Arizona Laws 10-2255. Loans by members
A. Notwithstanding the provisions of any other law, the notes or other interest-bearing obligations of a corporation shall be legal investments for the members of the corporation, subject to the applicable loan limits of subsection B.
Terms Used In Arizona Laws 10-2255
- Bank: means any banking corporation or national banking association. See Arizona Laws 10-2251
- Corporation: means a business development corporation formed under this chapter. See Arizona Laws 10-2251
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Member: means any bank or federal or state savings and loan association authorized to do business within this state that shall undertake to lend money to the corporation on its call and in accordance with this chapter. See Arizona Laws 10-2251
- written: includes blockchain technology as defined in section 44-7061. See Arizona Laws 10-140
B. As required by its loan agreement, a member shall lend funds to the corporation as and when called upon by it to do so, but the total amount in which a corporation may be indebted to a member at any one time shall not exceed:
1. If a bank, two per cent of the total of the bank’s capital stock, surplus, capital notes and capital debentures.
2. If a savings and loan association, one per cent of loans outstanding or two hundred fifty thousand dollars, whichever is the lesser.
C. All loan limits shall be established at the thousand dollars nearest to the amount computed on an actual basis. All calls of funds which members are committed to lend to a corporation shall be prorated by the corporation among the members in the same proportion that the lending commitment of each bears to the aggregate lending commitments of all members of the corporation. Upon six months’ prior written notice to the corporation of its intention, a member may terminate its loan agreement and after the effective date of withdrawal, the member shall not be obligated to make any loan to the corporation, but shall remain a member so long as the corporation is indebted to it.
D. At no time shall the total obligations of a corporation exceed ten times the amount of its paid-in capital and surplus.