INCORPORATION AND DISSOLUTION OF COMPANIES 1. The corporate charter.—In early times corporate charters were g,ranted by the king. Later this pre rogative was taken over by Parliament, and when the colonies became independent the right -was vested in the state legislatures. The Federal Congress has power to incorporate companies to do any of the things over which Congress has been given jurisdic tion by the Constitution. Thus, because the national government may borrow and coin money, Congress may form—and has formed—national banks. Be cause Congress can regulate interstate commerce, it may give charters to companies engaged in interstate commerce. Indeed, it is urged that a necessary step in the solution of many vexing railroad problems is the incorporation of the railroad companies under Federal law.
Similarly, the Dominion Parliament may incorpo rate companies to do any of the things over which by the Constitution it has been given jurisdiction. Cer tain subjects are within its exclusive jurisdiction, such as banking, so that we find a Dominion Bank Act and no other. In Canada there is a Dominion Railway Act, under which any railway wishing to operate as an interprovincial or international railway must seek incorporation, and then of course only by special act of the Dominion Parliament. The various provinces have their own railway acts governing railways purely provincial. Industrial companies intending to market their goods thruout Canada now seek Do minion incorporations, almost without exception, as there has been considerable doubt raised as to the right of a locally chartered company to engage generally in interprovincial trade.
At first each company was formed by a special act of the legislature. Thus many of the canal and turn pike companies have special charters. For example, Chapter 21 of the Laws of 1793 of Massachusetts is an act the sole purpose of which is to give certain persons the rights and privileges of a corporation for the purpose of building and managing the Middlesex Ca.nal. About 1811, in order to facilitate the forma
tion of companies, general incorporation acts were passed which did away with the necessity of applying to the legislature for each separate charter. Accord ing to the provisions of these general acts a paper, called a certificate, or articles of incorporation, is drawn up, and if approved as not being in contraven tion of law, is filed in designated public offices.
In manv states, as in New York, more than one general corporation act is on the statute books. In that state the so-called general corporation law ap plies to all corporations; thc so-called stock corpora tion law applies to stock corporations—as dis tinguished from incorporated clubs, churches, etc., which do not issue transferable shares of stock; finally there is a series of corporation laws governing special forms of business. Thus railroads incorporate under the railroad law and banks under the banking law, while ordinary industrial or mercantile companies incorporate under the business corporation law. The arrangement of corporation laws, of course, is not the same in every state.' But if New York be taken as a model, it may be said that the charter of any ordinary business corporation consists of the general corpora tion law, the stock corporation law, the business cor poration law and the articles of incorporation filed in the office of the Secretary of State.
2. Certificate of incorporation.—In New York the certificate of incorporation of a business corporation must contain nine clauses.
1. Name of the corporation. Usually the name ends with the word "corporation," but if not there must be added "Inc." or "Incorporated." 2. Purposes for which it is to be formed.
3. Amount and kinds of capital stock.
4. Number of shares into which the capital stock shall be divided (each of the par value of between $5 and $100), and the amount of the capital (not less than $500) with which the corporation will begin busi ness. Under a recent enactment, stock may be is sued without par value.