48A.03 CAPITAL AND SURPLUS REQUIREMENTS OF TRUST COMPANIES.
Subdivision 1. Required amount.
The capital of a trust company organized under this
chapter must be not less than $500,000. The trust company must also provide a surplus of at least
20 percent of its capital in addition to the capital amounts required by this section. The capital
or the surplus must not be reduced without the approval of the commissioner of commerce. In
the case of a trust company organized as a limited liability company, "capital and surplus" is
considered the "contribution" of its members reflected in the required records of a limited liability
Subd. 2. Required investment.
No trust company shall transact business until all of its
authorized capital stock and required surplus has been paid in, in cash, and at least 25 percent
of the capital has been invested in one or more of the first, second, third, and fourth classes of
authorized securities and railroad bonds, as described by section
, and also in the farm loan
bonds issued by the federal land banks, federal intermediate credit banks, and the banks for
cooperatives. These investments must be assigned and transferred to and deposited with the
commissioner of finance, provided, however, that no trust company shall be required to deposit
securities in excess of $1,000,000. The commissioner of finance shall submit the securities
deposited according to this subdivision to the commissioner. The commissioner shall carefully
examine the securities offered for deposit and determine if they comply with all applicable
provisions of law. Upon receipt of an order of the commissioner, the commissioner of finance
shall issue a receipt. This deposit must be maintained unimpaired as a guaranty fund for depositors
and creditors and for the faithful discharge of the trust company's duties, with the right to collect
the income from it and to substitute other similar authorized securities, of equal amount and value,
upon approval and order of the commissioner.
If the securities comply with the law, the commissioner shall issue a certificate of
authorization for the trust company to begin business.
Subd. 3. Reduction of capital stock.
The capital stock of a trust company may be reduced
with the approval of the commissioner, but not below the minimum amounts in this section.
A trust company shall not return assets to the stockholders unless its deposits of authorized
securities after the return equal one-fourth of the reduced capital, which in no event may be
less than $125,000. The liability of a stockholder or participant upon an existing contract is
not affected by the return of assets.
Subd. 4. Requirements for consolidated companies.
When two or more trust companies
have been or are consolidated under sections
, or, in the case of a limited liability
, the capital of the consolidated trust company is considered
substituted for the capital of the several trust companies entering into the consolidation, and the
aggregate of the securities of these trust companies on deposit with the commissioner of finance,
according to this section, must be increased or diminished accordingly.
Subd. 5. Requirements for limited purpose companies.
A company may also be organized,
with its principal place of business in the state, with a capital of not less than $10,000, to be paid
in cash, of which 50 percent must be invested in authorized securities and deposited with the
commissioner of finance, as provided in this section. The powers and business of the company
must be to act as assignee under an assignment for the benefit of creditors, or be appointed and act
as a trustee or receiver, as a guardian, as executor of a will, or administrator of an estate. The
company may accept and perform any other lawful trust over which a state or federal court has
jurisdiction. The company, before entering upon the duties of its trust, shall give a surety bond in
the sum the court directs, with sufficient surety, conditioned for the faithful performance of its
duties. The business of a company is limited to the matters in this subdivision. A company with a
capital stock of less than $10,000 shall not use the word "trust" in the title or name of the company.
History: 1998 c 331 s 16; 2003 c 112 art 2 s 50