CHAPTER 4. INDIANA BUSINESS DEVELOPMENT CREDIT CORPORATION LAW
IC 23-6-4
Chapter 4. Indiana Business Development Credit Corporation
Law
IC 23-6-4-1
"Credit corporation" defined
Sec. 1. As used in this chapter, "credit corporation" means a
corporation to which the secretary of state has issued a certificate of
election under section 8 of this chapter.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-2
"Lending agreement" defined
Sec. 2. As used in this chapter, "lending agreement" means an
agreement between a credit corporation and a lending institution,
under which the lending institution agrees to lend funds to the credit
corporation in accordance with section 13 of this chapter.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-3
"Lending institution" defined
Sec. 3. As used in this chapter, "lending institution" means a bank
or trust company, industrial loan and investment company, credit
union, savings bank, bank of discount and deposit, small loan
company, savings association, insurance company or related
corporation, partnership, limited liability company, foundation,
pension fund, or other institution engaged primarily in lending or
investing funds.
As added by P.L.236-1985, SEC.1. Amended by P.L.42-1993,
SEC.16; P.L.79-1998, SEC.24.
IC 23-6-4-4
"Loan limit" defined
Sec. 4. As used in this chapter, "loan limit" means, for any
member, the maximum amount permitted to be outstanding at any
one (1) time on loans made by that member to a credit corporation,
as determined by the credit corporation's board of directors.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-5
"Member" defined
Sec. 5. As used in this chapter, "member" means a lending
institution authorized to do business in Indiana that enters into a
lending agreement with, and undertakes to make member loans to, a
credit corporation organized or operated under this chapter.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-6
"Member loan" defined
Sec. 6. As used in this chapter, "member loan" means a loan made
by a member upon the call of the credit corporation under its lending
agreement with the member and section 13 of this chapter.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-7
"Small business concern" defined
Sec. 7. As used in this chapter, "small business concern" means
any business entity that qualifies as a small business concern under
the applicable section of the federal Aid to Small Business Act (15
U.S.C. 632) and accompanying regulations.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-8
Election to accept chapter; amendment of articles of incorporation;
resolution; vote of shareholders; approval; certificate of election
Sec. 8. (a) Any corporation organized before January 1, 1985,
under IC 23-1 (the Indiana General Corporation Act) may elect to
accept this chapter, and avail itself of the rights, privileges,
immunities, and franchises provided by this chapter, by filing in the
office of the secretary of state the election described in subsection
(b), together with amended articles of incorporation allowing it to
operate under this chapter.
(b) The board of directors of a corporation desiring to accept this
chapter shall, by a resolution adopted by a majority vote of the board,
approve a written election setting forth:
(1) the name of the corporation;
(2) the location of its principal office;
(3) the name and post office address of its resident agent;
(4) the date of its incorporation; and
(5) a declaration that it accepts all of the terms and provisions
of this chapter.
(c) The resolution of the board of directors electing to accept this
chapter and the corporation's amended articles of incorporation shall
be submitted to a vote of the shareholders of the corporation entitled
to vote on those proposals at a designated meeting called for that
purpose. The affirmative votes of the holders of at least two-thirds
(2/3) of the outstanding voting shares of the corporation are required
for adoption of the election and the amended articles of
incorporation. If the election and the amended articles of
incorporation are adopted, they shall be signed in duplicate by a
current officer of the corporation, verified and affirmed subject to
penalties for perjury, and presented in duplicate to the secretary of
state at the secretary of state's office.
(d) Upon the presentation of an election and amended articles of
incorporation adopted under this section, the secretary of state shall
endorse an approval upon both of the duplicate copies of each
document, if the secretary determines that they conform to law. If all
fees have been paid as required by law, the secretary shall also:
(1) file one (1) copy of each document in the secretary's office;
(2) issue a certificate of election to the corporation; and
(3) return the remaining copies bearing the endorsement of the
secretary's approval to the corporation.
(e) Upon the issuance of a certificate of election to a corporation
by the secretary of state under subsection (d):
(1) the election becomes effective;
(2) the corporation is entitled to all of the rights, privileges,
immunities, powers, and franchises, and is subject to all of the
penalties, liabilities, and restrictions granted to or imposed upon
credit corporations organized by this chapter; and
(3) the amendments to the corporation's articles of incorporation
become effective.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-9
Purposes of corporations
Sec. 9. The purposes for which a credit corporation may exist
must include the following:
(1) To assist, promote, encourage, and, through the cooperative
efforts of the institutions and corporations that from time to
time become members of the credit corporation, develop and
advance the business prosperity and economic welfare of
Indiana.
(2) To encourage and assist in the location of new business and
industry in Indiana and to rehabilitate existing Indiana business
and industry.
(3) To stimulate and assist in the expansion of all kinds of
business activity, primarily through the making of loans and
other extensions of credit to small business concerns, for
purposes of:
(A) promoting the business development and maintaining the
economic stability of Indiana;
(B) providing maximum opportunities for employment;
(C) encouraging thrift; and
(D) improving the standard of living of the citizens of
Indiana.
(4) To cooperate with other organizations, public or private, the
objectives of which are the promotion and advancement of
industrial, commercial, agricultural, or recreational
developments in Indiana.
(5) To furnish money and credit to approved and deserving
applicants, primarily small business concerns, for the
promotion, development, and conduct of all kinds of business
activity in Indiana, and to thereby establish a source of credit
not otherwise readily available to those applicants.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-10
Powers of corporations
Sec. 10. In furtherance of its purposes and in addition to the
powers conferred on corporations by IC 23-1, a credit corporation
may:
(1) borrow money from any lending institution or from any
agency established under the Small Business Investment Act of
1958 (Public Law 85-699, 72 Stat. 689), as amended, or under
other federal or state statutes;
(2) do all things necessary or desirable to secure aid, assistance,
loans, and other financing from its members (whether as
member loans or otherwise);
(3) issue bonds, debentures, notes, or other evidences of
indebtedness, whether secured or unsecured, and secure any of
those instruments by a mortgage, pledge, deed of trust, or other
lien on any property, franchise, rights, or privileges of the credit
corporation, without securing member or shareholder approval;
(4) lend money to, and guarantee, endorse, or act as surety on
the bonds, notes, contracts, or other obligations of, or otherwise
assist financially, any person, firm, corporation, limited liability
company, or association;
(5) establish and regulate the terms and conditions of
transactions entered into under subdivision (4) and the charges
for interest and services connected with those transactions;
(6) acquire any interest in the goodwill, business rights, real and
personal property, and other assets of any persons or
corporations and assume, undertake, or pay the obligations,
debts, and liabilities of that person or corporation;
(7) acquire improved or unimproved real estate for the purpose
of constructing industrial plants or other business
establishments;
(8) acquire, construct, reconstruct, alter, repair, maintain,
operate, sell, convey, transfer, lease, or otherwise dispose of
industrial plants or business establishments;
(9) acquire, subscribe for, own, sell, hold, assign, transfer,
mortgage, pledge, or otherwise dispose of the stock, shares,
bonds, debentures, notes, or other securities and evidences of
interest in or indebtedness of any person or corporation and,
while the owner or holder of such a property interest, exercise
all the rights, powers, and privileges of ownership, including
the right to vote;
(10) acquire and dispose of an interest in any other type of real
or personal property, including any real or personal property
acquired by the corporation from time to time in the satisfaction
of debts or as a result of the enforcement of obligations;
(11) mortgage, pledge, or otherwise encumber any property,
right, or thing of value acquired by the credit corporation as
security for the payment of any part of the purchase price for
the acquired item;
(12) cooperate with and avail itself of the facilities of the
United States Department of Commerce, the Indiana economic
development corporation, and any other similar state or federal
governmental agencies;
(13) cooperate with, assist, and otherwise encourage
organizations in the various communities of Indiana in the
promotion, assistance, and development of the business
prosperity and economic well-being of those communities,
Indiana, or any political subdivision of Indiana;
(14) make, amend, and repeal bylaws, not inconsistent with its
articles of incorporation or with the laws of Indiana, for the
administration and regulation of the affairs of the corporation,
which bylaws may:
(A) establish internal governance procedures and standards,
including procedures for voting by proxy at and for giving
notice of meetings of directors and of members and
shareholders, procedures and standards for the payment of
dividends, and procedures for the delegation by the board of
directors of its authority under the articles of incorporation
and this chapter to one (1) or more committees of the board
or to officers of the corporation; and
(B) give the board of directors or committees of the board
the power to pass resolutions necessary or convenient to
carrying out the purposes of the corporation; and
(15) do all acts and things necessary or convenient to carrying
out the powers expressly granted in this chapter.
As added by P.L.236-1985, SEC.1. Amended by P.L.8-1993,
SEC.318; P.L.4-2005, SEC.132.
IC 23-6-4-11
Persons or entities qualified to participate; shareholders' rights;
amount of capital stock acquired
Sec. 11. (a) Notwithstanding any other law, any person, domestic
or foreign corporation, public utility company, insurance company,
lending institution, or trust may acquire, purchase, hold, sell, assign,
transfer, mortgage, pledge, or otherwise dispose of any bonds,
securities, other evidence of indebtedness, or shares of the capital
stock of a credit corporation. While a shareholder of a credit
corporation, such a person or entity may exercise all the rights,
powers, and privileges granted other shareholders of the credit
corporation, including the right to vote. Except as otherwise
specifically provided in this chapter, such a person or entity may take
any action authorized by this section without the approval of any
Indiana regulatory authority.
(b) The amount of capital stock of a credit corporation that a
member may acquire under this section is in addition to the amount
of capital stock in corporations that the member may otherwise
acquire.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-12
Lending institutions as members; loans
Sec. 12. Notwithstanding any other law, lending institutions may
become members of a credit corporation and make loans to the credit
corporation as provided in this chapter.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-13
Lending agreements; time of membership; evidence of loans;
interest
Sec. 13. Any lending institution may become a member of a credit
corporation by entering into a lending agreement with the credit
corporation on such form and in such manner as the board of
directors of the credit corporation may require. Membership in a
credit corporation becomes effective upon execution of such an
agreement. Each member shall lend funds to the credit corporation
according to the terms of the lending agreement. The board of
directors of the credit corporation shall determine and approve the
terms for lending agreements, subject to the following conditions:
(1) The total amount outstanding on loans to the credit
corporation made by any member under its lending agreement
or otherwise at any time, when added to the amount of the
investment in the capital stock of the credit corporation then
held by that member, may not exceed the lesser of:
(A) any limit established by applicable state or federal law;
or
(B) the loan limit for that member.
(2) All loans made to the credit corporation by members must
be evidenced by bonds, debentures, notes, or other evidences of
indebtedness of the credit corporation.
(3) The board of directors of the credit corporation shall
determine the interest rate for the debt instruments referred to
in subdivision (2).
As added by P.L.236-1985, SEC.1.
IC 23-6-4-14
Duration of membership; withdrawal of membership
Sec. 14. The board of directors of a credit corporation shall
determine the duration of membership in the credit corporation.
However, upon written notice given to the credit corporation ninety
(90) days in advance, a member may withdraw from membership in
the credit corporation. After notice of the intended withdrawal of a
member has been received by the credit corporation, the member is
not obligated to make any further loans to the credit corporation.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-15
Powers of members and shareholders; voting rights
Sec. 15. (a) Only the members and shareholders of a credit
corporation may exercise the following powers of the credit
corporation:
(1) To elect directors of the credit corporation as provided in
section 16 of this chapter.
(2) To amend the credit corporation's articles of incorporation
as provided in section 17 of this chapter.
(3) To dissolve the credit corporation as provided in section 19
of this chapter.
(4) To exercise such other of the powers of the credit
corporation, consistent with this chapter, as may be conferred
on the members and shareholders by the bylaws of the credit
corporation.
(b) As to any matter requiring action by the members and
shareholders of the credit corporation, the members and shareholders
shall vote separately on that matter by classes. Except as otherwise
provided in this chapter, such a matter requires the affirmative vote
of at least a majority of the votes to which the members present or
represented at the meeting are entitled and the affirmative vote of at
least a majority of the votes to which the shareholders present or
represented at the meeting are entitled.
(c) Each shareholder has one (1) vote for each share of stock held
by the shareholder, and each member has one (1) vote. However,
additional votes may be granted to any member or group of members
by the articles of incorporation of the credit corporation.
(d) As to any matter requiring action by the members and
shareholders of a credit corporation, the members and shareholders
may vote either in person or by proxy.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-16
Board of directors; loan committees
Sec. 16. (a) Except as otherwise provided in section 15 of this
chapter, the corporate powers of a credit corporation shall be
exercised by its board of directors. The board of directors of a credit
corporation consists of:
(1) thirteen (13) individuals who are elected to serve as
directors by the shareholders and members of the credit
corporation; and
(2) two (2) ex officio directors as provided in subsection (c).
Each elected director must be at least eighteen (18) years of age, a
citizen of the United States, and a resident of Indiana.
(b) The number of directors to be elected by the shareholders of
a credit corporation and the number of directors to be elected by the
members of the corporation must be included in the articles of
incorporation of the credit corporation.
(c) The treasurer of state and the director of the department of
financial institutions shall each serve as an ex officio director of a
credit corporation, with the same authority as an elected director, but
without liability for that service, except for gross negligence or
willful misconduct.
(d) If an elected director of a credit corporation ceases being a
citizen of the United States or a resident of Indiana, the individual's
position as a director of the credit corporation immediately becomes
vacant.
(e) If a vacancy occurs in the elected membership of the board of
directors of a credit corporation through death, resignation, or
otherwise, the vacancy shall be filled in the manner prescribed in this
subsection. A vacancy in the office of a director elected by the
members shall be filled by the directors elected by the members, and
a vacancy in the office of a director elected by the shareholders shall
be filled by the directors elected by the shareholders.
(f) The board of directors of a credit corporation, by resolution
adopted by a majority of the actual number of directors holding
office, may establish a loan committee. Except as otherwise provided
in this chapter, such a loan committee, to the extent provided in the
resolution, may exercise all the authority of the board of directors
over the lending operations of the credit corporation. However, only
an individual who is a member of the credit corporation's board of
directors or who has significant commercial lending experience may
serve on the loan committee.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-17
Amendment of articles of incorporation
Sec. 17. (a) Subject to subsection (b), a credit corporation's
articles of incorporation may be amended by the members and
shareholders of the corporation. The members and shareholders shall
vote on proposed amendments in the manner prescribed by section
15 of this chapter. However, the affirmative vote of at least
two-thirds (2/3) of the votes to which each class is entitled is
required for adoption of an amendment.
(b) An amendment to the articles of incorporation that is
inconsistent with the general purposes expressed in this chapter or
that authorizes any additional class of capital stock to be issued may
not be adopted. In addition, an amendment of the articles of
incorporation that:
(1) increases the obligation of a member to make loans to the
credit corporation;
(2) makes any change in the principal amount, interest rate,
maturity date, or security or credit position of any outstanding
loan of a member to the credit corporation; or
(3) affects a member's voting rights;
may not be made without the consent of each member affected by the
amendment.
(c) An amendment to the articles of incorporation of a credit
corporation shall be filed with the secretary of state. The amendment
takes effect on the date of that filing.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-18
Deposits of funds
Sec. 18. (a) A credit corporation may deposit its funds only in a
financial institution that has been designated as a depository by a
vote of a majority of the directors of the credit corporation present at
an authorized meeting of the board of directors. However, a director
of the credit corporation who is also an officer or director of a
financial institution may not vote on a proposal to designate that
financial institution as a depository and may not be counted as being
present when a vote on such a proposal is taken.
(b) A credit corporation may not receive money on deposit.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-19
Period of existence; dissolution of corporation
Sec. 19. (a) The period of existence of a credit corporation must
be perpetual, subject to the right of the members and shareholders to
dissolve the corporation under subsection (b).
(b) The members and shareholders of a credit corporation may
dissolve the credit corporation. The members and shareholders shall
vote on a proposal to dissolve the credit corporation in the manner
prescribed by section 15 of this chapter. However, the affirmative
vote of at least two-thirds (2/3) of the votes to which each class is
entitled is required to dissolve the credit corporation.
(c) Upon dissolution of a credit corporation, none of the credit
corporation's assets may be distributed to the shareholders until all
sums due the members and creditors of the credit corporation have
been paid in full.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-20
State development company
Sec. 20. A credit corporation is a state development company, as
defined in the Small Business Investment Act of 1958 (P.L.85-699,
72 Stat.689) or any similar federal statute, and is authorized to
operate on a statewide basis.
As added by P.L.236-1985, SEC.1.
IC 23-6-4-21
Exemptions; securities registration; taxation; financial institutions
regulation
Sec. 21. (a) Any securities issued by a credit corporation are
exempt from registration under, or compliance with, IC 23-19.
(b) Any tax exemptions, tax credits, or tax privileges granted to
banks, savings and loan associations, trust companies, and other
financial institutions by Indiana law are granted to a credit
corporation.
(c) A credit corporation is exempt from regulation under, or
compliance with, IC 28-1-1 through IC 28-1-23. However, the
department of financial institutions shall conduct an annual
examination of the credit corporation for the purpose of determining
its financial condition.
As added by P.L.236-1985, SEC.1. Amended by P.L.27-2007,
SEC.22.
IC 23-6-4-22
Reports
Sec. 22. Each credit corporation shall make an annual report of its
condition to the governor and the general assembly before March 2
of each year. An annual report under this section to the general
assembly must be in an electronic format under IC 5-14-6.
As added by P.L.236-1985, SEC.1. Amended by P.L.28-2004,
SEC.162.
IC 23-6-4-23
Application of IC 23-1
Sec. 23. IC 23-1 applies to a credit corporation. However, if there
is a conflict between IC 23-1 and this chapter, this chapter controls.
As added by P.L.236-1985, SEC.1.