Secretary of State. If the object for which such corporation is proposed to be organized is clearly and distinctly stated and is a lawful object, the Secretary of State shall thereupon issue to said persons a license as commissioners to open books for subscription to the capital stock of the proposed corporation at such time and place as they may determine. Power is given to the Secretary of State to propound to the incorporators such interrogatories as he shall deem necessary to ascertain the object for which the corporation is formed. The commissioners are required to make a full report of their proceedings, including a copy of the notice of the opening of books of subscription and of the subscription list, a statement of the amount of capital, not less than one-half actually paid in, the amount of such capital not paid in, what disposition has been made of stock subscribed and not paid, and if any proportion of the capital stock has been paid in property the same shall be appraised by such commissioners and they shall report the fair cash value thereof. The report must also contain the names of the directors elected and their residence, terms of office, and must be sworn to by at least a majority of the commissioners and filed in the office of the Secretary of State. The latter thereupon issues a certificate of the complete organization of the corporation, making a part thereof a copy of all the papers filed in his office in and about the organization of the corporation duly authenticated under his hand and seal of state. This certificate must then be recorded in the office of the county where the principal office of said company is located, whereupon the corporation shall be deemed fully organized and may proceed to do business (Laws of 1905, pp. 130–133). The corporation must be organized and proceed to do business within two years after the issuance of the license by the Secretary of State relative to the opening of books for subscription to the capital stock.

People v. Rose, 188 Ill. 268; 59 N. E. 432; Elgin Ill. Watch Co. v. Loveland, 132 Fed. 41; Gade v. Company, 165 Ill. 367; Edwards v. Company, 190 Ill. 467; Ricker v. Larkin, 27 Ill. App. 625.

6. Corporate Indebtedness.

Corporate indebtedness should not exceed

the authorized capital stock (sec. 16).

7. Organization Tax. The organization tax on any capitalization up to $2,500 is $30; up to $5,000 is $50; over $5,000, $50, and an additional $1 for each thousand dollars of capitalization over $5,000 (Laws of 1899, p. 117).

8. Filing and Recording Fees. There is no filing fee payable to the Secretary of State other than the organization tax. There is a charge for recording the statement of incorporators and the return of the commissioner of 15 cents per hundred words. For certified copy of the foregoing the charge is 15 cents per hundred words and $1 for affixing the secretary's certificate thereto. The charge for filing amendments to articles of incorporation is $1. The recording fees in local county office are as follows: In counties of first class (population not over 25,000), 10 cents per hundred words; in counties of second class (over 25,000 and not exceeding 100,000), 8 cents per hundred words and certificate 25 cents additional; in counties of third class (population exceeding 100,000), 6 cents per hundred words and 25 cents additional for certificate.

9. Commencing Business. - Corporations may commence business as soon as the Secretary of State issues a certificate of complete organization and the same is recorded in the office of the recorder of deeds of the county where the principal place of business of said corporation is located. The cor

poration must organize and proceed to business within two years after the Secretary of State issues his certificate of complete organization (sec. 4).

People v. N. S. Bank, 129 Ill. 618; 22 N. E. 288; Gent. v. M. & M. I. Co., 107 Ill. 652; Allman v. Company, 88 Ill. 521; Merrick v. Company, 111 Ill. Ap. 153.

10. Organization Meeting. - In the absence of any statute providing otherwise, this meeting must be held within the State. The commissioners appointed by the Secretary of State to receive stock subscriptions have power under the statute to convene a meeting of the subscribers to the capital stock of the corporation for the purpose of electing directors, etc. Notice of this meeting may be waived in writing (the statute requires ten days' notice), the time and place fixed for said meeting to be designated therein. At this meeting the subscribers to the capital stock may vote in person or by proxy. Cumulative voting is permitted if desired. Stockholders may divide the board of directors into three classes, to hold office for one, two, and three years respectively. After the Secretary of State has issued a certificate of complete organization, the board of directors should meet and after effecting a temporary organization should first adopt a code of by-laws. They then should proceed to the election of a president, secretary, and treasurer, and such other officers as shall be designated by the by-laws so adopted (sec. 3).

11. Meetings of Stockholders and Directors. - Stockholders' meetings must be held within the State. Directors' meetings to be valid must be held within the State, unless any action taken by the board without the limits of the State is either authorized or the action thereat taken ratified by a vote of two-thirds of the directors cast at a regular meeting of said board (secs. 20, 22). Harding v. Company, 182 Ill. 551; 55 N. E. 577.

12. Directors' Qualifications and Liabilities. a. Qualifications. There must not be less than three nor more than eleven directors. There are no

residential requirements. Directors may be divided into classes if desired. The right to cumulate votes for directors is mandatory (secs. 3, 6).

Fey v. Company, 32 Ill. Ap. 618.

b. Liabilities. If the indebtedness of any corporation shall exceed the amount of its capital stock, the directors assenting thereto are individually liable for such excess to the creditors of the corporation. They are also jointly and severally liable for all debts of the corporation then existing or thereafter contracted when they declare and pay any dividends when the corporation is insolvent or any dividend the payment of which would render the corporation insolvent or which diminishes the amount of its capital stock; also for assuming to exercise corporate powers before all the capital stock is subscribed in good faith (secs. 16-19, 21).

Greene v. Masten et al., 66 Ill. Ap. 345; Kent v. Clark, 181 Ill. 237; 54 N. E. 967. 13. Stockholders' Liabilities. Stockholders are personally liable for the amount unpaid upon their stock (sec. 8). The law also provides that all persons assuming to exercise corporate powers or to use a corporate name without complying with the law in regard to procuring charters before all stock named in the articles of incorporation is subscribed in good faith, shall be liable for all debts and liabilities contracted by them in the name of such corporation (sec. 18).

Sprague v. Nat. Bank, 172 Ill. 149; 50 N. E. 19; First Nat. Bank v. Company, 191 III. 128; 60 N. E. 859; Sherwood v. Bank, 195 Ill. 112; 62 N. E. 835; Foote v. Bank,

194 Ill. 600; 62 N. E. 834; McCoy v. Exposition, 186 Ill. 356; 57 N. E. 1043; Florsheim v. Bank, 192 Ill. 382; 61 N. E. 491; Coleman v. Howe, 154 Ill. 458, 37 N. E. 725. 14. Preferred Stock. There is no statutory provision expressly authorizing the issuance of preferred stock.

First Nat. Bank v. Company, 191 Ill. 128; 60 N. E. 859.

15. Payment of Capital Stock. The statute is silent as to how the capital stock shall be paid. Under the common law rule, in the absence of any statutory prohibition, stock may be paid for in cash or in property taken in good faith at a fair valuation.

G. C. & S. R. Co. v. Kelly, 77 Ill. 426; Higgins v. Lansingh, 154 Ill. 301; Farwell v. Company, 161 Ill. 522; S. R. C. S. Co. v. Rankin, 152 Ill. 622; Sprague v. Nat. Bank, 172 Ill. 149; Dean v. Baldwin, 99 Ill. App. 582; Parmelee v. Price, 208 Ill. 544; 70 N. E. 725; M. B. I. Co. v. Company, 210 Ill. 26; 71 N. E. 22.

16. Books. The directors must keep at the principal office within the State books of account of the corporate business (sec. 13). They are open to inspection of stockholders.

17. Stock Certificates. Each shareholder is entitled to a certificate showing the number of shares owned by him signed by such officers as the by-laws shall prescribe. Par value of shares must not be less than $10 nor more than $100.

18. Office. Every corporation must maintain an office within the State (secs. 2, 13).

19. Reports. Before receiving a certificate of complete organization, corporations shall file with the Secretary of State a statement showing the post-office address of its business office, giving street and number, and it shall annually between February 1st and March 1st file with the Secretary of State a statement showing the location of the principal office within the State, with town, street, and number, names of its officers and their residences, — town, street, and number, - date of expiration of their terms of office; whether or not the corporation is pursuing an active business under its charter, and the kind of business; report must be under the corporate seal, signed and sworn to by some officer of the corporation, and a fee of $1 must be paid to the Secretary of State (Laws of 1903, pp. 121, 122). Within twenty days from December 1st of each year, a statement must be filed with the Secretary of State, and recorded with the recorder of the county wherein the principal place of business of the corporation is located, showing the real estate holdings of the corporation.

20. Anti-Trust Statute. Illinois has an elaborate statute forbidding pools, trusts, and combinations of every class and description. This statute has in part at least been declared unconstitutional (Crim. Code, secs. 269 a, 269 b, 615).

D. & C. F. Co. v. People, 156 Ill. 448; 41 N. E. 188; Harding v. Company, 182 Ill. 551; 55 N. E. 577.

21. Statutory Ground for Forfeiture of Charter. The charter may be forfeited for failure to organize and commence business within two years from the date of incorporation. It is also subject to forfeiture for entering into illegal trusts, pools, and combinations (secs. 4, 269 m).

N. & S. R. S. Co. v. People, 147 Ill. 234; 35 N. E. 608; Independent Medical College v. People, 182 Ill. 274; 55 N. E. 345; People v. Rose, 207 Ill. 352; 69 N. E.

762.

22. Extension of Corporate Existence. There is no statutory provision for extending corporate existence after the expiration of the term limited in the charter. (See sec. 10.)

People ex rel. Stickney v. Marshall, 1 Gilm. 672.

23. Annual License Tax. There is no annual license tax. 24. Amendments. To change the corporate name, place of business, enlarge or change the object for which the corporation was formed, to increase or decrease the capital stock, to change the number of shares of capital stock, to increase or decrease the par value of shares of capital stock, to increase or decrease the number of directors, or to consolidate with other corporations requires the calling of a special meeting of the stockholders by the board of directors. This meeting must be called by delivering personally or depositing in the post-office, at least thirty days before the date of such meeting, a notice signed by a majority of said directors, stating the time, place, and object thereof. A similar general notice must also be published for three successive weeks in some newspaper printed in or nearest the county in which the principal office of the corporation is located. A two-thirds vote of all the stock of the corporation is necessary for the adoption of the proposed amendment. Thereafter a certificate must be prepared, signed, and verified by the affidavit of the president under the corporate seal. This must be filed in the office of the Secretary of State and a like certificate filed for record in the office of the recorder of deeds of the county where the principal business office of the corporation is located. There must also be published, in some newspaper published in the county above referred to, a notice of such change, for three successive weeks (secs. 50-54 as amended by Laws of 1903, pp. 116, 117).

Sykes v. People, 132 Ill. 32.

25. Dissolution.

Any court of competent jurisdiction may decree dissolution of a corporation upon petition therefor. Voluntary dissolution may be effected by vote of two-thirds of capital stock (secs. 49 a, 49 b, 149). 26. Foreign Corporations. All foreign corporations doing business within the State must make application to the Secretary of State, signed and sworn to by the president and secretary, stating what business such corporation proposes to pursue under its charter, the amount of capital stock of such corporation, whether it is transacting or intends to transact business in any State or country, the proportion of its business intended to be carried on in the State of Illinois, the amount paid in upon its capital stock, what property and assets and estimate of the value thereof will be employed in the business of such corporation in the State of Illinois; if any of its capital subscribed has not been paid in what disposition is to be made thereof, the names of the president, secretary, and directors of said corporation and their residences, where its principal office in Illinois will be located, and the name and address of some attorney in fact upon whom process may be served, and if required by the Secretary of State, the names and residences of all of the stockholders in said corporation. Such corporation shall file with the Secretary of State a copy of its articles of incorporation duly certified and authenticated by the officer who issued the original, or by the recorder or registrar of the office in which said original articles may have been recorded. The Secretary of State is also given power to propound additional interrogatories if he sees fit. Upon the admission of such corporation to do business the Secretary of State shall issue a certified copy of all papers, including a certified copy of the charter of

such corporation, and shall state in the certificate of authority to do business issued by him, the powers and objects of such corporation which may be exercised in this State, and no corporation shall by the certificate of the Secretary of State be authorized to transact any business in this State for the transaction of which the corporation cannot be organized under the laws of this State. No foreign corporation shall exercise powers in this State not authorized by the provisions of its charter. Every foreign corporation admitted to do business in Illinois shall keep on file in the office of the Secretary of State an affidavit of the president and secretary showing the location of its principal business office in the State of Illinois, the name of some person who may be found at such office for the purpose of accepting service upon said corporation in all suits that may be commenced against it, and as often as such corporation shall change the location of its office or its attorney for receiving and accepting service a new affidavit shall be filed. Foreign corporations shall be required to make such reports from time to time as are required to be made by similar domestic corporations. Only such real estate may be held as may be necessary for the proper carrying on of its legitimate business.

Before being authorized to do business it must pay into the office of the Secretary of State, upon the proportion of its stock represented by its property and business in Illinois, fees equal to fees required of similar corporations formed within and under the laws of this State. Foreign corporations failing to comply with the provisions of law are subject to a penalty of not less than $1000 and not exceeding $10,000 (Session Laws of 1905, pages 124-129 inclusive).

Spry Lumber Co. v. Chappell, 184 Ill. 539; 56 N. E. 794; Richardson v. U. S. M. & T. Co., 194 Ill. 259; 62 N. E. 606; Bradbury r. Company, 113 Ill. Ap. 600.

INDIANA.

(References are to Burns' Annotated Indiana Statutes, Revision of 1901, unless otherwise stated.)

1. Statute under which Business Corporations may incorporate. The Business Corporation Act of Indiana is to be found in Burus' Annotated Statutes of 1901, secs. 3423-3452, 4583-4622. Important amendments to the original act are to be found in the Session Laws of 1901 and 1903. The sections relative to manufacturing, mining, and mechanical companies are separate and apart from the General Act and are to be found in secs. 50515128 of the same statutes, and in Laws of 1905, chap. 139.

2. Incorporators.

- Any number of persons not less than three may be incorporators. There are no residential requirements (secs. 4583, 5051; Laws of 1903, chap. 73; Laws of 1905, chap. 139).

The articles of associa

3. Contents of the Articles of Association. tion for all ordinary business corporations incorporated under Act of 1901, p. 289 (Burns, sec. 4583), must set forth:

a. Name. The corporate name of the proposed corporation. Similarity of names is forbidden as to domestic corporations.

b. Capital Stock. - The articles must set forth the amount of capital stock and the number of shares into which the same shall be divided, with the par value of the same. The capital stock may be any amount (except gas and oil companies, where capital stock is limited to $2,000,000), and the par value