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NAME OF CORPORATION.
(See also CHANGING NAME.)
Law in general.
Domestic corporations may use the same name as a foreign corporation, unless the name amounts to a trade name.
Hazleton Boiler Co. v. Tripod Boiler Co., 142 Ill. 494 (505). Changing name-new name must not be similar to that of another corporation procedure.
Illinois Watch Case Co. v. Pearson, Sec. of State, 140 Ill. 423 (430). Corporate name becomes corporate property as soon as license is issued by the Secretary of State.
Illinois Watch Case Co. v. Pearson, Sec. of State, 140 Ill. 423 (432). Notices of meeting to change name are for stockholders, not the general public.
Illinois Watch Case Co. v. Pearson, Sec. of State, 140 Ill. 423. The name of a corporation as stated in the original charter cannot be changed by user or otherwise, except according to statute.
Sykes v. People, 132 III. 32. Corporate names under which profitable business has been built up are protected as "trade names.
Elgin Nat. Watch Co. v. Eppenstein, 1 Ill. C. C. R. 602.
OFFICERS AND AGENTS.
Introductory.-Before proceeding to the transaction of the business for which the company was organized, officers and agents to act in the name of the corporation must be elected, and the powers and duties defined. Such powers and duties are usually defined in the by-laws or resolutions adopted or by statutes, laws and the usages of the office. The officers in small companies are the board of directors, a president, secretary and a treasurer, but where useful, one or more vicepresidents, a general manager, auditor, general counsel and assistant secretaries and treasurers may be chosen. There is no legal retriction on the number of officers that may be appointed, except that they shall be useful or necessary in the conduct of the company in order to justify paying them out of corporate funds.
Board of Directors.—This board is the practical head of the corporation and exercises all the powers which the company, by its charter, is authorized to exercise, but nothing that is not so authorized directly or as necessarily incident to powers directly given. (Chap. 32, Sec. 6.) (See Powers.) Frequently the board of directors, where it is a large body, select a suitable committee, known as the executive committee, to take the place of the board in the actual conduct of the corporate affairs from day to day. (By-law for appointing executive com
mittee, form No. 71.) The board, however, is not authorized to delegate their discretionary power to the executive committee, but only to carry out the plans and policy as directed by the board.
Directors must be stockholders during the term of office, but need not be residents of Illinois, except that a majority of the directors of commercial railroads must be residents.
If directors incur indebtedness in excess of the amount of the capital stock, they are personally liable for the excess. (Chap. 32, Sec. 16.)
The by-laws must provide for the meetings to be held by the board, when and where. All meetings must be held within the State of Illinois, but actions taken at meetings held in another State may be made good by prior authority or ratification by two-thirds vote at a regular meeting within the State. Until so ratified or authorized all such proceedings are absolutely void. (Chap. 32, Sec. 20.)
Directors are elected for one year and hold office until their successors are elected and qualified. There are no qualifications for a director except that he be adult and a stockholder.
Directors cannot be removed from office except by a vote of the stockholders at a stockholders' meeting, special or regular, for cause shown; cause being conduct or conditions detrimental to the company or injurious to its progress. The usual method of removal is to pass a resolution of the board asking the officer to be removed to resign. If he refuses, action at a stockholders' meeting will be necessary.
For injury resulting from unauthorized acts of directors, they are personally liable.
The board may ratify the unauthorized acts of an officer and by so doing make them corporate acts; or may ratify by receiving the benefits of the act, without direct ratification; and will be held to have ratified or acquiesced in them so as to make the company liable by acts or failure to act that may reasonably be construed as ratification.
Directors appoint all officers and all agents unless otherwise provided by the by-laws or the custom and usage of the office.
Directors Election of.
Constitution.) Art. 11, Sec. 3. The General Assembly shall provide, by law, that in all elections for directors or managers of incorporated companies, every stockholder shall have the right to vote, in person or by proxy, for the number of shares of stock owned by him, for as many persons as there are directors or managers to be elected, or to cumulate said shares, and give one candidate as many votes as the number of directors multiplied by the number of his shares of stock shall equal, · or to distribute them on the same principle among as many candidates as he shall think fit; and such directors or managers shall not be elected in any other manner.
Directors—To pass by-laws.
6. $ 6. The corporate powers shall be exercised by a board of directors or managers: Provided, The number of directors or managers shall not be increased or diminished, or their term of office changed, without the consent of the owners of a majority of the shares of stock. The officers of the company shall consist of a president, secretary and treasurer, and such other officers and agents as shall be determined by the directors or managers, and the directors or managers may adopt by-laws for the government of the officers and affairs of the company: Provided, They are not inconsistent with the laws of this State. The directors or managers may require of the officers and agents bonds, with such sureties and conditions as they shall deem proper, and may remove any officer when the interests of the corporation shall require. The officers shall hold their respective offices for the period provided by the by-laws. (Chapter 32, Hurd.)
Directors—Changing number of.
AN ACT authorizing the changing of the number of directors of incorporated companies in certain cases. (Approved and in force May 22, 1877. Laws of 1877, p. 67; Legal News Ed., p. 73.
59. Meeting of stockholders for change.) § 1. Be it enacted by the People of the State of Illinois, represented in the Gen
eral Assembly: That whenever the stockholders holding a majority of the stock of any corporation existing by virtue of any general or special law of this State, or any corporation hereafter organized by virtue of any law of this State, may desire to change the number of its directors, managers or trustees from an even number to an odd number, they may call a special meeting of the stockholders of such corporation for the purpose of submitting to a vote of the stockholders of such corporation the question of such change of directors, managers or trustees from an even to an odd number: Provided, That the number of directors, managers or trustees shall in no case after such change be less than five nor more than eleven.
When directors and officers liable for debts.) § 16. If the indebtedness of any stock corporation shall exceed the amount of its capital stock, the directors and officers of such corporation, assenting thereto, shall be personally and individually liable for such excess to the creditors of such corporation. (Chapter 32, Hurd.)
For forms of call, notice, etc., see Change of Name.
Board of directors—Rules as to.
May incur indebtedness to amount of capital stock but not
Slater v. Taylor, 241 Ill. 102.
A decree finding directors guilty of fraud in buying real estate of themselves and raising their salaries, is final, and is appealable; although the question of accounting has been referred to a master for adjustment.
Klein v. Independent Brwg. Co., 231 Ill. 594. Purchase of real estate made by certain directors on authority of a general resolution of the board of directors will be closely scrutinized by a court of equity, when it appears such directors purchased their own property at questionable valuations. The transaction will be set aside if to the injury of other stockholders. Here the court ordered the directors to take their property back at the price paid for it by the corporation.
Klein v. Independent Brwg. Co., 231 Ill. 594.