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General business corporations

to lease tracts of woodland suitable for propagating game, for terms of 25 or 50 years, at an annual rental of not more than $5 for each preserve. New York ['01 ch.147] has appropriated $5000 for restocking the Adirondack region with moose, and Utah ['01 ch.36] $500 for the importation of the Kohlmeise or great titmouse of Europe (Parus major), supposed to be useful in destroying the codling moth. The probable benefits to be derived from the acquisition of this bird have been greatly overestimated and its value to horticulturists is still open to question. On the other hand, Maine ['01 ch.222] has adopted the conservative policy of requiring persons who wish to import live animals or birds to obtain beforehand a permit from the commissioners of fisheries and game. This provision if properly enforced will prevent undesirable species from gaining a foothold in the state.

GENERAL BUSINESS CORPORATIONS1

FREDERICK J. STIMSON LL. B. 53 STATE ST. BOSTON

For ordinary business corporations enjoying no public franchise, the set of the tide is still strongly toward what may be called the New Jersey theory, as distinct from the Massachusetts theory. Connecticut has adopted a "liberal" corporation law during the past year. Delaware, Pennsylvania and other states have amended their corporation laws in the direction of greater liberality. The only restrictive tendency may be noted as to foreign corporations in some of the western states, which continue to evince a lively anxiety lest such corporations do business within the state without paying proper fees for that privilege. It can not be said that there is any thing new in principle in the corporation statutes of the east, unless we call new such regulations of what had become the practice, if not the common law, as are found in the statutes of New York authorizing a corporation to sell all its property to another corporation by a vote of 95% of the stockholders, and that of Pennsylvania which in terms authorizes ordinary business corporations to hold stock of other corporations.

See also Comparative Summary and Index, 1901, no. 1114-221.

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The Connecticut general act ['01 ch.157] is a careful com- General promise between the extreme license afforded by such states corporaas Delaware and the careful statutes of older times. In its scope it is somewhat narrower than these latter, inasmuch as it excepts not only the usual banking and insurance businesses, but also building and loan associations, railroads or street railways, gas and electric light and water companies and any company which is clothed with the right of eminent domain, or of occupying the public highways. The certificate of incorporation may provide for different classes of stock and may also include any lawful provisions for the regulation of the business of the corporation, its powers, and those of the directors and stockholders. The tax on original issues of stock is 50c per $1000 up to $5,000,000, and 10c per $1000 beyond. No stock can be issued until paid for in full, but stock may be paid otherwise than in cash, upon written statement by the directors on the books of the corporation, showing the property received in payment for stock and that it has an actual value equal to the amount for which it is so received, the judgment of the direc tors being conclusive; but the directors concurring in such judgment, in case of fraud or gross negligence in their valu ation, are jointly and severally liable to the amount of the dif ference between the actual value of the property so accepted and the amount for which it is received, and it is the duty of the secretary to keep a record of the names of the directors concurring in such judgment of value. Stockholders are only liable for the unpaid balance on their stock. Stock is only transferable on the books and when a transfer is made for collateral security the record on the books must so state. It will be seen that the old annoyance of the Connecticut corporation law by which purchasers or pledgees for value of stock certificates have no rights as against an attaching creditor, is not removed. A corporation may not purchase or vote on its own stock. Annual reports must be filed with the secretary of state both by home and foreign corporations, showing the names and addresses of the officers, the amount of stock authorized, the amount issued and the amount paid, the names and residence of stockholders whose stock has not been fully paid, the number of shares of stock or other securities of any other

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corporation owned by it and the location of the principal offices and the name of the agent or attorney on whom process may be served. The officer in charge of the stock books is required to give information as to the number of shares owned by any person on the application of a creditor of such person. No pledges of stock are valid except as against the pledgor, his executors and administrators, unless the stock be actually transferred on the books or a power filed with the company. Stockholders' meetings must be held within the state.

Foreign corporations are given power to purchase, hold, mortgage, lease, sell and convey real and personal estate in Connecticut for their lawful uses, etc., but no foreign corporation shall engage in any kind of business in Connecticut the transaction of which is not permitted to domestic corporations by her laws. This is a very interesting and wise provision, the law on this point being, in the absence of such a statute, unsettled. There are the usual provisions for filing charter and appointing the secretary of state lawful attorney to receive process, and all penalties and liabilities imposed by the laws of the state upon officers and stockholders of domestic corporations for false representations apply to the officers and stockholders of foreign corporations doing business within the state.

The New York law ['01 ch.130] provides that any stock corporation except a railway corporation may sell and convey its property and franchises to a domestic corporation engaged in business of the same general character, or which might be included under its certificate of incorporation under any general law, with the consent of two thirds of its stock, and may, with the consent of the holders of 95% of its stock, sell and convey its property situated without the State of New York, not including its franchises, to a corporation organized under the laws of such adjoining state.

Ch. 354 of the New York laws contains very material amendments to the general stock corporation law recently adopted. For example, it confers full power to borrow money and contract debts, and to issue obligations for any amount so borrowed, and to mortgage its property, franchises, etc., with the consent of two thirds of the stock, and the bonds may be made

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convertible into stock at any time after 2 and not more than General 12 years from the date of the mortgage. There are elaborate corporaamendments as to the reorganization of corporations. The tions annual report [§30] must contain the amount of stock and the proportion actually issued, the amount of debts and the amount of assets or an amount" which its assets at least equal." § 42 provides that no corporation shall issue its stock or bonds. except for money, labor done or property actually received. Stock issued for property necessary for the lawful purposes of the corporation is fully paid, and the holder is not liable for any further payment, and in the absence of fraud the judgment of the directors is conclusive; but such stock must be reported as having been issued for property and not for cash in all statements and reports of the corporation. Preferred stock of various classes may be issued with consent of two thirds of the capital stock given at a meeting called for the purpose. § 48 contains elaborate provisions against assignments and transfers of the property of the corporation by its officers, or of the stock of the corporation by the stockholders, in contemplation of its insolvency.

Ch. 355 amends in some particulars the "General Corporation Law," reenacting the provisions against selling proxies or votes for money or other consideration. At least one of the directors in general corporations must be resident within the state ['01 ch.214].1

In New Jersey ['01 ch.110] preferred stock may be issued, but not in excess of two thirds of the common stock and such stock may be subject to redemption within 3 years and the dividends may not exceed 8%. Holders of preferred stock are in no event liable for the debts of the corporation.

Colorado ['01 ch.52] in her zeal to get corporation fees of $20 as a minimum and 20c for each $1000 above $50,000 and the same amount upon increase of stock, provides that every officer or stockholder of any corporation is personally and severally liable for all the debts of such corporation incurred for any time during which such fees happen to be unpaid; but this extreme provision is not extended to stockholders of foreign corporations. While

"The statement in the Comparative Summary and Index, 1901, no. 1162, that two members must be so resident is an error.

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the law remains it would seem unsafe to hold the stock of any Colorado corporation.

In South Carolina ['01 ch.401] any corporation may issue preferred stock upon a two-thirds stock vote at a meeting held upon four weeks notice. At least one stockholders' meeting must be held annually within the state [S. C. '01 ch.403]. By the South Carolina constitution cumulative voting for officers is required. No alien or corporation controlled by aliens either in its own. right or under any trust can own or control within the limits of the state more than 500 acres of land, not counting mortgages foreclosed, etc., which latter must be sold within five years [S. O. '01 ch.404]. There is a curious statute [ch.400] which declares stock in manufacturing corporations of South Carolina to be "realty," but the stock is nevertheless still transferable and taxable as personal property, is not subject to dower, and is to be distributed like personal property in the case of intestacy.

In West Virginia ch.35 of 1901 contains many amendments to ch.53 of the code concerning corporations; notably, § 24 as amended now provides that no stock can be sold or disposed of at less than par, except by three-fourths vote of all stock, at a stockholders' meeting after notice of such intention by publication for two weeks; but any mining and manufacturing corporation can issue stock or bonds and sell the same in payment of real and personal estate for the use of such corporation at such price and and terms as may be agreed upon, and subscribers to stock may pay for the same by transfer of real or personal property, and stock so issued is fully paid, and in absence of actual fraud the valuation is conclusive, but the record books of the corporation must show with reasonable detail the items of the property in payment for which stock or bonds were so issued. The principal office of the corporation need not be within the state, and the bylaws may prescribe where stockholders' meetings shall be held. Foreign corporations may hold property and do business within the state upon filing copy of the articles, etc. A new section is added to the code whereby corporations may sell all their property and assets only on a vote of 60% of the outstanding stock. Nonresident corporations are now taxed by an annual license fee, a minimum of $20; corporations between $25,000 and $100,000 capital,

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