O.C.G.A.

O.C.G.A. § 7-1-391 (2019)

Prohibition of promoters’ fees

✓ O.C.G.A. — 2019 edition (Public.Resource.Org Release 73)

Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.

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(a) A bank or trust company shall not pay any fee, compensation, or commission for promotion in connection with its organization or apply any money received on account of shares or subscriptions, selling shares, or other services in connection with its organization, except legal fees, commissions or fees to disinterested third parties for sale of bank stock to others, and other usual and ordinary expenses necessary for its organization. (b) In the event of a violation of this Code section the department may disapprove the articles on account of such violation.

History

Code 1933, § 41A-1802, enacted by Ga. L. 1974, p. 705, § 1; Ga. L. 1999, p. 674, § 7; Ga. L. 2024, p. 354, § 1-2/HB 876, effective July 1, 2024. Amendments. The 2024 amendment, effective July 1, 2024, deleted former subsection (b), which read: “A majority of incorporators shall file with the department at the time of filing of the articles an affidavit:

“(1) Setting forth all expenses incurred or to be incurred in connection with the organization of the bank or trust company, subscription for its shares, and sale of its shares; and “(2) Stating that no fee, compensation, or commission prohibited by subsection (a) of this Code section has been paid or incurred.” and redesignated former subsection (c) as present subsection (b).

Annotations

RESEARCH REFERENCES Am. Jur. 2d. 18 Am. Jur. 2d, Corporations, §§ 98, 99.

C.J.S. 18 C.J.S., Corporations, § 112.

Notes of Decisions

Cited in 2 cases, 1999–2008 · leading case: O'NEAL v. Home Town Bank of Villa Rica, 514 S.E.2d 669 (Ga. Ct. App. 1999).

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O'NEAL v. Home Town Bank of Villa Rica, 514 S.E.2d 669 (Ga. Ct. App. 1999). · cites it 2× “Finally, OCGA § 7-1-391 (a) provides: A bank or trust company shall not pay any fee, compensation, or commission for promotion in connection with its organization or apply any money received on account of shares or subscriptions, selling shares, or other services in connection…”

JR Constr./Elec., LLC v. Ordner Constr. Co., 669 S.E.2d 224 (Ga. Ct. App. 2008). · cites it 2× “325, 329 (2) ( 514 SE2d 669 ) (1999) (trial court properly granted summary judgment to bank on executive’s unjust enrichment claim for compensation for his efforts in creating the bank, because OCGA § 7-1-391 prohibits a bank from paying compensation in connection with its…”

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