The Morris County chronicle. [volume] (Morristown, N.J.) 1877-1915, 1910-02-08
'TAFT's BILL FOR
FEDERAL incorporation
No Company to Hold Stock of
Any Other Concern.
BANKING POWERS FORBIDDEN
Watering rohibited--UnIawfu Conn
bination or Monopoly VIII Be
Punished by Forfeiture of Fran
chise at Discretion of Congress.


Punished by Forfeiture of Fran
chise at Discretion of Congress.
Washington, D. C.-The draft of
the Federal Incorporation act, as pre-
pared by Attorney-G General Wicker
sham and approved by President Taft,
provides as follows:
Any five or more persons, citizens
of the United States, may, on COM
Dliance with the act, form a corpora
tion to engage in Interstate or foreign
trade and commerce. Articles Of as
sociation must be made, setting forth
many details.
The amount of the capital, which
bhall not be less than 100000, must
be stated, with the number of shares
into which it is divided, which may be
either with or without par value;
the classes, if any, into which the
stock is to be divided; the number
Df directors, no term to be longer than
1--we years; and certain other formal
requisites.
The certificate must be presented to
the Commissioner of Corporations for
inspection and approval and unless
the name conflicts with that Of some
other duly registered corporation, he
{ shall issue certificate and the cor
poration is duly formed.
Scope of the Companies.
Every corporation formed under
this act is given the general powers
usually incident to Incorporation, and
the power to carry on the general
kind of interstate and foreign trade
specified in the articles OF association
with foreign nations or among the
States.
/ No corporation is permitted to pur-
chase, acquire or hold stock In any
other corporation,
At least a majority of the directors
are required at all times to be citizens
Of the United States, and bona fide
residents therein. The articles may
provide that members Of the board,
Others than those constituting the
executive committee, shall not be liza
bile in any respect except for the ex-
ercise of good faith and due diligence
In respect to matters brought before
the meetings of the board
L Strict Control Over Stock.
Stock may be paid for in cash or in
property, but every certificate of stock
ISSUED in payment for property must
contain a statement that it is so is
sued. Before any stock is so issued a
Full statement, sworn to by a major
PITY of the board, must be filed in the
bureau of Corporations, setting forth
"a full description of the property, the
humber of shares to be issued in pay
pnent therefor, and whether such
shares are to have a par value or not;
the names and addresses of the ven
doris of the property, the statement of
Fheir connection, if any, with the COM
pany; the terms of any agreement,
verbal or written, with respect to the
transfer of the property.
Full details as to price must be
given, and all amounts paid or intend
led to be paid to each vendor. and If
She vendors are directors of the cor
Woration, or stockholders, statment
Eof the price paid or agreed to be paid
lby them for the property to be sold to
Ethe corporation.
l. Property to Be Appraised.
Where the stock to be issued for
such payment has par value there
must be filed in the bureau an ap-
praisement of the value of the prop
lerty by two disinterested appraisers,
approved in writing by the Commits
lsioner, who may also appoint other
appraisers.
No stock with par value may be
ISSUED in payment of property pur-
chased or acquired by the corporation
ITO an amount in par value exceeding
lthe value approved by the Commits
Eioner after appraisement.
h No Water in Mergers.
The total amount of stock and Sc
Icurities with par value to be issued
Eby such corporation, pursuant to such
nlan, shall not exceed the fair esti-
mated value of the property and bust
mess to be transferred to the new
corporation, as approved by the Com
missioner of Corporations. Provision
may be made for the payment to non
Assenting stockholders of the corpor-
ation to be reorganized, of the APP
praised value of their stock
4 Provisions are made for the in
Grease or decrease of the capital stock,
and for other amendments to the arti-
cles of association by the vote of the
holders of two-thirds of each class of
stock
i Power is given to borrow money,
issue bonds and mortgage property on
the vote of the holders of two-thirds
cf the stock No property or other
thing than money shall be taken in
payment to the corporation of the
price of such bonds, except at a fair
valuation, as fixed by the Commits
sioner
! Whenever corporation shall have
failed to pay any written obligation at
maturity, or If an execution against
dts property shall have been returned
unsatisfied, the Commissioner may
appoint a receiver with the usual
powers Of chancery receivers.
b Forfeiture and Taxation.
The charters of corporations are
made subject to alteration, suspension
and repeal at the discretion Of the
congress.
b Arbitration of Fisheries Dispute.