N.J. Stat. tit. 17, ch. 52

N.J. Stat. tit. 17, ch. 52
in effect

N.J. Stat. § 17:52-1 Business development corporations; purposes

Five or more persons, all of whom shall be residents of this State, may form a corporation, which shall be designated as a business development corporation, which shall have power to make loans and investments for the purposes of bringing new industrial, mercantile, recreational, agricultural, mining and business establishments into this State; assisting existing industrial, mercantile, recreational, agricultural, mining and business establishments to remain in this State; expanding, rehabilitating, and developing industry, commerce, agriculture, mining, recreational facilities and business generally in this State to the end that the economic stability of the State may be maintained, and that the opportunities for employment and the enjoyment of a high standard of living be uniform throughout the State. L.1957, c. 218, p. 753, s. 1.

N.J. Stat. § 17:52-2 Certificate of incorporation; contents

A. The persons desirous of creating a business development corporation shall execute and acknowledge a certificate of incorporation stating (a) the name by which the corporation shall be known, which shall include the words "Business Development Corporation;" (b) the location, described by street, number, municipality and county, of the principal office of the corporation; (c) the name of the agent in charge of the principal office of the corporation, upon whom service of process against the corporation may be served; (d) the amount of the authorized capital stock of the corporation; (e) the par value of each share of stock of the corporation, which shall be not less than $10.00; (f) the amount of the capital stock with which the corporation will commence business, which shall be not less than $100,000.00; (g) the names and addresses of the incorporators, and the number of shares subscribed for by each; (h) the names and addresses of the corporations, as limited by section 14 of this act, which have undertaken in writing to become members of the business development corporation, and the aggregate amount which such members are required to lend to the corporation, which shall be not less than $100,000.00; (i) such other provisions, not inconsistent with this act, or with the provisions of Title 14, Corporations, General, of the Revised Statutes as the incorporators may choose to insert for the management of the business and the conduct of the affairs of the corporation. B. Each certificate of incorporation of a business development corporation shall contain a statement that it is incorporated under the provisions of the Business Development Corporation Act of 1957. No certificate of incorporation of a business development corporation shall be required to contain a statement of its powers or purposes. L.1957, c. 218, p. 753, s. 2.

N.J. Stat. § 17:52-3 Submission of certificate of incorporation to Commissioner of Banking and Insurance; statement

The certificate of incorporation shall be submitted to the Commissioner of Banking and Insurance within 60 days after its execution, together with a statement, certified as hereinafter provided, setting forth (a) the names and addresses of the subscribers to the capital stock with which the corporation will commence business, and the number of shares subscribed for by each; (b) the names and addresses of those corporations which have agreed in writing to become members of the corporation, and the amount, as hereinafter limited, which each such member is committed to lend to the business development corporation; (c) in any case where an incorporator or a subscriber is acting as the agent for or nominee of another, the name and address of the principal for whom he is acting, and the number of shares which will be held for such principal; (d) whether it is intended that the scope of the corporation's business is to be State-wide, or restricted to one or more counties; and, if the latter, the name or names of the county or counties in which it is contemplated the corporation will transact business. L.1957, c. 218, p. 754, s. 3.

N.J. Stat. § 17:52-4 Certification of statement

The statement submitted pursuant to section 3 of this act shall be signed and certified by any 2 of the incorporators, and shall state that the contents thereof, insofar as they relate to matters within the knowledge of the signers, are true; and that, insofar as they relate to matters not within their knowledge, the signers believe them to be true. L.1957, c. 218, p. 755, s. 4.

N.J. Stat. § 17:52-5 Application for charter

The submission of the certificate of incorporation and the certified statement pursuant to sections 3 and 4 of this act shall constitute the application for a charter under this act. L.1957, c. 218, p. 755, s. 5.

N.J. Stat. § 17:52-6 Designation of time and place of hearing; notice

If the Commissioner of Banking and Insurance shall find that the certificate of incorporation and the certified statement comply with the requirements of sections 3 and 4 of this act, he shall designate a time and place for a hearing upon the application for charter, which shall be not less than 6 weeks and not more than 8 weeks after the date of the submission of the application for charter. The commissioner may require that the incorporators give such public notice of the application for charter and of the time and place of the hearing thereon, as the commissioner may deem advisable, but the commissioner may, if he considers that such notice will serve no useful purpose, hold such hearing without such notice. L.1957, c. 218, p. 755, s. 6.

N.J. Stat. § 17:52-7 Hearing on application for commissioner

At the time and place designated for the hearing, the incorporators shall file proof with the Commissioner of Banking and Insurance that the requirements, if any, for public notice of the hearing have been complied with, and the commissioner shall afford all those desirous thereof, an opportunity to be heard. In addition to the matters presented at the hearing, the commissioner shall consider such facts and circumstances as he may determine to be relevant as a result of an independent investigation made or caused to be made by him. The commissioner shall cause a stenographic record of the hearing to be made, the cost whereof shall be paid by the incorporators. L.1957, c. 218, p. 756, s. 7.

N.J. Stat. § 17:52-8 Determination by commissioner

The commissioner shall, within 90 days after the hearing, approve or disapprove the application and shall file a written memorandum of his decision in the Department of Banking and Insurance in which he shall state the reasons for his decision. L.1957, c. 218, p. 756, s. 8.

N.J. Stat. § 17:52-9 Approval of application by charter; record

If the commissioner shall determine, as a result of the hearing and of the independent investigation made by him (a) that the capital stock with which the corporation will commence business has been subscribed for, and that each subscriber has undertaken in writing to pay the amount of his subscription in cash upon approval according to law of the certificate of incorporation; (b) that the amounts which those who have agreed in writing to become members of the corporation are bound, as hereinafter provided, to lend to the corporation, at least equal in the aggregate the amount of the capital stock with which the corporation will commence business; (c) that the incorporators are qualified by character and experience to conduct a business development corporation; (d) that the establishment of the business development corporation will not interfere with or adversely affect existing facilities for credit he shall approve the application. The commissioner shall have power, in approving an application for charter, to limit the transaction of the corporation's business to a single county, or to 2 or more contiguous counties. L.1957, c. 218, p. 756, s. 9.

N.J. Stat. § 17:52-10 Concurrence by banking advisory board

If the Commissioner of Banking and Insurance approves the application for charter, he shall present the record of the hearing and a memorandum of his conclusions to the banking advisory board at a meeting of that board called for the purpose of considering the application for charter. If the banking advisory board concurs in the approval by the commissioner, the commissioner shall endorse upon or annex to the certificate of incorporation a certificate that it has been approved by him and by the banking advisory board, and the certificate shall be filed in the Department of Banking and Insurance. L.1957, c. 218, p. 757, s. 10.

N.J. Stat. § 17:52-11 Beginning of corporate existence

A. Upon the filing of the certificate of incorporation pursuant to section 10 of this act, the subscribers to the certificate, their successors and assigns, shall be a corporation by the name stated in the certificate, subject to the provisions of this act, and subject to the provisions of Title 14, Corporations, General, of the Revised Statutes, to the extent that the provisions of Title 14 are not inconsistent with the provisions of this act. Every corporation created pursuant to this act shall be subject to dissolution as otherwise by law provided, and shall be empowered to exercise all the powers authorized by this act, whether or not such powers are specifically set forth in its certificate of incorporation. B. If, in approving the application for charter, the Commissioner of Banking and Insurance has limited the transaction of the corporation's business to a single county, or to 2 or more contiguous counties, the corporation shall have power to transact business only in the county or counties designated by the commissioner in his approval of the application. For the purposes of this act, a corporation is deemed to transact business in a county, if it makes a loan to a borrower whose sole or principal place of business is within the county, or if it directly or indirectly invests in lands or tangible personal property located within the county, or if it purchases or otherwise invests in securities or obligations of an issuer whose sole or principal place of business is located within the county. L.1957, c. 218, p. 757, s. 11.

N.J. Stat. § 17:52-12 Powers

Every corporation organized pursuant to this act shall have power to (a) lend money and make investments for the purposes expressed in section 1 of this act, but no such corporation shall lend any money or advance any credit to any borrower except upon proof that the borrower has applied for a loan to at least 2 banking institutions transacting business in this State, and has been refused such loan, and unless the board of directors of the corporation is satisfied that the loan applied for is not one that is obtainable from a financial institution transacting business in this State; (b) borrow money, and otherwise incur indebtedness for any of its purposes; evidence its indebtedness by any form of obligation it sees fit; and secure any indebtedness incurred by it; (c) buy, sell, encumber and otherwise dispose of such personal property as shall be necessary or convenient for the transaction of its business; (d) buy, sell, mortgage, rent, lease, and otherwise deal in improved and unimproved real property for the purpose of industrial, mercantile, agricultural, recreational, mining or commercial development, and to erect, maintain, alter, hold, sell or lease industrial, commercial or other plants, buildings or establishments; (e) co-operate with and assist local organizations and governmental units of this State in the promotion of the economic welfare of the State and its governmental subdivisions; (f) exercise all other powers which a corporation organized pursuant to Title 14, Corporations, General, may exercise, to the extent that such powers are not inconsistent with the provisions of this act. L.1957, c. 218, p. 758, s. 12.

N.J. Stat. § 17:52-13 Directors

The business and affairs of every business development corporation shall be managed by a board of directors consisting of not less than 9 and not more than 18, as the by-laws may prescribe. Not less than 2/3 of the directors shall be elected by the members of the corporation, and the remainder shall be elected by the stockholders. L.1957, c. 218, p. 759, s. 13.

N.J. Stat. § 17:52-14 Members; qualifications

Any bank, trust company, national bank, insurance company, surety company or public utility company which is authorized to transact business in this State shall be eligible to become a member of a business development corporation. Membership shall become effective upon the acceptance by the board of directors of an application therefor. No corporation, other than 1 of the nature in this section designated, and no individual or individuals shall be eligible to become a member of a business development corporation. L.1957, c. 218, p. 759, s. 14.

N.J. Stat. § 17:52-15 Members; obligations

Each member shall, when called upon to do so by the board of directors, lend money to the corporation, but no member shall make any loan to the corporation in any sum which would cause the amount owing to the member by the corporation to exceed 2% of the member's capital and surplus, or $100,000.00, whichever is the lesser. Calls for loans shall be prorated among the members who are subject to such call, according to the ratio which each member's maximum lending capacity, as in this section limited, bears to the aggregate lending capacities of all members. L.1957, c. 218, p. 759, s. 15.

N.J. Stat. § 17:52-16 Members; termination of membership

Any member may withdraw from membership at the expiration of 3 months from the date when written notice of intention to withdraw is given to the board of directors. At the expiration of the period of the notice, the member shall be relieved of any further obligation to lend funds to the corporation, except to the extent necessary to fulfill commitments made by the corporation prior to the date when withdrawal is effective. L.1957, c. 218, p. 760, s. 16.

N.J. Stat. § 17:52-17 Members; stockholders; voting rights; preemptive rights

At all meetings of the corporation, members and stockholders shall vote by classes. Each stockholder shall have 1 vote, in person or by proxy, for each share of stock held by him, and each member shall have 1 vote, in person or by proxy; except that, when the maximum liability of a member to make loans to the corporation pursuant to section 15 of this act exceeds $1,000.00, such member shall have 1 vote for each full $1,000.00 of the amount which represents the maximum liability of such member to make loans to the corporations. The members and stockholders shall have the power to elect directors, to make, amend and repeal by-laws, and to exercise such other powers, voting by classes, as are generally exercised by stockholders pursuant to the provisions of Title 14, Corporations, General, of the Revised Statutes. Stockholders shall have no pre-emptive or other preferential right to subscribe to stock of the corporation, whether on the issue of stock pursuant to an increase in the authorized capital stock, or on the issue of authorized but previously unissued stock, nor shall stockholders have any pre-emptive or other preferential right to purchase or subscribe for bonds or other evidences of debt of the corporation, notwithstanding that they are convertible into stock. L.1957, c. 218, p. 761, s. 17.

N.J. Stat. § 17:52-18 Banks and trust companies; powers

Every bank and trust company organized under the laws of this State shall have power to become a member and a stockholder of a business development corporation, but a bank or trust company which is not a member of such a corporation shall not hold any stock of the corporation. No such bank or trust company shall become a member of more than 1 business development corporation, or hold stock in more than 1 such corporation, and no such bank or trust company shall invest more than 10% of its capital stock and surplus in the stock of any such corporation. Banks and trust companies which are not members of a business development corporation may invest in the obligations of any such corporation or corporations, but the aggregate amount so invested shall not exceed 10% of the capital and surplus of any such bank or trust company. L.1957, c. 218, p. 761, s. 18.

N.J. Stat. § 17:52-19 Other corporations; powers

Corporations of this State other than banks and trust companies may also become stockholders of a business development corporation, except in any case where the certificate of incorporation or the by-laws of such corporation forbid the ownership of stock by any such corporation. L.1957, c. 218, p. 761, s. 19.

N.J. Stat. § 17:52-20 Limitations on indebtedness

No business development corporation shall voluntarily incur any liability or indebtedness at any time when the incurring of any such liability or indebtedness will exceed 10 times its paid-in capital stock, or $10,000,000.00, whichever is the greater. L.1957, c. 218, p. 761, s. 20.

N.J. Stat. § 17:52-21 Loans prohibited

No business development corporation shall make a loan to any of its officers or directors, or to any partnership of which such an officer or director is a member, or to any corporation in which any such officer or director has a controlling interest. L.1957, c. 218, p. 761, s. 21.

N.J. Stat. § 17:52-22 Reports

A. Every business development corporation shall, not later than February 15 of each year, or within such extended period, not to exceed 45 days, as the commissioner may permit, make and file in the Department of Banking and Insurance, a report of its condition in a form prescribed by the Commissioner of Banking and Insurance. The commissioner shall have power to call for special reports when, in his judgment, such reports are necessary in order to obtain a full knowledge of the condition of the business development corporation. B. A business development corporation which fails to make and transmit a report required by this section shall be subject to a penalty of $100.00 for each day during which such failure continues, to be recovered with costs by the State in a civil action prosecuted by the Attorney-General. L.1957, c. 218, p. 762, s. 22.

N.J. Stat. § 17:52-23 Supervision by Commissioner of Banking and Insurance

A. The Commissioner of Banking and Insurance shall, whenever and as often as he deems it necessary, cause the affairs of every business development corporation to be examined to determine whether it is conducting its business in conformity with the laws of this State and its certificate of incorporation. In carrying out the provisions of this subsection, the commissioner shall have the same powers conferred upon him in the examination of the affairs of a banking institution organized under the laws of this State. B. If the Commissioner of Banking and Insurance finds that a business development corporation is violating the provisions of its certificate of incorporation, or is conducting its business in violation of any law of this State, or in an unsafe manner, he shall order the business development corporation to cease its ultra vires, unlawful or unsafe practices, as the case may be. For a violation of any order of the commissioner, the business development corporation shall be subject to a penalty of $500.00, to be recovered with costs by the State in a civil action prosecuted by the Attorney-General. C. The Commissioner shall have power to revoke the authority to transact business of a business development corporation which has willfully violated any lawful order made by him, upon not less than 20 days' notice to the corporation, and after formal hearing upon the causes assigned for such revocation, which shall be stated in the notice of hearing. D. Any order or determination made by the commissioner pursuant to this section shall be subject to review, hearing and relief in the Superior Court in a proceeding in lieu of prerogative writ. L.1957, c. 218, p. 762, s. 23.

N.J. Stat. § 17:52-24 Filing fees and costs of examination

In administering the provisions of this act, the Commissioner of Banking and Insurance shall receive, for the use of the State, the same filing fees and costs of examination as are charged or collected from banking institutions in like cases. L.1957, c. 218, p. 763, s. 24.

N.J. Stat. § 17:52-25 Business development corporation not deemed banking institution

No business development corporation shall be deemed to be a banking institution for any purpose whatsoever, nor shall any such corporation accept deposits or act in a fiduciary capacity. L.1957, c. 218, p. 763, s. 25.

N.J. Stat. § 17:52-26 Applicability of act

Nothing in this act shall affect or apply to any person, corporation, partnership or association which is otherwise by law authorized to exercise, or is not prohibited by law from exercising, any power or powers herein conferred upon business development corporations. L.1957, c. 218, p. 763, s. 26.

N.J. Stat. § 17:52-27 Short title

This act shall be known as the Business Development Corporation Act of 1957. L.1957, c. 218, p. 763, s. 27.
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