not apply to contracts entered into by the corporation after authorized to commence business, in the ordinary course of business, unless shares, bonds, or debentures are to be issued as a consideration or part consideration therefor.

(8.) The names and addresses of the auditors or proposed auditors, if any, of the company.

§. 67. Signing and Filing Prospectus. Every prospectus shall be signed by every person named therein as a director or proposed director of such corporation, and shall be filed with the Commissioner of Corporations on or before the date of its issue, which date, together with the date of filing, shall be stated on the face of said prospectus; and said prospectus shall not be received and filed by said Commissioner unless it is so signed and dated.

§ 68. No Waiver of Conditions Valid. Any condition requiring or binding an applicant for shares, bonds or debentures to waive, and any agreement to waive due compliance with sections 64, 65, and 66, or purporting to affect him with notice of any document, contract or matter not specifically referred to in the prospectus shall be void.

§ 69. Effect of Failure to Comply. Every prospectus which does not comply with the provisions of sections 64 to 68, above, shall, if knowingly or negligently issued by them, be deemed fraudulent on the part of every promoter, incorporator, director, or manager who is such at the time of issuing the prospectus, and also every person who is, by his authority or consent, named in the prospectus as, or as having agreed to become, a director of the corporation. Such parties, or any of them, shall be liable to make compensation to to any person aggrieved by such defective prospectus, unless such party proves that the matter not disclosed by the prospectus was unknown, and could not with reasonable diligence have been discovered by him, or the same was due to an honest mistake of fact, or the aggrieved person had actual notice and knowledge of the undisclosed matter. Any person subscribing for or taking shares, bonds, or debentures on the faith of such defective prospectus shall, unless he has actual knowledge of the facts omitted, be entitled to rescind, or sue for rescission of his subscription. Nothing herein shall limit or diminish any liability which any person may incur under the general law apart from the provisions of this section.

Promoters, officers, directors, and agents violating the foregoing provisions shall be subject to the penalties imposed in section 181.

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3. Organization.

§ 70. Notice of Organization Meeting. A written or printed notice stating time, place, and purpose, of the organization meeting signed by at least three of the incorporators shall, at least ten days before the time fixed for such meeting, be given to each incorporator, and to each one with whom a contract to take shares exists, either by delivering such notice to him, or mailing it, postage prepaid, addressed to him at his residence or usual place of business; and the affidavit of one of the signers of such notice stating how, when, and to whom such notice has been given, shall be filed and recorded with the records of the corporation. But if all those entitled to notice shall in writing indorsed upon the Agreement of Association waive such notice and fix the time and place of meeting, no notice need be given.

§ 71. Business of Organization Meeting. At such meeting a quorum shall consist of a majority of shares contracted to be taken, whether by subscription, application and allotment, or otherwise, and each share, unless otherwise provided in the Agreement of Association, shall be entitled to one vote; a temporary chairman and a secretary shall be chosen by ballot; by-laws, which shall be expressed in separate articles and paragraphs, properly numbered, shall be adopted; directors, and such other officers as may be required, unless the by-laws shall otherwise provide, shall be elected by ballot, to hold office until the first annual meeting is held, and their successors are elected and qualified, but the president shall be elected from among the directors. The temporary secretary shall make and attest a record of the proceedings of such meeting, including a copy of the by-laws, and the names of the directors and officers elected, and the same shall be filed and kept as a part of the records of the corporation.

§ 72. Officers to Qualify. Each original director and officer, before entering upon the duties of his office, shall, unless he has already done so, sign the Agreement of Association, and indicate thereon the shares which he agrees to take and pay for as other subscribers, and which shall in no case be less than the amount of qualification shares required to hold such office; each original director and officer, shall, also before entering upon his duties, take the oath required by section 33.

§ 73. Other Officers to be Chosen. If the by-laws provide for the election of any of the officers by the directors they shall, forthwith,

hold a meeting for that purpose, and the record thereof shall be preserved with the records of the corporation.

§ 74. Articles of Organization. The directors, or a majority of them, who are elected at the organization meeting, together with the President, Secretary and Registered Agent, shall forthwith, make, sign and make oath to Articles of Organization, setting forth truly:

(1.) A copy of the Agreement of Association, with all the signatures thereto, and the indorsements thereon.

(2.) The date of the organization meeting, and of successive adjournments thereof, with the names of the temporary chairman and secretary.

(3.) A copy of the by-laws adopted.

(4.) A list of the names of the officers and directors elected, with their residences and post office addresses.

(5.) The amount of capital stock which is to be paid for in

money.

(6.) Whether such capital stock is to be paid for in whole or in part before the corporation commences business, and if in part, the amount of the instalments. But at least ten per cent of the authorized capital stock shall be paid for before commencing business.

(7.) The amount of capital stock to be paid for in property and if tangible property, its location, quantity, and description, and the amount of stock issued or to be issued therefor; and if intangible, whether patents, copyrights, franchises, good will, choses in action, or other kind, a full description thereof with the amount of stock issued or to be issued therefor.

(8.) The amount of capital stock to be issued or paid for in services or expenses, with a description of the nature of such services or expenses and the amount of stock issued or to be issued therefor.

4. Incorporation.

§ 75. Approval and Filing of Articles. The Articles of Organization shall be submitted to the Commissioner of Corporations, who shall examine the samę, and may require such additional information given, and such amendments made, as he may deem necessary. When the Articles of Organization are made to conform to the provisions of this Act, the Commissioner of Corporations shall so certify and indorse his approval thereon, with the date thereof, and thereupon the Articles of Organization shall, upon the payment of

the fees provided in section 80, be filed and kept in the office of the Secretary of the Department of Commerce and Labor, who shall indorse thereon the date of such filing, and the fees paid therefor.

§ 76. Issue of Certificate of Incorporation. Said Secretary shall thereupon issue a certificate of incorporation, in the following form:

CERTIFICATE OF INCORPORATION.

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31

there were

Whereas, on the day of in the year A. D., filed in this office Articles of Organization for the purpose of forming a corporation to engage in national commerce, in the words and figures, with all the indorsements thereon, except the by-laws adopted, as follows, to-wit: (copy in full of the Articles of Organization except the by-laws).

Now, therefore, I the Secretary of the Department of Commerce and Labor do hereby certify that the incorporators above named and their associates and successors are legally organized and established as, and are hereby made, an existing corporation under the name of with the powers, rights, and privileges, and subject to the limitations, duties, and restrictions, which by law appertain thereto.

Witness my official signature hereunto subscribed, and the seal of the Department of Commerce and Labor affixed this day of __ in the year

[SEAL]

-

---}

Secretary of Department of Commerce and Labor.

§ 77. Record of Certificate. Such Certificate of Incorporation shall be recorded at length in the office of said Secretary in books kept for that purpose, and the same, together with the Articles of Organization, including the by-laws shall be kept indexed in such manner that they may be readily referred to. Such documents shall be deemed public documents and shall be open to inspection and copying as are other public documents, and certified copies thereof shall be furnished to those who apply therefor upon payment of the cost thereof at not to exceed twenty-five cents per folio of one hundred words.

§ 78. Delivery and Effect of the Certificate. Such certificate shall be delivered to said corporation and shall have the force and effect of a special charter, and it, or the record thereof, or a certified copy, or a printed copy of the same, as hereafter provided, shall be con

clusive evidence of the existence of such corporation from the date of filing of the Articles of Organization with the said Secretary.

§ 79. Publication of Certificate. The said Secretary shall from year to year or oftener, cause to be printed in pamphlet form ten thousand copies of the Certificates of Incorporation issued by said office during the preceding year or part of year; such copies shall be distributed to the parties, and in the numbers provided by section 73 of the Act of Congress of January 12, 1895, chapter 23, for distributing the bound copies of the Statutes at Large, except there shall be kept for the use of the Department of Commerce and Labor, such number of copies as the Secretary thereof may designate as necessary, the balance, after supplying the parties indicated in said section 73 to be kept by said Secretary of the Department of Commerce and Labor, to be disposed of to such persons as may wish them, at the cost price thereof, the receipts therefor to be accounted for and paid over as other receipts by such department are.

§ 80. Fees. (1.) On filing the Articles of Organization in the office of the Secretary of the Department of Commerce and Labor, the incorporators shall pay to said Secretary, before he accepts said Articles, the following fees, for the use, and to be paid to the Treasurer, of the United States:

Twenty cents on each one thousand dollars of capital stock authorized for the first one hundred millions or under, but in no case less than twenty-five dollars.

Twenty-five cents per one thousand dollars for the second one hundred millions, and so on at a rate per one thousand dollars, increasing five cents for each additional one hundred million dollars, of capital stock authorized.1

1 NOTE:-It will be seen that the fees provided herein increase as the authorized capital stock increases; this for two reasons, first, large franchises are more valuable to the holders, and second, more dangerous to the public. The fees herein provided would be as follows:A corporation with a capital stock of:

The latter is the amount of the capital stock of the United States Steel Corporation; the amount that corporation had to pay to the State of New Jersey, as an incorporation fee, was $220,000; in Michigan the fee would have been $550,000; in Ohio, $1,100,000; in Pennsylvania, $1,375 000.

The same method is applied to the franchise tax provided for in section 148, and for the same reasons.