New-York tribune., 1901-03-03
FORMING \ CORPORATION
WAT THE NEyy-JERsEY LAW REQUIRES.
AND HOW 1T IS COMPLIED WITH.

has given rise 70 much discussion on the sub
ieot of corporations generally and New-Jersey
corporations in particular. and people who are
Instrumental in forming these business concerns
have been asked many questions about the
initial steps necessary toward making them op-
tratiye.
John s. Parker. Of the firm of Dill. Bomeiser
& Baldwin. in speaking on the subject, said
that one of the mistakes people made most
frequently WAS in judging the strength of the
corporation by the amount named in its charter
and many people who have read carefully every
thing printed by the newspapers in connection
with the J. Pierpont Morgan company were
ny. titled when they saw that the capital named
l.. the charter WAS only $1,000. while the inter
ests represented 10y the various corporations
which had been brought under one head afsgre-
gated more than 1000 100000.
The Federal Steel Company" said Mr..
Parker. was incorporated with a capital OF
$4,000 and reached S90,ooo,000, the Tin Plate
Company grew from $4,000 to S500O00D and
he National Steel Company from $4,000 to
,ia00oo00
1t must not he inferred from this that all
corporations started under the beneficent laws
f New-Jersey have similar experiences. Com
ranes are formed. and many of them. whose
natural life is about two years. They
formed by men who have patents for articles
which they think the whole world is standing
in line 10 purchase, and they form companies
thinking that they may sell the stock, allow
others to do the business and retire on their
laurels. After they have been in business for
icmc time the fact dawns upon them that they
L4ust pay the State one-tenth of per
al ;he stock issued. and that usually eats up
their working capital in the course of two years.
Ia some instances they disappear from the scene
after the ...-. H. n paid
The formation of a company. which appears
to be simple thing, is really intricate oper-
alton. The first step necessary is to make out
the articles of incorporation ordinarily known
ss the charter The blank for this may hc oh
aimed from the office Of the Secretary of State.
This is simply skeleton. which must be filled
Dr. in keeping with the requirements of the
corporation. The paper states In the first para
graph the name of the company. and then fol
lows the object for which 1t has been formed.
This part of the charter Is usually filled in so
that 1t may cover almost any ground. II the
paper is well drawn thc corporation viii have
he privilege To carry on almost any business
that comes within tht limit Of the law Thus the
American Steel and Wir- Company may operate
transportation conpani~s. well as make nails
The Instrument also gives thu right {" huld real
estate, 10 buy and sell land and other property
them by mcrtgag' on property. and is also a
asSport To 10 business in places outsiG, ~ th,.
Stale named in the Incorporation articles. New
Jersey corporations usually select their birth
a-", and thcn carry away with them their
charters which give them power to DO bust
% in a"y STATE. Territory or colony Of In,
Ia "a States and also in foreign countries The
10" itf'n II tlc carter states tn amount II The
G. ''' stock which the company is authorized
Ia issue. the number Of shares into which IL is
oN;t@! ana the par value Of each share If
th' C"p"'i = divided into preferred and com
mon s;C,k, NE amount of each of n, So is stated
and also the terms On which they are issued If
IN" duration of the corporation is limited the
time is stated in the charter. and If nothing is
said "n that score the corpuration becomes one
of the "perp-tua class. In The next clause
matters pertaining to the power of IN stock
holder" and officers mentioned For in
stance, if no mortgages on the cumpany's real
estate may be made without the consent of "A
certain number # the Stockholders il must be
mentioned here. and other similar restrictions
Then follows "a clause giving the situation of the
principal office of the concern in New Jersey
and tn" name Of the agent ia charge of that
office upon whom legal processes may be- serI ed
Tho agent selected is usually a trust COMPANY
The Corporation Trust Company of New-Jersey
with offices in Jersey city is of the concerns
frequently designated for that purpose. The