The purpose of restricting the power to create corporations by special act has been well set forth as follows: "To inaugurate the policy of placing corporations of the same kind upon a perfect equality as to all future grants and powers by making such laws applicable to all parts of the State and thereby securing the vigilance and attention of its whole representation, and, finally, of making the judicial construction of their powers or the restrictions imposed upon them equally applicable to all corporations of the same class.” 1 It is universally recognized in this country that legislative authority is essential to the creation of a corporation.2 Incorporators cannot come together and agree to become a corporation without conforming to legislative requirements. It has been well said that there is an obvious reason for making such organization by written articles of agreement a condition precedent to the exercise of corporate rights. It is the basis upon which all subsequent proceedings are to rest, and is designed to take the place of a charter or act of incorporation by which corporate rights and privileges are usually granted. If there were no such provisions, there would be an absence of any provision by which the right to exercise corporate powers could be definitely fixed and established, and there would be no means of ascertaining the rights of stockholders and of persons dealing with such association." 4 The charter of a company together with the general laws of the State of its creation, enumerating and limiting the powers of all corporations of that class, constitutes the measure of its powers, and the enumeration thereof implies the exclusion of all other powers except such as are incidentally or necessarily implied.5 The instrument by which corporations are created is known by different names in various parts of the country. The term "charter" is a word which has descended to us from the common law existing in England long before the United States became a nation. It originally referred to the specific grant of certain privileges running from the sovereign to a subject. Subsequently it was applied in this country to a specific act of the legislature 1 Atkinson v. Company, 15 O. St. 21; see also Ex parte Pritz, 9 Ia. 30. 2 McKim . Odom, 8 Bland's Chancery (Md.), 407. 3 Stowe v. Flagg, 72 III. 397. Utley v. Union Tool Co., 11 Gray (Mass.), 139. G. L. & H. I. Co. v. Kamper, 73 Ala. 325; Steiner v. Steiner L. & L. Co. (Ala.), 26 So. 494; Salt Co. v. East Saginaw, 13 Wall. (U. S.) 378. creating a corporation with distinct and exclusive purposes and powers. With the advent of the passage of general business corporation acts in this country, the word "charter" has been replaced by such terms as "articles of incorporation," "articles of association," "certificate of incorporation," "certificate of organization," and "petition for incorporation." It goes without saying that under the Business Corporation Acts referred to there must be articles of some sort properly executed.1 It has been said that the essence of a corporation consists, first, in its capacity to have perpetual succession under a special name and in an artificial form; second, to take and grant property and contract obligations, suc and be sued by its corporate name as an individual; and third, to receive and enjoy corporate privileges and immunities. The first two are the privileges of the incorporators, and the third is the franchise of the corporation.2 As far back as 1612 Lord Coke enumerated the essentials of a corporate charter as follows: (1) lawful authority for incorporation; (2) persons to be incorporated; (3) corporate name; (4) domicile; (5) words sufficient in law enumerating the purposes and powers of the corporation. All of these essentials and many more, which by statute are made essentials, are to be found in the business corporation acts of to-day. Referring now briefly to those matters which are by statute in this country made necessary parts of articles of incorporation, the following may be said: with the exception of Arkansas, Georgia, Indian Territory, Maine, Massachusetts, Mississippi, New Hampshire, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, and Vermont, all have incorporation acts requiring that the duration of corporate existence shall be set forth in the articles of incorporation. Again, all but New Hampshire and Tennessee require a statement as to the number and par value of shares. More than half the States prescribe that the names of the first or temporary board of directors shall be inserted in the articles, while most of the remaining States require that the number of directors only shall be inserted. Fully half the States authorize the insertion in the articles of provisions for the issuance of preferred stock. A few of the Commonwealths require that the articles. 1 Abbott v. Company, 4 Neb. 416; Lusk v. Riggs (Neb.), 97 N. W. 1033; Childs v. Smith, 55 Barb. (N. Y.) 45. 2 Snell v. City of Chicago, 133 Ill. 413; 24 N. E. 532. shall contain a statement as to the amount of stock subscriptions, the amount of capital stock paid in, and the amount of capital with which the corporation will begin business. Alaska, Arizona, Delaware, Louisiana, Iowa, Minnesota, Nebraska, and Utah require that the date of the annual meeting shall appear in the articles. Alabama, Connecticut, Delaware, Maryland, Massachusetts, Nevada, New Jersey, New York, North Carolina, South Carolina, Utah, Virginia, West Virginia, and Wisconsin expressly authorize the insertion in the articles of provisions for the regulation of the internal affairs of the corporation. If it is desired to protect stockholders from personal liability for corporate debts, there must be inserted in the articles of incorporation of companies organized under the laws of Arizona, Delaware, Iowa, Kentucky, and Utah provision specifically exempting stockholders from such liability. And so the enumeration might be continued almost indefinitely of special provisions required in particular States in connection with the incorporation of corporate enterprises. Finally, attention is called to the various steps necessary to create a corporation under the modern business corporation acts, qualified in every respect to carry out the purposes for which it is formed. These steps may be enumerated as follows: (1) the drafting of the articles of incorporation; (2) the signing of the articles by the requisite number of incorporators, and acknowledgment of the same before an officer duly authorized to take such acknowledgments; (3) filing and recording the articles with the proper State and county officials after payment of the requisite organization tax and filing and recording fees; (4) organization of the corporation ready for the transaction of business; (5) securing the necessary permit from State officials (if any is required) to transact business within the domiciliary State.1 § 2. Incorporators. An incorporator is one of the constituents of a corporation, who by petition or by means of the execution of articles of incorporation invokes the exercise of the supreme political power of the State in the creation of a corporation for the benefit of himself and associates and their successors in interest.2 The words "corporator" and "incorporator" have essentially 1 See Carmody v. Powers, 60 Mich. 26; 26 N. W. 80/ 2 In re Lady Bryan Co., 1 Saw. 349; E. & N. Y. C. R. R. Co. v. Owen, 32 Barb. (N. Y.) 616. the same meaning. The qualifications of incorporators vary with the State from which the charter is sought. The usual number of incorporators required by the various acts varies from. one to five.1 In Iowa and Nebraska one person may incorporate.2 Residential requirements on the part of incorporators exist in Alaska, California, Idaho, Kansas, Maryland, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Texas, Utah, and Wisconsin.3 Failure to state residence of incorporators in articles is, however, not fatal to corporate existence.* The general rule is that citizenship is not necessary unless specifically required by the statute of incorporators. It has been said that in the absence of statute providing otherwise incorporators must be stockholders. The rule, however, appears to be otherwise in Oregon, Pennsylvania, South Dakota, Texas, Tennessee, and Georgia. In a majority of the States, however, statutes expressly prescribe that incorporators must be subscribers for at least one share of the capital stock of the proposed corporation. If married women are under no disabilities, they may act as incorporators. Aliens may be incorporators if statute does not provide otherwise." Some of the States expressly limit the right to become incorporators to natural persons. However, where no such express limitation exists, there is no question but what the word "person," when used in the statute limiting such matters, would not permit corporations to act as incorporators.10 The rule seems to be that incorporators must be of full age. 11 Incorporators must also be known persons.12 The modern rule. 1 See Part III. Table 4, page 574. 2 P. B. Corporation v. Lamson, 16 Me. 224; Ulmer v. Company, 98 Me. 579; 57 Atl. 1001. 8 See Part III. Table 5, page 575. State v. Foulkes, 94 Ind. 493; see also Halbert v. Association (Tex. Civ. App.), 34 S. W. 636. 6 M. N. F. Co. v. Baumbach, 32 Fed. 205; A. S. Co. v. Heidenheimer, 80 Tex. 344; 15 S. W. 1038. 6 Gulliver v. Roelle, 100 Ill. 141; Byronville Creamery Ass'n r. Ivers (Minn.), 100 N. W. 387; Chase v. Lord, 77 N. Y. 11; Medler v. Company, 6 N. Mex. 331. 7 Coyote, etc. Co. v. Ruble, 8 Ore. 284; Densmore Oil Co. v. Densmore, 64 Pa. St. 43; Singer Mfg. Co. v. Peck, 9 S. D. 29; 67 N. W. 947; Ramsey v. Tod, 95 Tex. 614; 69 S. W. 133; Byrnes v. Beck, 10 Ga. 121; B. B. & T. Co. v. J. B. T. Co., 101 Tenn. 545; 48 S. W. 228; Wechselberg v. Bank, 64 Fed. 90. 8 In re application for charter, 27 Weekly Notes of Cases (Pa.), 399; In re Century Club, 27 W. N. C. (Pa.) 399. 9 Lamar v. Browne, 92 U. S. 187; 23 Law. Ed. 650. 10 C. R. Co. v. P. R. Co., 31 N. J. Eq. 475; Insurance Co. v. N. H. P. Co., 37 La. An. 233. 11 Matter of Globe, etc. Ass'n, 135 N. Y. 280; 32 N. E. 122; H. F. Road Co. v. Townsend, 13 Ont. Ap. Rep. 534. 12 C. R. R. of N. J. v. P. R. R. Co., 31 N. J. Eq. 475. seems to be that incorporators are merely conduits for the purpose of organization for the benefit of future stockholders.1 Under this rule there can be no valid legal question raised at this day as to the legality of the use of what are commonly known as "dummy incorporators" in the organization of corporations.2 § 3. Corporate Name. Every corporation, like an individual, must have a name under which its business must be carried on. It has been said "that the name goes to the very being of the creation, the knot of the combination, without which corporations could not do their corporate acts, without which it is unable to implead and be impleaded, to take any action until it hath gotten a name." The word "company," which is usually a part of the corporate name, does not necessarily imply a corporation. In Alabama, Colorado, Connecticut, Delaware, Kansas, Kentucky, Missouri, North Carolina, and Virginia statutes exist which provide that the corporate name must end with some such word as "association," 66 company," corporation," "club," "society," "syndicate," or "limited." 5 66 In a number of the States corporations upon organization are forbidden to take the same name as that of an existing domestic corporation, or one so similar as to be calculated to deceive or cause confusion. Some few of the States go still further and forbid the use of the name of any foreign corporation by newly created domestic corporations, provided the former has secured a permit to do business in the State. The States here referred to are Connecticut, Delaware, Kentucky, Massachusetts, New York, Utah, Virginia, and West Virginia. In the absence of such statute there is ordinarily no restriction on the right to take the corporate name of a foreign corporation.7 The corporate name is the property of the corporation, and equity will protect the corporation in any jurisdiction from the 1 Densmore Oil Co. v. Densmore, 64 Pa. St. 43. 2 Salamon v. Salamon Co. (House of Lords Cases), 45 Weekly Rep. 193; 75 Law Times Rep. 426. But see Louisville Banking Co. v. Eisenman, 94 Ky. 83; 21 S. W. 531, 1049; Tillyer v. Hero Jar Co., 17 Phil. (Pa.) 153. 8 Smith v. Plank Road, 30 Ala. 650; Hazelton Boiler Co. v. Company, 137 Ill. 231; 28 N. E. 248. 77. 4 Clarke v. Insurance Co., 7 Mo. App. 5 On use of word "limited" see Sparks 6 See State v. McGrath, 75 Mo. 424. 1 |