Oklahoma § 18-951 - Prohibition on forming - Exceptions

§ 18-951. Prohibition on forming - Exceptions

A. It is hereby declared to be the public policy of this state

and shall be the prohibition of this act that, notwithstanding the

provisions of Section 5 of this act, no foreign corporation shall be

formed or licensed under the Oklahoma General Corporation Act for

the purpose of engaging in farming or ranching or for the purpose of

owning or leasing any interest in land to be used in the business of

farming or ranching. A domestic corporation may, however, be formed

under the Oklahoma General Corporation Act to engage in such

activity if the following requirements are met by that domestic

corporation:

1. There shall be no shareholders other than (a) natural

persons; (b) estates; (c) trustees of trusts for the benefit of

natural persons, if such trustees are either (i) natural persons or

(ii) banks or trust companies which either have their principal

place of business in Oklahoma or are organized under the laws of the

State of Oklahoma; or (d) corporations owned by no shareholders

other than those described in paragraph 1 (a), (b) or (c) of this

section and meeting the requirements of paragraph 3 of this section.

2. Not more than thirty-five percent (35%) of the corporation's

annual gross receipts shall be from any source other than (a)

farming or ranching or both, as the case may be, or (b) allowing

others to extract from the corporate lands any minerals underlying

the same, including, but not limited to, oil and gas. Provided,

however, in the event a corporation does not comply with the thirtyfive percent (35%) annual gross receipt test, then, in that event

the corporation may furnish records of its gross receipts for each

of the previous five (5) years, or for each year that it has been in

existence if less than five (5) years, and the average of said

annual gross receipts shall be used in lieu of the corporation's

annual gross receipts for purposes of complying with this section.

3. Except as otherwise provided in this paragraph, there shall

not be more than ten shareholders unless said shareholders in excess

of ten are related as lineal descendants or are or have been related

by marriage to lineal descendants or persons related to lineal

descendants by adoption or any combination of same. For a

corporation incorporated for the purpose of breeding horses, there

shall not be more than twenty-five shareholders.

4. Certificates of incorporation for domestic corporations

which intend to engage in farming or ranching or owning or leasing

any interest in land to be used in the business of farming or

Oklahoma Statutes - Title 18. Corporations

ranching shall initially be approved by the State Board of

Agriculture concerning the purpose prior to filing in the office of

the Secretary of State. No stated purpose is to be disapproved by

the Board of Agriculture unless such stated purpose violates

existing civil or criminal code.

B. The Secretary of State shall provide the State Department of

Agriculture a list of corporations registering in the state that

list farming or ranching or owning or leasing any interest in land

to be used in the business of farming or ranching at least weekly.

Amended by Laws 1986, c. 292, § 156, eff. Nov. 1, 1986; Laws 1991,

c. 38, § 2, emerg. eff. April 3, 1991.