This leads us naturally to our next paragraph, a con sideration of acts ultra vires (beyond the power) of the company.
7. Ultra . vires contracts.—When a corporation makes a contract that is beyond its express, implied and incidental powers the contract is said to be ultra vires. The state may intervene and go so far as to dissolve the corporation. Moreover, the contract is generally unenforcible, especially if it has not yet been acted upon by either party. It is very impor tant, therefore, in cases where a corporation may wish to extend its business in the future, that the charter confer broad privileges and that whoever draws the contract use his imagination to cover every conceivable line of the business that the company is lik-ely to care to undertake. The charter may indeed be expanded later by amendment; but such a procedure tak-es time and may cause trouble and, in the case of large com panies with many stock-holders, may involve an ex pense which is by no means negligible.
An ultra vires act cannot be validated by even the unanimous consent of the shareholders, or by a judg ment rendered against the company by consent. If it were otherwise, this creature of the legislature, the company, would acquire from its own shareholders or from the courts the benefit of acts which by its author were denied it. A shareholder can sue in his own name alone, to prevent a company either commencing or continuing something which is beyond the com pany's powers.
8. Corporations are persons, but not citizens.—A corporation is generally considered as a person and entitled to all the privileges and immunities conferred by the Federal and state constitutions guaranteeing to every person the rights of life, liberty and property. These cannot be revoked except by due process of law. For a few exceptional purposes a corporation is con sidered a citizen. For instance, a corporation is en titled to go into the Federal courts if it desires to sue a citizen of another state. But corporations are gen erally not considered to be citizens. They are not citizens under that provision of the United States Con stitution which says that "the citizens of each state shall be entitled to all the privileges and immunities of citizens in the several states." 9. Classification of corporations.—Corporations may be classified in three groups : domestic, foreign and alien. The first group depends on the sovereign
to whom the corporation primarily owes allegiance. A corporation is considered domestic only within the state in which the corporation is formed. In other states it is considered a foreign corporation. Cor porations organized outside the country are consid ered alien corporations. They generally have the rights of aliens under the law.
10. Foreign corporations.—It is possible for a state to prevent a foreign corporation from doing business inside its boundaries, but such a provision cannot be construed to prevent the corporation from doing busi ness from its home state into any other state of the Union since transactions between the states are con sidered interstate commerce, over which Congress has exclusive jurisdiction.
In Canada a Dominion company may do busi ness in any province, filo it may be taxed by the province. It is not regarded as a foreign company, nor can it be prevented from doing business because it does not pay the tax. A provincial company is regarded in other provinces, however, as foreign, and can engage in business in a province other than the province of its origin, only upon permission or license to do so. It may do buf-iness from its home province into another province, but cannot go and establish itself there without license.
Ordinarily, before a corporation may do business within a state or province, it must f-ile certain papers— generally a copy of the certificate of incorporation and a statement designating the place where the prin cipal office inside the state is to be kept, and also some person upon whom service of judicial and other proc esses may be made. In many states foreign corpora tions are required to consent to the appointment of some public official as the person to receive service of processes in the event that tbe agent designated by the corporation cannot be found. Foreign corpora tions are also ordinarily required to pay a, tax which is imposed on the corporation in proportion to the amount of capital employed within the state. If all of the business of the foreign corporation is inter state business and none of it is intrastate, this license tax cannot be collected since it is a burden upon inter state commerce.