Massachusetts General Laws ch. 160 sec. 48 – Approval by department of issue
Section 48. Before any railroad corporation shall issue any shares of capital stock or any bonds, notes or other evidences of indebtedness payable at periods of more than one year after the date thereof, it shall apply to the department for its approval of the proposed issue to such amount as the department shall determine to be reasonable and proper for the purpose of funding its floating debt properly incurred for lawful purposes, or reasonable and proper for any other lawful purpose set forth in the application for such approval. The department shall render a written decision assigning its reasons therefor upon such an application within thirty days after the final hearing thereon. Any order of the department approving any such issue of stock, bonds, notes or other evidences of indebtedness may provide for the application of the proceeds thereof to such particular uses as the department shall by that order or by some subsequent order specify, and the corporation shall not apply such proceeds otherwise than as thus specified in such orders. The decision of the department as to the amount of stock reasonably necessary for the purpose for which such stock is proposed to be issued shall be based upon the price at which such stock is to be issued, and the department shall refuse to approve any particular issue of stock, if, in its opinion, the price at which it is proposed to be issued is so low as to be inconsistent with the public interest. This section shall not require a railroad corporation incorporated under the laws of one or more other states or foreign countries, as well as under the laws of this commonwealth, to apply to the department for approval of the issue of shares of capital stock or of bonds, notes or other evidences of indebtedness for the sole ultimate purpose of providing funds for additions to or improvements of property of such corporation or of any corporation controlled by it through lease or stock ownership, if such property has a situs in another state or country by the laws of which such railroad corporation is authorized to operate a railroad therein and to make such additions to or improvements of such property, nor to apply to the department for approval of the issue of shares of capital stock, bonds, notes or other evidences of indebtedness for paying, funding or refunding indebtedness incurred for such ultimate purpose; but all such proposed issues and the authority therefor shall, before the issue of such securities, be reported to the department. Except for such ultimate purpose, such a railroad corporation shall not, without the approval of the department, issue any shares of capital stock, or any bonds, notes or other evidences of indebtedness payable at periods of more than one year after the date thereof, in exchange for or to pay for shares of capital stock, notes, bonds or other evidences of indebtedness of any other corporation which are acquired or contracted for; but if the acquisition or holding of such securities by such railroad corporation shall be authorized by the laws of any state or country where it has been incorporated, and shall also be permitted by the laws of the state or country where such other corporation has been incorporated, the department may authorize the acquisition of such securities by such railroad corporation, and may approve the issue of shares of capital stock, bonds, notes or other evidences of indebtedness by such railroad corporation in exchange for or to pay for such securities, provided that the department shall find that such acquisition and the terms thereof are consistent with the public interest. A director, treasurer or other officer or agent of a railroad corporation, who knowingly votes to authorize the issue of, or knowingly signs, certifies or issues stock or bonds contrary to this or the preceding section, or who knowingly votes to authorize the application, or knowingly applies the proceeds of such stock or bonds contrary to any provision of said sections, or who knowingly votes to assume or incur, or knowingly assumes or incurs in the name or behalf of such corporation, any debt or liability except for the legitimate purposes of the corporation, shall be punished by a fine of not more than one thousand dollars or by imprisonment for not more than one year, or both.
Terms Used In Massachusetts General Laws ch. 160 sec. 48
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC