Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-10-03
ID. c. BAR TO STUDY
|PLANS TO MODIFY
CORPORATION LAW
Meeting Called October 20
to Act on Proposal to
Liberalize Statute.
SPECIAL Committee
| CALCULATES REPORT
More Supervision of Local Firms
and Lower Costs Sought
by Sponsors.

A proposal to bring the Districts
60-year-old corporation law in line
with more liberal practices existing
in Delaware. Maryland and Virginia,
will be made to the District Bar
Association at special meeting tenta-
lively set for october 20, it was learned
today.
For two years a special committee
of the association has been working
on a preliminary draft of a bill for
submission to Congress. Its report
now is finished and has been circu-
lated among Bar Association men,
bers for study and criticism.
The proposed law would greatly
liberalize requirements for incorpora-
ton, make possible more supervision
over the affairs Of local corporations
and bring foreign corporations op-
Grating here under the jurisdiction
Of District authorities.
Few Incorporated Here.
Because Of the stringent require
ments for District charter, not
one in so corporations doing business
here are incorporated under District
law. according to William E. Richard
son, chairman OF the special COM
mittee
THE existing law makes 1t prac-
tically impossible for any large Or
ganization to obtain a charter in the
District" Richardson explained. BE
fore a charter is granted, all the cap
ital stock must have been subscribed
and 10 per cent of 1t paid in cash.
These conditions are impossible to
meet in the course of modern busi-
ness"
The committee report recommends
that the stock subscription regula-
ton be wiped out and corporations
before they begin operation.
Cost Would Be Reduced.
Cost OF Incorporation here would
be materially reduced, but still would
be maintained at a slightly higher
level than in Delaware, where, it is
estimated, half the corporations in the
United States obtained their charters.
In order to bring as many as pos
sible of the corporations doing their
principal business here under District
charters, a tax would be imposed on
foreign corporations only slightly less
than that levied on domestic concerns.
Richardson pointed out this would
mean organizations incorporated else
where would have to pay q double
yearly assessment-here and in the
jurisdiction Of their incorporation.
Proponents of the suggested law
predict that its passage would bring
thousands Of dollars in taxes into
the Districts Golfers. Richardson esti-
mated that at least a thousand cor
porations doing business in the Capt.
tai pay an average yearly tax of $50
each to the various States where they
we're incorporated.
The committee urged creation of
the post Of commissioner Of corpora
tons, and that he be empowered to
require full annual reports from all
corporations doing their principal
business here without regard to wheth-
er they are incorporated under Dis
| trict laws or in other jurisdictions.
Under the proposed law. corporations
would report on the amount of bust
ness transacted as well as their cor
porate set-up.
In the past two and half years.
IS States have been forced by the
changing needs Of business to mod
ernie their corporation laws, Richard
son said, and since January l, six
States have passed revised corpora
ton statutes.