14 May 1891. P. L. 61. nate to this statute, the charter of the same, the constitution and laws of this XVIII. Capital stock. 9 May 1889. 65. The capital stock of every such corporation that has or requires capital stock, shall consist of not more than one million dollars, except companies incorporated for the purpose of supplying the public with water, whose capital Water companies stock shall not exceed two million dollars, (q) and shall be divided into shares of authorized to have a capital not more than one hundred dollars each; and all subscriptions to the capital stock stock of two shall be paid in such instalments and at such times as the directors may require, million dollars. and if default be made in any payment, the person or persons in default shall be liable to pay, in addition to the amount so called for and unpaid, at the rate of onehalf of one per centum per month for the delay of such payment, and the directors may cause suit to be brought for the recovery of the amount due, together with a penalty of one-half of one per centum per month, as aforesaid, or the directors may cause the stock to be sold in the manner provided in clause two of section thirtynine of this act; and no stockholder shall be entitled to vote at any election, or at any meeting of the stockholders, on whose share or shares any instalments or arrearages may have been due and unpaid for the period of thirty days immediately preceding such election or meeting. The shares of the capital stock of every such company may be transferred on the books of the company, in person or by attorney, subject to such regulations as the by-laws may prescribe; (r) but the provisions of this section shall not apply to corporations in which by this act different and other rules and provisions are enacted for their regulation and government.(s) P. L. 77. 66. The directors of such corporation shall procure certificates or evidences of 29 April 1874 § 7. stock, and shall deliver them, signed by the president, countersigned by the treasurer, and sealed with the common seal of the corporation, to each person or Certificates of party entitled to receive the same, according to the number of shares by him, her stock. or them respectively held; which certificates or evidences of stock shall be trans- Transfers. ferrible at the pleasure of the holder, in person or attorney duly authorized, as the by-laws may prescribe, subject, however, to all payments due, or to become due thereon; and the assignee or party to whom the same shall have been so transferred, shall be a member of said corporation, and have and enjoy all the immunities, privileges and franchises and be subject to all the liabilities, conditions and penalties incident thereto, in the same manner as the original subscriber or holder would have been; but no certificate shall be transferred so long as the holder thereof is indebted to said company, unless the board of directors shall consent thereto. 25 May 1887. See amendment Supp. 2554. 67. The stock of every corporation created under the provisions of this statute shall be deemed personal property; and no shares shall be transferrible until all previous calls thereon shall have been fully paid in, or shall have been declared Stock to be deemed forfeited for the non-payment of calls thereon.(t) No note or obligation given by a personal property. stockholder, whether secured by pledge or otherwise, shall be considered as pay- Not to be transferrible until all prement of any part of the capital stock, and it shall not be lawful for any such cor- vious calls are fully poration to use any of its funds in the purchase of any stock in any other corporation, paid. or to hold the same, except as collateral security for a prior indebtedness, except as provided in section thirty-seven of said act.(u) Funds not to be in vested in stock of May issue stock 68. Every corporation created under the provisions of this act, or accepting its provisions, may take such real and personal estate, mineral rights, patent-rights, and other property, as is necessary for the purposes of its organization and business, and issue stock to the amount of the value thereof, in payment thereof, and for real and perthe stock so issued shall be declared and taken to be full-paid stock, and not liable sonal property. to any further calls or assessments; and in the charter and the certificates and statements to be made by the subscribers and officers of the corporation, such stock shall not be stated or certified as having been issued for cash paid into the (9) The act 25 May 1887, P. L. 268, authorizes corporations created for the purpose of supplying water in cities of the first and second classes to increase the amount of their capital from time to time to such amount as shall have been found requisite and exigible, provided that the amount shall not exceed twenty millions of dollars. (r) See Pennsylvania Railroad Co.'s Appeal, 86 P. S. 80. (8) This is an amendment of the act 29 April 1874, § 11. P. L. 79. (t) This is an amendment to the act 29 April 1874, § 12, P. L. 75, and operates as a repeal of the right to make assessments as provided by that section. See the following decisions under that section: Price's Appeal, 106 P. S. 421; Dairymen's Association v. Ryan, 2 Chest. Co. 541; Creamery Association v. Buckwalter, Ibid. 544. (u) See tit. "Building Associations." See act 21 April 1858, P. L. 412, infra 103. P. L. 75. deceased tenants in common may convey. 29 April 1874 § 17. company, but shall be stated or certified in this respect according to the fact. And the executors or administrators of any deceased tenant in common of lands, Executors, &c., of mines and mineral rights so proposed to be taken, may, and they are hereby authorized to, convey the individual estate and interest of such decedent therein to such company, receiving therefor so much stock in such company as the said decedent would have been entitled to receive in his lifetime, to be held in the same manner as the lands: Provided, That no directions or limitations contained in any last will and testament of such decedent shall be in any manner interfered To give security. with: And provided, That before making such conveyance, such executors or administrators shall give sufficient security, to be approved by the orphans' court having jurisdiction of their accounts, for the faithful application of the stock received therefor. No such corporation shall issue either bonds or stock, except for Fictitious increase money, labor done, or money or property actually received; and all fictitious increase of stock or indebtedness in any form shall be void. Every such corporation may provide for the issue of deferred stock, in payment for such real or personal estate or mineral rights, and if so provided, it shall be expressly stated in the charter filed, or in a certificate to be made and recorded, or in the acceptance of this statute, to be filed by any corporation accepting its provisions, with the amount of such deferred stock, and the consideration of the same, and the terms on which the same shall be issued; and the said stock may be made to await payments of dividends thereon, until out of the net earnings at least five per centum has been declared and paid upon the other full-paid stock of the corporation. (v) to be void. Deferred stock. 29 April 1874 § 16. P. L. 75. Preferred stock may be issued. 28573 § 1. L. 79. Preferred stock classes. XIX. Preferred stock. 69. Every corporation created under the provisions of this act, or accepting its provisions, may, with the consent of a majority in interest of its stockholders, obtained at a meeting to be called for that purpose, of which public notice shall be given during thirty days in a newspaper of the proper county, issue preferred stock of the corporation, the holders of which preferred stock shall be entitled to receive such dividends thereon as the board of directors of the corporation may prescribe, payable only out of the net earnings of the corporation. 70. Any company authorized by the act to which this is a supplement, (w) to issue preferred stock, may issue the same in different classes, to be distinguished in such manner as the directors of such company may prescribe; and they may may be issued in give to the various classes such order of preference in the payment of the dividends, or in the rate of dividends thereon, or in the redemption of the principal thereof, as may be approved by the holders of a majority of the stock of the company; and the company shall have the right to redeem its preferred stock upon such terms as may be prescribed in the issue thereof; and it may specifically appropriate for the payment of the dividends upon any class of stock, or for the redemption of the principal thereof, the revenues from any specific department of its business, or the proceeds of any specified portions of its assets or property: Provided, That no injustice shall thereby be done to the existing rights of other stockholders or creditors of the company. 22 May 1878 § 1. P. L. 97. Bonus on capital stock. When payable. XX. Bonus. 71. Every company incorporated by or under the provisions of this act, (x) or accepting the same, except turnpike, bridge and cemetery companies, or building and loan associations, and excepting all of those corporations named in the first class of section two of this act, shall pay to the state treasurer, for the use of the commonwealth, a bonus of one-quarter of one per centum, upon the amount of the capital stock which said company is authorized to have, in two equal instalments. and a like bonus upon any subsequent increase thereof. The first instalment shall be due and payable upon the incorporation of said company, or upon the increase of the capital thereof, and the second instalment one year thereafter; and no company, as aforesaid, shall have or exercise any corporate powers, until the first instalment of said bonus is paid; and the governor shall not issue letterspatent to any company, until he is satisfied that the first instalment of said bonus has been paid to the state treasurer; and no company, incorporated as aforesaid, shall go into operation, or exercise any corporate powers or privileges, until said On a reduction of first instalment or bonus has been paid as aforesaid: Provided, That when any capital. corporation shall have reduced its capital stock, in accordance with the provisions of the 23d section of this act, such corporation shall not be liable, in the aggregate, for a greater bonus than one-fourth of one per cent upon the capital stock as altered and reduced. (v) So amended by act 17 April 1876, P. L. 32. See act 18 April 1874, infra 80, which is a general law, not restricted to corporations erected under this act. (w) See Reading Industrial Manufacturing Co. v. Graeff, 84 P. S. 395. (x) This is an amendment of the 44th section of the act 29 April 1874. 72. Every company, except railroad, canal, turnpike, bridge or cemetery com- 18 April 1874 § 7. panies, and companies incorporated for literary, charitable or religious purposes, P. L. 61. which shall increase its capital stock, under the provisions of this act, shall pay to Bonus on increase. the state treasurer, for the use of the commonwealth, a bonus of one-quarter of one per centum upon the amount of said increase, in two instalments, the first to be due upon the filing of the certificate required by the preceding section of this act, to be filed in the office of the secretary of the commonwealth, and the second instalment one year thereafter: Provided, That nothing in this act shall be construed to reduce the amount of bonus to be paid by any company having in its charter a special provision, requiring the payment of a bonus at a higher rate than one-quarter of one per centum. 7 May 1889. P. L. 155. on increase of 73. From and after the passage of this act, any corporation heretofore or hereafter incorporated by or under any general or special law of this commonwealth, except railroad, canal, turnpike, bridge and cemetery companies, building and Certain corporaloan associations, agricultural societies and companies and associations incorpo- tion to pay bonus rated for literary, charitable or religious purposes, upon increasing their capital capital. stock, in pursuance of any general or special law, shall pay to the state treasurer, for the use of the commonwealth, a bonus of one-quarter of one per centum upon the amount of the authorized increase, in two equal annual instalments; the first shall be due and payable upon the date of the authority to increase as aforesaid, and the second within one year thereafter. All laws or parts of laws inconsistent Repealing clause. herewith are hereby repealed. XXI. Reduction of capital stock. P. L. 75. 74. Any corporation created under the provisions of this act, and any corpora- 29 April 1874 § 28. tion of the classes named in the second section hereof, that is now in existence by virtue of any law of this commonwealth, may reduce its capital stock, or alter and Reduction of change the par value of the shares thereof, by a vote of the stockholders, taken in capital. the manner and under the regulations prescribed in the 18th, 19th, 20th, 21st and 22d sections of this act, and it shall be lawful for any corporation in the same manner to sell, assign, dispose of and convey to any corporation created under or accepting the provisions of this act, its franchises, and all its property, real, personal and mixed; and thereafter such corporation shall cease to exist, and the said property and franchises, not inconsistent with this act, shall thereafter be vested in the corporation so purchasing as aforesaid. (y) P. L. 351. Capital stock of corporations may 75. The capital stock of any corporation may be reduced from time to time by 8 June 1893 § 17. the consent of the persons or bodies corporate holding the larger amount in value of the stock of such company, provided that such reductions shall not be below the amount of capital stock required by law for the formation of such company. 76. That any corporation desirous of reducing its capital stock as provided by this act shall, by a resolution of its board of directors, call a meeting of its stockholders therefor, which meeting shall be held in its chief office or place of business holders to be in this commonwealth, and notice of the time, place and object of said meeting called. shall be published once a week for sixty days prior to such meeting in at least one Notice to be pubnewspaper published in the county, city or borough wherein such office or place of business is situate. 77. At the meeting called pursuant to the second section of this act, an election Meeting of stock lished. Ibid. § 8. be sworn. of the stockholders of such corporation shall be taken for or against such reduc- Election for or tion, which shall be conducted by three judges, stockholders of said corporation, against reduction appointed by the board of directors to hold said election, and if one or more of said to be held. judges be absent, the judge or judges present shall appoint a judge or judges who Election judges to shall act in the place of the judge or judges absent, and who shall respectively take and subscribe an oath or affirmation before an officer authorized by law to administer the same well and truly and according to law, to conduct such elections to the best of their ability, and the said judges shall decide upon the qualification of Qualification of voters, and when the election is closed, count the number of shares voted for and voters. against such reduction, and declare whether the persons or bodies corporate holding the larger amount of the stock of such corporation have consented to such reduction or refused to consent thereto, and shall make out duplicate returns of Result of election said election, stating the number of shares of stock that voted for such reduction to be declared. and the number that voted against such reduction, and subscribe and deliver the same to one of the chief officers of said company. Ibid. § 4. dorsed with num 78. Each ballot shall have indorsed thereon the number of shares thereby represented, but no share or shares transferred within sixty days shall entitle the holder or holders thereof to vote at such election or meeting, nor shall any proxy be Ballots to be inreceived or entitle the holder to vote unless the same shall bear date and have been ber of shares. executed within three months next preceding such election or meeting, and it shall Proxies shall bear be the duty of such corporation to furnish the judges at said meeting with a state- been executed ment of the amount of its capital stock with the names of persons or bodies cor- three months preporate holding the same, and number of shares by each respectively held, which ceding election. (y) So amended by act 17 April 1876. P. L. 33. date and have 8 June 1593 § 4. P. L. 351. Statement of capi tal stock and shareholders to be furnished judges. Ibid. § 5. notice to be filed with secretary of commonwealth. statement shall be signed by one of the chief officers of such corporation, with an affidavit thereto annexed that the same is true and correct to the best of his knowledge and belief.(z) 79. It shall be the duty of such corporation, if consent is given to such reduction, to file in the office of the secretary of the commonwealth, within thirty days after such election or meeting, one of the copies of the return of such election provided Copy of return and for by the third section of this act with a copy of the resolution and notice calling the same thereto annexed, and upon the reduction of the capital stock of such corporation made pursuant thereto, it shall be the duty of the president or treasurer Duty of president of such corporation, within thirty days thereafter, to make a return to the secretary of the commonwealth, under oath, of the amount of such reduction, and in case of neglect or omission so to do, such corporation shall be subject to a penalty of five thousand dollars, which penalty shall be collected on an account settled by the auditor-general and state treasurer as accounts for taxes due the commonwealth are settled and collected, and the secretary of the commonwealth shall cause said return to be recorded in a book kept for that purpose and furnish a certified copy of the same to the auditor-general. or treasurer. Penalty for neglect. Duty of secretary of commonwealth. 18 April 1874 § 1. P. L. 61. Corporations may increase their capital stock and indebtedness. Limitation. Ibid. § 2. Proceeding for increase of capital, &c. Ibid. § 3. ers to be taken. Election, how conducted. XXII. Increase of capital or indebtedness. 80. The capital stock or indebtedness of any corporation may be increased, from time to time, by the consent of the persons or bodies corporate holding the larger amount in value of the stock of such company, to such amount as such corporation is by law authorized to increase its capital stock or indebtedness: Provided, That no corporation shall increase the amount of its indebtedness, beyond the amount of its capital stock subscribed, until the amount of its capital stock subscribed shall be fully paid in.(a). 81. Any corporation desirous of increasing its capital stock or indebtedness, as provided by this act, shall, by a resolution of its board of directors, call a meeting of its stockholders therefor, which meeting shall be held at its chief office or place of business in this commonwealth; and notice of the time, place and object of said meeting shall be published, once a week for sixty days prior to such meeting, in at least one newspaper published in the county, city or borough wherein such office or place of business is situate. 82. At the meeting called pursuant to the second section of this act, an election of the stockholders of such corporation shall be taken for or against such Vote of stockhold increase, which shall be conducted by three judges, stockholders of said corporation, appointed by the board of directors to hold said election; and if one or more of said judges be absent, the judge or judges present shall appoint a judge or judges, who shall act in the place of the judge or judges absent, and who shall respectively take and subscribe an oath or affirmation, before an officer authorized by law to administer the same, well and truly, and according to law, to conduct such elections to the best of their ability; and the said judges shall decide upon the qualification of voters, and when the election is closed, count the number of shares voted for and against such increase, and declare whether the persons or bodies corporate holding the larger amount of the stock of such corporation have consented to such increase, or refused to consent thereto; and shall make out duplicate returns of said election, stating the number of shares of stock that voted for such increase, and the number that voted against such increase, and subscribe and deliver the same to one of the chief officers of said company. Returns. Ibid. § 4. Ballots. Statements to be furnished to election officers. Ibid. § 5. 83. Each ballot shall have indorsed thereon the number of shares thereby represented, but no share or shares transferred within sixty days shall entitle the holder or holders thereof to vote at such election or meeting, nor shall any proxy be received or entitle the holder to vote, unless the same shall bear date and have been executed within three months next preceding such election or meeting; and it shall be the duty of such corporation to furnish the judges, at said meeting, with a statement of the amount of its capital stock, with the names of persons or bodies corporate holding the same, and number of shares by each respectively held, which statement shall be signed by one of the chief officers of such corporation, with an affidavit thereto annexed, that the same is true and correct, to the best of his knowledge and belief. 84. It shall be the duty of such corporation, if consent is given to such increase, to file in the office of the secretary of the commonwealth, within thirty days after such election or meeting, one of the copies of the returns of such election provided for by the third section of this act, with a copy of the resolution and notice with the secretary calling the same thereto annexed; and upon the increase of the capital stock or If increase be voted, returns, &c., to be filed of the commonwealth. indebtedness of such corporation made pursuant thereto, it shall be the duty of the president or treasurer of such corporation, within thirty days thereafter, to make a return to the secretary of the commonwealth, under oath, of the amount of such increase; and in case of neglect or omission so to do, such corporation shall be subject to a penalty of five thousand dollars, which penalty shall be (z) See tit. "Proxies." Penalty for neglect. (a) See Lewis's Appeal, 86 P. S. 340. collected on an account settled by the auditor-general and state treasurer, as 18 April 1874 § 5. accounts for taxes due the commonwealth are settled and collected; and the secre- P. L. 61. tary of the commonwealth shall cause said return to be recorded in a book kept for Returns to be that purpose, and furnish a certified copy of the same to the auditor-general. recorded. 85. Every corporation shall, within sixty days, when requested by the auditor- Ibid. § 6. general, render to him a report, under the oath of its president or treasurer, of Reports to be the amount of capital stock or bond indebtedness, issued pursuant to the provisions made to the audiof this act, showing, in case of stock, to whom issued and the price or considera- tor-general. tion received therefor, amount received, and from whom, in money, in labor, and in other property; and, if so requested, a detailed statement of the character, value and situation of the property so received; and in case of refusal or neglect Penalty for negso to do, shall be subject to a penalty of five thousand dollars for each and every thirty days thereafter such corporation shall refuse or neglect to make such report, which penalty or penalties shall be collected on an account or accounts settled, from time to time, by the auditor-general and state treasurer, as accounts for taxes due the commonwealth are settled and collected. lect. P. L. 75. 86. The capital stock or indebtedness of any corporation to be created under the 29 April 1874 § 18. provisions of this statute, or accepting its provisions, may be increased, from time to time, by the consent of the persons or bodies corporate holding the larger amount Capital and indebtin value of the stock of such company, to such amount as such corporation is by edness may be inthis act authorized to increase its capital stock or indebtedness; but such increase shall only be made for money, labor done, or money or property actually re ceived. creased. Ibid. § 19. Stockholders to 87. Any such corporation desirous of increasing its capital stock or indebtedness as provided by this act, shall, by a resolution of its board of directors, call a meeting of its stockholders therefor, which meeting shall be held at its chief office or vote on increase. place of business in this commonwealth; and notice of the time, place and object of said meeting shall be published, once a week for sixty days prior to such meet- Notice. ing, in at least one newspaper published in the county, city or borough wherein such office or place of business is situate. Ibid. § 20. How election to be 88. At the meeting called pursuant to the nineteenth section of this act, an election of the stockholders of such corporation shall be taken for or against such increase, which shall be conducted by three judges, stockholders of said corporation, conducted. appointed by the board of directors to hold said election; and if one or more of said judges be absent, the judge or judges present shall appoint a judge or judges, who shall act in the place of the judge or judges absent; and who shall respectively take and subscribe an oath or affirmation before an officer authorized by law to administer the same, well and truly, and according to law, to conduct such election to the best of their ability; and the said judges shall decide upon the qualification of voters, and when the election is closed, count the number of shares voted for and against such increase, and declare whether the persons or bodies corporate holding the larger amount of the stock of such corporation have consented to such Returns. increase, or refuse to consent thereto, and shall make out duplicate returns of said election, stating the number of shares of stock that voted for such increase, and the number that voted against such increase, and subscribe and deliver the same to one of the chief officers of said company. Ibid. § 21. Form of ballots. 89. Each ballot shall have indorsed thereon the number of shares thereby represented, and be signed by the holder thereof, or by the person holding a proxy therefor; but no share or shares transferred within sixty days shall entitle the holder or holders thereof to vote at such election or meeting, nor shall any proxy be received, or entitle the holder to vote, unless the same shall bear date and have been executed within three months next preceding such election or meeting; and it shall be the duty of such corporation to furnish the judges at said meeting with Statement to be a statement of the amount of its capital stock, with the names of persons or bodies furnished to eleccorporate holding the same, and the number of shares by each respectively held, which statement shall be signed by one of the chief officers of such corporation, with an affidavit thereto annexed, that the same is true and correct to the best of his knowledge and belief. tion officers. Ibid. § 22. 90. It shall be the duty of such corporation, if consent is given to such increase, to file in the office of the secretary of the commonwealth, within thirty days after If increase be such election or meeting, one of the copies of the return of such election provided voted, returns, &c., for by the twentieth section of this act, with a copy of the resolution and notice to be filed in the calling same thereto annexed; and upon the increase of the capital stock or in- secretary's office. debtedness of such corporation made pursuant thereto, it shall be the duty of the president or treasurer of such corporation, within thirty days thereafter, to make a return to the secretary of the commonwealth, under oath, of the amount of such increase and terms of the same, that is to say, the terms on which additional stock is issued; and in case of neglect or omission so to do, the corporation shall be subject to a penalty of five thousand dollars, which penalty shall be collected on an Penalty for account settled by the auditor-general and state treasurer, as accounts for taxes neglect. due the commonwealth are settled and collected; and the secretary of the commonwealth shall cause said returns to be recorded in a book to be kept for that purpose, Returns to be and furnish a certified copy of the same to the auditor-general; and the corporation recorded. |