Imagens da página
PDF
ePub

8. Power of the State of charter over the corporation.

A corporation is subject, as to the continuance of its rights and powers, to the legislature of the State of its creation, so far as that legislature may constitutionally act; and all persons who deal with the corporation must do so with this fact in mind. This principle is well illustrated by the case of Canada Southern Railway v. Gebhard.43 Gebhard was the holder of bonds of the railway company, a corporation chartered in Canada; and he brought suit on them in the courts of New York. The defence offered was that the Dominion Parliament had passed an act authorizing the road to reorganize and substitute other securities for its bonds, and providing that when a majority of the stockholders assented to this it should be deemed to have been accepted by all. There was no constitutional restriction upon the action of the Parliament. The Supreme Court held the defence good. Waite, C. J., said: "The charter of a foreign corporation is the same abroad that it is at home. Whatever legislative control it is subjected to at home, must be recognized and submitted to by those who deal with it elsewhere. Every person who deals with a foreign corporation impliedly subjects himself to such laws of the foreign government affecting the powers and obligations of the corporation with which he voluntarily contracts, as the known and established policy of the government authorizes. Anyone contracting is conclusively presumed to have contracted with a view to such laws of that government because the corporation must of necessity be controlled by them and it has no power to contract with a view to any other laws with which they are not in harmony. It follows, therefore, that anything done at the legal home of the corporation under the authority of such laws, which discharges it from liability there, discharges it everywhere." 44

The existence of a successor to the corporation is to be 43 109 U. S. 527, 27 L. ed. 1020.

44 See to the same effect, Rust v. United Waterworks Co., 70 Fed. 129.

determined by the same law. Thus where the laws of the State of charter provide that in case of insolvency of a corporation its assets shall pass to a designated officer of the State for the purpose of winding up the corporation, upon the insolvency being declared by the proper court the assets everywhere pass to the officer named.45 "The law which clothed him with the trust was, in legal effect, part of the charter of the corporation. He was the statutory successor of the corporation, for the purpose of winding up its affairs. . . . Every person who deals with it, everywhere, is bound to take notice of the provisions which have been made in its charter for the management and control of its affairs, both in life and after dissolution." 46

45 Relfe v. Rundle, of Amer., 77 Va. 85. 70 Fed. 129.

103 U. S. 222, 26 L. ed. 337; Bockover v. Life Assoc. To the same effect, Rust v. United Waterworks Co.,

46 WAITE, C. J., in Relfe v. Rundle, supra.

CHAPTER II.

STATE LAWS FOR THE FORMATION OF CORPORATIONS.

10. Introduction.

11. Alabama.

12. Arizona.

13. Arkansas.

14. California.

15. Colorado.
16. Connecticut.

17. Delaware.

18. District of Columbia.

19. Florida.

20. Georgia. 21. Hawaii.

22. Idaho.
23. Illinois.

24. Indiana.
25. Iowa.
26. Kansas.

27. Kentucky.
28. Louisiana.
29. Maine.

30. Maryland.

31. Massachusetts.

32. Michigan. 33. Minnesota.

34. Mississippi. 35. Missouri. 36. Montana.

37. Nebraska.

§ 39. New Hampshire.

40. New Jersey.

41. New Mexico.

42. New York.

43. North Carolina.

44. North Dakota.

45. Ohio.

46. Oklahoma.

47. Oregon.

48. Pennsylvania.

49. Rhode Island.
50. South Carolina.
51. South Dakota.

52. Tennessee.

53. Texas.

54. Utah.
55. Vermont.
56. Virginia.
57. Washington.
58. West Virginia.
59. Wisconsin.

60. Wyoming.

61. Great Britain.

62. Canada.

63. New Brunswick.

64. Nova Scotia.

65. Ontario.

66. Quebec.

38. Nevada.

10. Introduction.

The purposes of this chapter are, first, to indicate so much of the duration, powers, and limitations of a corporation as it may be essential for one dealing with the corporation in another State to know; second, to inform persons who con

template the formation of a corporation abroad, or an investment in the shares of a foreign corporation, of the advantages or disadvantages of incorporation in any particular State.

As has already been seen,' the constitutions of most States forbid the formation of corporations by special legislative act. In a few States, however, this may be done; and in case of a corporation so formed the provisions of its special charter may supersede the provisions of the general law, and must be consulted in order to determine the extent of its powers and liabilities.

The matters principally included in this chapter are the provisions regulating the number of incorporators required, and the number (if any) who must be resident; the purposes for which corporations may be formed; the amount of capital stock which must be subscribed or paid in before doing business, if there is any requirement of the sort; the special examination, if any, made by a State officer before issuing the charter; the term for which the corporation may continue in existence; and the enumeration and limitation of its powers. If the State requires a publication of the names of the stockholders, this is also noted. The consideration of the stockholder's liability is postponed to a subsequent chapter; but the provision made in a few States which permits the incorporators in their Articles of Incorporation to fix the amount of the stockholder's liability is here given.

Most States make no requirement of residence for the incorporators. In California, Maryland, and Ohio a majority must be resident; in North Dakota, Oklahoma and South Dakota, one-third; in Kansas, three; in Texas, two; in Idaho, New York, Pennsylvania, and Utah, one; and in Wisconsin, all. In New York two-thirds must be citizens of the United States.

The whole number of incorporators required is usually at least three or five. In Illinois the number is limited to seven.

1 Ante, § 2.

In Alabama, South Carolina and Washington, it may be two, and in Iowa a single individual may incorporate. In Arizona, Georgia, Hawaii, Mississippi and Nebraska, the number of incorporators is not specified, but the use of the plural form would indicate a requirement of at least two.

In most States a corporation may be formed for any lawful purpose; often excepting from the general provisions banking, insurance, and public service companies, and in a few States manufacturing companies, which are specially dealt with. In Indiana, Maryland, Montana, Oklahoma, Pennsylvania, Tennessee, Texas, and Wisconsin, the specific purposes for which corporations may be formed under the general laws are enumerated. In Indiana special care is taken to prevent a corporation from going beyond the purposes prescribed.

In a majority of States the amount of capital stock and the amount to be paid in before beginning business is either not prescribed at all or is left to be fixed by the articles. In several States, however, this is a matter for elaborate arrangement, the policy of the State requiring the protection of the creditors in this way. States making strict provisions of this sort are Missouri (one-half paid in); Alabama, Florida, Georgia, Michigan, Pennsylvania, South Carolina, Utah, West Virginia (ten per cent. paid in); Connecticut, Delaware and New Jersey (one thousand dollars paid in); New York (five hundred dollars paid in); Texas (one hundred thousand dollars paid in, or fifty per cent. subscribed and ten per cent. paid in). Massachusetts requires all the capital stock to be paid in except in case of business corporations, in respect to which there is no provision.

In most States the Secretary of State issues a certificate of incorporation, as of course, upon a compliance with the prescribed forms. In a few States, however, a State officer or board examines into the affairs of the proposed corporation, to determine whether it complies with the law. In Alabama, Georgia, Maryland, Virginia and Vermont (if the Secretary

« AnteriorContinuar »