§707. Capital stock; types of stock; consideration for issuance; security for loan

A. A capital stock association shall not issue any shares of stock except those authorized by its articles of incorporation. Capital stock shall have the par value stated in the articles of incorporation and, with the prior approval of the commissioner, may consist of common stock and preferred stock, which may be divided into classes and the classes may be divided into series. Each kind, class, and series may have such distinguishing characteristics, including designations, preferences, or restrictions regarding dividends, redemption, voting powers, or restrictions or qualifications of voting powers as are imposed in the articles of incorporation. Restrictions and qualifications of voting powers so imposed shall control in any case in which any vote or consent of stockholders is now or hereafter required by law, unless such a law expressly provides to the contrary. Voting rights shall be exclusively vested in the holders of the capital stock of the association, and depositors and borrowers of the association not holding such stock shall have no voting rights. A capital stock association shall have no members, as defined in this Chapter.

B. Except for stock issued pursuant to a plan of merger, consolidation, conversion from mutual to a capital stock association, or other type of reorganization which has been approved by the commissioner, the consideration for the issuance of voting common capital stock, the par value of which shall be maintained as the permanent capital of the association, shall be paid in cash, and any excess over par value shall be credited to paid in surplus which shall not be available for dividends or other distribution to stockholders except upon liquidation.

C. Except as provided herein, the total of the par value of all outstanding shares of voting common stock shall be the permanent capital of the association and shall not be retired until final liquidation of the association. No association shall reduce its outstanding voting common capital stock without first obtaining the consent of the commissioner. Consent shall be withheld if the reduction will cause the par value of outstanding voting common capital stock to be less than the minimum required by this Chapter or result in less than adequate net worth or reduce the capital of the association below the amount required for a liquidation account established in connection with the conversion of a mutual association to a capital stock association.

D. The provisions of R.S. 6:416 and the rules and regulations promulgated thereunder shall be applicable to associations chartered under the provisions of this Title in the same manner as they are applicable to state banks.

E. Repealed by Acts 1997, No. 1003, §2.

Acts 1983, No. 675, §1; Acts 1997, No. 1003, §§1, 2.