Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-01-26
FOR A MODEL LA W
PROVISIONS OF MR.. CLEPHANE'S
CORPORATION BILL.

The bill introduced In the House the
other day by Chairman Babcock of the
| District of Columbia committee containing
| the provisions of model incorporation law
! drafted by Mr.. Walter c. Clephane OF this
! city has been referred to the District Com
| missioners, who have In turn forwarded il
| to the committee of the local bar assoc!a-
! ton for consideration. This was the nten.
| ton with which the bill was introduced
I! The committee decided that although Mr.
| Clephane had made an exhaustive study OF
| incorporation conditions, and had freely con-
suited authorities on the subject, it would
| be better to have his draft of the model in
corporation law printed and distributed in
| the proper quarters prior to consideration
| by the District committee. Consequently
| this was done, and the bill will be taken up
| by the committee Immediately after 1t is
| returned with report from the bar asso-
citation and the Commissioners.
| Covers the Field in Detail.
The bill as introduced contains 300 sec
| tons and covers the incorporation field in
! great detail. 1t repeats certain provisions
| of the inadequate existing law, and pro-
| vides rules of conduct for existing corpora
| lions, kinds of business of incorporated
| companies, powers of Congress, powers of
interpretations, certificate OF corporation,
| organization and extension of corporations.
| and, under the head of management of
| corporations, with the following subjects:
| Directors, executive committee, officers. by
| laws, sale of property, creating bonded in.
debtedneSS, ackno wledgments, stockholders
meetings, directors meetings, stock. dvi-
| dends, transfers. increase and dimlnution or
| stock, lost certificate of stock, execution
against stock, amendments; govern nssnIIa
| ton, foreign corporations, organization fees
and franchise taxes.
| Some of the Provisions.
Following are some of the provisions of
| the bill by sections:
| l. Any three or more persons, one being
| a resident of the District of Columbia, may
| form corporation for the conduct of any
| business except that of public service cor
pora ton.
2 Charters subject to alteration by Con-
gress.
g. Congress may alter the incorporation
act.
4. Corporations shall have powers ordi-
narily possessed by such bodies
o. Certificate of incorporation shall be
signed by all the subscribers to the capltai
stock named therein and shall set forth the
name of the proposed corporation; location
| of it's principal office; object; amount OF
| total authorized capital stock, which shali
| be not less than $2,GG0; the number OF
| shares into which it is divided; par value
amount of capital stock with which 1t VIII
| commence business, which shall not be less
| than 10 per cent of total authorized CAPITA +,
names and places of residence of incorpor-
| ators with number of shares subscribed Tor
| by each; directors who will manage AFFAIRS
of corporation for the first year.
T. No corporation hereafter organized
| shall assume name similar to that of an
existing corporation without full consent.
s. District of Columbia Supreme Court
shall have jurisdiction in equity over cases
growing out of foregoing section.
i'm, For
include in it's title the word university or
to claim United States charter.
H. Corporations organized must begin
business within one year after date or De
dissolved.
a. Incorporation changes returned on
voluntary dissolution within one year.
16 and II. Provides extension of char
tiers.
20. corporation may not proceed I'M
der section 10, unless affidavits are pre-
scented that the corporation is doing the
| business for which 1t was organized.
Management of Business.
81 Business Of corporations must be
managed by not less than three directors
and stockholders, one resident of the Dis
trict, chosen for from one to three years.
% and %. Deals with manner of electing
directors.
% No director shall be removed unless
by vote of stockholders holding two
thirds of capital stock.
-. Books, etc, of corporation subject to
investigation 10y directors or committee
representing stockholders.
80. Punishment for negligence or fraud
in corporate book entries by officers or
agents of corporations.
81. Punishment to corporations of $50 a
day for failure to keep proper books during
continuance of neglect.
81. Directors of every corporation of $780,
| 600 capital stock or over must make de-
tailed report to stockholders at each an
nual meeting.
80. Punishment for false statements in
connection with above section.
40. One thousand dollars fine and ten
years Imprisonment to any corporation Of
ficer who fraudulently sells or transfers
stock.
Borrowing From Ones Corporation.
A. Prohibits officer or director from Dor
rowing money from his corporation without
interest and without majority vote of Cd
rectors and adequate security. Voting d.
rectors responsible for loan.