32-2-233. Expense fund for mutual association. (1) In addition to their subscriptions to savings accounts, the incorporators shall create an expense fund of not less than one-half of the minimum amount of savings account subscriptions required to be paid under this chapter. The expense fund must be used to pay the expenses of organizing the association, and its operating expenses may be paid from the fund until the time that its net income is sufficient to pay the earnings that may be declared and paid or credited to its savings account holders from sources available for payment of earnings. Before a certificate of incorporation is issued, the incorporators shall deposit to the credit of the presiding officer of the incorporators the amount of the expense fund, in cash. The amounts contributed to the expense fund by the incorporators may not constitute a liability of the association except as otherwise provided.

(2) Contributions made by the incorporators and others to the expense fund may be repaid pro rata from the net income of the association after provision for statutory reserves and declaration of earnings of not less than 2% on savings accounts. If the association is liquidated before contributions to the expense fund have been repaid, any contributions to the expense fund remaining unexpended must be repaid to the contributors pro rata after the payment of the expenses of liquidation, creditors, and withdrawal value of all savings accounts. The books of the association must reflect the expense fund. The contributors to the expense fund must be paid earnings on the amounts paid in by them at the times earnings are regularly distributed to savings account holders; and for this purpose, the contributions must in all respects be considered as savings accounts of the association.

History: En. Sec. 28, Ch. 5, L. 1983; amd. Sec. 1033, Ch. 56, L. 2009.