Failure to pay installment on stock or contribution: Sale of stock or member’s interest; forfeiture of amount previously paid.
1. If a stockholder of a banking corporation or member of a banking company fails to pay any installment on his stock or contribution when the installment is required by law to be paid, the directors or managers of the bank shall sell the stock or member’s interest at public or private sale, as they may deem best, having first given the delinquent stockholder or member 20 days’ notice, personally or by mail, at his last known address.
2. If no person can be found who will pay for the stock or interest the amount due thereon, together with any additional indebtedness of the stockholder or member to the bank, the amount previously paid is forfeited to the bank. The stock or interest must be sold, as the directors may order, within 30 days after the forfeiture and, if not sold, it must be cancelled and deducted from the capital of the bank.
3. The other members of a banking company have a joint and several right of first refusal to buy the interest of the delinquent member. If this right is not exercised, the buyer becomes a member.
Last modified: February 26, 2006