2020 Georgia Code
Title 7 - Banking and Finance
Chapter 1 - Financial Institutions
Article 2 - Banks and Trust Companies
Part 8 - Incorporation of Banks and Trust Companies
§ 7-1-398. Liability for Premature Business
Incorporators and other persons who organize a bank or trust company which transacts business before its capital stock and paid-in capital have been paid in shall be jointly and severally liable to depositors and other creditors to make good the amounts not paid in by subscribers or otherwise deficient. Such liability shall be deemed as an asset of the bank or trust company and may be enforced by it, its successors or assignees, or by a shareholder suing derivatively, or by a receiver appointed under this chapter.
(Ga. L. 1919, p. 135, art. 18, § 6; Code 1933, § 13-1906; Code 1933, § 41A-1809, enacted by Ga. L. 1974, p. 705, § 1; Ga. L. 2019, p. 828, § 8/HB 185.)
The 2019 amendment, effective July 1, 2019, substituted "capital stock and paid-in capital" for "capital stock, paid-in capital, and expense fund as required by Code Section 7-1-396" in the first sentence of this Code section.
RESEARCH REFERENCES
Am. Jur. 2d.
- 18 Am. Jur. 2d, Corporations, §§ 126, 127.
C.J.S.- 18 C.J.S., Corporations, § 89 et seq.
19 C.J.S., Corporations, §§ 640 et seq., 707.
ALR.
- False representation by officers or directors of bank or building and loan association that impairment of capital has been made good, as basis of action against them, 144 A.L.R. 1498.
Validity, construction, and effect of statutory provisions concerning capital requisites of state incorporation of bank, 79 A.L.R.3d 1190.
PART 9 FINANCIAL STRUCTURE
Cross references.
- Applicability of security-registration requirements to securities issued by or guaranteed by banks or trust companies, § 10-5-8.
OPINIONS OF THE ATTORNEY GENERAL
Charter may not be amended to provide authorized but unissued shares.
- Regulated certificated bank is not authorized by law to amend the bank's charter to provide for authorized but unissued shares of common stock. 1974 Op. Att'y Gen. No. 74-149.
