where he has no intention or desire to hold a controlling interest, and expects to make his profits at the inception, allowing the incorporators to conduct the enterprise or develop the property with future profits in view. When this method is adopted, the promoter is usually the owner of, or has an option on, that which is to constitute the basic property of the corporation in contemplation, and his main purpose is to make an advantageous sale of the property. The creation of a corporation is merely the means to an end. Or, the promoter, or promoters, may undertake the creation and floating of the corporate enterprise with a reservation of a substantial interest in stock, but not a controling interest, in return for their property, desiring no cash payment. Such is the usual plan where they are confident that the enterprise will prove to be extremely profitable, and that a minority interest will, if the scheme is prudently and honestly conducted, alone bring large returns. But, under either of the conditions above authorized, the same end may be reached by first forming and completing the organization.

A great many of the prospectuses that are circulated embody a proposition to sell treasury stock, that being a convenient and plausible method of raising cash capital with which to develop property, or otherwise carry out the purposes of the incorporators. Preliminary to the issuance of such a prospectus there must, of course, be treasury stock provided. To do this there must have been previously a regular issue of the stock or property and then a donation of the stock to the corporation, or it must have been forfeited

to the corporation for non-payment of assessments. (As to which see also § 98.)

The incorporators usually subscribe for only a nominal or at most, a minority of the specified capital stock, leaving the balance open to those they may induce to advance capital and come in afterwards. And it may be safely asserted that 90 per cent. of prospectuses are issued after the corporation has been organized and fully officered.

Printed documents are often promulgated to induce patronage after the corporation has been set on its feet and begun business. These, too, are often termed prospectuses; but they are not such, in any proper sense. They are mere advertisements of the business.

Nothing pertaining to corporate business, excepting, of course, the judicial settlement of knotty legal questions, requires more skill and ability than the preparation of a prospectus. The literary productions of this class are as numerous and varied in matter, quantity and quality as are corporate schemes, mental endowments, subjects for exploitation and development.

It may be said, in a general way, that in order to make the best impression a natural order of arrangement of the parts should be adopted, and a clear and concise style of composition attained and adhered to. That is about all that can be said, unless a large volume could be devoted to this subject alone.

From the nature of the case it would be useless to insert exemplars. Prospectuses vary in size

from a small folder containing a brief statement and the names of the officers, to a book of many pages,profusely illustrated, with maps and pictures.

§ 192. Various Instruments, Often Used By, But Not Peculiar to, Corporations.

The following forms are such as are used between individuals, not being peculiar to corporations. But as transactions between corporations, and between corporations and individuals, frequently involve the subjects of these forms, it is thought that the space devoted to them will be acceptably utilized. Those here given may be easily adapted to other dealings:

Form 174.

LEASE OF MINERAL LANDS. MEMORANDUM OF AGREEMENT, Made and en

Witnesseth That for and in consideration of the mutual covenants and agreements herein contained, and in further consideration of the sum of ....

Dollars, by the part.... of the second part to the part.... of the first part in hand paid, the said part.... of the first part ha.... granted and do.... by these presents grant and lease unto the said part.... of the second part the exclusive right for the sole and only purpose of operating for coal, oil, gas and other minerals, all that certain tract of land situate, lying and being in the County of .......

State of as follows:

and bounded and described

(Here insert full description.)

Subject to the conditions, terms, restrictions and agreements hereinafter set forth :

That the term of this lease shall be for ten years, with the privilege of a renewal for an additional ten years, and so long as oil, gas, coal and other minerals shall be found in paying quantities, the part.... of the second part shall deliver to the part.... of the first part a full ..

part of such product.

That the part.... of the second part shall commence a well within

date hereof, and sink it with reasonable diligence;

from the

The part.... of the second part shall have the privilege of using sufficient wood, surface land, water, coal, gas and oil from the premises to run necessary machinery, and other purposes pertaining to said operations, and the right to remove all machinery and fixtures placed on the premises by them at any time, with the right of ingress and egress, and the exclusive right to lay and operate pipe-lines or rails to convey oil, gas and other substances.

That the part.... of the second part, ...... heirs or assigns, shall have the right to subdivide said tract of land into any number of smaller lots or pieces, or sublease the whole or any part of said tract of land, for the purposes named in this lease.

....

That if oil or mineral of any kind is not found in paying quantities after one well has been completed upon the premises hereby leased within ... years from the date hereof, then the lease is void, and of no effect. And a written notice by either party at the expiration of said years shall constitute notice as to the termina

tion of the lease.

That the part.... of the second part are to keep true and correct books of accounts showing the production of each and every well, and the shares or portions due the part.... of the first part, which books shall be kept open and free to the inspection of all parties interested therein.

That it is further understood and agreed by the part....

of the first part, .... that if the parties of the second part elect to bore the first well upon other land not described in this lease, that may be selected within a radius of three miles from the above described land by said parties of the second part, the parties of the second part have one more year in which to sink a well upon the land described in this lease before the lease is forfeited and becomes null and void.

And it is further understood and agreed between the parties of the first and second part that the said part..... of the first part gives and grants unto the said part.... of the second part the exclusive and sole right on or before ... years from and after this date to purchase the royalty derived from the oil and mineral upon all or any portion of the land above described and leased to the part.......... of the second part by paying to the part............ of the first part ......dollars per acre, as payment in full for all royalty benefits derived from the land so selected and purchased.

A failure on the part of the part..... of the second part to commence operations within the specified time, or to perform all conditions embodied herein or pay the royalty above mentioned, renders this lease null and void.

It is agreed further, that any forfeiture of this lease by non-performance or surrender, shall terminate all liabilities to accrue under and by virtue of its terms.

That all conditions herein shall extend to the heirs, administrators executors and assigns of both parties.

In Witness Whereof, the parties hereto have hereunto set their hands on the day and year first above written.

(Acknowledgment.)

(Signatures.)