Chapter 6
Article 4 Ownership by Minors

TABLE OF CONTENTS

  • Section 8-6-90 Short title.
  • Section 8-6-91 Definitions.
  • Section 8-6-92 Liability of bank, transfer agent, etc., for treating minor as having capacity to exercise security rights; presumption that holder not minor.
  • Section 8-6-93 Minor may not disaffirm security transaction unless prior written notice of minority given.
  • Section 8-6-94 Right of minor to receive dividends, etc.
  • Section 8-6-95 Certain laws not affected by article.

Section 8-6-90
Short title.

This article may be cited as the Securities Ownership by Minors Act.

(Acts 1961, No. 1010, p. 1585, §5.)

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Section 8-6-91
Definitions.

In this article, unless the context otherwise requires, the following terms shall have the meanings ascribed to them by this section:

(1) Bank.

A bank, trust company, national banking association, savings bank, or industrial bank.

(2) Broker.

A person, including a bank, lawfully engaged in the business of effecting transactions in securities for the account of others and includes a broker lawfully engaged in buying and selling securities for his own account.

(3) Issuer.

A person who places, or authorizes the placing of, his name on a security other than as a transfer agent to evidence that it represents a share, participation, or other interest in his property or in an enterprise or to evidence his duty to perform an obligation evidenced by the security or who becomes responsible for or in place of any such person.

(4) Person.

Such term includes a corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, two or more persons having a joint or common interest or any other legal or commercial entity.

(5) Security.

Such term includes any note, stock, treasury stock, bond, debenture, evidence of indebtedness or certificate of interest or participation in an oil, gas, or mining title or lease or in payment out of production under such a title or lease, collateral trust certificate, transferable share, voting trust certificate, or, in general, any interest or instrument commonly known as a security or any certificate, interest or participation in any temporary or interim certificate, receipt or certificate of deposit for, or any warrant or right to subscribe to or purchase, any of the foregoing.

(6) Third-party.

A person other than a bank, broker, transfer agent, or issuer who with respect to a security held by a minor effects a transaction otherwise than directly with the minor.

(7) Transfer agent.

A person who acts as authenticating trustee, transfer agent, registrar, or other agent for an issuer in the registration of transfers of securities in the issue of new securities or in the cancellation of surrendered securities.

(Acts 1961, No. 1010, p. 1585, §1.)

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Section 8-6-92
Liability of bank, transfer agent, etc., for treating minor as having capacity to exercise security rights; presumption that holder not minor.

(a) A bank, broker, issuer, third-party or transfer agent incurs no liability by reason of his treating a minor as having capacity to transfer a security, to receive or to empower others to receive dividends, interest, principal, or other payments or distributions, to vote or give consent in person or by proxy, or to make elections or exercise rights relating to the security unless prior to acting in the transaction the bank, broker, issuer, third-party or transfer agent had received written notice in the office acting in the transaction that the specific security is held by a minor.

(b) Except as otherwise provided in this article, such a bank, broker, issuer, third-party or transfer agent may assume without inquiry that the holder of a security is not a minor.

(Acts 1961, No. 1010, p. 1585, §2.)

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Section 8-6-93
Minor may not disaffirm security transaction unless prior written notice of minority given.

A minor who has transferred a security, received or empowered others to receive dividends, interest, principal, or other payments or distributions, voted or given consent in person or by proxy or made an election or exercised rights relating to the security has no right thereafter, as against a bank, broker, issuer, third-party or transfer agent, to disaffirm or avoid the transaction unless, prior to acting in the transaction, the bank, broker, issuer, third-party or transfer agent against whom the transaction is sought to be disaffirmed or avoided had received written notice in the office acting in the transaction that the specific security is held by a minor.

(Acts 1961, No. 1010, p. 1585, §3.)

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Section 8-6-94
Right of minor to receive dividends, etc.

A minor may receive in his own right dividends or other moneys in respect to any securities standing in his name on the books of a corporation, bank, or business trust, and such receipt shall constitute a valid and sufficient release and discharge of the corporation, bank, or business trust for such dividends or other moneys paid to such minor, notwithstanding that the corporation, bank, or business trust may have actual or written notice of the minority of such person.

(Acts 1961, No. 1010, p. 1585, §4.)

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Section 8-6-95
Certain laws not affected by article.

Nothing in this article shall be construed to repeal or in any way affect Sections 10-6-1 through 10-6-4.

(Acts 1961, No. 1010, p. 1585, §7.)

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