Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/840

 APPENDIX. Jersey plan by which the value of the property for which the stock is issued is, in the absence of actual fraud, conclusively presumed to be the same as the value of the stock, doing away with onerous penalties for failure to file reports, and in other ways assimilating the statutory plan of incorporation to mod- ern business methods. The formation of an ordinary business enterprise at the present time has, therefore, resolved itself practically into drafting a plan under which the affairs of all interested there- in are to be regulated. This plan is embodied in the certificate of incorporation. It sets forth, among other details, the name of the corporation, the various objects of the corporation, and its capital stock. Under the heading of its objects, there is scope for restriction upon what it may do, if that is what the incorporators desire for the protection of one as against the other, or of amplification to such an extent that it may do any- thing and everything, thereby eliminating almost entirely questions of ultra vires. The certificate may also state what powers one class of stockholders shall have as against another, who shall elect the directors, wdiat shall be the powers of the directors, what limitations shall be thereon, what shall be the restrictions against mortgages upon the property, etc. In short the certificate of incorporation becomes a comprehensive basic contract, which is to be read into all other contracts thereafter made in regard to any matters of that corporation. There are provisions for the amendment of the original charter, by con- sent of certain members, or a proportion of the people in- terested. It is manifest from this resume of the present method of the formation of corporations, that where a corporation is care- fully formed, there is now substantially no restraint put upon it by the public authority, unless it desires or has obtained some special public privileges. Corporations of the most enormous magnitude now regulate themselves with almost the same amount of secrecy as a private individual gives to his own af- fairs. The almost unvarying attitude of the courts to an in- quisitive stockholder or creditor, is that no rights will be ac- corded to them, so long as the corporate body apparently moves along the contract lines laid down in its certificate of incorporation. The stockholder or creditor became such with 820