liability company that has converted, and all
property, real, personal and mixed, and all debts due to the limited
liability company, as well as all other things and causes of action
belonging to the limited liability company, shall remain vested in
the entity to which the limited liability company has converted and
shall be the property of the entity, and the title to any real
property vested by deed or otherwise in the limited liability company
shall not revert or be in any way impaired by reason of the
conversion; but all rights of creditors and all liens upon any
property of the limited liability company shall be preserved
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unimpaired, and all debts, liabilities and duties of the limited
liability company that has converted shall remain attached to the
entity to which the limited liability company has converted, and may
be enforced against it to the same extent as if said debts,
liabilities and duties had originally been incurred or contracted by
it in its capacity as the entity. The rights, privileges, powers and
interests in property of the limited liability company that has
converted, as well as the debts, liabilities and duties of the
limited liability company, shall not be deemed, as a consequence of
the conversion, to have been transferred to the entity to which the
limited liability company has converted for any purpose of the laws
of this state.
K. Nothing in this section shall be deemed to authorize the
conversion of a charitable domestic limited liability company into
another entity, if the charitable status of such domestic limited
liability company would thereby be lost or impaired.
Added by Laws 2001, c. 405, § 36, eff. Nov. 1, 2001. Amended by Laws
2004, c. 255, § 53, eff. Nov. 1, 2004; Laws 2008, c. 253, § 30; Laws
2017, c. 323, § 53, eff. Nov. 1, 2017.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2054.3. Appraisal rights.
An operating agreement or other agreement may provide that
contractual appraisal rights with respect to a membership interest or
another interest in a limited liability company shall be available
for any class or group of members or membership interests in
connection with any amendment of an operating agreement, any merger
or consolidation to which the limited liability company is a
constituent party, any conversion of the limited liability company to
another business entity, any transfer to or domestication in any
jurisdiction by the limited liability company, or the sale of all or
substantially all of the limited liability company’s assets. The
district court shall have jurisdiction to hear and determine any
matter relating to any such appraisal rights.
Added by Laws 2004, c. 255, § 54, eff. Nov. 1, 2004.
§18-2054.4. Series of members, managers or membership interests
having separate rights - Personal obligation of member or manager.
SERIES OF MEMBERS, MANAGERS, OR MEMBERSHIP INTERESTS HAVING SEPARATE
RIGHTS - PERSONAL OBLIGATION OF MEMBER OR MANAGER
A. An operating agreement may establish or provide for the
establishment of one or more designated series of members, managers,
membership interests or assets. Any such series may have separate
rights, powers or duties with respect to specified property or
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obligations of the limited liability company or profits and losses
associated with specified property or obligations, and any such
series may have a separate business purpose or investment objective.
B. Notwithstanding anything to the contrary set forth in the
Oklahoma Limited Liability Company Act or under other applicable law,
if an operating agreement establishes or provides for the
establishment of one or more series, and if the records maintained
for any such series account for the assets associated with such
series separately from the other assets of the limited liability
company, or any other series thereof, and if the operating agreement
so provides, and if notice of the limitation on liabilities of a
series as referenced in this subsection is set forth in the articles
of organization of the limited liability company, then the debts,
liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular series shall be
enforceable against the assets of such series only, and not against
the assets of the limited liability company generally or any other
series thereof, and, unless otherwise provided in the operating
agreement, none of the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to the
limited liability company generally or any other series thereof shall
be enforceable against the assets of the series. Assets associated
with a series may be held directly or indirectly, including in the
name of such series, in the name of the limited liability company,
through a nominee or otherwise. Records maintained for a series that
reasonably identify its assets, including by specific listing,
category, type, quantity, computational or allocational formula or
procedure, including a percentage or share of any asset or assets, or
by any other method where the identity of such assets is objectively
determinable, will be deemed to account for the assets associated
with such series separately from the other assets of the limited
liability company, or any other series thereof. Notice in articles
of organization of the limitation on liabilities of a series as
referenced in this subsection shall be sufficient for all purposes
regardless of whether the limited liability company has established
any series when the notice is included in the articles of
organization, and there shall be no requirement that any specific
series of the limited liability company be referenced in the notice.
The fact that articles of organization containing the foregoing
notice of the limitation on liabilities of a series are on file in
the office of the Secretary of State shall constitute notice of the
limitation on liabilities of a series.
C. A series established in accordance with subsection B of this
section may carry on any lawful business, purpose or activity,
whether or not for profit, with the exception of the business of a
domestic insurer. Unless otherwise provided in the operating
agreement, a series established in accordance with subsection B of
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this section shall have the power and capacity to, in its own name,
contract, hold title to assets, including real, personal and
intangible property, grant liens and security interests, and sue and
be sued.
D. Notwithstanding Section 2022 of this title, under an
operating agreement or under another agreement, a member or manager
may agree to be obligated personally for any or all of the debts,
obligations and liabilities of one or more series.
E. An operating agreement may provide for classes or groups of
members or managers associated with a series having such relative
rights, powers and duties as the operating agreement may provide, and
may make provision for the future creation in the manner provided in
the operating agreement of additional classes or groups of members or
managers associated with the series having such relative rights,
powers and duties as may from time to time be established, including
rights, powers and duties senior to existing classes and groups of
members or managers associated with the series. An operating
agreement may provide for the taking of an action, including the
amendment of the operating agreement, without the vote or approval of
any member or manager or class or group of members or managers,
including an action to create under the provisions of the operating
agreement a class or group of the series of membership interests that
was not previously outstanding. An operating agreement may provide
that any member or class or group of members associated with a series
shall have no voting rights.
F. An operating agreement may grant to all or certain identified
members or managers or a specified class or group of the members or
managers associated with a series the right to vote separately or
with all or any class or group of the members or managers associated
with the series, on any matter. Voting by members or managers
associated with a series may be on a per capita, number, financial
interest, class, group or any other basis.
G. Unless otherwise provided in an operating agreement, the
management of a series shall be vested in the members associated with
the series in proportion to their membership interest, with the
decision of members owning a majority of the membership interest
controlling; provided, however, that if an operating agreement
provides for the management of the series, in whole or in part, by a
manager, the management of the series, to the extent so provided,
shall be vested in the manager who shall be chosen in the manner
provided in the operating agreement. The manager of the series shall
also hold the offices and have the responsibilities accorded to the
manager as set forth in an operating agreement. A series may have
more than one manager. Subject to paragraph 3 of Section 2014 of
this title, a manager shall cease to be a manager with respect to a
series as provided in an operating agreement. Except as otherwise
provided in an operating agreement, any event under this chapter or
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in an operating agreement that causes a manager to cease to be a
manager with respect to a series shall not, in itself, cause the
manager to cease to be a manager of the limited liability company or
with respect to any other series thereof.
H. Subject to subsections I and L of this section, and unless
otherwise provided in an operating agreement, at the time a member
associated with a series that has been established in accordance with
subsection B of this section becomes entitled to receive a
distribution with respect to the series, the member has the status
of, and is entitled to all remedies available to, a creditor of the
series, with respect to the distribution. An operating agreement may
provide for the establishment of a record date with respect to
allocations and distributions with respect to a series.
I. Notwithstanding Section 2040 of this title, a limited
liability company may make a distribution with respect to a series
that has been established in accordance with subsection B of this
section. A limited liability company shall not make a distribution
with respect to a series that has been established in accordance with
subsection B of this section to a member to the extent that at the
time of the distribution, after giving effect to the distribution,
all liabilities of the series, other than liabilities to members on
account of their membership interests with respect to the series and
liabilities for which the recourse of creditors is limited to
specified property of the series, exceed the fair value of the assets
associated with the series, except that the fair value of property of
the series that is subject to a liability for which the recourse of
creditors is limited shall be included in the assets associated with
the series only to the extent that the fair value of that property
exceeds that liability. For purposes of the immediately preceding
sentence, the term "distribution" shall not include amounts
constituting reasonable compensation for present or past services or
reasonable payments made in the ordinary course of business pursuant
to a bona fide retirement plan or other benefits program. A member
who receives a distribution in violation of this subsection, and who
knew or should have known at the time of the distribution that the
distribution violated this subsection, shall be liable to a series
for the amount of the distribution. A member who receives a
distribution in violation of this subsection, and who did not know
and had no reason to know at the time of the distribution that the
distribution violated this subsection, shall not be liable for the
amount of the distribution. Subject to subsection C of Section 2040
of this title, which shall apply to any distribution made with
respect to a series under this subsection, this subsection shall not
affect any obligation or liability of a member under an agreement or
other applicable law for the amount of a distribution.
J. Unless otherwise provided in the operating agreement, a
member shall cease to be associated with a series and to have the
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power to exercise any rights or powers of a member with respect to
the series upon the assignment of all of the member's capital
interest with respect to the series. Except as otherwise provided in
an operating agreement, any event under this chapter or an operating
agreement that causes a member to cease to be associated with a
series shall not, in itself, cause the member to cease to be
associated with any other series or terminate the continued
membership of a member in the limited liability company or cause the
termination of the series, regardless of whether the member was the
last remaining member associated with the series.
K. Subject to Section 2037 of this title, except to the extent
otherwise provided in the operating agreement, a series may be
terminated and its affairs wound up without causing the dissolution
of the limited liability company. The termination of a series
established in accordance with subsection B of this section shall not
affect the limitation on liabilities of the series provided by
subsection B of this section. A series is terminated and its affairs
shall be wound up upon the dissolution of the limited liability
company under Section 2037 of this title or otherwise upon the first
to occur of the following:
1. At the time specified in the operating agreement;
2. Upon the happening of events specified in the operating
agreement;
3. Unless otherwise provided in the operating agreement, upon
the affirmative vote or written consent of the members of the limited
liability company associated with the series or, if there is more
than one class or group of members associated with the series, then
by each class or group of members associated with the series, in
either case, by members associated with the series who own more than
two-thirds (2/3) of the then-current membership interest owned by all
of the members associated with the series or by the members in each
class or group of the series, as appropriate; or
4. The termination of the series under subsection M of this
section.
L. Unless otherwise provided in the operating agreement, a
manager associated with a series who has not wrongfully terminated
the series or, if none, the members associated with the series or a
person approved by the members associated with the series or, if
there is more than one class or group of members associated with the
series, then by each class or group of members associated with the
series, in either case, by a majority of the membership interest
owned by all of the members associated with the series or by the
members in each class or group associated with the series, as
appropriate, may wind up the affairs of the series; but, if the
series has been established in accordance with subsection B of this
section, the district court, upon cause shown, may wind up the
affairs of the series upon application of any member or manager
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associated with the series, or the member's personal representative
or assignee, and in connection therewith, may appoint a liquidating
trustee. The persons winding up the affairs of a series may, in the
name of the limited liability company and for and on behalf of the
limited liability company and the series, take all actions with
respect to the series as are permitted under subsection A of Section
2039 of this title. The persons winding up the affairs of a series
shall provide for the claims and obligations of the series and
distribute the assets of the series as provided in Section 2040 of
this title, which section shall apply to the winding up and
distribution of assets of a series. Actions taken in accordance with
this subsection shall not affect the liability of members and shall
not impose liability on a liquidating trustee.
M. On application by or for a member or manager associated with
a series established in accordance with subsection B of this section,
the district court may decree termination of the series whenever it
is not reasonably practicable to carry on the business of the series
in conformity with an operating agreement.
N. If a foreign limited liability company that is registering to
do business in this state in accordance with Section 2043 of this
title is governed by an operating agreement that establishes or
provides for the establishment of designated series of members,
managers, membership interests or assets having separate rights,
powers or duties with respect to specified property or obligations of
the foreign limited liability company or profits and losses
associated with specified property or obligations, that fact shall be
so stated on the application for registration as a foreign limited
liability company. In addition, the foreign limited liability
company shall state on the application whether the debts, liabilities
and obligations incurred, contracted for or otherwise existing with
respect to a particular series, if any, shall be enforceable against
the assets of the series only, and not against the assets of the
foreign limited liability company generally or any other series
thereof, and whether any of the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect
to the foreign limited liability company generally or any other
series thereof shall be enforceable against the assets of the series.
Added by Laws 2004, c. 255, § 55, eff. Nov. 1, 2004. Amended by Laws
2017, c. 323, § 54, eff. Nov. 1, 2017.
§18-2055. Fees.
The Secretary of State shall charge and collect the following
fees:
1. For filing the original articles of organization, a fee of
One Hundred Dollars ($100.00);
2. For filing amended, corrected or restated articles of
organization, a fee of Fifty Dollars ($50.00);
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3. For filing articles of merger or consolidation and issuing a
certificate of merger or consolidation or filing articles of
conversion, a fee of One Hundred Dollars ($100.00);
4. For filing articles of dissolution and issuing a certificate
of cancellation, a fee of Fifty Dollars ($50.00);
5. For filing a certificate of correction of statements in an
application for registration of a foreign limited liability company,
a fee of One Hundred Dollars ($100.00);
6. For issuing a certificate for any purpose whatsoever, a fee
of Ten Dollars ($10.00);
7. For filing an application for reservation of a name, or for
filing a notice of the transfer or cancellation of any name
reservation, a fee of Ten Dollars ($10.00);
8. For filing a statement of change of address of the principal
office or change of resident agent, or both, a fee of Twenty-five
Dollars ($25.00);
9. For filing a change of address for an individual,
corporation, limited liability company or limited partnership
designated by a limited liability company as its registered agent for
service of process, for change of name of registered agent or for the
resignation of a registered agent, a fee of Twenty-five Dollars
($25.00) for the first forty corporations and Five Dollars ($5.00)
for each additional corporation within any bulk filing;
10. For filing an application for registration as a foreign
limited liability company, a fee of Three Hundred Dollars ($300.00);
11. For filing an application of withdrawal as provided in
Section 2047 of this title, a fee of One Hundred Dollars ($100.00);
12. For any service of notice, demand, or process upon the
Secretary of State as resident agent of a limited liability company,
a fee of Twenty-five Dollars ($25.00), which amount may be recovered
as taxable costs by the party to be sued, action, or proceeding
causing such service to be made if such party prevails therein; and
13. For acting as the registered agent, a fee of Forty Dollars
($40.00) shall be paid on July 1 each year to the Office of the
Secretary of State.
All fees shall be properly accounted for and shall be paid into
the State Treasury monthly. All fees received by the Secretary of
State pursuant to the provisions of this section shall be paid to the
credit of the Revolving Fund for the Office of the Secretary of State
created pursuant to Section 276.1 of Title 62 of the Oklahoma
Statutes.
Added by Laws 1992, c. 148, § 56, eff. Sept. 1, 1992. Amended by
Laws 1993, c. 366, § 25, eff. Sept. 1, 1993; Laws 1994, c. 382, § 19,
eff. Sept. 1, 1994; Laws 2001, c. 406, § 13, emerg. eff. June 4,
2001; Laws 2002, c. 22, § 3, emerg. eff. March 8, 2002; Laws 2009, c.
447, § 4, eff. Jan. 1, 2010.
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NOTE: Laws 2001, c. 405, § 37 repealed by Laws 2002, c. 22, § 34,
emerg. eff. March 8, 2002.
§18-2055.1. Failure to pay registered agent fees.
FAILURE TO PAY REGISTERED AGENT FEES
A domestic or foreign limited liability company for which the
Secretary of State acts as the registered agent that fails to pay the
registered agent fee by the due date as provided in paragraph 12 of
Section 2055 of this title shall be subject to the provisions of
Sections 29 and 39 of this act.
Added by Laws 1996, c. 69, § 15, eff. Nov. 1, 1996. Amended by Laws
2001, c. 405, § 38, eff. Nov. 1, 2001.
§18-2055.2. Annual certificate for domestic limited liability
company and foreign limited liability company.
ANNUAL CERTIFICATE FOR DOMESTIC LIMITED LIABILITY
COMPANY AND FOREIGN LIMITED LIABILITY COMPANY
A. Every domestic limited liability company and every foreign
limited liability company registered to do business in this state
shall file a certificate each year in the Office of the Secretary of
State, which confirms it is an active business and includes its
principal place of business address, and shall pay an annual
certificate fee of Twenty-five Dollars ($25.00).
B. The annual certificate shall be due on the anniversary date
of filing the articles of organization or registration, as the case
may be, until cancellation of the articles of organization or
withdrawal of the registration.
C. The Secretary of State shall, at least sixty (60) days before
the anniversary date of each year, cause a notice of the annual
certificate to be sent to each domestic limited liability company and
each foreign limited liability company required to comply with the
provisions of this section to its last known electronic mail address
of record with the Secretary of State.
D. A domestic limited liability company or foreign limited
liability company that fails to file the annual certificate and pay
the annual certificate fee within sixty (60) days after the date due
shall cease to be in good standing as a domestic limited liability
company or registered as a foreign limited liability company in this
state.
E. Except for accepting a resignation of a registered agent when
a successor registered agent is not being appointed or an application
for reinstatement, the Secretary of State shall not accept for filing
any certificate or articles, or issue any certificate of good
standing, in respect to any domestic limited liability company that
has ceased to be in good standing or foreign limited liability
company that has ceased to be registered, unless or until the
domestic limited liability company has been reinstated as a domestic
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limited liability company in good standing or the foreign limited
liability company has been reinstated as a foreign limited liability
company duly registered in this state.
F. A domestic limited liability company that has ceased to be in
good standing or a foreign limited liability company that has ceased
to be registered in this state may not maintain any action, suit or
proceeding in any court of this state until the domestic limited
liability company has been reinstated as a domestic limited liability
company in good standing or the foreign limited liability company has
been reinstated as a foreign limited liability company duly
registered in this state. An action, suit or proceeding may not be
maintained in any court of this state by any successor or assignee of
the domestic limited liability company or foreign limited liability
company on any right, claim or demand arising out of the transaction
of business by the domestic limited liability company after it has
ceased to be in good standing or a foreign limited liability company
that has ceased to be registered in this state until the domestic
limited liability company or foreign limited liability company, or
any person that has acquired all or substantially all of its assets,
has caused the limited liability company to be reinstated as a
domestic limited liability company in good standing or as a foreign
limited liability company duly registered in this state, as
applicable.
Added by Laws 2001, c. 405, § 39, eff. Nov. 1, 2001. Amended by Laws
2006, c. 22, § 1, eff. Nov. 1, 2006; Laws 2008, c. 253, § 31; Laws
2012, c. 245, § 1, eff. Nov. 1, 2012; Laws 2017, c. 323, § 55, eff.
Nov. 1, 2017.
NOTE: Laws 2008, c. 382, § 315, which changed the effective date of
Laws 2008, c. 253, §§ 1-47 to Jan. 1, 2010, was held unconstitutional
by the Oklahoma Supreme Court in the case of Weddington v. Henry, 202
P.3d 143, 2008 OK 102 (2009).
§18-2055.3. Reinstatement of a limited liability company.
REINSTATEMENT OF A LIMITED LIABILITY COMPANY
A. A domestic limited liability company not in good standing for
failure to file an annual certificate and pay the annual certificate
fees or registered agent fees, including a domestic limited liability
company whose articles of organization have been canceled under
subsection B of Section 2012.1 of Title 18 of the Oklahoma Statutes,
or a foreign limited liability company whose registration was
withdrawn for failure to file an annual certificate and pay the
annual certificate fees or registered agent fees may apply to the
Secretary of State for reinstatement by:
1. Filing all delinquent annual certificates with the Secretary
of State and paying all delinquent annual certificate fees or paying
all delinquent registered agent fees to the Secretary of State; and
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2. Filing an application for reinstatement with the Secretary of
State stating its name at the time it ceased to be in good standing
or was withdrawn, the date it ceased to be in good standing or was
withdrawn, and its current name, if its name at the time it ceased to
be in good standing or was withdrawn is no longer available under
Section 2008 or 2045 of Title 18 of the Oklahoma Statutes.
If the Secretary of State determines that the application
contains the required information, the information is correct, all
delinquent certificates or other filings are submitted, all
delinquent fees are paid, and the name satisfies the requirements of
Section 2008 or 2045 of Title 18 of the Oklahoma Statutes, the
Secretary of State shall accept the application for reinstatement and
issue a certificate of reinstatement in the manner provided in
Section 2007 of Title 18 of the Oklahoma Statutes for domestic
limited liability companies or Section 2044 of Title 18 of the
Oklahoma Statutes for foreign limited liability companies. If the
limited liability company is required to change its name because its
name at the time it ceased to be in good standing or was withdrawn is
no longer available, acceptance of the reinstatement shall constitute
an amendment to the domestic limited liability company's articles of
organization to change its name or the adoption of a fictitious name
by the foreign limited liability company, as applicable. The
application for reinstatement may amend the articles of organization
of the domestic limited liability company or the application for
registration of the foreign limited liability company, subject in
either case to the payment of the additional fee required in Section
2055 of Title 18 of the Oklahoma Statutes for amendments; provided,
that the application may not extend the term of a limited liability
company that had expired before the application for reinstatement.
For purposes of this section, a foreign limited liability company
applying for reinstatement is deemed to have done business
continually in the state following the administrative withdrawal.
B. When reinstatement under this section has become effective,
the reinstatement relates back to and takes effect as if the domestic
limited liability company had never ceased to be in good standing and
as if its articles of organization had never been canceled, or as if
the foreign limited liability company's registration was never
withdrawn.
C. The failure of a domestic limited liability company or
foreign limited liability company to file an annual certificate and
pay an annual certificate fee or a registered agent fee to the
Secretary of State shall not impair the validity on any contract,
deed, mortgage, security interest, lien or act of the domestic
limited liability company or foreign limited liability company or
prevent the domestic limited liability company or foreign limited
liability company from defending any action, suit or proceeding with
any court of this state.
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D. All real and personal property, and all rights and interests,
which belonged to the domestic limited liability company at the time
its articles of organization were canceled or which were acquired by
the limited liability company after cancellation, and which were not
disposed of before its reinstatement, shall be vested in the limited
liability company after its reinstatement as fully as they were held
by the limited liability company at, and after, as the case may be,
the time its articles of organization were canceled.
E. A member or manager of a domestic limited liability company
or foreign limited liability company is not liable for the debts,
obligations or liabilities of the domestic limited liability company
or foreign limited liability company solely by reason of the failure
of the domestic limited liability company or foreign limited
liability company to file an annual certificate and pay an annual
certificate fee or a registered agent fee to the Secretary of State
or by reason of the domestic limited liability company ceasing to be
in good standing or its articles of organization being canceled or
the foreign limited liability company ceasing to be duly registered.
Added by Laws 2017, c. 323, § 56, eff. Nov. 1, 2017.
§18-2056. Action to compel execution or filing of articles or other
documents.
Any person who is adversely affected by the failure or refusal of
any person to execute and file any articles or other document to be
filed under this act may petition the district court in the county
where the registered office of the limited liability company is
located or, if no such address is on file with the Secretary of
State, in Oklahoma County, to direct the execution and filing of the
articles or other document. If the court finds that it is proper for
the articles or other document to be executed and filed and that
there has been failure or refusal to execute and file such document,
it shall order the Secretary of State to file the appropriate
articles or other document.
Added by Laws 1992, c. 148, § 57, eff. Sept. 1, 1992.
§18-2057. Application of act to foreign and interstate commerce.
The provisions of this act shall apply to commerce with foreign
nations and among the several states only as permitted by law.
Added by Laws 1992, c. 148, § 58, eff. Sept. 1, 1992.
§18-2058. Rules of construction of act.
RULES OF CONSTRUCTION OF ACT
A. The rules that statutes in derogation of the common law are
to be strictly construed shall have no application to the Oklahoma
General Corporation Act.
B. The law of estoppel shall apply to this act.
C. The law of agency shall apply under this act.
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D. It is the policy of this act to give the maximum effect to
the principle of freedom of contract and to the enforceability of
operating agreements.
E. This act shall not be construed so as to impair the
obligations of any contract existing when the act goes into effect,
nor to affect any action or proceedings begun or right accrued before
this act takes effect.
Added by Laws 1992, c. 148, § 59, eff. Sept. 1, 1992. Amended by
Laws 2001, c. 405, § 40, eff. Nov. 1, 2001.
§18-2059. District court - Jurisdiction.
The district court shall have jurisdiction to enforce the
provisions of this act.
Added by Laws 1992, c. 148, § 60, eff. Sept. 1, 1992.
§18-2060. Cases not provided for in act.
CASES NOT PROVIDED FOR IN ACT
In any case not provided for in the Oklahoma Limited Liability
Company Act, the rules of law and equity, including the rules of law
and equity relating to fiduciary duties and the law merchant, shall
govern.
Added by Laws 1992, c. 148, § 61, eff. Sept. 1, 1992. Amended by
Laws 2017, c. 323, § 57, eff. Nov. 1, 2017.
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