The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-07-08

fectIve as had been thought
The General Corporation Act of
1929 was the first carefully conceived
vancouver TO close the many gaps
which, up 10 then. had existed in
the task Of regulating corporations.
Every corporation for profit, except
ing banks, insurance companies,
railroads, building and loan asso-
Citations. mortgage guarantee COM
panies. trust companies or trust bust
nesses. was brought under the juris-
diction OF the act
Mueller in Charge
The exceptions cited are subject
to special supervision of other de-
partments. At the last session Of
the Legislature. dominion was ex-
tended over not-for- profit corpora
tions.
Entrusted with the Administration
Of this act is the Secretary Of State,
August G. Mueller, who bears a
striking resemblance TO New York'S
distinguished Senator Robert Wag-
ner. Having direct supervision over
corporation affairs as head of the
corporation division is Joseph Hoff-
mann.
AT the risk Of being bromide, it
should be pointed out that groups
incorporate for the simple reason
that a corporations liability Is
limited to its assets. BY tha same
token, stockholders. who are part
ners in such enterprises, stand to
lose only as much money as they
put into the venture in the event of
the collapse of the company.
Mythical Company Formed
To better understand the pro-
cedure involved in the formation of
a corporation, We will erect a myth
ical enterprise known as the XYZ
Co, group Of three persons doing
business under a partnership
They intend to incorporate.
The law says that before incor-
pOratiOn papers will be given, the
firm must have a minimum of
$1,000 worth of stock subscribed for.
Thus, with this in mind, the XYZ
Co. opens stock subscriptions, re-
oeives the stipulated minimum,
holds an organization meeting at
which three incOrporators and
three directors are designated.
At this meeting the embryonic
corporation is authorized to file in
corporation papers. These articles
Of incorporation are submitted to
the secretary of state ard set out
specifically what the company in
tends to do in a business way and
represents that a meeting has been
held and that at least $1,000 of
stock has been subscribed for. These
articles are filed in triplicate; one
copy remains with the secretary of
state, one with the county recorder
and one is made part of the COM
pany's records.
Contract With State
In the event that the representa-
tons in the articles of incorporation
do not meet with the requirements
of the law, or if the company at
tempts TO assume powers not within
the purview of the Corporation Act
of 1929, they are disapproved.
This law, incidentally, wisely de-
clares that before any Incorporated
company can begin business in this
state, the majority of the board of
directors must file an affidavit with
the county recorder setting out that
at least $500 of the paid-in capital
with which it will begin business,
as stated in the articles, has, in fact,
been paid-in to the company. This
simple demand tends to prevent a
fraud upon potential creditors of
the corporation.
Broken down into the simplest
form, the articles of incorporation
constitute a contrast between the
state and the potential corporation.
Laws governing corporations vary
in the different states. Delaware,
for instance. has very lenient laws
on this subject with the result that
that state IS far ahead of any other
state in the issuance Of charters.
Many Seek Revenue
Avarice prompted lax corporation
laws in most instances. States at
one time we're eager to swap liber-
atty in law for the revenue con-
nected with interpretations. Fees
for incorporation vary in the vari-
Gus states. Indiana collects a fee
OF l cent for every share of stock
issued, with a minimum fee OF
S1l.50.
Thus. we can see that the secre-
tary of state, through the corpora
ton division, constitutes the first
buffer which the companv-in-the-
making Confronts. Every corpora
ton. whether incorporated in Della
ware, Idaho. Montana or any other
state. which desires to do business
in Indiana must procure a license to
operate here.
Indiana has set out the boun-
diaries within which the corpora
tons NAV do business and the eX-
ecutives know that if they step over
the line they are counting a visit
from the attorney general
\ Good Title Is Big Help
In this connection it might be
mentioned that one of the most
vexatious problems of any secretary
of states Office is determining what
constitutes doing business"
Among corporations, names play
an important part. A good corpor-
ate title can mean much in bust
ness way. The best evidence of how
companies try TO capitalize on this
is had in connection with the town
Of Santa Claus. The natural ad-
vantage Of a toy manufacturer. for
instance. having the word Santa
Claus" in his corporate title can i'm
mediately be recognized.