ANALYSIS. 1. Definition. 2. Kinds of corporations. 3. Creation of corporations. 4. Characteristics of corporations. 5. Irregular or de facto corporations. 6. Citizenship of corporations. 7. Foreign corporations. 8. Promoters and their acts— Subscriptions to stock. 9. Securing the charter. 10. The charter - A contract- Police powers. 11. Powers of a corporation - Express and implied. 12. Ultra-vires acts. 13. Some customary powers of a corporation. 14. Power of a corporation to acquire its own stock and stock in another company. 15. Corporate agents- Officers and Directors. 16. Stock. 17. Stockholder's right of management. 18. Creditors. 19. Dividends. 20. Relation of the State to the corporation. 21. Dissolution of corporation. CORPORATIONS. 1. A corporation is an artificial being, created by the State for some defined purpose, and permitted to do business under a particular name and have a succession of members without dissolution. Corporations differ from partnerships in that the partners never lose their identity, that a change of partners terminates the partnership, that partners are liable for the firm debts, and a partnership needs no legislative authority to create it, while a corporation is distinct from the individuals (shareholders) composing it. One shareholder may withdraw and substitute another in his place. The debts of the corporation are not the debts of shareholders. The debts of the partnership are also the debts of each partner. 2. Kinds of Corporations. 1. Public and Private Corporations. Public corporations are those which have to do with the government of people. Private corporations embrace all other corporations. The distinction between these two kinds is, that the legislature which authorized their creation, may alter, limit or extend the powers of a public corporation or even abolish it, but may not do so as to a private corporation. Private corporations are of many kinds, as ecclesiastical and lay corporations; the former being devoted to religious purposes; the latter to secular purposes. Lay corporations are of two kinds, eleemosynary and civil. Eleemosynary corporations are devoted to charitable objects; civil corporations are devoted to various objects of a business nature. Corporations are also sole or aggregate. A corporation sole consists of a single person and his successors, who is made a body corporate and politic in order to give him some legal capacities and advantages, particularly that of perpetuity, which in his natural person he could not have had. Examples of a corporate sole are king and bishop and certain other church officials of England, who hold property as a corporation sole. This class of corporation does not exist in the United States. Corporations aggregate consist of many persons united together in one society, and are kept up by a perpetual succession of members so as to continue forever. 3. Creation of Corporations. The power to create corporations is usually expressly conferred by constitutions on the legislature, but where not expressly conferred it is said to be impliedly conferred as an incident to other powers expressly vested in the legislature. Formerly corporations were created by special legislative acts, but constitutions now forbid special acts of incorporation, and general acts of incorporation universally exist, under which persons may incorporate as a corporate body. These general incorporation acts designate the purposes for which persons may incorporate, and the powers of the incorporated bodies. The acts also designate the method of incorporating. This is usually done by filing with designated officials for recording, the articles of incorporation. These articles set forth certain essential facts, chief among which are the name of the proposed corporation and its proposed headquarters, the purposes for which the incorporation is sought, its total capital stock, and the number of shares into which it is divided, the names of the shareholders and the number of shares each take, and the number and names of its first board of directors. Upon the filing of the articles of incorporation and due compliance with other statutory requirements, a certificate of incorporation is granted. 4. Characteristics of Corporations. Every aggregate corporation had five certain incidents and attributes, to wit: 1. Perpetual succession; 2. To sue and be sued; 3. To purchase and hold lands; 4. A common seal; 5. The right to make by-laws. Perpetual Succession. Formerly corporations were created for no definite period, but to continue indefinitely. Now generally the number of years a corporation may exist is fixed by law. A corporation has perpetual succession of its members during its existence, whether for a fixed or indefinite period of years. By this is meant that its members, i. e. shareholders, may die or otherwise be removed, and new members may perpetually succeed retiring members during the corporate existence without disturbance of the affairs of the corporation. Name. A corporation being an artificial being, must possess a name to distinguish and identify it, and frequently its right to the exclusive use of the chosen name is assured to it by law. Seal. Every corporation possesses a seal, and, at common law, no corporate contract was valid unless sealed with the corporate seal by an authorized agent. Originally a seal had to be a wax or a wafer, and impressed with the seal of the corporation. Under modern laws the impress of the seal may be made directly on the paper itself, or may be simply a scroll drawn on the paper. Sue and be Sued. A corporation may sue and be sued, implead and be impleaded, and grant and receive by its corporate name. Acquiring Lands. A corporation may acquire lands and hold them for its benefit if it is within the scope of its powers as defined by its charter. 5. Irregular or De Facto Corporations. In incorporating under general laws, the incorporators have to follow the procedure set forth in the statutes. A correct compliance with this procedure results in a perfect incorporation, but where the incorporators have failed to comply fully the question is, have the incorporators been incorporated or not? It is held that if the non-compliance be as to a necessary step in the process of incorporation, there has been no incorporation; but if as to immaterial matters, there has been. Where the incorporation is defective by reason of non-compliance with the statutory requirements, many courts hold that the stockholders are liable on the corporate contracts as partners, for the reason that there being no corporation there can be no corporate liability and the incorporators are only part |