TRUST COMPANIES

M.G.L. pt. Part I, tit. Title XXII, ch. c. 172

in effect

M.G.L. c. 172, § 1 Definitions

c. 172, § 1. Definitions Section 1. (a) As used in sections 1 to 9, inclusive, of this chapter the words ''board'' or ''board of bank incorporation'' shall, unless the context clearly requires otherwise, mean a board consisting of the commissioner of banks, the commissioner of revenue and the state treasurer. (b) As used in this chapter the following words shall, unless the context clearly requires otherwise, have the following meanings:— ''Capital stock'', the sum of the par value of the preferred and common shares of capital stock, issued and outstanding. ''Commissioner'', the commissioner of banks. ''Common stock'', the shares of capital stock of a trust company, other than preferred stock. ''Incorporators'', subscribers to the agreement of association for the purpose of forming a trust company under this chapter. ''Officer'', any individual designated as such in accordance with the by-laws including, whether or not so designated, the president, vice-president, treasurer and the clerk or secretary, or any individual who performs the duties appropriate to those offices. ''Stockholder'', a registered owner of shares of capital stock of a trust company. ''Surplus account'', an account so designated on the books of a trust company and consisting of such amounts as shall be required by law or shall be transferred thereto by vote of the board of directors. ''Trust company'' or ''corporation'', a trust company incorporated as such in the commonwealth.

M.G.L. c. 172, § 1A Repealed, 2014, 482, Sec. 58

M.G.L. c. 172, § 2 Powers

c. 172, § 2. Powers Section 2. A trust company shall have all the powers expressly granted by law and whatever further incidental powers may fairly be implied from those expressly conferred and such as are reasonably necessary to enable it to exercise fully those powers according to common or accepted banking customs and usages.

M.G.L. c. 172, § 3 Use of words ''trust company''

c. 172, § 3. Use of words ''trust company'' Section 3. No person, other than a trust company, shall use the words ''trust company'', even though said words may be separated by 1 or more other words, as part of the person's or its name or in any representation describing the person's or its business, powers, services or functions. Any person who violates this section shall be punished by a fine of $100 for each day during which such violation continues.

M.G.L. c. 172, § 4 Capital structure upon incorporation

c. 172, § 4. Capital structure upon incorporation Section 4. A trust company shall upon its incorporation have such capital structure as the board of bank incorporation shall deem adequate. Such capital structure may vary by the board based on the application and business plan submitted.

M.G.L. c. 172, § 5 Formation of trust company; agreement of association

c. 172, § 5. Formation of trust company; agreement of association Section 5. Fifteen or more individuals who associate themselves by a written agreement to form a trust company may, upon compliance with sections 4 to 9, inclusive, become a corporation, with all the powers and privileges and subject to all the duties, restrictions and liabilities set forth in all general laws relating to such corporations. The agreement of association shall specifically state: (1) That the incorporators associate themselves with the intention of forming a corporation; (2) The name by which the corporation shall be known; (3) The location of the principal office of the corporation, which shall be within the commonwealth; (4) The purposes for which the corporation is formed and the nature of the business to be transacted; (5) The amount and classes of its capital stock, and the number of shares into which any class is to be divided; (6) the amount of the surplus account; (7) the amount of the undivided profits account; and (8) the name of each incorporator and the number of shares of capital stock, if any, which the individual agrees to take and the class or classes of such shares. The name of each incorporator shall be subscribed to the agreement of association.

M.G.L. c. 172, § 6 Notice of intention to form trust company; application for certificate

c. 172, § 6. Notice of intention to form trust company; application for certificate Section 6. A notice of the intention of the subscribers to form such a trust company shall be given to the board of bank incorporation. A notice in such form as said board shall approve, shall be published at least once a week, for 3 successive weeks, in 1 or more newspapers designated by the board, and published in the city or town in which it is proposed to establish the trust company, or if there is no newspaper in such city or town, in a newspaper published in the city or town which is nearest to the proposed location. Such notice shall specify the names of the proposed incorporators, the name of the corporation and the location of the same. The subscribers to said agreement shall apply to the board for a certificate that public convenience and advantage will be promoted by the establishment of such trust company. Such an application for a proposed trust company shall be accompanied by an investigation fee, the amount of which shall be determined by the secretary of administration and finance pursuant to section 3B of chapter 7. In determining whether the public convenience and advantage will be promoted by the establishment of such trust company, the board shall consider the adequacy of its capital structure, the general character of its management, the adequacy of banking facilities in the area and the convenience and needs of the community to be served. The board may grant such certificate, which shall be deemed to be revoked if the applicants therefor do not become incorporated and begin business not more than 1 year after its date of issue; provided, however, that the board may grant an additional extension upon a demonstration of good cause; and provided further, that the board may impose terms and conditions on such extension. If the board refuses to issue such certificate, no further proceeding shall be taken by the applicant during the year next following the date of such refusal except with the approval of the board; provided, however, the applicant may renew the application as of right after 1 year from the date of such refusal, and may dispense with further notice or publication unless the board orders such notice or publication.

M.G.L. c. 172, § 7 First meeting of incorporators

c. 172, § 7. First meeting of incorporators Section 7. The first meeting of the incorporators shall be called by a notice signed either by that incorporator who is designated in the agreement for the purpose, or by a majority of the incorporators, and such 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 such incorporator's residence or usual place of business, and another copy thereof and an affidavit of 1 of the signers that the notice has been duly served shall be recorded with the records of the corporation. If all the incorporators shall, in writing endorsed upon the agreement of association, waive such notice and fix the time and place of the meeting, no notice shall be required. At such first meeting, or at any adjournment thereof, the incorporators shall organize by the choice by ballot of a temporary clerk who shall be sworn, by the adoption of by-laws and by the election in such manner as the by-laws may determine, of directors, a clerk or secretary, and such other officers as the by-laws may prescribe. The temporary clerk shall make and attest a record of the proceedings until the clerk or secretary has been chosen and sworn, including a record of such choice and qualification.

M.G.L. c. 172, § 8 Articles of organization; certificate of incorporation

c. 172, § 8. Articles of organization; certificate of incorporation Section 8. The president, clerk or secretary and a majority of the directors as applicable elected at such first meeting shall make and sign under penalties of perjury articles of organization in duplicate, setting forth: (1) a true copy of the agreement of association, the names of the incorporators thereto, and the name of each of the officers and directors as applicable of the company; and (2) the date of the first meeting and the successive adjournments thereof, if any. One duplicate original of the articles so signed shall be submitted to the commissioner and the other, together with the records of the proposed corporation, to the state secretary, who shall examine the same, and who may require such amendment thereof or such additional information as the secretary may consider necessary. If the commissioner finds that the articles conform to the 4 preceding sections relative to the organization of the corporation and that section 6 has been complied with, the commissioner shall so certify and endorse the commissioner's approval thereon. The articles shall be filed within 30 days thereafter in the office of the state secretary, who, upon receipt of a fee, the amount of which shall be determined annually by the secretary of administration and finance pursuant to section 3B of chapter 7, said state secretary shall issue a certificate of incorporation in the following form: COMMONWEALTH OF MASSACHUSETTS Be it known that whereas (the names of the subscribers to the agreement of association) 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 agreement of association), with a capital stock of (the amount fixed in the agreement of association), and have complied with the statutes of the commonwealth in such case made and provided, as appears from the articles of organization of said corporation, duly approved by the state secretary and recorded in this office: Now, therefore, I (the name of the state secretary), secretary of the commonwealth of Massachusetts, do hereby certify that said (the names of the subscribers to the agreement of association), 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 the law appertain thereto. Witness my official signature hereunto subscribed and the great seal of the commonwealth of Massachusetts hereunto affixed, this day of in the year (the date of the filing of the articles of organization). The state secretary shall sign the certificate of incorporation and cause the great seal of the commonwealth to be thereto affixed, and such certificate shall have the force and effect of a special charter. The existence of every such corporation shall begin upon the filing of the articles of organization in the office of the state secretary. The state secretary shall also cause a record of the certificate of incorporation to be made, and such certificate, or such record, or a certified copy thereof, shall be conclusive evidence of the existence of such corporation. A bank may amend its articles of organization if approved by its board and submitted to and approved by the bank's governing body except as provided in sections 10.05, 10.07 and 14.34 of chapter 156D. After approval by the board and governing body, the amendment shall be submitted to the commissioner for the commissioner's endorsement thereon before delivering the amendment to the state secretary for filing.

M.G.L. c. 172, § 9 List of stockholders; issuance of certificate authorizing corporation to begin transaction of business

c. 172, § 9. List of stockholders; issuance of certificate authorizing corporation to begin transaction of business Section 9. When all the 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 in each class held by each stockholder, shall be filed with the board of bank incorporation, which list shall be verified by the clerk of the corporation. Upon receipt of such list the board shall cause an examination to be made of the method of payment of the capital stock, of the personnel of the corporation, including the officers and directors thereof, and if, after such examination, it appears that the whole capital stock, surplus account and undivided profits account have been paid in cash, that all requirements of law have been complied with, that the bank is a member of the Federal Deposit Insurance Corporation, and that the qualifications of the personnel are satisfactory, the board shall, if satisfied that the public convenience and advantage will be promoted thereby, issue a certificate authorizing such corporation to begin the transaction of business. No such corporation shall begin the transaction of business until such a certificate has been granted.

M.G.L. c. 172, § 9A Limited purpose trust company

c. 172, § 9A. Limited purpose trust company Section 9A. After notice of intent, application and hearing as the commissioner may require and with the commissioner's written permission and under conditions the commissioner may impose, the commissioner may, if satisfied that public convenience and advantage will be promoted and that competition among banking institutions will not be unreasonably affected, grant a certificate to establish a limited purpose trust company for the purpose of conducting trust and fiduciary business authorized under chapter 167G and other law applicable to a state-chartered bank; provided, however, that it shall have sufficient capital to support its business operations; provided further that any such limited purpose trust company shall not accept deposits, make loans or otherwise carry on a banking business in the commonwealth; and provided, further, that this section shall not apply to an attorney licensed to practice law in the commonwealth or to a person exercising trust or fiduciary powers in the commonwealth under lawful authority. A person seeking authority to establish a limited purpose trust company under this section shall file a notice and an application for a certificate with the commissioner, together with a fee, the amount of which shall be determined by the secretary of administration and finance pursuant to section 3B of chapter 7. The application shall include the following: (1) the name under which the corporation will conduct business; (2) the name of each officer of the corporation; (3) the location of the principal office thereof which shall be within the commonwealth; (4) the purpose for which the corporation is formed and the nature of the business to be transacted; (5) the amount and classes of its capital stock, and the number of shares into which any class is to be divided; and (6) such other information as the commissioner considers necessary. Upon receipt of the certificate from the commissioner, the corporation shall file its articles of organization with the state secretary and shall thereupon become eligible to conduct business; provided, however, the certificate shall be considered to be revoked if the corporation does not commence business within 1 year after the date of issuance thereof by the commissioner. In the transaction of business, a limited purpose trust company shall be subject to sections 10 to 13, inclusive, and other applicable sections of this chapter, section 36A of chapter 167, sections 13 and 14 of chapter 167I, and sections 2 to 6, inclusive, sections 8 to 11, inclusive, and sections 14 to 20, inclusive, of chapter 167J. A limited purpose trust company may establish and maintain a trust office or a representative trust office in any state other than the commonwealth. A company intending to establish a trust office or representative trust office in the other state shall file a notice with the commissioner. The notice shall be in a form prescribed by the commissioner and shall contain the name and address of the limited purpose trust company, the location of the proposed office and be accompanied by a copy of the resolution of its board of directors authorizing the establishment of the out-of-state office. The company may commence business at the out-of-state trust office or representative trust office upon the expiration of 30 days from the date the required notice is received by the commissioner; provided, however, the 30 day period may be extended by the commissioner upon notice in writing to the company that additional information is required to be submitted to the commissioner. For the purposes of this section, a ''trust office'' shall mean the business office of the limited purpose trust company at which its licensed business activities are transacted and ''representative trust office'' shall mean an office established by the company in order to market and solicit business and provide administrative support but at which, licensed business activities of the company could not be conducted. A limited purpose trust company, or any similar institution as determined by the commissioner, established under the laws of any other state or the United States, may, with the approval of the commissioner, establish and maintain an office in the commonwealth if the laws of the state in which such company or similar institution was established expressly authorize, under conditions no more restrictive than those imposed by the laws of the commonwealth, as determined by the commissioner, the establishment of an office in said state by a limited purpose trust company chartered in the commonwealth. The commissioner may establish rules and regulations necessary to carry out this section and to govern the affairs of the company, including an examination thereof by the commissioner. The regulations may specify which provisions of chapters 167 through 167G, chapters 183 and 184 and other laws of the commonwealth shall be applicable to any such limited purpose trust company. A limited purpose trust company may be merged, consolidated, converted, liquidated, dissolved or its charter cease to exist in such manner as the commissioner may prescribe and subject to such terms and conditions the commissioner may impose. Section 4 of chapter 167A relative to the Massachusetts Housing Partnership Fund shall apply to any subsequent transaction involving an unaffiliated entity and a limited purpose trust company that had converted from a trust company to a limited purpose trust company and that, but for such conversion, would have been subject to said section 4. The commissioner shall not approve any transaction subject to this paragraph until the commissioner has received notice from the Massachusetts Housing Partnership Fund that satisfactory arrangements have been made.

M.G.L. c. 172, § 10 Adoption of by-laws; regulations controlling assignment and transfer of shares; quorum

c. 172, § 10. Adoption of by-laws; regulations controlling assignment and transfer of shares; quorum Section 10. Such corporation may adopt by-laws for the proper management of its affairs and as appropriate to exercise all powers necessary, convenient or incidental to the purposes for which the corporation was formed. The corporation may also establish regulations controlling the assignment and transfer of its shares. A majority in interest of the stockholders entitled to vote shall constitute a quorum at any meeting unless the by-laws require more than a majority.

M.G.L. c. 172, § 11 Stockholder voting; votes by proxy

c. 172, § 11. Stockholder voting; votes by proxy Section 11. Stockholders entitled to vote may vote in person or by proxy. No proxy dated more than 6 months before the date of the meeting named therein shall be valid, and no proxy shall be valid after the final adjournment of such meeting. A proxy with respect to stock held in the name of 2 or more persons shall be valid if executed by any 1 of them unless at or prior to the exercise of the proxy such corporation receives a specific written notice to the contrary from any 1 of them. A proxy purporting to be executed by or on behalf of a stockholder shall be deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity shall rest on the challenger. Except as otherwise provided in the articles of organization or by-laws of the corporation, special meetings of the stockholders may be called pursuant to section 7.02 of chapter 156D.

M.G.L. c. 172, § 12 Board of directors; executive committee

c. 172, § 12. Board of directors; executive committee Section 12. The business of such corporation shall be managed by a board of not less than 7 nor more than 25 directors. A majority of the directors shall be citizens of the commonwealth and residents therein; provided, however, upon application in writing by a bank engaged in a global custody business, the commissioner may waive or modify this requirement and may take into consideration factors including, but not limited to, the impact on the safety and soundness of the bank, or the current or prospective board composition and their expertise, experience and qualifications. The directors shall be elected, in such manner as is provided in the by-laws, by the stockholders at their annual meeting or at a special meeting called for the purpose; provided, however, that if the by-laws so prescribe, a number of directors, not exceeding 2, may be elected by vote of a majority of the directors then in office. The directors shall hold office for such term, not exceeding 3 years, as is provided in the by-laws and until their successors are selected and have qualified. A director shall be eligible for reelection. Any vacancy in the board may be filled by appointment by the remaining directors and any director so appointed shall hold the office until the next election. Each director shall own, in the director's own right and free of any lien or encumbrance, common stock, either of such corporation or of a company owning 75 per cent or more of the stock of such corporation, having a par value, or a fair market value on the date the person became a director, of not less than $1,000. Any director who ceases to be the owner of the required number of shares of stock, or who becomes in any other manner disqualified, shall vacate the office forthwith. Each director, when appointed or elected, shall take an oath that the director will faithfully perform the duties of the office and that the director is the owner, in the director's own right and free of any lien or encumbrance, of the amount of stock required by this section. The oath shall be taken before a notary public or justice of the peace, and a record of the oath shall be made a part of the records of such corporation. The office of any director who seeks, or against whom, an order of relief is entered in a personal capacity, pursuant to Title 11 of the United States Code, or who, on examination in a supplementary process proceeding, has been found unable to pay a judgment, shall thereby be vacated. A record of any such vacancy shall be entered upon the books of the corporation. Any director whose office is so vacated shall again be eligible to serve as director upon: the receipt of a discharge in bankruptcy under chapter 7 of said Title 11; the completion of all payments required pursuant to a plan of reorganization under chapter 11 of said Title 11; the completion of all payments under a plan of debt adjustment under chapter 13 of said Title 11; or the payment of said judgment. In determining what a director reasonably believes to be in the best interests of such corporation, in considering proposed business combinations, as defined in paragraph (c) of section 3 of chapter 110F, a director may consider the interests of the corporation's employees, suppliers, creditors and customers, the economy of the state, region and nation, community and societal considerations, and the long-term and short-term interests of the corporation and its stockholders, including the possibility that these interests may be best served by the continued independence of the corporation. Each such corporation shall have an executive committee of not less than 3 members, who shall be elected by and from the directors and shall hold office during their pleasure. An executive committee may take any action that could be taken by the board of directors except that an executive committee may not: (1) authorize dividends or other distributions to shareholders; (2) approve or propose to the corporation's shareholders actions that require the approval of the corporation's shareholders; (3) change the number of members of the board of directors, remove directors from office or fill vacancies on the board of directors; (4) amend the corporation's articles of organization; (5) adopt, amend or repeal the corporation's by-laws; (6) authorize or approve reacquisition of shares of capital stock, except according to a formula or method prescribed by the board of directors; (7) take any action specifically required by law or regulation to be taken by the entire board of directors; or (8) approve a transaction described in section 8 of chapter 167I.

M.G.L. c. 172, § 13 Election of officers

c. 172, § 13. Election of officers Section 13. The clerk or secretary shall be elected by the stockholders at their annual meeting or at a special meeting duly called for the purpose. The president shall be elected by and from the board of directors and shall be chairman thereof unless the board designates a director in lieu of the president to be chairman. The directors shall elect the treasurer and any other officers including an executive vice president. The president as may be required or permitted by law or by-law may select other officers. The officers elected by the board shall hold their respective offices during the pleasure of the directors. The directors may fill a vacancy in the office of clerk or secretary until the next meeting of the stockholders.

M.G.L. c. 172, § 14 Meetings of board of directors; action without meeting

c. 172, § 14. Meetings of board of directors; action without meeting Section 14. Subsection (a) to (e), inclusive, shall apply to meetings of the board and its committees. (a) The board of directors shall meet at intervals, not less frequent than quarterly; provided, however, upon application in writing by the corporation, the commissioner may waive or modify this requirement. Unless the articles of organization, the by-laws, or a resolution by the board otherwise provide, members of the board of directors or a committee designated thereby may participate in a meeting of the board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting may simultaneously hear each other and participation by those means shall constitute presence in person at a meeting. Members may transmit written authorizations that may be required during the meeting by electronic facsimile or other commercially acceptable transmission. (b) Unless the articles of organization or bylaws provide that action required or permitted by this chapter or any other general law to be taken by the directors shall be taken only at a meeting, the action may be taken without a meeting if the action is taken by the unanimous consent of the members of the board of directors. The action must be evidenced by 1 or more consents describing the action taken, in writing, signed by each director, or delivered to the corporation by electronic transmission, to the address specified by the corporation for the purpose or, if no address has been specified, to the principal office of the corporation, addressed to the secretary or other officer or agent having custody of the records of proceedings of directors, and included in the minutes or filed with the corporate records reflecting the action taken. (c) Action taken under this section is effective when the last director signs or delivers the consent, unless the consent specifies a different effective date. (d) A consent signed or delivered under this section has the effect of a meeting vote and may be described as such in any document. (e) This section shall also apply to committees and their members.

M.G.L. c. 172, § 15 to 28 Repealed, 2014, 482, Sec. 58

M.G.L. c. 172, § 29 Repealed, 1987, 239, Sec. 13

M.G.L. c. 172, § 30 to 39 Repealed, 2014, 482, Sec. 58

M.G.L. c. 172, § 40 to 47 Repealed, 1998, 474, Sec. 8

Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter172Fetched: 10/20/2026