The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-04-11
Neqv York S Corporation
La1v Is Best, Says Hugo
Offers Maximum Of Benefit With Minimum of Liza
bty and Expensc-Ths state Leads All Others
in Organizations. West Virginia Being Second.


on the amount OF capital TO he Invested
in any corporate enterprise, nevertheless
in Maine and Massachusetts a minimum
of 81 900 must he subscribed before any
debts are incurred. Connecticut requires
$4,000. 81. 900 of which Is to be paid In
at once. while New York provides $500
as a minimum. with further require
ment that one-half OF the capital stock
must be paid in within one year after
the date OF Incorporation.
All incorporators may he non-reside nts
In the States above enumerated with
the exception OF New York. at least one
director must be a resident, while In
Maryland one incorporation and one d.
rector must be residents. Stockholders
meetings must always he held within the
state. excepting in Delaware. West Nir-
ginia and South Dakota. although d.
rectors' meetings may he held outside
in all States.
Voting trusts are authorized IN one
half Of the States, namely, Maine, Mas
sachusetts, New York. New Jersey
Maryland and Virginia; while cumula-
tive voting is authorized in New York
New Jersey. Maryland. Virginia and
West Virginia.
collateral inheritance tax is inn
posed upon the shares OF capital stock
OF both resident and nonresident own
ers, with the exception of Delaware and
New York. The organization tax Ia the
highest i'm Maryland and an elaborate.
detailed report is required annually in
Massachusetts.
The number Of corporations organized
for business purposes in these States
during last year is shown as follows
New York. e.Ol5; West Virginia. $500 :
Delaware. 1913: New Jersey. l,525 {;
Massachusetts. 1904: South Dakota.
1,joo: Maryland. lao Virginia. $40
Connecticut. 755; Maine. $40 Nevada.
$40; District OF Columbia, 1O2.
From the above results it will be noted
that competition il keenest between
West Virginia and New York. where tho
legal requirements are quite similar the
latter state adopting its present law
largely after that OF the former one.
But in West Virginia no capital Is
required to be paid In before the cor
poration becomes going concern
whereas In New York state at least
$500 is required before any Indebtedness
may be incurred. Besides detailed
report is required annually and the
liability OF the directors is much moro
eXact.ng.
@ on the other hand. expense Of incor-
rorating in New York Is less. voting
trusts are permitted. stock may be IS
sued without par value and no inhcri-
lance tax can he levied upon non-resi-
dent stockholders. 1t Is these and other
reasons that rendered our corporation
laws. in ;he opinion OF many autnori-
ties. the most advanta geous in the
world
. Bankers and underwriters have learned
to discriminate in favor OF New York
corporations when entering into agree
ments In relation 20 mo financing OF new
enterprises. and the underwriting al
bond issues, because of the more ready
market for the sale of the securities OF
New York companies. Directors. Will,
required by the New York laws TO oh
o. serve good faith and common honesty
toward the company's stockholders. II!
creditors and the State. are not subjected
to the hazard and annoyance OF Grim
inal prosecution for mere errors OF judg