Corporation Law for State Banks and Trust Companies

Del. Code tit. 5, ch. 7
in effect

Del. Code tit. 5, § 701 Establishment of banks and trust companies; savings banks and national banks [For application of this section, see 85 Del. Laws, c. 337, § 24].

(a) Except as specifically provided by Chapter 15 or Chapter 16 of this title, banks and trust companies shall be established or created in this State under and in accordance with this chapter. This chapter shall not, however, apply to national banks, except as otherwise provided in subchapters VI and VII of this chapter. The terms “bank” or “banks,” when used in this chapter, do not include such national banks, except as otherwise provided in subchapters VI and VII of this chapter. Furthermore, the provisions of this chapter specifically relating to capital stock or stockholders of a bank organized under this chapter shall not apply to a corporation without capital stock doing a savings bank business. (b) The State Bank Commissioner shall have the authority to allow the establishment under this chapter of banks and trust companies that are authorized to exercise all or less than all of the powers, including incidental powers, that are conferred on them by this chapter, including banks and trust companies whose powers are limited in their articles of association and by order of the State Bank Commissioner. The State Bank Commissioner may promulgate regulations to carry out the State Bank Commissioner’s authority under this chapter, including adopting different forms of applications for a certificate of public convenience and advantage with differing requirements based on the underlying risks of the proposed activities of the bank or trust company.

Del. Code tit. 5, § 702 Applicability of other laws.

Every corporation (but not including a limited liability company) created under this chapter shall be deemed to be subject to and entitled to the benefit of this Code and any other general statutes of this State making provision for the regulation of banks and trust companies, or for the regulation and governance of corporations established under Title 8 of this Code, where the same are not inconsistent with the express provisions of this chapter. Every limited liability company created under this chapter shall be deemed to be subject to and entitled to the benefit of this Code and any other general statutes of this State making provision for the regulation of trust companies, or for the regulation and governance of limited liability companies formed under Title 6, where the same are not inconsistent with the express provisions of this chapter.

Del. Code tit. 5, § 703 Taxation.

Every corporation and limited liability company created by or under this chapter, and every corporation and limited liability company whose charter, certificate of incorporation or certificate of formation is amended under this chapter, shall be subject to the same taxation as shall be fixed by the laws of this State for banks and trust companies.

Del. Code tit. 5, § 704 Reserved power of State to amend or repeal this chapter.

This chapter may be amended or repealed, at the pleasure of the General Assembly, but such amendment or repeal shall not take away or repeal any remedy against any corporation established under this chapter, or its officers, for any liability which shall have been previously incurred.

Del. Code tit. 5, § 705 Revocation for nonuse of charters granted prior to July 1, 1933.

Every charter authorizing the establishment of a bank or trust company in this State and which was granted or passed by the General Assembly of this State prior to the 1st day of July, 1933, shall be deemed and held to be revoked for nonuse of corporate franchise unless the corporation created or authorized by such charter was actively engaged in business in this State on December 31, 1933.

Del. Code tit. 5, § 706 Limited liability companies as trust companies, conversions [For application of this section, see 85 Del. Laws, c. 346, § 9].

(a) Notwithstanding any other provision of law to the contrary, a trust company, including a limited purpose trust company or a family trust company, may be a limited liability company and any trust company that is a limited liability company shall have all the powers and privileges of, and, except to the extent expressly otherwise provided in this Code, shall be subject to all the duties, restrictions and liabilities of, a corresponding trust company that is a corporation. Except to the extent expressly otherwise provided in this Code, a trust company that is a limited liability company shall be subject to all of the same laws and regulations of this State that relate to a trust company that is a corporation. (b) Unless another intention clearly appears or unless the context requires a different meaning, any terms used in this Code that apply to a trust company that is a corporation shall be construed to apply in the same manner, or in a manner as similar as possible given the context, to a trust company that is a limited liability company, and without limiting the generality of the foregoing, each reference in this Code to: (1) “Capital stock” or “stock” that refers to the stock of a trust company that is a corporation shall also refer to the limited liability company interests in a trust company that is a limited liability company and, correspondingly, each reference in this Code to “common stock”, “preferred stock” and “voting stock” that refers to common stock, preferred stock and voting stock, respectively, of a trust company that is a corporation shall also refer to common limited liability company interests, preferred limited liability company interests and voting limited liability company interests, respectively, in a trust company that is a limited liability company; (2) “Certificate of incorporation” or “charter” that refers to the certificate of incorporation, charter or articles of association, as applicable, of a trust company that is a corporation shall also refer to the certificate of formation and/or articles of association, as applicable, of a trust company that is a limited liability company; (3) “Corporate” that relates to a trust company that is a corporation shall mean “limited liability company” in relation to a trust company that is a limited liability company; (4) “Corporation” that refers to a trust company that is a corporation shall also refer to a trust company that is a limited liability company; provided, that nothing in this chapter shall be construed to affect the status of a trust company that is a limited liability company as a limited liability company rather than a corporation; (5) “Director” or “board of directors” that refers to a director or the board of directors of a trust company that is a corporation shall also refer to a manager or the board of managers of a trust company that is a limited liability company; (6) “Dividends” that refers to dividends of a trust company that is a corporation shall also refer to distributions of a trust company that is a limited liability company; (7) “Incorporated” or “incorporation” that refers to a trust company that is a corporation shall refer to the formation status or formation of a trust company that is a limited liability company; provided that, notwithstanding the foregoing, a trust company that is a limited liability company is formed rather than incorporated; (8) “Incorporator” that refers to an incorporator of a trust company that is a corporation shall also refer to an initial member of a trust company that is a limited liability company; (9) “Shares” that refers to the shares of stock of a trust company that is a corporation shall also refer to the units into which the limited liability company interests in a trust company that is a limited liability company are divided; and (10) “Stockholder” or “shareholder” that refers to a stockholder of a trust company that is a corporation shall also refer to a member of a trust company that is a limited liability company. (c) The limited liability company agreement of a trust company that is a limited liability company shall be comprised solely of the articles of association of the trust company and the bylaws of the trust company and shall be subject to the approval of the State Bank Commissioner as to form and substance. The bylaws of a trust company that is a limited liability company shall not contain any provision that is inconsistent with the articles of association of the trust company. The business and affairs of a trust company that is a limited liability company shall be managed by or under the direction of a board of managers, which shall be designated as a “board of directors” and each manager shall be a natural person and shall be designated as a “director”. Each member of a trust company that is a limited liability company shall be designated as a “stockholder.” The limited liability company interests in a trust company that is a limited liability company shall be designated as “stock.” The units into which limited liability company interests in a trust company that is a limited liability company are divided shall be designated as “shares.” (d) With the prior approval of the State Bank Commissioner, a trust company that is a corporation may convert to a trust company that is a limited liability company by following the applicable procedures set forth in Titles 6 and 8 for the conversion of a corporation incorporated under Chapter 1 of Title 8 to a limited liability company formed under Chapter 18 of Title 6, provided, that, in lieu of filing in the office of the Secretary of State a certificate of formation that complies with § 18-201 of Title 6 pursuant to § 18-214 of Title 6, articles of organization of the limited liability company that comply with § 730 of this title shall be filed in the office of the Secretary of State and, upon the filing of a certificate of conversion to limited liability company as required by § 18-214 of Title 6 and the articles of organization as required by § 730 of this title, the Secretary of State shall issue a certificate of formation for such limited liability company pursuant to § 731 of this title. Such a conversion shall be subject to, and shall have all of the effects provided for under, § 18-214 of Title 6 and § 266 of Title 8 to the extent the same are not inconsistent with the express provisions of this chapter. (e) With the prior approval of the State Bank Commissioner, a trust company that is a limited liability company may convert to a trust company that is a corporation by following the applicable procedures set forth in Titles 6 and 8 for the conversion of a limited liability company formed under Chapter 18 of Title 6 to a corporation incorporated under Chapter 1 of Title 8, provided, that, in lieu of filing in the office of the Secretary of State a certificate of incorporation pursuant to § 265 of Title 8, articles of organization of the corporation that comply with § 730 of this title shall be filed in the office of the Secretary of State and, upon the filing of a certificate of conversion to corporation as required by § 265 of Title 8 and the articles of organization as required by § 730 of this title, the Secretary of State shall issue a certificate of incorporation for such corporation pursuant to § 731 of this title. Such a conversion shall be subject to, and shall have all of the effects provided for under, § 265 of Title 8 and § 18-216 of Title 6 to the extent the same are not inconsistent with the express provisions of this chapter.

Del. Code tit. 5, § 721 Restrictions on use of words “savings” or “trust” in corporate name [Repealed].

Repealed by 70 Del. Laws, c. 6, § 2, eff. Feb. 10, 1995.

Del. Code tit. 5, § 722 Incorporators; number and qualifications.

Three or more persons, at least 2 of whom must be citizens and residents of this State, of lawful age who associate themselves by a written agreement, hereinafter called “articles of association,” for the purpose of forming a bank or trust company may, upon compliance with this chapter, become a corporation, with the powers conferred by this chapter and subject to the regulations prescribed by this chapter and subject also to the regulations prescribed for banks and trust companies by any general statute of this State. Notwithstanding the foregoing, in the case of a trust company that is a limited liability company, 1 or more persons, whether individuals or nonnatural persons, each of whom will be an initial stockholder of the limited liability company and regardless of the citizenship, residency or domicile of such persons, who associate themselves by a written agreement, or in the case of 1 person, who executes a written agreement, in each case hereinafter called “articles of association,” for the purpose of forming a trust company may, upon compliance with this chapter, form a limited liability company with the powers conferred by this chapter and subject to the regulations prescribed for trust companies by any general statute of this State.

Del. Code tit. 5, § 723 Articles of association; contents and execution.

(a) The articles of association shall set forth that the subscribers thereto associate themselves with the intention of forming a corporation, and shall specifically state: (1) The name by which the corporation shall be known; (2) The purpose for which it is formed; (3) The city or town where its place of business will be located; (4) The amount of its capital stock, and the number of shares into which it is to be divided; (5) The number, or manner of fixing such number, of its directors, which shall not be less than 5; (6) Whether or not the corporation is to have perpetual existence, and if not the time when its existence is to cease; (7) Whether the private property of the stockholders shall be subject to the payment of corporate debts, and if so, to what extent. (b) The articles of association may also contain other provisions defining, limiting and regulating the powers of the corporation, the powers and duties of the directors, and the powers of the stockholders, if such provisions are consonant with the object, purpose and provisions of this chapter and are not in conflict with this Code or any other general statute of this State relating to banks and trust companies. (c) Each incorporator shall subscribe to the articles his or her name, residence, post-office address and the number of shares of stock which he or she agrees to take, and shall acknowledge the same to be his or her act and deed before some officer authorized by the laws of this State to take acknowledgments of deeds. (d) The articles of association may contain an article which provides that any article or provision thereof shall not be amended, modified, repealed or otherwise changed in any manner whatsoever. Such an article, when approved by the Commissioner under § 729 of this title, shall be valid, binding and enforceable against the corporation and its shareholders notwithstanding any other provision of this title.

Del. Code tit. 5, § 724 Notice of intention to incorporate; publication.

Notice of the intention of the incorporators to form a bank or trust company shall be given to the State Bank Commissioner, and a notice in such form as the Commissioner shall approve shall be published at least once a week, for 2 successive weeks, in 1 or more newspapers designated by the Commissioner, at least 1 of which newspapers shall be published in the county where it is proposed to establish the bank or trust company. The published notice shall specify the names of all the associates, the name of the proposed corporation, the city or town where it is to be located, and the amount of its capital stock.

Del. Code tit. 5, § 725 Application for a certificate of public convenience and advantage.

Within 60 days after the second publication of the notice of intention to incorporate but not before the expiration of 20 days from the date of the second publication, the incorporators shall apply to the State Bank Commissioner for a certificate that public convenience and advantage will be promoted by the establishment of the bank or trust company.

Del. Code tit. 5, § 726 Determination of public convenience.

Upon the application for a certificate that public convenience and advantage will be promoted by the establishment of the bank or trust company, the State Bank Commissioner shall consider and determine whether public convenience and advantage would be promoted by the establishment of the bank or trust company, and whether the terms and provisions of the articles of association are in compliance with this chapter and shall issue or refuse to issue a certificate in accordance with such determination. If the Commissioner refuses to issue a certificate, no further proceedings shall be had, but the application may be renewed after 1 year from the date of the refusal. If the Commissioner issues the certificate, the incorporators shall hold the first meeting and follow the procedure prescribed by § 727 of this title.

Del. Code tit. 5, § 727 Organization meeting of incorporators; notice; proceedings.

(a) The first meeting of the incorporators shall be called by a notice signed either by the incorporator who is designated in the articles of association for the purpose, or by a majority of the incorporators. The notice shall state the time, place and purposes of the meeting. A copy of the notice shall, at least 7 days before the day appointed for the meeting, be given to each incorporator, or left at the incorporator’s residence or usual place of business, or deposited in the post office, postage prepaid, and addressed to the incorporator at his or her residence or usual place of business, and another copy thereof and an affidavit of 1 of the incorporators that the notice has been duly served shall be filed and recorded with the records of the corporation. If all the incorporators shall in writing, endorsed upon the articles of association, waive such notice and fix the time and place of the meeting, no notice shall be required. (b) At the first meeting, or at any adjournment thereof, the incorporators shall organize by the choice by ballot of a temporary secretary, by the adoption of bylaws and by the election in such manner as the bylaws may determine, of directors, a president, a secretary, and such other officers as the bylaws may prescribe. All the officers so elected shall be sworn to the faithful performance of their duties. The temporary secretary shall make and attest a record of the proceedings until the secretary has been chosen and sworn, including a record of such choice and qualification.

Del. Code tit. 5, § 728 Articles of organization.

The president and a majority of the directors elected at the organization meeting of the incorporators shall make, sign and make oath to, a certificate (hereinafter called “articles of organization”) setting forth: (1) A true copy of the articles of association; (2) The names of the subscribers thereto; (3) The name, residence, business, post office or mailing address of each of the officers of the corporation; and (4) The date of the first meeting and the successive adjournments thereof, if any.

Del. Code tit. 5, § 729 Approval of articles of organization.

The articles of organization, together with the records of the proposed corporation, shall be submitted to the State Bank Commissioner. The Commissioner shall examine the same, and may require such amendment thereof or such additional information as it may consider proper or necessary. If the Commissioner finds that the provisions of law have been complied with, the Commissioner shall endorse its approval upon the articles of organization.

Del. Code tit. 5, § 730 Filing of articles of organization.

The articles of organization with the endorsement of the State Bank Commissioner shall, within 30 days after the date of the endorsement, be filed in the office of the Secretary of State.

Del. Code tit. 5, § 731 Certificate of incorporation; issuance, form, recording and evidence.

(a) Upon the filing of the articles of organization as required by § 730 of this title, the Secretary of State shall issue a certificate of incorporation in the following form: STATE OF DELAWARE Be it known that whereas (the names of the incorporators) have associated themselves with the intention of forming a corporation under the name of (the name of the corporation), for the purpose (the purpose declared in the articles of association), with a capital stock of (the amount fixed in the articles of association), and having its place of business in (the city or town where its place of business will be located) and have complied with the statutes of this State in such case made and provided, as appears from the articles of organization of the corporation, duly approved by the State Bank Commissioner and on file in this office; now, therefore, I (the name of the Secretary of State), Secretary of the State of Delaware, do hereby certify that (the names of the incorporators), their associates and successors, are legally organized and established as, and are hereby made, an existing corporation under the name of (name of the corporation), with the powers, rights and privileges, and subject to the limitations, duties and restrictions which by law appertain thereto. Witness my official signature hereunto subscribed, and the great Seal of the State of Delaware hereunto affixed, this ________ day of ________________ in the year ________ (the date of the filing of the articles of organization). (b) Notwithstanding the foregoing, in the case of a trust company that is a limited liability company, upon the filing of the articles of organization as required by § 730 of this title, the Secretary of State shall issue a certificate of formation in the following form: STATE OF DELAWARE Be it known that whereas (the name(s) of the incorporator(s)) [has executed articles of association for the purpose][have associated themselves with the intention] of forming a limited liability company under the name of (the name of the limited liability company), for the purpose (the purpose declared in the articles of association), with a capital stock of (the amount fixed in the articles of association), and having its place of business in (the city or town where its place of business will be located) and [has][have] complied with the statutes of this State in such case made and provided, as appears from the articles of organization of the limited liability company, duly approved by the State Bank Commissioner and on file in this office; now, therefore, I (the name of the Secretary of State), Secretary of the State of Delaware, do hereby certify that (the name(s) of the incorporator(s)), [his][her][its][their] associates and successors, are legally formed and established as, and [is][are] hereby made, an existing limited liability company under the name of (name of the limited liability company), with the powers, rights and privileges, and subject to the limitations, duties and restrictions which by law appertain thereto. Witness my official signature hereunto subscribed, and the great Seal of the State of Delaware hereunto affixed, this ________ day of ________________ in the year ________ (the date of the filing of the articles of organization). (c) The Secretary of State shall sign the certificate of incorporation or certificate of formation, as applicable, and cause the Great Seal of the State to be thereto affixed and shall deliver the same to the corporation or the limited liability company, as applicable, together with a certified copy of the articles of organization and the endorsement of the State Bank Commissioner thereon, upon payment of the costs and charges therefor. A certified copy of the certificate shall be kept on file in the office of the Secretary of State with the articles of organization, and the certificate together with the articles of organization and the endorsement thereon of the State Bank Commissioner shall be recorded in the office of the recorder of deeds for the county in which the place of business of the corporation is to be located. (d) The certificate or a copy thereof duly certified by the Secretary of State, together with a certified copy of the articles of organization and the endorsement thereon of the State Bank Commissioner, accompanied with the certificate of the recorder of deeds for the county wherein the same is recorded under the recorder of deed’s hand and the seal of the recorder of deed’s office, stating that the certificate and articles of organization have been recorded in the office of the recorder, or a copy of the record duly certified by the recorder, shall be evidence in all courts of this State.

Del. Code tit. 5, § 732 Commencement of corporate existence.

Upon the issuance of the certificate of incorporation or certificate of formation by the Secretary of State and the recording of the certificate and articles of organization as provided in § 731 of this title, the corporation or limited liability company named in such certificate and articles of organization shall from the date of the certificate be and constitute a corporation or limited liability company, for the purposes and by the name set forth in the certificate, subject to dissolution, termination or the revocation or forfeiture of the franchise under this chapter or under this Code or any other statute of this State relating to the dissolution or termination of or to the revocation or forfeiture of the charter or franchise of banks or trust companies; but the corporation or limited liability company shall not have the right to do any business until it has secured from the State Bank Commissioner of this State the certificate provided for in § 733 of this title.

Del. Code tit. 5, § 733 Commencement of business; certificate authorizing.

A certified copy of the certificate of incorporation and of the articles of organization and the endorsement of the approval of the State Bank Commissioner shall be filed with the State Bank Commissioner; and when the whole capital stock has been issued, a list of the stockholders, with the name, residence and post-office address of each, and the number of shares held by each, shall be filed with the State Bank Commissioner, which list shall be certified by the president and the cashier or treasurer of the corporation. Upon receipt of the list the Commissioner shall cause an examination to be made of the method of payment of the capital stock and if, after such examination, it appears that the whole capital stock has been paid in cash, and that all requirements of this Code and any other law have been complied with, the Commissioner shall issue a certificate authorizing the corporation to begin the transaction of business. No corporation shall begin the transaction of business until a certificate has been granted.

Del. Code tit. 5, § 734 Revocation of charter for failure to commence business within reasonable time.

Every corporation created under this chapter shall, after the expiration of a reasonable time from the date of its incorporation, as determined by the State Bank Commissioner, be actively engaged in the business for which it was created or its certificate of incorporation and corporate franchise shall be deemed and held to be revoked. The Commissioner shall by regulations prescribe the criteria to be applied in determining what constitutes a reasonable period of time.

Del. Code tit. 5, § 735 Fees of Secretary of State and Commissioner.

(a) The following fees shall be collected by and paid to the Secretary of State, for the use of the State: (1) For making and issuing the certificate of incorporation, $200. (2) For making the certified copy of the articles of association, $50. (3) For making the certified copy of the certificate of incorporation to be kept on file in the office of the Secretary of State and for filing and indexing the same and the articles of association in said office, $50. (4) For supplying any additional certified copy of the certificate of incorporation or articles of association requested by the corporation, $50. (5) For all services described in paragraphs (a)(1) through (a)(4) of this section that are requested to be completed within 24-hours of the time of request, an additional fee of up to $300. (b) Before issuing the certificate authorizing the corporation to begin the transaction of business, the State Bank Commissioner shall collect from the corporation, for the use of the State, the sum of $5,750. In addition, the applicant shall pay an investigation fee of $1,150 which shall not be refundable and shall be submitted with the application.

Del. Code tit. 5, § 741 Bylaws, adoption, amendment and repeal.

A corporation may adopt bylaws for the proper management of its affairs, and may establish regulations controlling the assignment and transfer of its shares. The first set of bylaws shall be adopted at the meeting of the incorporators, as provided in § 727 of this title, but thereafter the power to make, alter or repeal bylaws shall be in the stockholders, provided that any corporation may, in the certificate of incorporation, confer that power upon the directors.

Del. Code tit. 5, § 742 Directors; number, quorum, term, vacancies and oath.

(a) The business of every corporation organized under this chapter shall be managed by a board of directors. The number of directors which shall constitute the whole board shall be such as shall be fixed by, or in the manner provided in, the articles of association, but in no case shall the number of directors be less than 5. The bylaws shall prescribe how many directors shall constitute a quorum for the transaction of business. (b) The directors elected at the organization meeting of the incorporators, as provided in § 727 of this title, shall hold office until the succeeding annual meeting of the stockholders and until their successors have been duly chosen and qualified, and thereafter directors shall be elected at the annual meeting of the stockholders or at an adjournment of the annual meeting. Vacancies in the board of directors shall be filled by a majority of the remaining directors, though less than a quorum, and the directors so chosen shall hold office until the next annual election and until their successors shall be duly elected and qualified. (c) Every director shall be sworn to the faithful performance of the director’s duties.

Del. Code tit. 5, § 743 Stockholders’ meetings; time, place, adjournment and quorum.

(a) Meetings of stockholders (except the meeting of incorporators referred to in § 727 of this title) shall be held in this State. The bylaws shall fix the time of the annual meeting and may provide for special or called meetings of stockholders. (b) Any meeting of the stockholders may be adjourned and at such adjourned meeting, any business may be transacted that could have been acted on at the meeting which was adjourned. (c) The bylaws may prescribe what number of shares shall be represented at any stockholders’ meeting to constitute a quorum, but in the absence of such a provision, any number of shares represented at a stockholders’ meeting shall be sufficient for the transaction of business thereat.

Del. Code tit. 5, § 744 Voting rights of stockholders.

Each stockholder shall, at every meeting of the stockholders, be entitled to 1 vote in person or by proxy for each share of the capital stock held by such stockholder on all issues on which such stockholder is entitled to vote. No stock shall be voted which shall have been transferred on the books of the corporation within 20 days next preceding the stockholders’ meeting.

Del. Code tit. 5, § 745 Capital stock; minimum required.

The capital stock of a bank organized under this chapter shall be as follows: not less than $500,000 if the bank is located in a city or town having a population of more than 50,000 persons; not less than $350,000 if the bank is located in a city or town of not more than 50,000 nor less than 5,000 persons; and not less than $250,000 if the bank is located in a town of not more than 5,000 persons, or such greater amount as the Commissioner may require after review of the charter, business plan and proposed activities of the bank. The capital stock of a trust company or limited purpose trust company organized under the law of this State shall not in any case be less than $500,000; provided, however, that this requirement shall not apply to trust companies organized under the laws of this State prior to February 28, 1933, and authorized by a certificate issued by the State Bank Commissioner to transact the business of a trust company on January 1, 1997. In addition to the capital stock required by the foregoing, every such bank, trust company or limited purpose trust company shall have a paid-in surplus account equal to no less than one-half of the minimum capital stock required by this section. The minimum capital stock and paid-in surplus required to be maintained by such corporation in its banking or trust company business pursuant to this section may not be utilized to satisfy the capital or reserve requirements to which the corporation may be subject with respect to any activity authorized by § 761(a)(14) of this title.

Del. Code tit. 5, § 746 Par value of stock; payment for and issuance; increase and reduction.

The capital stock shall be divided into shares of a stated par value. No business shall be transacted by the corporation until the whole amount of its capital stock is subscribed for and actually paid in in cash. No stock shall be issued by any corporation until the par value thereof shall be fully paid in in cash. Any corporation may, subject to the approval of the State Bank Commissioner, increase or reduce its capital stock in the manner hereinafter provided. In the case of a reduction, the capital stock shall not be reduced to less than the amount required by § 745 of this title.

Del. Code tit. 5, § 747 Stockholders’ liability.

The private property of the stockholders shall not be subject to the payment of the corporate debts except as otherwise provided in the articles of association.

Del. Code tit. 5, § 748 Dividends.

The directors of a bank or trust company may declare dividends on common or preferred stock of so much of the net profits of the corporation as they shall judge expedient; but the corporation shall, before the declaration of a dividend on common stock from the net profits, carry 50% of its net profits of the preceding period for which the dividend is paid to its surplus fund until the same shall amount to 50% of its capital stock; and thereafter shall carry 25% of its net profits of the preceding period for which the dividend is paid to its surplus fund until the same shall amount to 100% of its capital stock.

Del. Code tit. 5, § 749 Amendment of charter.

(a) Banks and trust companies heretofore or hereafter created by or under this Code or any other special act or general law of this State, except as provided in Chapters 15 or 16 of this title, shall hereafter amend their charters, certificates of incorporation, certificates of formation or articles of association by and under this section. (b) Any bank or trust company in this State whether created under this chapter or by special act of the General Assembly (but not under Chapters 15 or 16 of this title), may, from time to time, when and as desired, amend its charter, certificate of incorporation or articles of association relating to the regulation and governance of corporations established under Title 8, or, in the case of a trust company that is a limited liability company, its certificate of formation or articles of association relating to regulation and governance of limited liability companies formed under Title 6, in each case where the same are not inconsistent with the express provisions of this chapter, including, but not limited to, addition to its corporate powers and purposes, or diminution thereof, or both (provided such additional corporate power or purpose to be such as is authorized or contemplated under any of the provisions of this chapter); or by increasing or decreasing its authorized capital stock (provided that such increase or decrease be expressly approved by the State Bank Commissioner, and provided also that the capital stock shall not be reduced below the amount prescribed by § 745 of this title); by changing the number or par value of its shares of stock; or by changing its corporate title (provided that the word “savings” shall not be used in the amended title, and provided further that no corporation not authorized to do a trust company business shall use the word “trust” in its amended title); and by increasing or decreasing its number of directors (provided that in no case shall the whole number of directors be less than 5). Any or all such changes or alterations may be effected by 1 certificate of amendment. No amendment shall contain a provision which would not have been lawful and proper to insert in an original charter, certificate of incorporation, certificate of formation or articles of association adopted granted or issued under this chapter, but nothing contained in this section shall prohibit the increase in capital stock of a trust company organized prior to February 28, 1933 and authorized by a certificate issued by the State Bank Commissioner to transact the business of a trust company on January 1, 1997, to any amount which may be less than required in § 745 of this title. In the case of an increase of capital stock, the amendment may provide that the increased stock may in whole or in part be disposed of without being offered to the stockholders, but in no case shall any stock be issued except upon payment in full in cash. (c) The procedure for amendment and the manner of making and effecting the same shall be as prescribed in Chapter 1 of Title 8 for the amendment of the certificate of incorporation of a corporation having a capital stock or, in the case of a trust company that is a limited liability company, as prescribed in Chapter 18 of Title 6 for the amendment of the certificate of formation or limited liability company agreement of a limited liability company. No certificate of amendment shall be received or filed by the Secretary of State or be deemed or held to be effective unless and until the proposed certificate of amendment shall have been submitted to the State Bank Commissioner and shall have been approved both in substance and in form by said Commissioner.

Del. Code tit. 5, § 751 Acquisition or sale of assets, assumption of liabilities, consolidation and merger; Commissioner’s approval; title to property.

(a) No bank or trust company doing business in this State, whether or not organized under this chapter, shall merge or consolidate with, sell any substantial portion of its assets to, or take over any substantial portion of the assets and/or assume the liabilities, in whole or in part, of any other bank or trust company, savings bank, national bank, federal savings association (as defined in the Home Owners’ Loan Act, 12 U.S.C. § 1461 et seq.) or out-of-state bank (as defined in § 795 of this title) (whether any of the foregoing is then doing business or has ceased to do business or has surrendered its charter or has dissolved) unless and until such action shall be approved by the State Bank Commissioner. (b) The Commissioner may require that he or she be furnished with such information as to the assets and liabilities and as to the condition of the banks or trust companies concerned as he or she deems necessary or proper to determine whether to give or withhold his approval. The State Bank Commissioner shall refuse his or her approval whenever in his opinion the transaction will weaken or tend to weaken any bank or trust company concerned. (c) No title to any property shall pass where the transaction is in violation of this section.

Del. Code tit. 5, § 752 Fees for merger, consolidation or acquisition of assets and assumption of liabilities [Repealed].

Repealed by 70 Del. Laws, c. 327, § 4, eff. May 2, 1996.

Del. Code tit. 5, § 761 General powers of corporations organized under this chapter.

(a) A corporation established under and in compliance with this chapter shall have power to: (1) Sue and be sued, complain and defend in any court of law or equity; (2) Make and use a common seal and alter the same at pleasure; (3) Hold, purchase, convey, mortgage or lease real and personal property; (4) Borrow and lend money; (5) Discount bills, promissory notes or other evidences of debt; (6) Receive deposits of money either on time or demand; (7) Buy and sell gold and silver bullion and foreign money and coin; (8) Purchase securities for the investment of the funds under its control and sell the same; (9) Take mortgages and obligations of all kinds for payment of money for the investment of funds under its control and sell the same; (10) Receive for safekeeping securities and all types of choses in action and all kinds of personal property; (11) Keep deposit boxes and rent them to customers or patrons; (12) Engage in the sale, distribution and underwriting of, and deal in, stocks, bonds, debentures, notes or other securities; (13) Exercise the powers and engage in the activities permissible for such corporations through 1 or more subsidiaries; (14) Act as an insurer and transact the business of insurance in accordance with the provisions of Title 18; except that no corporation established under and in compliance with this chapter shall have power to act as a title insurer and transact the business of title insurance; (15) Act as guarantor or surety for the debt or obligation of another, including specifically but without limitation the rediscounting with recourse of commercial paper and the issuance of letters of credit as defined in § 5-103(1)(a) of Title 6 and standby letters of credit. As used herein, the term “standby letter of credit” includes every letter of credit (or similar arrangement however named or designated) which represents an obligation to the beneficiary on the part of the issuer to repay money borrowed by or advanced to or for the account of the customer, or to make payment on account of any evidence of indebtedness undertaken by the customer, or to make payment on account of any default by the customer in performance of an obligation. The terms “beneficiary,” “issuer” and “customer” as used herein have the same meaning as in § 5-103(1) of Title 6; and (16) Authorize an affiliated insured depository institution (as those terms are defined in § 796 of this title) to engage in the authorized agency activities provided in § 796A of this title. (17) Generally, use, exercise and enjoy all of the powers, rights, privileges and franchises incident to a banking corporation and, if established as a trust company, incident to a trust company, and which are necessary or proper for the transaction of the business of the corporation. (b) All powers conferred by this section are subject to and are to be construed as qualified by the limitations, restrictions and regulations prescribed by the Commissioner or in other sections of this chapter or by this Code or any other statute of this State providing regulations for banks and trust companies. (c) For the purposes of this subchapter, “personal property” includes digital assets.

Del. Code tit. 5, § 762 Ownership of real estate used for transaction of business.

A corporation established under this chapter may hold real estate suitable for the transaction of its business; but, if the aggregate amount invested and proposed to be invested therein, including the cost of alterations and additions in the nature of permanent fixtures, exceeds, directly or indirectly, 50 percent of its capital, surplus and undivided profit accounts, the excess investment shall be made only with the approval of the State Bank Commissioner. The amount of money invested by the corporation in the securities of any corporation, trust or other organization which holds real estate in whole or in part used for the transaction of the business of the corporation or intended for such use, shall be included in determining the amount of real estate that may be held by the corporation under this section.

Del. Code tit. 5, § 763 Membership in Federal Reserve System.

(a) Any bank or trust company incorporated under this Code or any other laws of this State may become a member of the Federal Reserve Bank, organized or to be organized in the Federal Reserve District in which such bank or trust company is located, under the act of Congress known as the Federal Reserve Act, approved December 23, 1913, and such bank or trust company may subscribe for, purchase, hold and surrender, from time to time, such amounts of the capital stock of such Federal Reserve Bank as the bank or trust company may deem advisable or as may be required under the Federal Reserve Act, or any amendment thereof, in order to obtain and continue such membership, and upon the purchase of such stock, to assume the liabilities and become entitled to the benefits recited in the Federal Reserve Act. (b) Any corporation which becomes a member of the Federal Reserve System may, while it continues as a member bank of the System, have and exercise any and all of the corporate powers and privileges which may be exercised by member banks of the System.

Del. Code tit. 5, § 764 Capital notes or debentures.

(a) With the approval of the State Bank Commissioner, any bank or trust company in this State, whether or not organized under this chapter, may at any time through action of its board of directors and without requiring any action of its stockholders issue and sell its capital notes or debentures. The capital notes or debentures shall be subordinate and subject to the claims of depositors and may be subordinated and subjected to the claims of other creditors. (b) The term “capital” as used in this Code and any other laws of this State relating to banking shall be construed to embrace the amount of outstanding capital notes and debentures legally issued by any bank or trust company in this State and sold by it. The capital stock of any bank or trust company may be deemed to be unimpaired when the amount of the capital notes and debentures as represented by cash or sound assets exceeds the impairment as found by the State Bank Commissioner. Before any capital notes or debentures are retired or paid by the bank or trust company, any existing deficiency of its capital (disregarding the notes or debentures to be retired) must be paid in cash, to the end that the sound capital assets shall at least equal the capital stock of the bank or trust company. (c) The capital notes or debentures shall in no case be subject to any assessment. The holders of capital notes or debentures shall not be held individually responsible as such holders for any debts, contracts, or engagements of the bank or trust company and shall not be held liable for assessments to restore impairments in the capital of the institution.

Del. Code tit. 5, § 765 Power of trust company.

In the case of a corporation established as a trust company under this chapter, the powers conferred by § 761 of this title shall include the right or power to be appointed executor of a will, codicil or writing testamentary, administrator with the will annexed or administrator of the estate of any decedent, receiver, assignee, guardian, conservator or trustee by will or by any written instrument or other act of the parties, or by any court or official, under the same circumstances, in the same manner, and subject to the same control by the court having jurisdiction of the same, as a legally qualified individual.

Del. Code tit. 5, § 766 Power of trust company to act as agent, registrar, trustee, etc.

A trust company established under this chapter may act as agent for the purpose of issuing, registering or countersigning the certificates of stock, bonds, or other evidences of indebtedness of a corporation, association, municipal corporation, state or national government, on such terms as may be agreed upon, and may also act as trustee for the bondholders of a corporation, and for such purpose may receive transfers of real and personal property upon such terms as may be agreed upon.

Del. Code tit. 5, § 767 Limitations on powers and activities of banks and trust companies.

(a) Any bank or trust company which engages in any activity authorized by § 761(a)(14) of this title otherwise than through a subsidiary thereof shall engage in each such activity through a department or division which shall maintain financial records separate and distinct from other records of such bank or trust company; provided, that such division may be established and may engage in each such activity only in accordance with the provisions of Title 18. (b) A bank or trust company which engages in any activity authorized by § 761(a)(14) of this title, whether through a department, division or subsidiary, may make loans to and transact other business with such department, division or subsidiary, provided such loan or other transaction is made on terms and under circumstances substantially the same as for comparable transactions with or involving other customers, or, in the absence of comparable transactions, upon terms and under circumstances that in good faith would be offered to or would apply to other customers. (c) No department, division or subsidiary of a bank or trust company which engages in any activity authorized by § 761(a)(14) of this title shall utilize in any manner or for any purpose the information contained in any insurance contract between a nonaffiliated insurer and the insured which such company has obtained from the insured in connection with any request for an extension of credit. (d) No bank or trust company which engages in any activity authorized by § 761(a)(14) of this title shall, in evaluating any request or application for the extension of credit, discriminate against an applicant on the basis that such applicant is a competitor of such bank or trust company in any such activity. (e) The offer to sell or the sale of any insurance product authorized to be sold under this section shall be made only by those individuals who are validly licensed as insurance agents or brokers in the State or other jurisdiction in which the sale of insurance is offered or consummated. The offer to sell insurance products shall include, but not be limited to, solicitation by mail, telephone, electronic or print media, and by personal contact. Violation of this subsection shall subject the violator and the employer of the violator to the penalties prescribed in Title 18 for solicitation or sale of insurance and the receipt or payment of commissions to unauthorized persons, if the violation occurred in this State. The Banking Commissioner and the Insurance Commissioner shall be charged to advise regulators in other states or jurisdictions when it is discovered that such violations have occurred in such other state or jurisdiction.

Del. Code tit. 5, § 768 Loans on security of and purchase of its own capital stock.

No corporation established under this chapter or under Chapter 15 of this title shall directly or indirectly make a loan or discount on the security of the shares of its own capital stock, nor be the purchaser or holder of such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith. The stock so purchased or acquired shall, within 6 months after its purchase or acquisition, be sold or disposed of at public or private sale. Notwithstanding the foregoing, the Commissioner may approve the purchase by such a corporation of the shares of its own capital stock, subject to such terms and conditions, if any, as the Commissioner may require.

Del. Code tit. 5, § 769 Ownership of capital stock of another bank or trust company.

No bank or trust company shall hold more than 10 percent of the capital stock of any other bank or trust company without the approval of the Commissioner. In determining whether to grant such approval, the Commissioner shall consider the convenience and needs of the public of this State. Any acquisition by a bank or trust company of more than 10 percent of the capital stock of any other bank or trust company that was approved by the Commissioner before January 1, 1996, shall be deemed to have been approved by the Commissioner without the survival of any conditions required by former subsection (b) of this section.

Del. Code tit. 5, § 770 Branch office.

(a) (1) Any bank or trust company, if authorized by its charter, may open a branch office or place of business, or branch offices or places of business in this State, upon application submitted to and approved by the State Bank Commissioner and upon the issuance of a certificate of authority of the State Bank Commissioner. For the purposes of this section, a branch office or place of business shall include any location, except as provided by §§ 771 and 772 of this title, at which deposits are received or checks paid or money lent. The application shall state the exact location of the intended branch office and the necessity for its opening and the Commissioner shall inquire into the matter, and if the Commissioner deems that the public convenience will be served thereby and that there is good and sufficient reason that the corporation shall have the branch office, the Commissioner shall issue its written permission for the opening of the branch office. Any certificate of authority issued by the Commissioner shall be void and of no effect if after the expiration of a reasonable period of time, as determined by the State Bank Commissioner, such branch is not actually opened for business. The Commissioner shall by regulations prescribe the criteria to be applied in determining what constitutes a reasonable period of time. (2) The applicant shall pay to the Commissioner an investigation fee of $250, which shall not be refundable and shall be submitted with the application. (b) Nothing in this section contained shall deny any bank or trust company the right to continue a branch office or branch offices if such branch office or branch offices shall have been actually established prior to the 1st day of January, 1934, and business continuously conducted thereat since such establishment. (c) (1) Any bank or trust company that is authorized by its charter to operate a branch office may open a mobile branch upon application submitted to and approved by the Commissioner and upon the issuance of a certificate of authority of the Commissioner. For purposes of this section, a “mobile branch” means a branch that operates at more than one location. The application for a mobile branch shall specify the manner of operation of the mobile branch, the area in which the mobile branch will operate, and the necessity for the opening of the mobile branch. If the Commissioner deems that the public convenience will be served and that there is good and sufficient reason that the bank or trust company should operate the mobile branch, the Commissioner shall issue written permission for its opening. Any certificate of authority that the Commissioner issues shall be void and have no affect if, after the expiration of a reasonable period of time as determined by the Commissioner, the mobile branch is not actually open for business. The Commissioner shall by regulation prescribe the criteria to be applied for determining what constitutes a reasonable period of time. (2) The applicant for a mobile branch shall pay the Commissioner an investigation fee of $250 which shall not be refundable and shall be submitted with the application.

Del. Code tit. 5, § 771 Foreign branch offices.

(a) Any bank or trust company having a paid-in capital and surplus exceeding $1,000,000 or more may open branch offices or places of business without the State, in the United States of America, or its possessions or in any other state of the United States of America or in foreign countries upon issuance of a certificate of authority by the State Bank Commissioner and upon such conditions and under such regulations as the State Bank Commissioner may prescribe; provided, however, that the Commissioner shall be authorized to exempt from the coverage of this section such places of business or classes of places of business as the Commissioner shall find inappropriate to include in order to effectuate the purposes of this section. (b) If any bank or trust company has opened and occupied a branch office in a foreign country pursuant to subsection (a) of this section, it may, unless otherwise advised by the State Bank Commissioner, open and occupy an additional branch office or branch offices in such country without having to apply for the approval of the Commissioner provided that it gives the Commissioner notice of at least 30 days (or such shorter period as the Commissioner in individual cases may approve) before opening and occupying any such additional branch office. (c) The applicant shall pay to the Commissioner an investigation fee of $250, which shall not be refundable and shall be submitted with the application for the issuance of a certificate under subsections (a) or (e) of this section. (d) Electronic devices or machines located without the State which may be utilized to accomplish banking transactions by customers of banks located within the State, by whatever arrangement, shall not be deemed to be a branch office under this section or any other provision of Delaware law, nor shall any such arrangement require approval of the State Bank Commissioner. (e) Any corporation established under this chapter or Chapter 16 of this title or by act of the General Assembly having paid-in capital and surplus exceeding $1,000,000 may open affiliated offices or places of business inside or outside this State, in the United States of America or its possessions or in foreign countries solely to conduct activities authorized by § 761(a)(14) or § 1661(a)(14) of this title upon the issuance of a certificate of authority by the Commissioner, and upon such conditions and under such regulations as may be prescribed.

Del. Code tit. 5, § 772 Automated service branch.

Any bank or resulting bank (as defined in § 795 of this title) may install or operate 1 or more automated service branches in this State without approval of, or notice to, the Commissioner.

Del. Code tit. 5, § 773 Definitions.

As used in this subchapter: (1) “Affiliate” means a person that directly, or indirectly through 1 or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. “Control” means beneficial ownership directly, or indirectly through 1 or more intermediaries, of more than 50 per centum of the voting securities or partnership interests in any person other than an individual. (2) “Loans” means consumer loans for personal, property or household purposes, mortgage loans and commercial loans other than to affiliates. (3) “Located in the State” means, with respect to state chartered banks or trust companies, banks or trust companies created under the laws of this State and, with respect to national banking associations, banks or trust companies whose principal place of business is located in this State. (4) “Trust company powers” means all of the powers, rights, privileges and franchises incident to a trust company established under subchapter IV of this chapter, except: a. To receive deposits subject to check or to repayment upon presentation of a passbook, certificate or deposit or other evidence of debt, or upon request of the depositor; and b. To make loans.

Del. Code tit. 5, § 774 Establishment.

A corporation established under this subchapter shall be known as a limited purpose trust company. The Commissioner shall issue no certificate of public convenience and advantage or certificate of authority to establish a family trust company with respect to any corporation proposed to be established under this chapter solely for the purpose of exercising trust company powers, excepting a corporation organized under this subchapter or subchapter IX of this chapter.

Del. Code tit. 5, § 775 Powers; restrictions.

(a) With respect to a limited purpose trust company, the powers conferred by subchapter IV of this chapter or otherwise by law shall be limited solely to such powers as are necessary or incidental to the performance of trust company powers. (b) No limited purpose trust company established under this subchapter may: (1) Amend its articles of association, charter, certificate of incorporation or bylaws by addition to its corporate purpose or powers; (2) Merge or consolidate, except with: a. An affiliate or affiliates; or b. A corporation or corporations established under this subchapter; (3) Have more than a single office within this State open to the public for the conduct of its business; or (4) Exercise any power of appointment in a manner inconsistent with § 3548 of Title 12.

Del. Code tit. 5, § 776 Organization; number of incorporators.

(a) Except as otherwise required by this subchapter, the organization of a limited purpose trust company shall be governed by subchapter II of this chapter, provided that: (1) The articles of association of a limited purpose trust company shall specifically state that the formation of a limited purpose trust company is the purpose for which the subscribers thereto associate themselves; (2) Any application for a certificate of public convenience and advantage made with respect to a limited purpose trust company shall plainly state on its face that the application is for such a certificate with respect to a limited purpose trust company and not for a certificate with respect to a bank or trust company; and (3) Any certificate of public convenience and advantage issued by the Commissioner on such application shall similarly state on its face that such certificate approves the formation of a limited purpose trust company pursuant to this subchapter. (b) The number of persons who associate themselves for the purpose of forming a limited purpose trust company shall be no less than 3, except to the extent otherwise provided in § 722 of this title for a trust company that is formed as a limited liability company.

Del. Code tit. 5, § 777 Certificate of public convenience and advantage.

(a) In determining whether a certificate of public convenience and advantage shall be issued with respect to any limited purpose trust company, the Commissioner shall consider: (1) The financial and managerial resources of the limited purpose trust company and whether it will have sufficient capital to support its business operations; provided however, that in no event shall the capital of the limited purpose trust company be less than that required by § 745 of this title; (2) The future prospects of the limited purpose trust company; (3) The financial history of affiliates of the limited purpose trust company, if any; (4) Whether the organization of the limited purpose trust company may result in undue concentration of resources or substantial lessening of competition in this State; and (5) The convenience and needs of the public and this State. (b) No certificate of public convenience and advantage shall be issued with respect to any limited purpose trust company except on a finding: (1) [Repealed.] (2) That the limited purpose trust company itself, or together with its affiliates, will employ within 3 years of its commencement of business in this State at least 100 persons within this State; provided, that the Commissioner shall extend, upon request of the limited purpose trust company, the time within which to employ such 100 persons to a 4th year if 50 such persons are employed by the end of the 3rd year and thereafter to a 5th year for reasonable cause shown; provided however, that the requirements of this paragraph shall not apply to a limited purpose trust company established under this subchapter on or after January 1, 1996; (3) That the limited purpose trust company itself, or together with its affiliates, has a total ownership equity of at least $25,000,000; provided, however, that the requirements of this paragraph shall not apply to a limited purpose trust company established under this subchapter on or after January 1, 1996; (4) That the limited purpose trust company shall maintain its headquarters in this State; and (5) That, pursuant to its application for such certificate, the limited purpose trust company has specifically agreed to be bound by the conditions set forth in this subchapter. (c) Every corporation formed under this subchapter shall operate in compliance with the standards set forth in subsection (b) of this section; provided however, that any limited purpose trust company established under this subchapter before January 1, 1996, may file an application with the Commissioner for the waiver of either or both of the conditions specified in subsections (b)(2) and (3) of this section. Such application shall contain such information as the Commissioner may by regulation require, shall be accompanied by an investigation fee of $1,150 payable to the Office of the State Bank Commissioner and shall be approved by the Commissioner upon finding that the applicable provisions of law have been complied with. In determining whether to approve an application pursuant to this subsection, the Commissioner shall consider the convenience and needs of the public of this State and, in the case of an application to waive the requirement of subsection (b)(3) of this section, whether the limited purpose trust company will have sufficient capital to support its business operations; provided however, that in no event shall the capital of the limited purpose trust company be less than that required by § 745 of this title.

Del. Code tit. 5, § 778 Violations.

If any limited purpose trust company is found by the Commissioner to have violated any condition of § 777(c) of this title or to have exercised powers beyond those conferred by § 775 of this title, the Commissioner shall issue an order pursuant to § 136 of this title to cease and desist such violation by a date certain. Upon a finding that the limited purpose trust company has not complied with such order, the Commissioner shall take such steps as set forth in § 131 of this title as regards violations of this Code.

Del. Code tit. 5, § 779 Applicability of other provisions of law.

To the extent not inconsistent with the object, purpose, and provisions of this subchapter, a limited purpose trust company shall be subject to any section of this Code or any other statute or law of this State applicable to trust companies.

Del. Code tit. 5, § 781 Definitions.

As used in this subchapter: (1) “Bank” means a state or a national bank. (2) “Continuing bank” means a merging bank, the charter of which becomes the charter of the resulting bank. (3) “Converting bank” means a bank converted from a state to a national bank, or the reverse. (4) “Merger” includes consolidation. (5) “Merging bank” means a party to a merger. (6) “National bank” means a national bank association located in this State. (7) “Resulting bank” means the bank resulting from a merger or conversion. (8) “State bank” means a bank or trust company chartered under the laws of this State.

Del. Code tit. 5, § 782 Merger with or conversion into national bank.

(a) Nothing in the laws of this State shall restrict the right of a bank created under this chapter or Chapter 16 of this title or under any special act of the General Assembly to merge with or convert into a resulting national bank. The action to be taken by such merging or converting state bank and its rights and liabilities and those of its stockholders shall be the same as those prescribed for national banks at the time of the action by the laws of the United States and not by the laws of this State, except that a vote of the holders of two thirds of each class of voting stock of a state bank shall be required for the merger or conversion, and that on conversion by a state into a national bank the rights of dissenting stockholders shall be those specified in § 788 of this title. (b) Upon the completion of the merger or conversion, the certificate and charter of any merging or converting state bank shall automatically terminate. (c) A resulting national bank shall be considered the same business and corporate entity as each merging bank or as the converting bank with all the property, rights, powers, duties and obligations of each merging bank or the converting bank, except as affected by the federal law and by the charter and bylaws of the resulting bank.

Del. Code tit. 5, § 783 Merger with or conversion into state bank.

(a) Upon written approval by the State Bank Commissioner banks may be merged to result in a state bank, or a national bank may convert into a state bank as hereafter prescribed, except that the action by a national bank shall be taken in the manner prescribed by and shall be subject to limitations and requirements imposed by the laws of the United States which shall also govern the rights of its dissenting stockholders. (b) In the case of a merger of banks, without any order or action on the part of any court or otherwise, all appointments, designations, and nominations, and all other rights and interests as trustee, executor, administrator, custodian, registrar of stocks and bonds, guardian of estates, assignee, receiver, trustee of estates of persons mentally ill and in every other fiduciary capacity, shall be automatically vested in the resulting bank; provided, however, that any party in interest shall have the right to apply to an appropriate court or tribunal for a determination as to whether the resulting bank shall continue to serve in the same fiduciary capacity as the merging bank not surviving such merger, or whether a new and different fiduciary should be appointed. (c) In the case of a conversion of national banks or federal savings associations to a state bank, without any order or action on the part of any court or otherwise, all appointments, designations, and nominations, and all other rights and interests as trustee, executor, administrator, custodian, registrar of stocks and bonds, guardian of estates, assignee, receiver, trustee of estates of persons mentally ill and in every other fiduciary capacity, automatically shall remain vested in the state bank resulting from such conversion.

Del. Code tit. 5, § 784 Premerger procedure for resulting state bank.

(a) The board of directors of each merging state bank shall, by a majority of the entire board, approve a merger agreement which shall contain: (1) The name of each merging bank and location of each office; (2) With respect to the resulting bank: (i) its name and the location of the principal and of each additional office which shall not be at places other than preexisting offices of any merging bank; (ii) the name and residence of each director to serve until the next annual meeting of the stockholders; (iii) the name and residence of each officer; (iv) the amount of capital, the number of shares and the par value of each share, or a statement that the resulting bank will be a nonstock corporation; (v) whether preferred stock is to be issued and the amount, terms and preferences; (vi) the designation of the continuing bank, the charter of which is to be the charter of the resulting bank, together with the amendments to the continuing charter and to the continuing bylaws; (3) Provisions governing the manner of converting the shares of the merging banks into shares of the resulting state bank and, if any shares of any of the merging banks are not to be converted solely into shares or other securities of the resulting state bank, the cash, property, rights or securities of any other bank or corporation which the holders of such shares are to receive in exchange for, or upon conversion of, such shares and the surrender of the certificates evidencing them, which cash, property, rights or securities of any other bank or corporation may be in addition to or in lieu of shares of other securities of the resulting state bank and such other details or provisions as are deemed desirable, including, without limiting the generality of the foregoing, a provision for the payment of cash in lieu of the issuance or recognition of fractional shares, interest or rights, or for any other arrangement with respect thereto consistent with § 155 of Title 8; (4) A statement that the agreement is subject to approval by the State Bank Commissioner and by the stockholders of each merging bank; (5) Provisions governing the manner of disposing of the shares of the resulting state bank not taken by dissenting stockholders of merging banks; and (6) Such other provisions as the State Bank Commissioner may require to enable him or her to discharge his or her duties with respect to the merger. (b) After approval by the board of directors of each merging state bank, the merger agreement shall be submitted to the State Bank Commissioner for approval, together with certified copies of the authorizing resolutions of each board of directors showing approval by a majority of the entire board and evidence of proper action by the board of directors of any merging national bank. (c) Within 30 days after receipt by the State Bank Commissioner of the papers specified in subsection (a) of this section, the Commissioner shall approve or disapprove the merger agreement, and if no action is taken, the agreement shall be deemed approved; provided, however, that before the expiration of such 30-day period or any extension thereof, the Commissioner in the Commissioner’s sole discretion may by order extend such period for up to an additional 30 days in order to enable the Commissioner to fulfill the Commissioner’s responsibilities with respect to the merger. The Commissioner shall approve the agreement if it appears that: (1) The resulting state bank meets the requirements of state law as to the formation of a new state bank; (2) The agreement provides an adequate capital structure, including surplus, in relation to the deposit liabilities of the resulting state bank and its other activities which are to continue or are to be undertaken; (3) The agreement is fair; and (4) The merger is not contrary to the public interest. (d) If the State Bank Commissioner disapproves an agreement, the State Bank Commissioner shall state the objections thereto and give an opportunity to the merging banks to amend the merger agreement to obviate such objections.

Del. Code tit. 5, § 785 Merger procedure for resulting state bank.

Following the approval of the merger agreement both in substance and in form by the State Bank Commissioner, the procedure for a merger which is to result in a state bank and the legal effect of any such merger (except as regards the rights of dissenting stockholders to payment for their shares) and the manner of making and effecting the same shall be as prescribed in Chapter 1 of Title 8 for the merger or consolidation of 2 or more corporations organized under the provisions of that chapter.

Del. Code tit. 5, § 786 Conversion of national banks and federal savings associations into state banks.

(a) Except as provided in § 789 of this title, a national bank or federal savings association (as defined in the Home Owners’ Loan Act, as amended, at 12 U.S.C. § 1462) located in this State which follows the procedure prescribed by the laws of the United States to convert into a state bank may be granted a state charter with the approval of the State Bank Commissioner; provided, however, that the conversion shall be deemed approved if no action is taken by the State Bank Commissioner within 30 days after receipt of the completed application in accordance with subsection (b) of this section. Notwithstanding any other provision of this title, a state bank resulting from the conversion of a national bank or federal savings association may retain and exercise all the powers and rights of the converting national bank or federal savings association, in addition to all the powers and rights available to a state bank under this title. (b) The national bank or federal savings association may apply for such charter by filing with the State Bank Commissioner: (1) A certificate signed by its president and cashier and by a majority of the entire board of directors, setting forth the corporate action taken in compliance with the laws of the United States governing the conversion of a national bank or federal savings association to a state bank; and (2) The plan of conversion and the proposed articles of incorporation, approved by the stockholders or members, for the operation of the bank as a state bank.

Del. Code tit. 5, § 787 Use of old name.

A resulting bank shall have the right to use the name of any merging bank or of the converting bank whenever it deems it more convenient to do so.

Del. Code tit. 5, § 788 Dissenting stockholders.

(a) The owner of shares of a state bank (other than the continuing bank), which were voted against a merger to result in a state bank, or against the conversion of a state bank into a national bank, shall be entitled to receive their value in cash, if and when the merger or conversion becomes effective, upon written demand, made to the resulting state or national bank at any time within 30 days after the effective date of the merger or conversion accompanied by the surrender of the stock certificates. The value of such shares shall be determined, as of the date of the stockholders’ meeting approving the merger or conversion, by 3 appraisers, 1 to be selected by the owners of two thirds of the shares involved, 1 by the board of directors of the resulting state or national bank, and the third by the 2 so chosen. The valuation agreed upon by any 2 appraisers shall govern. If the appraisal is not completed within 90 days after the merger or conversion becomes effective the State Bank Commissioner shall cause an appraisal to be made. (b) The expenses of appraisal shall be paid by the resulting state bank. (c) The resulting state or national bank may fix an amount which it considers to be not more than the value of the shares of a merging or the converting bank at the time of the stockholders’ meeting approving the merger or conversion, which it will pay dissenting shareholders of that bank entitled to payment in cash. The amount due under such accepted offer or under the appraisal shall constitute a debt of the resulting state or national bank.

Del. Code tit. 5, § 789 Abandonment of trust powers and provision for successor fiduciaries.

Where a resulting state bank is not to exercise trust powers, the State Bank Commissioner shall not approve a merger or conversion until satisfied that adequate provision has been made for successors to fiduciary positions held by the merging banks or the converting bank.

Del. Code tit. 5, § 790 Nonconforming assets or business.

If a merging or converting bank has assets which do not conform to the requirements of state laws for the resulting state bank or carries on business activities which are not permitted for the resulting state bank, the State Bank Commissioner may permit a reasonable time to conform with state law.

Del. Code tit. 5, § 791 Book value of assets.

Without approval by the State Bank Commissioner no asset shall be carried on the books of the resulting bank at a valuation higher than that on the books of a merging or converting bank at the time of its last examination by a state or national bank examiner before the effective date of the merger or conversion.

Del. Code tit. 5, § 792 Investigation fee.

The resulting bank shall pay to the office of the State Bank Commissioner an investigation fee of $1,150 which shall not be refundable and shall be submitted with the application.

Del. Code tit. 5, § 793 Conversion of credit card institution on or after September 29, 1997.

(a) Any credit card institution formed under Chapter 15 of this title, upon filing with the Commissioner an application in such form as the Commissioner shall from time to time prescribe, submitted and sworn to by the directors of the credit card institution, may become a bank which shall be deemed as having been formed under and which shall be governed by the provisions of Chapter 7 of this title. (b) Upon a determination that the applicant(s) have satisfied the requirements of subsection (a) of this section, the Commissioner shall issue a certificate certifying such compliance and ordering and approving the conversion of the credit card institution, which certificate shall be duly filed with the Secretary of State. A certified copy of such filing shall constitute the certificate authorizing commencement of business pursuant to § 733 of this title. From and after such filing, the credit card institution shall become a bank governed by the provisions of Chapters 7 and 8 of this title and any other law of this State regulating banks generally and shall not be subject to any provision of Chapter 15 of this title or any regulation promulgated thereunder. (c) The resulting bank shall pay to the Commissioner an investigation fee of $1,150 which shall not be refundable and which shall be submitted with the application.

Del. Code tit. 5, § 794 Conversion of a building and loan association.

(a) Notwithstanding any other provision of this title, a building and loan association with voting stock regulated pursuant to Chapter 17 of this title may become a bank which shall be deemed as having been formed under and which shall be governed by the provisions of Chapter 7 of this title. The application for conversion filed with the Commissioner shall be in such form as the Commissioner shall from time to time prescribe, submitted and sworn to by the directors of the building and loan association. A 45-day comment period shall commence upon the date of the first notice required under subsection (b) of this section. (b) The Commissioner shall, at least once during each of the first 2 weeks following the filing of an application under this section, cause to be filed in a newspaper having statewide circulation, at the expense of the applicants, a notice of the filing of such application, which notice shall invite public inspection and comment hereon prior to the expiration of the 45-day period. (c) If, based upon the application and any other information filed with the Commissioner in support of or objection to such application, the Commissioner shall have cause to believe that a certificate of public convenience and advantage would not be issued to the applicants, the Commissioner shall, not later than 45 days after the close of the comment period, advise applicants of such objection, together with support therefor. At the request of the applicants, the Commissioner shall forthwith proceed to give notice and conduct a hearing in accordance with the Administrative Procedures Act, Chapter 101 of Title 29. (d) Upon a determination that the applicants have met the requirements of this section, the Commissioner shall issue a certificate certifying such compliance and ordering and approving a conversion of the building and loan association, which certificate shall be duly filed with the Secretary of State. From and after such filing, the resulting bank shall be governed by the provisions of Chapter 7 of this title and any other law of this State regulating banks generally. (e) If an application is made for conversion of a building and loan pursuant to this section in connection with an application for acquisition of an existing bank pursuant to subchapter IV of Chapter 8 of this title, the Commissioner may consider and approve or reject both applications concurrently. (f) The resulting bank shall pay to the Office of the State Bank Commissioner a fee of $5,000 for the use of the State if there is an approval of the conversion. In addition, the resulting bank shall pay an investigation fee of $1,000 which shall not be refundable and which shall be submitted with the application for conversion.

Del. Code tit. 5, § 796 Definitions.

As used in this subchapter: (1) “Affiliate” has the meaning specified in § 2(k) of the Bank Holding Company Act of 1956, as amended, 12 U.S.C. § 1841(k). (2) “Branch office” has the meaning specified in § 770 of this chapter and also includes a foreign branch office as specified in § 771 of this chapter. (3) “Insured depository institution” has the meaning specified in 12 U.S.C. § 1813(c).

Del. Code tit. 5, § 796A Authorized agency activities.

(a) Any bank may, upon compliance with the requirements of this section, agree to receive deposits, renew time deposits, close loans, service loans, receive payments on loans and other obligations, and perform such other services as may receive the prior approval of the Commissioner as an agent for any affiliated insured depository institution. For purposes of this subsection: The term “receive deposits” means the taking of deposits to be credited to an existing account and is not meant to include the opening or origination of new deposit accounts at an affiliated institution by the agent institution; the term “service loans” means that agent banks may perform ministerial functions for the principal bank making a loan, including such activities as providing loan applications, assembling documents, providing a location for returning documents necessary for making the loan, providing loan account information (such as outstanding loan balances) and receiving payments, but not including such loan functions as evaluating applications or disbursing loan funds; and the term “close loans” does not include the making of a decision to extend credit or the extension of credit. (b) A bank that proposes to enter into an agency agreement under this section shall file with the Commissioner, at least 30 days before the effective date of the agreement: (1) A notice of intention to enter into an agency agreement with an affiliated insured depository institution; (2) A description of the services proposed to be performed under the agency agreement; and (3) A copy of the agency agreement. (c) If any proposed service is not specifically designated in subsection (a) of this section, and has not previously been approved in a regulation issued by the Commissioner, the Commissioner shall decide whether to approve the offering of such service within 30 days after receipt of the notice required by subsection (b); provided, that if the Commissioner requests additional information after reviewing such notice, the time limit for the Commissioner’s decision shall be 30 days after receiving such additional information. In deciding whether to approve, either by regulation or order, any proposed service that is not specifically designated in subsection (a), the Commissioner shall consider whether such service would be consistent with applicable federal and State law and the safety and soundness of the principal and agent institutions. The Commissioner shall give appropriate notice to the public of each approval, by regulation or order, of any proposed service pursuant to this subsection (c). (d) Any proposed service subject to subsection (c) shall be deemed approved if the Commissioner takes no action on the notice required by subsection (b) within the time limits specified in subsection (c). (e) A bank may not under an agency agreement: (1) Conduct any activity as an agent that it would be prohibited from conducting as a principal under applicable state or federal law; or (2) Have an agent conduct any activity that the bank as principal would be prohibited from conducting under applicable state or federal law. (f) The Commissioner may order a bank or any other institution subject to the Commissioner’s enforcement powers to cease acting as an agent or principal under any agency agreement that the Commissioner finds to be inconsistent with safe and sound banking practices. (g) Notwithstanding any other provision of the law of this State, a bank acting as an agent for an affiliated insured depository institution in accordance with this section shall not be considered to be a branch office of that institution.

Del. Code tit. 5, § 796B Regulations.

The Commissioner may promulgate regulations to carry out the responsibilities under this subchapter.

Del. Code tit. 5, § 797 Short title [For application of this section, see 85 Del. Laws, c. 346, § 9].

This chapter is entitled and may be cited as the “Family Trust Company Act.”

Del. Code tit. 5, § 797A Definitions [For application of this section, see 85 Del. Laws, c. 346, § 9].

As used in this subchapter: (1) “Adviser” means a person considered to be an adviser under § 3313 of Title 12. (2) “Affiliate” means a family affiliate of any family member and any person controlling, controlled by or under common control with the family trust company. (3) “Charitable” means having as 1 or more of its purposes or activities, or both, that would qualify an organization or trust as exempt from federal income taxation under 26 U.S.C. § 501(c)(1) through (c)(7) of the Internal Revenue Code, whether or not the organization or trust actually avails itself of such exemption or obtains administrative confirmation thereof. (4) “Collateral kinship” means a relationship that is not lineal but stems from a common ancestor. Degrees of collateral kinship are calculated by adding the number of steps from the designated relative (or other specified person) through the common ancestor to the family member. (5) “Confidential information” means any of the following: a. The names of stockholders, members, partners or other owners or managers, employees, trustees, other fiduciaries, advisers or officers. b. Ownership information. c. Capital contributions. d. Addresses and other contact information. e. Business affiliations. f. Information obtained from the family trust company or any of its directors, officers, employees or stockholders. g. Findings of the Commissioner through any examination or investigation of the family trust company. h. Any information required to be reported to or filed with the Commissioner in respect of the family trust company or its directors, officers, employees or stockholders, or of any accounts administered by the family trust company. i. Any information that qualifies as any person’s “nonpublic personal information” under 15 U.S.C. § 6809 and the regulations adopted pursuant thereto. j. Any information or agreement relating to any merger, consolidation, conversion, domestication, transfer, dividend, sale or transfer of assets or stock or other equity interests or any other similar reorganization or transaction. k. Any information or agreement relating to any relationship with an individual trustee, other fiduciary or adviser for services from the family trust company or with an outside services provider to the family trust company. l. Any other nonpublic information that, in the judgment of the Commissioner, is of a similar nature to any of the foregoing or could be used in connection with an act of bribery, extortion, identity theft or terrorism involving a family member or any owner, management personnel or employee or other representative of a family trust company. (6) “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise. (7) a. “Designated relative” means either a living or deceased person or a living or deceased person and their living or deceased spouse, surviving spouse, or former spouse, in each case designated by 1 of the following: 1. The application for a certificate of authority to establish a family trust company. 2. The most recent filing with the Commissioner pursuant to § 797J of this title. b. A living or deceased person and their living or deceased spouse, surviving spouse, or former spouse, if designated as a designated relative, shall count as 1 designated relative. (8) “Family affiliate” means a corporation, partnership (whether general or limited), limited liability company, trust (including a common law trust, business trust, statutory trust, purpose trust, voting trust or any other form of trust), association, or any other organization or entity with respect to which 1 or more family members possess control. (9) “Family member” includes any of the following: a. Each designated relative, and their spouse, surviving spouse, or former spouse. b. Any person within the tenth degree of lineal descent from a designated relative. c. Any person within the tenth degree of collateral kinship to a designated relative. d. Any individual who is a beneficiary (whether current, contingent, or residual), or a remainderman, legatee or devisee under a will or trust created or funded (directly or indirectly, in whole or in part) by a family member identified in paragraphs (8)a. through c. of this section, and the spouse, surviving spouse, former spouse, and other immediate family of that beneficiary, remainderman, legatee or devisee. e. The spouse and any surviving or former spouse of any person identified in paragraphs (9)a. through d. of this section. f. Any person who is within the fifth degree of lineal kinship of a spouse, surviving spouse, or former spouse identified in paragraph (9)e. of this section who is not a designated relative. g. Any family affiliate and the current or former officers, managers, directors, trustees, other fiduciaries, advisers, shareholders, partners or members of that family affiliate and their immediate families. h. A trust established or funded (directly or indirectly or in whole or in part) by 1 or more family members, either individually or jointly, with any individual trustee, fiduciary, adviser, protector or other individual assisting with the administration of that trust. i. A trust established or funded (directly or indirectly, in whole or in part) by a person who is not a family member if any of the following apply: 1. The majority of current beneficiaries of that trust are family members. 2. The majority of the current, noncharitable beneficiaries of that trust are family members. 3. If all current beneficiaries are nonfamily member charities, a majority of the beneficiaries who succeed to the primary nonfamily member charitable beneficiaries are family members. j. The estate of a family member and the estates of current or former officers, managers, directors, trustees, other fiduciaries, advisers, shareholders, partners, or members of a family affiliate and their immediate family. k. The estate of a person who is not a family member if the majority of the beneficiaries of that estate, determined by number of beneficiaries or monetary value of their bequests, are family members. l. An individual retirement account, qualified plan account or other deferred compensation or retirement account of a family member who is an individual and any beneficiary of such an account. m. A trust of which a family member is a trustee, other fiduciary or adviser, an estate of which a family member is an executor, conservator or similar fiduciary, and a person for whom a family member is a legal guardian, custodian, conservator or similar fiduciary. n. A charitable foundation, corporation, trust, or other entity that meets any of the following: 1. It is established by 1 or more family members and would qualify as any of the following: A. A “private foundation” as defined in 26 U.S.C. § 501(c)(3) of the Internal Revenue Code and 26 C.F.R. § 1.509(a)-1 of the Treasury Regulations, including a private “operating foundation” as defined in 26 U.S.C. § 4942 and 26 C.F.R. § 53.4942(b)-1 of the Treasury Regulations. B. A supporting organization as defined in 26 U.S.C. § 509(a)(3) of the Internal Revenue Code, regardless of whether the entity actually avails itself of the exemption or obtains administrative confirmation. C. An organization described in 26 U.S.C. § 501(c)(4) of the Internal Revenue Code. 2. It is primarily funded, directly or indirectly, by 1 or more family members. o. Any other individual whom the family trust company requests to be treated as a family member and whom the Commissioner determines has a close, family-like relationship with the family. (10) “Family trust company” means a corporation or limited liability company that meets all of the following: a. Acts or proposes to act as a fiduciary. b. Is organized under the laws of this State as a family trust company pursuant to this subchapter. c. Does not transact trust company business with, solicit trust company business from, or propose to or act as a fiduciary for, the general public or any person who is not a family member. d. Has 1 designated relative. (11) “Foreign family trust company” means a trust company that is organized as a corporation or a limited liability company under the laws of, and is supervised and regulated by the principal banking regulator of, another state, the District of Columbia, or a territory or possession of the United States, and that satisfies the definition of a “family trust company” under paragraph (10) of this section, excluding the requirement of paragraph (10)b. of this section. (12) “Immediate family” with respect to an individual, means any of the following: a. That individual’s: 1. Spouse. 2. Parents and step-parents. 3. Any person within the second degree of lineal descent of that individual b. The spouse of any individual listed under paragraphs (12)a.2. and a.3. of this section. c. The parents and step-parents of any individual listed under paragraph (12)a. or b. of this section. d. Any person within the second degree of lineal descent of any of the individuals listed under paragraphs (12)a. through c. of this section. (13) a. “Lineal kinship” means a family member who is in the direct line of ascent or descent from a designated relative. A “descendant” of a person includes any of the following: 1. Any natural child of that person. 2. Any individual legally adopted by that person. 3. Any stepchild or former stepchild of that person. 4. A foster child or former foster child of that person. 5. Any individual that was a minor when that person became the legal guardian of that individual. 6. Any child of that person’s spouse. For purposes of this paragraph (13), “any child” includes, a natural child, adopted child, or stepchild. b. Degrees of lineal kinship are calculated by adding the number of steps from the designated relative (or other specified person) directly through each person to the family member. (14) “Loans” means as defined in § 773 of this title. (15) “Principal place of business” means a physical office of a family trust company in this State, which office may be located within the premises of a bank, trust company, or other outside services provider that is providing services to the family trust company as permitted under paragraph (15)c.2. of this section, at which the family trust company does all of the following: a. Maintains original or true copies of all material business records and accounts of the family trust company that are accessible to and available for examination by the Commissioner. b. Conducts operations in this State through its directors, officers, or employees, or through a bank, trust company, or other outside services provider referred to in paragraph (15)c.2. of this section, as necessary to do all of the following: 1. Accept and administer trusts in this State. 2. Meet the applicable legal standards to permit the laws of this State to govern the administration of trusts for which the family trust company acts as fiduciary, to the extent that the laws of this State are intended to govern the administration of the trusts. 3. Hold confidential private meetings. c. Maintains at least 1 trust officer who is an employee of the family trust company or is provided through an arrangement under paragraph (15)c.2. of this section. The trust officer must have training and experience in accepting and administering trusts that is satisfactory to the Commissioner. The family trust company must also meet either of the following: 1. Maintain additional employees the Commissioner deems necessary to perform the functions required by paragraph (15)b. of this section. 2. Obtain the use of additional qualified personnel and administrative services necessary to perform the functions required by paragraph (15)b. of this section through an arrangement with either of the following: A. A bank or trust company that maintains its principal place of business in this State, is authorized under the laws of this State to exercise fiduciary powers in this State and is subject to the supervision of the Commissioner or the Office of the Comptroller of the Currency. B. An outside services provider satisfactory to the Commissioner. d. Meets other reasonable requirements the Commissioner imposes by regulation or order upon a finding that the requirement is necessary to protect beneficiaries of trusts administered by the family trust company. (16) “Spouse” means a spouse or spousal equivalent. (17) “Trust company powers” means the powers specified in § 773(4) of this title, including any regulations, guidance, and interpretations of the Commissioner regarding the powers of trust companies.

Del. Code tit. 5, § 797B Establishment [For application of this section, see 85 Del. Laws, c. 346, § 9].

A corporation or a limited liability company established under this subchapter shall be known as a family trust company.

Del. Code tit. 5, § 797C Powers; restrictions [For application of this section, see 85 Del. Laws, c. 346, § 9].

(a) With respect to a family trust company, the powers conferred by subchapter IV of this chapter or otherwise by law shall be limited solely to trust company powers and such powers as are necessary or incidental to the performance of trust company powers within the restrictions of the definition of a “family trust company.” (b) Without the Commissioner’s approval, a family trust company may not do any of the following: (1) Amend its articles of association, charter, certificate of incorporation, certificate of formation, or bylaws by addition to its corporate purpose of powers. (2) Merge or consolidate, except with the following: a. Another family trust company established under this subchapter. b. An entity that is a family member, so long as the family trust company is the surviving entity of such merger or consolidation. c. An entity that will become as a result of the merger or consolidation, a family trust company. (c) A family trust company may not do any of the following: (1) Have more than a single office within this State, which shall be its principal place of business. (2) Advertise its services to the general public. (3) Exercise any power of appointment in a manner inconsistent with § 3548 of Title 12.

Del. Code tit. 5, § 797D Organization; number of incorporators [For application of this section, see 85 Del. Laws, c. 346, § 9].

(a) Except as otherwise required by this subchapter, the organization of a family trust company is governed by subchapter II of this chapter. All of the following shall apply to the organization of a family trust company: (1) The articles of association of a family trust company shall specifically state that the formation of the family trust company is the purpose for which the subscribers thereto associate themselves. (2) Sections 724, 725, and 726 of this title, and any applicable regulations with respect thereto, shall be inapplicable to the organization of a family trust company. The incorporators of a family trust company shall apply to the Commissioner for a certificate of authority to establish the family trust company. (3) Any application for a certificate of authority to establish a family trust company shall plainly state on its face that the application is for such a certificate with respect to a family trust company and not for a certificate of public convenience and advantage with respect to a bank, trust company or limited purpose trust company. (4) Any certificate of authority to establish a family trust company issued by the Commissioner in respect of an application shall similarly state on its face that the certificate of authority approves the formation of a family trust company pursuant to this subchapter. (b) The number of persons who associate themselves for the purpose of forming a family trust company shall be no less than 3, except to the extent otherwise provided in § 722 of this title for a family trust company that is formed as a limited liability company.

Del. Code tit. 5, § 797E Application for a certificate of authority to establish a family trust company [For application of this section, see 85 Del. Laws, c. 346, § 9].

(a) The persons associating themselves for the purpose of forming a family trust company must file an application with the Commissioner on forms prescribed by the Commissioner. The application must contain or be accompanied by such information as the Commissioner requires, including the designated relative. (b) The fees associated with the formation of a family trust company are set forth in § 735 of this title, other than the fee under § 735 of this title for the issuance of a certificate authorizing the corporation to begin the transaction of business. In addition, an initial annual license fee of not less than $5,000 nor more than $25,000, determined in accordance with § 797J of this title, must be paid by the family trust company before the issuance of the certificate authorizing the family trust company to begin the transaction of business by the Commissioner. (c) Within 60 days after an applicant files an application for a certificate of authority to establish a family trust company, the Commissioner shall notify the applicant of any additional information required for the Commissioner to determine the application is complete. When the Commissioner receives all requested information and determines the application is complete, the Commissioner shall notify the applicant that the application is accepted for filing. Within 60 days after acceptance, the Commissioner shall investigate the application to determine if it meets the requirements of this subchapter. Notwithstanding any other law of this State, there is no requirement to publish public notice of the filing of, and the Commissioner is not required to hold a public hearing on, an application for a certificate of authority to establish a family trust company, in order to make a decision on the application. (d) The Commissioner shall consider an application for a certificate of authority to establish a family trust company withdrawn if the Commissioner does not receive all required information and fees within 6 months after the Commissioner’s initial request, or within a later period set by the Commissioner. If an application is withdrawn, the Commissioner may not issue a certificate of authority to establish a family trust company unless the applicant submits a new application and pays all required fees. (e) When determining whether to issue a certificate of authority to establish a family trust company, the Commissioner shall consider all of the following: (1) Whether the family trust company’s proposed capital and surplus satisfy the requirements of this subchapter and are adequate for its projected activities. In making this determination, the Commissioner shall consider the projected level of fiduciary assets under management and administration for each of the first 3 years of operation. The Commissioner may not require more than $375,000 in capital and surplus unless the Commissioner reasonably determines, considering all the factors under § 797F(b) of this title, that the family trust company’s operation would otherwise be unsafe and unsound or is necessary for the protection of family members. The Commissioner may not require more than $1,000,000 in capital and surplus unless extraordinary circumstances exist. The Commissioner shall state the basis for any determination under this paragraph (e)(1) in written findings. (2) The family trust company’s future prospects. (3) The family trust company’s managerial resources, including the background of each proposed officer, director, and stockholder of the family trust company, and the experience of any outside service provider. (4) The financial history of the family trust company’s affiliates. (5) The needs of the public and this State. (f) If the Commissioner refuses to issue a certificate of authority to establish a family trust company in connection with an application, the Commissioner shall notify the applicant in writing. The notice must state the reasons for the refusal. Within 10 days after receiving the notice, the applicant may request a hearing before the Commissioner under Chapter 101 of Title 29. If the Commissioner issues a certificate of authority to establish a family trust company, the incorporators shall hold the first meeting of incorporators and follow the procedure under § 727 of this title.

Del. Code tit. 5, § 797F Capital stock; capital assets [For application of this section, see 85 Del. Laws, c. 346, § 9].

(a) Section 745 of this title does not apply to a family trust company. The capital stock of a family trust company organized under this subchapter shall be $250,000. In addition to the capital stock required by the foregoing, a family trust company shall have a paid-in surplus account equal to no less than ½ of the minimum capital stock required by this section. The minimum capital stock and paid-in surplus required to be maintained by such family trust company in its trust company business under this section may not be utilized to satisfy the capital or reserve requirements to which the family trust company may be subject with respect to any activity authorized by § 761(a)(14) of this title. (b) The Commissioner may require a family trust company to maintain capital and surplus in excess of the minimum required under subsection (a) of this section. The Commissioner may impose this requirement at the time of organization of the family trust company or any later time. Unless the Commissioner reasonably determines that the family trust company’s operation would be unsafe and unsound or it is necessary for the protection of family members, the Commissioner may not require more than the minimum capital and surplus required by subsection (a) of this section. Unless the Commissioner reasonably determines that extraordinary circumstances exist, the Commissioner may not require more than $1,000,000 in total capital and surplus. The Commissioner shall base a family trust company’s required amount of capital and surplus on an assessment of the risks associated with the family trust company’s business plan, the application, any investigation, the conduct of its business, the nature of its fiduciary accounts, and any examination by or filing with the Commissioner. In making this determination, the Commissioner may consider any of the following: (1) The nature and type of business proposed to be conducted or being conducted by the family trust company. (2) The nature and liquidity of the family trust company’s assets or proposed assets. (3) The amount of fiduciary assets that are or are projected to be under management or under administration of the family trust company. (4) The type of fiduciary assets held or proposed to be held by the family trust company and the proposed depositories or custodians, if any, of the fiduciary assets. (5) The complexity of fiduciary responsibilities and degree of discretion undertaken or proposed to be undertaken by the family trust company. (6) The competence and experience of current or proposed directors and officers of the family trust company and their understanding of, and capability and willingness to perform, their duties, including, without limitation, the duties of directors arising under § 742(a) of this title; and whether, if any limitations be found in the management team, the extent to which they have been compensated for by capable and experienced outside services providers. (7) The extent and adequacy of proposed internal controls and written policies and procedures of the family trust company. (8) Whether the family trust company has obtained or will obtain suitable audits by qualified outside auditors of its books and records and its fiduciary activities under applicable accounting rules and standards, or suitable internal audits, and the results of any such audits that have been completed within the prior 3 years. (9) The existence and adequacy of insurance maintained or proposed to be maintained by the family trust company. (10) The level of success of the family trust company in achieving the financial projections submitted to the Commissioner with its application for a certificate of authority to establish a family trust company. (11) The level of fulfillment by the family trust company of its representations and its descriptions of its business structures and methods and management set forth in its application for a certificate of authority to establish a family trust company. (c) If the Commissioner requires capital and surplus in excess of the minimum required under this subchapter, the Commissioner shall issue an order stating the reasons for the requirement and the timetable for contribution to the family trust company of the additional capital and surplus. (d) Assets used to satisfy the minimum capital and surplus requirements under this section must consist of 1 or more of the following: (1) Cash. (2) United States government obligations that mature within 3 years after acquisition. (3) Obligations fully backed by the full faith and credit of the United States that mature within 3 years after acquisition. (4) Bank deposits insured by the Federal Deposit Insurance Corporation that mature within 3 years after acquisition. (5) Readily marketable securities or other liquid and secure assets. (e) A family trust company shall maintain the liquid portion of its stockholders’ equity in accounts with 1 or more banks or other financial institutions in this State. (f) Except as provided under subsections (d) and (e) of this section, a family trust company may invest its assets for its own account as permitted under this chapter.

Del. Code tit. 5, § 797G Conversion of foreign family trust company or limited purpose trust company to family trust company [For application of this section, see 85 Del. Laws, c. 346, § 9].

(a) Upon written approval by the Commissioner, a foreign family trust company or a limited purpose trust company may convert to a family trust company, as described in this section, except that the action by a foreign family trust company shall be taken in the manner prescribed by and subject to the limitations and requirements imposed by the laws of the jurisdiction in which the foreign family trust company is organized, and such laws shall also govern the rights of its dissenting stockholders or members. (b) A foreign family trust company or a limited purpose trust company that follows the conversion procedures set forth in Chapter 1 of Title 8 or Chapter 18 of Title 6, as applicable, as well as, with respect to the conversion of a foreign family trust company, the procedure prescribed by the laws of the jurisdiction in which the foreign family trust company is organized, to convert to a family trust company may be granted a certificate of authority to establish a family trust company with the approval of the Commissioner; provided, however, that the conversion shall be deemed approved if no action is taken by the Commissioner within 30 days after receipt of the completed application in accordance with subsection (c) of this section. (c) The foreign family trust company or limited purpose trust company may apply for a certificate of authority to establish a family trust company and approval of the conversion by filing all of the following with the Commissioner: (1) A certificate signed by its president and cashier or treasurer or equivalent officers and by a majority of its entire board of directors or equivalent governing body or governing persons, setting forth the corporate action taken in compliance with the laws of the jurisdiction in which the foreign family trust company or limited purpose trust company is organized. (2) The plan of conversion and the proposed articles of association and bylaws (if applicable), approved by the stockholders or members of the foreign family trust company or limited purpose trust company, for the operation of the foreign family trust company or limited purpose trust company as a family trust company. (3) Satisfactory evidence that at the effective time of the conversion, the family trust company will do all of the following: a. Satisfy the definition of a “family trust company” established under this subchapter. b. Comply with the requirements of §§ 797C, 797D, 797F and 797K of this title. (d) Following the approval of the conversion by the Commissioner under this section, the legal effect of a conversion of a foreign family trust company into a family trust company, and the manner of making and effecting the same, shall be as prescribed in Chapter 1 of Title 8 for the conversion of domestic or foreign corporations or Chapter 18 of Title 6 for the conversion of domestic or foreign limited liability companies, as applicable. (e) In the case of a conversion of a foreign family trust company or a limited purpose trust company to a family trust company, without any order or action on the part of any court or otherwise, all appointments, designations, and nominations, and all other rights and interests as trustee, executor, administrator, custodian, registrar of stocks and bonds, guardian of estates, assignee, receiver, trustee of estates of persons mentally ill and in every other fiduciary capacity, automatically shall remain vested in the family trust company resulting from such conversion.

Del. Code tit. 5, § 797H Conversion by a family trust company to a limited purpose trust company [For application of this section, see 85 Del. Laws, c. 346, § 9].

(a) Upon written approval by the Commissioner, a family trust company may convert to a limited purpose trust company, as described in this section. (b) A family trust company which follows the conversion procedures under Chapter 1 of Title 8 or Chapter 18 of Title 6, as applicable, to convert to a limited purpose trust company may be granted a certificate of public convenience and advantage with respect to a limited purpose trust company with the approval of the Commissioner; provided, however, that the granting of the certificate of public convenience and advantage and the conversion shall be deemed approved if no action is taken by the Commissioner within 30 days after receipt of the completed application in accordance with subsection (c) of this section. (c) The family trust company may apply for a certificate of public convenience and advantage with respect to a limited purpose trust company and approval of the conversion by filing the following with the Commissioner: (1) A certificate signed by its president and cashier or treasurer or equivalent officers and by a majority of its entire board of directors, setting forth the corporate action taken in compliance with the laws of this State. (2) The plan of conversion and the proposed articles of association and bylaws (if applicable), approved by the stockholders or members of the family trust company, for the operation of the family trust company as a limited purpose trust company. (3) Satisfactory evidence that at the effective time of the conversion, the limited purpose trust company will comply with the requirements set forth in subchapter V of this chapter.

Del. Code tit. 5, § 797I Foreign trust offices of family trust companies [For application of this section, see 85 Del. Laws, c. 346, § 9].

Any family trust company may open 1 or more trust offices or other places of business without this State, in the United States of America, or its possessions or in any other state of the United States of America or in foreign countries in conformance with and subject to the requirements of § 771 of this title; provided, however, that except as otherwise required by § 771(e) of this title, the paid-in capital and surplus of a family trust company need only meet the requirements of § 797F of this title.

Del. Code tit. 5, § 797J Annual fee; change of designated relative fee [For application of this section, see 85 Del. Laws, c. 346, § 9].

(a) On or before January 30 of each year, other than the year in which the initial license fee was paid under § 797E of this title, each family trust company holding a certificate of authority to transact business issued pursuant to this chapter must pay to the Office of the State Bank Commissioner a license fee of not less than $5,000 nor more than $25,000. The Commissioner may adopt regulations establishing the amount of the license fee in excess of the minimum required by this subsection. (b) A family trust company may designate a new designated relative or add the spouse, surviving spouse, or former spouse of the existing designated relative as a designated relative by making a filing with the Commissioner when the family trust company pays its annual license fee. A family trust company that designates a new designated relative or adds a spouse, surviving spouse, or former spouse of an existing designated relative as a designated relative when paying its annual license fee must pay an additional $1,000 fee for each person added. (c) A family trust company may change a designated relative or add a spouse, surviving spouse, or former spouse of an existing designated relative as a designated relative at any other time by making a filing with the Commissioner and paying a nonrefundable $1,000 fee for each person designated. (d) If the Commissioner disapproves any designation of a new designated relative or the spouse, surviving spouse, or former spouse of a designated relative as a designated relative, the Commissioner shall notify in writing the family trust company of the disapproval and the reasons for the disapproval. Within 10 days after receiving the notice of disapproval, the family trust company may request a hearing before the Commissioner under Chapter 101 of Title 29.

Del. Code tit. 5, § 797K Insurance coverage [For application of this section, see 85 Del. Laws, c. 346, § 9].

A family trust company shall at all times maintain a director, officer and employee dishonesty bond in the amount of at least $1,000,000. In addition, a family trust company that is subject to the minimum capital and surplus requirements under § 797F of this title shall at all times maintain general liability and errors and omissions insurance coverage in an amount of at least $5,000,000 per occurrence. The insurance coverage required by this section may be in any form and may be paid for by the family trust company or its affiliates.

Del. Code tit. 5, § 797L Confidentiality of family trust company records [For application of this section, see 85 Del. Laws, c. 346, § 9].

(a) Notwithstanding any contrary provision of this Code, and without limitation of the protections afforded by § 125 of this title or Chapters 100 and 101 of Title 29, except as otherwise provided in this section, any application or personal biographical or financial records submitted by a person pursuant to the provisions of this subchapter, any personal or financial records or other documents obtained by the Office of the State Bank Commissioner pursuant to an examination or audit conducted by the Office of the State Bank Commissioner pursuant to this chapter, and any other private information or confidential information relating to a family trust company or family members are confidential and may be disclosed by the Office of the State Bank Commissioner only to the following: (1) Any authorized employee of the Office of the State Bank Commissioner. (2) Any state or federal agency having jurisdiction over the family trust company. (3) Any other person, if the Commissioner determines that the interest of the public in disclosure outweighs the privacy interest of the person to whom the information relates. (b) Unless prohibited by law or court order, the Commissioner shall provide a family trust company or other person to whom the confidential information relates 10 days’ written notice before disclosing confidential information under paragraph (a)(3) of this section. (1) Any family trust company or other person that receives notice under this subsection may object to the disclosure of confidential information and is entitled to a hearing under Chapter 101 of Title 29. (2) If a family trust company or other person requests a hearing, the Commissioner may not disclose the information before the conclusion of the hearing and the issuance of a ruling, unless otherwise required by law or court order. (c) Prior to dissemination of any confidential information, the Commissioner shall require the receiving party to execute a written agreement to maintain the confidentiality of the information. The Commissioner may not disclose confidential information to the general public or to a competitor or potential competitor of a family trust company. (d) This subchapter does not preclude a law-enforcement officer, a law-enforcement agency, or a court from gaining access to confidential records by subpoena, court order, search warrant, or other lawful means.

Del. Code tit. 5, § 797M Violations [For application of this section, see 85 Del. Laws, c. 346, § 9].

If any family trust company is found by the Commissioner to have violated any condition or restriction of this subchapter or to have exercised powers beyond those conferred by this subchapter, or to have transacted trust company business with any person not a family member, the Commissioner shall issue an order pursuant to § 136 of this title to cease and desist such violation by a date certain. Upon a finding that the family trust company has not complied with such order, the Commissioner shall take such steps set forth in § 131 of this title as regards violations of this Code as the Commissioner deems appropriate.

Del. Code tit. 5, § 797N Examinations and regulations [For application of this section, see 85 Del. Laws, c. 346, § 9].

(a) The Commissioner may examine a family trust company as provided in Chapter 1 of this title. For each examination of a family trust company authorized under this subchapter, the Commissioner shall charge and collect from the family trust company an examination fee as provided in Chapter 1 of this title. (b) To the extent reasonable and justified under the circumstances, the Commissioner shall conduct examinations in a manner reasonably calculated to limit the burden on the family trust company and family members. The Commissioner may conduct an examination using any of the following or combination of the following: (1) An on-site examination at any office of the family trust company. (2) An off-site review of information provided by the family trust company at the Commissioner’s request. (c) The Commissioner may promulgate regulations to carry out the Commissioner’s responsibilities under this subchapter. (d) In establishing regulations and standards for the examination of family trust companies, the Commissioner shall do all of the following: (1) Distinguish the regulatory requirements and examination standards of family trust companies from trust companies serving the general public based on the relative risks of each type of trust company. (2) Tailor the regulatory requirements and examination standards applicable to a family trust company to achieve the purposes of this subchapter in light of the nature of the business of a family trust company.

Del. Code tit. 5, § 797O Applicability of other laws [For application of this section, see 85 Del. Laws, c. 346, § 9].

Except as otherwise expressly provided for in this subchapter, and to the extent not inconsistent with the object, purpose and provisions of this subchapter, a family trust company shall be subject to and be entitled to the benefits of any section of this Code and any other statute or law of this State applicable to trust companies.
Source: DE Code (Official Site)URL: https://delcode.delaware.gov/title5/c007/sc01/index.htmlFetched: 10/4/2026

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