Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1914-09-24
Should Keep in Close
Touch With Corporations
Claimed That Present Statutes Do Not Define With Sufficient.
Accuracy The Duties and Obligations of Corporate
ORGANIZATIONS.
t Present Statutes Do Not Define With SUFFICE
Organizations.

Coincident with the rapid growth
of the state in the past few years,
there has been a very large increase
in business transacted under corpor-
ate authority. The statutes of the
state governing the chartering OF
corporations, and providing for state
regulation and control, investigation
and supervision of corporations,
should be brought up to date. A
ward, as it were, of the state, the
corporation should be made subject
to and should be given the benefit OF
laws which will protect both the peo-
pie of the state and the corporation
itself. In a word many of the stat
utes should be made more explicit
and definite. A too liberal general
ization as to terms is a weakness in
herent in several important laws now
in effect. Alienation by weak stat
utes of the control Of private corpor-
atoms from the parent corporation
the state-should be done away with
through remedial and progressive Leg
islation. A brief summary of the
lines along which a change in the
statutes would be wholesome and
beneficial are set forth in the semi
annual report of Secretary of State
Hall, which is now on file with the
governor:
Cooperative Associations.
Considerable confusion has arisen
during the past two years over the
powers of so-called cooperative as
sociations. There is much question
and doubt as to the constitutionality
of a pro rata distribution Of profits
OF such associations on the basis OF
patronage, rather than on the basis
of the amount of stock held. The
statutes are not definite or conclusive
as to the difference between general
c operations and associations of a CO.
operative nature. A clear line OF
demarcation should be drawn be-
tween the two. A very rapid in
crease in the number OF cooperative
associations makes this necessary.
ProfitIM Taking Corporations.
The laws are indefinite as to what
corporations may be regarded as prof
it-making corporations. A mere re-
cital in the articles of incorporation
that the corporation is non-proft in
nature does not oftihles state the ex-
act truth. 1t is possible that the law
contemplates that " pecun1ary PROF.
it" also includes benefits and adWan-
tages profitable in themselves, but
not necessarily termed in dollars and
cents. All business corporations
should be required to file reports ev-
cry year.
Foreign Corporations.
Our statutes governing foreign cor
porations are brief and lack compre-
hensiveness, making them made
quate for present and future pur-
poses. "The twilight zone" now In
existence between intrastate bust
less transacted by some foreign cor,
porations and interstate business
transacted by others, should be swept
away. Corporations ~transacting in
terstate business are subject, in the
main, to the rules of the interstate
commerce commission, but corpora
tons tr~ansacting 'intrastate business
should be required to comply with
the statutes of this state in the strict
est sense. The present statutes, how
ever, permit a masquerade by foreign
corporations whenever it rs convent.
ent to term interstate business as in
terstate business. Corporations trans
acting businessso of the former nature
should at all times maintain an office
or agency within the state.
Capital Stock.
The department is of the opinion
that domestic corporations should not
be allowed to transact actual bust
ness until a certain per cent, say %
per cent, of the authorized capital
stock has been subscribed for and
paid in. A restriction of this mature
would be wholesome in that it would
tend to check the promotion ana
floating of corporations with a high
authorized capitalization, but with