The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1928-10-19
PROPOSED AMENDMENT NO. 2

PhOPOSEO AMENDMENT nv.
BY the adoption of chapter 444. Laws
1927. the legislature has proposed an
amendment to section 3, Article 10 of the
Constitution relating to corporations.
This section now reads as follows:
Each stakeholder in any corpora
ton, excepting those organized for
the purpose of carrying any kind
of manufacturing or mechanical BUSH
ness. shall be liable to the amount
of stock held or owned by him."
III amended as proposed, this section
will read as follows:
"Sectlon 8. The Legislature shall
have power from time to time to
provide for limit and otherwise
regulate the liability of stockhold-
erS or members of corporations and
cooperative corporations or asso-
Citations, however organized. Pro-
vided nothing in this section shall
be construed as repeating or in any
manner affecting the liability OF
stockholders in banks or corpora
tions organized for banking pur-
poses as provided in Section 10 of
Article of the Constitution of the
State of Minnesota"
The Purpose of the Proposed Amendments
The constitution as IL now stands,
makes every stockholder in any corpora
ton, excepting those organized for the
purpose of carrying on a manufacturing
or mechanical business, liable for the
debts OF the corporation, IL the corporate
assets are insufficient to pay the debts,
up to an amount equal to the par value
of the stock held or owned by him, In
addition to any sum that he may owe
the corporation on account of his stock.
The purpose of the proposed amendment
Is to authorize the legislature to prescribe
and regulate by law the liability of stock
holders or members in all corporations,
Including cooperative corporations or
associations, however organized, except
stockholders In corporations and Joint
associations organized for banking pur.
poses which issue bank notes, as pro-
vded by section 10 of Article of the
Constitution. The effect of this excep-
tlon Is explained In the next following
paragraphs.
The Effect Of the Proposed Amendment:
The effect of the proposed amendment,
II adopted, will be to abrogate the pres
emit fixed rule Of stockholders liability
prescribed by the Constitution, except in
the case of stockholders in banks which
ter of prescribing and regulating the
liability of stockholders In all corpora
tions, cooperative corporations or asso-
Citations created under the laws of this
state Except those banking corporations
and joint associations specifically ex-
cepted therefrom) entirely within the
control of the legislature, subject to
change from time to time as they may
see fit.
Stockholders In banks of the kind pro.
vIded for by section 10 of Article of the
Constitution are by that section made
liable for the debts of such corporation
double the amount of stock owned by
them. Stockholders of this class are ex.
cepted from the operation of the pro-
posed amendment. However, the only
banks provided for by section 10 are those
that issue bank notes. There are none
such In this state. Hence, stockholders
In state banks are not within the excep-
tlon of the proposed amendment but fan
In the same class as stockholders in other
corporations.
The ballot used at the election should
have printed thereon the following:
Seccnd:
LIABILITY OF STOCKHOLDERS IN
CORPORATIONS.
Amendment to section 3, Article
10, of the Constitution, authorizing
the legislature to prescribe and limit
the liability of stockholders in cor
pCrations.
YES.....
NJ
G. A. YOUNGQUIST,
Attorney General.