(1) Seven or more citizens of the United States, a majority of whom are citizens of this State, who desire to form a fraternal benefit society may make, sign, and acknowledge articles of incorporation before an officer competent to take acknowledgment of deeds. The articles of incorporation shall state:

(a) the proposed corporate name of the society, which may not so closely resemble the name of a society or an insurance company as to be misleading or confusing;

(b) the purposes for which it is being formed and the mode in which its corporate powers are to be exercised. These purposes may not include more liberal powers than are granted by this chapter;

(c) the names and residences of the incorporators and the names, residences, and official titles of all the officers, trustees, directors, or other persons who are to have and exercise the general control of the management of the affairs and funds of the society for the first year or until the ensuing election at which all such officers must be elected by the supreme governing body, which election must be held not later than one year from the date of issuance of the permanent certificate of authority.

(2) The articles of incorporation, certified copies of the society’s bylaws and rules, copies of all proposed forms of certificates, applications, and circulars to be issued by the society and a bond conditioned upon the return to applicants of the advanced payments if the organization is not completed within one year must be filed with the director or his designee, who may require further information he considers necessary. The bond with sureties approved by the director or his designee must be in an amount of not less than three hundred thousand dollars nor more than one million five hundred thousand dollars, as required by the director or his designee. All documents filed must be in the English language. If the purposes of the society conform to the requirements of this chapter and all provisions of the law have been complied with, the director or his designee shall certify, retain, and file the articles of incorporation, and furnish the incorporators a preliminary certificate of authority authorizing the society to solicit members as provided in this chapter.

(3) A preliminary certificate of authority granted under the provisions of this section is not valid after one year from its date or after any further period, not exceeding one year, as may be authorized by the director or his designee upon cause shown, unless the five hundred applicants required have been secured and the organization has been completed as provided in this chapter. The charter and all other proceedings under the charter become null and void in one year from the date of the preliminary certificate of authority, or at the expiration of the extended period, unless the society has completed its organization and received a certificate of authority to do business as provided in this chapter.

(4) Upon receipt of a preliminary certificate of authority from the director or his designee, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its table of rates, and shall issue to each applicant a receipt for the amount collected. A society shall not incur liability other than for the return of the advance premium, issue a certificate, or pay or allow, or offer or promise to pay or allow, a benefit to a person until:

(a) actual bonafide applications for benefits have been secured on not less than five hundred applicants, and any necessary evidence of insurability has been furnished to and approved by the society;

(b) at least ten subordinate lodges have been established into which the five hundred applicants have been admitted;

(c) there has been submitted to the director or his designee, under oath of the president or secretary, or corresponding officer of the society, a list of the applicants, giving their names, addresses, date each was admitted, name and number of the subordinate lodge of which each applicant is a member, amount of benefits to be granted, and premiums; and

(d) it has been shown to the director or his designee by sworn statement of the treasurer, or corresponding officer of the society, that at least five hundred applicants have each paid in cash at least one regular monthly premium as provided in this chapter, which premiums in the aggregate must equal at least one hundred fifty thousand dollars. The advance premiums must be held in trust during the period of organization, and if the society has not qualified for a certificate of authority within one year, the premiums must be returned to the applicants.

(5) The director or his designee may make any examination and require any further information as he considers advisable. Upon presentation of satisfactory evidence that the society has complied with all the provisions of law, the director or his designee shall issue to the society a certificate of authority to that effect and that the society is authorized to transact business pursuant to § 38-38-550 and other applicable provisions of this chapter. The certificate of authority is prima facie evidence of the existence of the society as of the date of the certificate. The director or his designee shall cause a record of the certificate of authority to be made. A certified copy of this record may be given in evidence with like effect as the original certificate of authority.

(6) An incorporated society authorized to transact business in this State at the time this chapter becomes effective is not required to reincorporate.