Evening star. [volume] (Washington, D.C.) 1854-1972, 1899-06-19
BIDDING FOR THE TRUSTS
Delaware's Recent Legislation Designed to
Attract Corporations.
Entering Into Competition with New
Jersey-Claimed Advantages
of the New Law.

The state of Delaware has entered in
competition with New Jersey as bidder for
| the trusts. New Jersey a few years ago
adopted laws particularly favorable for the
incorporation of trusts. and as a result Sc
cured fees aggregating immense sum
| from trusts taking advantage of the favor
able opportunities offered. Delaware be-
came covetous of the good fortune of its
neighbor, and lately proceeded to frame a
law which 1t was calculated would attract
some of the trusts into its limits. This law
gave rise to the formation of a corporation
trust company of Delaware for the purpose
| of facilitating incorporation in that state.
Features of the New Legfslafion.
In its circular soliciting business this
company states:
The state Of Delaware has just adopted
the most favorable of existing general cor
poration laws-one marking a forward step
in the evolution of the corporation.
1T does not encourage reckless incorpo-
ration nor permit the existence Of wildcat
companies, but 1t furnishes at least ex-
pense ample rights TO stockholders and
duces restrictions upon corporate action to
Il minimum
The enactment is not the result (as is
the case i'll most other states) of heStating
Ealting enaCtng, amending and repeating,
but is logical and systematic measure,
II dileu Dy d committee OF abie lawyers aD-
pointed by the legislature to examine the
statutes of the various states and to pre-
pare a bill which should embody the good
and eliminate the bad points of existing
laws.
The law is based broadly upon that of
the state Of New Jersey, and embra ices all
OF the beneficial provisions and safeguards
FOUND in the laws of that state. 1t has,
however. in many respects advanced far
beyond New Jersey, and makes Delaware
a much more attractive home for business
corporation. In the following salient pro-
visions the Delaware and New Jersey laws
are subs antially identical namely:
First. Any three persons may organize a
corpora ton.
Second. 1t may engage in any lawful
business except banking.
Third Its existence may be perpetual or
limited.
Fourth. 1t may purchase and deal in
real and personal property. wherever sit
uated. and to any desired amount
Fifth. 1t may be a mortgage or a mort
gagor.
Sixth. 1t may conduct business any
where III the world
Seventh Stock may be issued for proper
ty purchased land, in Delaware, for serv-
ices rendered., and, in the absence of fraud
the judgment of the directors as to the
value Of such property Cor services) is con-
elusive.
Eighth. 1t may easily wind up its af-
fairs and dissolve itself.
Mint. Its authorized capital stock need
this need be subscribed for.
Tenth. The amount of capital stock
which it may issue is unlimited.
Eleventh 1t may file its certificate Of
incorporation and even commence business
before any sum whatever is paid in.
Twelfth. 1t may have different classes
of stocks with different privileges or re-
Thirteenth. The charter may be easily
amended.
Fourteenth. Only one director need be
Z resident of Delaware.
"Fifteenth-Capital stock may be easily
increased decreased.
Sixteenth. The corporation may be read
lily merPed irto or consolidated with other
corporations.
Seventeenth. 1t may own and vote upon
the stock Of other corporations.
Eighteenth. The incorporators may or
may not limit the authority of the directors
as to the amount of Indebtedness or liza
blity the incorpora ton may incur at any
one time.
Advantages of the LAW.
The Delaware law possesses the follow
ing decided advantages:
I'D The original fee to be paid for in
corporation is small-about three-fourths of
that in New Jersey, for instance.
''C) The annual tax is very small-one-
half of that in New Jersey. Delaware is a
small state, ard does not need a very large
revenue.
90 Stockholders and directors may hold
their meetings wherever they please. and
need never meet in the state of Delaware.
tNew Jersey stockho' ders must meet in that
State).
I'D The original stock and transfer
books (Which in New Jersey corporations
must be KEEP. in the state) may be kept in
or out of Delaware, in the discretion of the
company
'(5) The examination of the books by
Intermediates is much more difficult under
the Delaware law than under the laws of
any other state.
go The liability of the stockholder is
absolutely limited when the stock has once
been issued Tor cash. property or services
% Stock may be issued in compensation
for services rendered. and in the absence Of
fraud in the transaction the judgment of
the directors as TO the value of such SER
vices is conclusive. On New Jersey au-
but not for services)
tS In certain important classes of COR
porations, as. for instance, railroad. rail-
way, telegraph. telephone, cable electric
light, steam, heat, power, gas, oil, pipe
line or sleeping car companies the adyan-
tage Is still more marked.
CD The annual report of Delaware COR
poratlon is required to give no secret or
confidential information
40 The certificate need not show nor
need public record be in any way made
OF the amount of stock subscribed To INV
any incorporation ~ ~