DRAFT CSC, Title 16.  Business Organizations & Regulation
 
CHAPTER 1
Corporations

1001.  Authority of Governor or his designee to grant corporate charters and establish public  corporations.
1002.  Scope and application of Chapter; exceptions.
1003.  Application for charter; articles of incorporation.
1004.  Application for charter; bylaws.
1005.  Audits and inspections authorized; application to nonprofit corporations.
1006.  Use of the terms "cooperative" and "credit union" restricted.
1007.  Enjoinder of violations.

      1001.  Authority of Governor or his designeeHigh Commissioner to grant corporate charters and establish public corporations.
     The Governor or his designee High Commissioner may grant charters of incorporation for the establishment and functioning of business organizations, associations of persons for any lawful purpose other than pecuniary profit, cooperatives, and credit unions.  The Governor or his designee High Commissioner may create and establish public corporations subject to approval and consent of the Congress of Micronesia.

Source:  1980 TTC, 37 TTC 1, modified.

      1002.  Scope and application of Chapter; exceptions.

     (1)  The provisions of this Chapter are applicable to every private corporation, profit or nonprofit, stock or non-stock, now existing or hereafter formed, and to the outstanding and future securities thereof, unless such corporation be expressly excepted from the operation thereof, or there be a special provision in relation to any class thereof inconsistent with some provision of this Chapter, in which case the special provision prevails.

     (2)  The existence of corporations heretofore formed or existing shall not be affected by the enactment of this Chapter nor by any change in the requirements for the formation of corporations nor by amendment or repeal of the laws under which they were formed or created.

Source:  TT Code 1980, 37 TTC 2, modified.

      1003.  Application for charter; articles of incorporation.

     (1)  An association of persons seeking a charter as a corporation shall submit for the approval of the Governor or his designee High Commissioner articles of incorporation which shall provide at least the following information:
 
     (a)  Proposed name of the corporation.

     (b)  Principal office or place of business.

     (c)  Proposed duration.

     (d)  Purposes.

     (e)  Powers.

     (f)  Capitalization.

     (g)  Names of incorporators.

     (h)  Number of directors, which shall be not less than three, and proposed officers.

     (i)  Names of directors and officers to serve until first election.

     (j)  Provisions for management, if any.

     (k)  Provisions for voting by members.

     (l)  Provisions for shareholding, if any

     (m)  Disposition of financial surplus.

     (n)  Provisions for liquidation.

     (o)  Provisions for amendment of articles of incorporation.

Source:  TT Code 1980, 37 TTC 3 (1), modified.

      1004.  Application for charter; bylaws.
     In addition to articles of incorporation, persons seeking a charter as a corporation shall submit for the approval of the Governor or his designee High Commissioner proposed by-laws governing the operation of the corporation.

Source:  TT Code 1980, 37 TTC 3 (2), modified.

      1005.  Audits and inspections authorized; application to nonprofit corporations.

     (1)  The Governor or his designee High Commissioner may appoint officers to audit and report on the accounts of corporations authorized to do business within the State of Chuuk Trust Territory and such officers shall have the right at any and all times to inspect, examine, and audit the books and accounts of such corporations.

     (2)  Any member of a nonprofit corporation shall have the right to inspect and examine the books and accounts of the corporation of which he is a member, provided that such inspection and examination shall be held at the place where such books and accounts are normally kept, and shall take place on weekdays during normal business hours in such a manner as not to interfere with usual conduct of business or corporate affairs.

Source:  TT Code 1980, 37 TTC 4, modified.

      1006.  Use of the terms "cooperative" and "credit union" restricted.
     No person, firm, corporation or association hereafter organized or doing business in the State of Chuuk Trust Territory shall be entitled to use the terms "cooperative" or "credit union" as part of its corporate name or other business name or title, or otherwise represent itself to the public to be a nonprofit cooperative association or a credit union or cooperative savings and loan association unless it has complied with the provisions of this Chapter, except as provided in Section 1002 of this Chapter.

Source:  TT Code 1980, 37 TTC 5, modified.

      1007.  Enjoinder of violations.
     Violations of the provisions of this Chapter or regulations promulgated hereunder are hereby declared to be enjoinable, and the Attorney General, or the district attorney in the name of the Attorney General, shall have the power to seek appropriate relief from such violations or from other corporate practices in violation of the law of the State of Chuuk Trust Territory or contrary to the public interest.

Source:  TT Code 1980, 37 TTC 6, modified.