GENERAL CORPORATION LAW.

AN ACT concerning Corporations. [Approved April 18, 1872, in force July 1, 1872, and amendments thereto in force July 1, 1905.

SECTION 1. Be it enacted by the People of the State of Illinois, represented in the General Assembly: That corporations may be formed in the manner provided by this Act, for any lawful purpose except banking, insurance, real estate brokerage, the operation of railroads and the business of loaning money: Provided, that horse and dummy railroads, and organizations for the purchase and sale of real estate, for burial purposes only, may be organized and conducted under the provisions of this act: And, provided, further, that corporations formed for the purpose of constructing railroad bridges shall not be held to be railroad corporations. [As amended by act approved April 19, 1879, in force July 1, 1879.

§ 2. Whenever any number of persons not less than three, nor more than seven, shall propose to form a corporation under this act, they shall make a statement to that effect under their hands and duly acknowledged before some officer in the manner provided for the acknowledgment of deeds, setting forth the name of the proposed corporation, the object for which it is to be formed, its capital stock, the number of shares of which such stock shall consist, the location of the principal office and the duration of the corporation, not to exceed ninety-nine years, which statement shall be filed in the office of the Secretary of State. If the object for which said corporation is proposed to be organized is clearly and definitely stated, and is a lawful object, the Secretary of State shall thereupon issue to such persons a license as commissioners to open books for subscription to the capital stock of said corporations at such times and places as they may determine; but no license shall be issued to two companies having the same or a similar name, nor shall any foreign corporation having the same or a similar name as any domestic corporation be admitted to this State under any foreign corporation law and no domestic corporation shall hereafter be organized with the same or a similar name as any foreign corporation previously admitted to do business in this State. Upon the filing of any statement with the Secretary of State for the purpose of obtaining a license to incorporate, he may propound such interrogatories as he shall deem necessary to ascertain the true

1 The Illinois Act is quoted on account of its brevity. A full and complete digest of the statutory provisions relating to corporations in the United States is to be found in "The Corporation Manual," published bi-annually by the Corporation Manual Company, New York City.

object: Provided, that the Attorney General may file a bill in chancery in the name of the People of the State of Illinois, against any corporation authorized to confer degrees, diplomas or other certificate or certificates of qualification in the science of medicine, pharmacy or dentistry which conducts a fraudulent business or abuses, misuses or violates the terms of its charter, in any court having jurisdiction of the corporation and subject-matter of such bill, for an injunction to restrain said corporation from conducting its business fraudulently or abusing, misusing or violating the terms of its charter and also for the dissolution of said corporation, and thereupon it shall be the duty of the court in which said bill is filed to grant such injunction and to hear and determine the same as in other cases in chancery: And provided, further, that this act shall apply to schools, colleges or universities which now are, or may hereafter be, licensed in this State, notwithstanding any provisions that may exist in their charters. [As amended by act approved May 16, 1905; in force July 1, 1905.

§ 3. As soon as may be, after the capital stock shall be fully subscribed, the commissioners shall convene a meeting of the subscribers, for the purpose of electing directors or managers, and the transaction of such other business as shall come before them. Notice thereof shall be given by depositing in the postoffice, properly addressed to each subscriber, at least ten days before the time fixed, a written or printed notice, stating the object, time and place of such meeting. In all elections for directors or managers of corporations organized under this Act, every subscriber or stockholder shall have the right to vote in person, or by proxy, for the number of shares owned or subscribed by him, for as many persons as there are directors or managers to be elected, or to cumulate such shares and give one candidate as many votes as the number of directors or managers multiplied by the number of his shares of stock shall equal, or to distribute them on the same principle among as many candidates as he shall think fit; and such directors or managers shall not be elected in any other manner. shall be lawful for any such corporation, by resolution of the stockholders, to divide its board of directors or managers into three classes, numbered consecutively, the term of office of the first class to expire on the day of the annual election of said company then next ensuing; the second class one year thereafter, and the third class two years thereafter. At each annual election, after such classification, the stockholders of such company shall elect, for a term of three years, a number of directors or managers equal to the number in the class whose term expires on the day of such election. All other vacancies. to be filled in accordance with the by-laws of the corporation.

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4. The commissioners shall make a full report of their proceed

ings, including therein a copy of the notice provided for in the foregoing section, a copy of the subscription list, a statement of the amount of the capital, not less than one-half actually paid in, the amount of such capital not paid in, what disposition has been made of stock subscribed and not paid, and if any proportion of the capital has been paid in property, the same shall be appraised by said commissioners and they shall report the fair cash value thereof; the names of the directors or managers elected and their respective terms of office, which report shall be sworn to by at least a majority of the commissioners and shall be filed in the office of the Secretary of State. The Secretary of State shall thereupon issue a certificate of the complete organization of the corporation, making a part thereof a copy of all the papers filed in his office in and about the organization of the corporation, and duly authenticated under his hand and seal of State, and the same shall be recorded in a book for that purpose, in the office of the recorder of deeds of the county where the principal office of such company is located. Upon the recording of the said copy, the corporation shall be deemed fully organized and may proceed to business. Unless such company shall be organized and shall proceed to business as provided in this act within two years after the date of such license, then such license shall be deemed revoked, and all. proceedings thereunder void. [As amended by act approved May 16, 1905; in force July 1, 1905.

§ 5. Corporations formed under this act shall be bodies corporate and politic for the period for which they are organized; may sue and be sued; may have a common seal which they may alter or renew at pleasure; may own, possess and enjoy so much real and personal estate as shall be necessary for the transaction of their business, and may sell and dispose of the same when not required for the uses of the corporation. They may borrow money at legal rates of interest. and pledge their property, both real and personal, to secure the payment thereof; and may have and exercise all the powers necessary and requisite to carry into effect the objects for which they may be formed: Provided, however, that all real estate, so acquired in satisfaction of any liability or indebtedness, unless the same may be necessary and suitable for the business of such corporation, shall be offered at public auction at least once every year, at the door of the court house of the county wherein the same be situated, or on the premises so to be sold, after giving notice thereof for at least four consecutive weeks in some newspaper of general circulation published in said county; and if there be no such newspaper published therein, then in the nearest adjacent county where such newspaper is published; and said real estate shall be sold whenever the price

offered for it is not less than the claim of such corporation, including all interest, costs, and other expenses: And, provided, further, that in case such corporation shall not, within such period of five years, sell such land, either at public or private sale as aforesaid, it shall be the duty of the State's Attorney to proceed by information, in the name of the people of the State of Illinois, against such corporation, in the circuit court of the county within which such lands, so neglected to be sold, shall be situated, and such court shall have jurisdiction to hear and determine the fact, and to order the sale of such land or real estate at such time and place subject to such rules as the court shall establish. The court shall tax as the fees of the State's Attorney such sum as shall be reasonable; and the proceeds of such sale, after deducting the said fees and costs of proceedings, shall be paid over to such corporation. The provisions of this section shall apply to and be binding upon all corporations now existing by virtue of any special charter granted by this State. [As amended by act approved June 5, 1889; in force July 1, 1889.

§ 6. The corporate powers shall be exercised by a board of directors or managers: Provided, the number of directors or managers shall not be increased or diminished, or their term of office changed, without the consent of the owners of a majority of the shares of stock. The officers of the company shall consist of a president, secretary and treasurer, and such other officers and agents as shall be determined by the directors or managers, and the directors or managers may adopt by-laws for the government of the officers and affairs of the company: Provided, they are not inconsistent with the laws of this State. The directors or managers may require of the officers and agents bonds, with such sureties and conditions as they shall deem proper and may remove any officers when the interest of the corporation shall require. The officers shall hold their respective offices for the period provided by the by-laws.

§ 7. The shares of stock shall be not less than ten nor more than one hundred dollars each, and shall be deemed personal property, and transferable as such in the manner provided by the by-laws, and subscriptions therefor shall be made payable to the corporation, and shall be payable in such installments and at such time or times as shall be determined by the directors or managers, and an action may be maintained in the name of the corporation to recover any installment which shall remain due and unpaid for the period of twenty days after personal demand therefor, or, in cases where personal demand is not made, within thirty days after a written or printed demand has been deposited in the postoffice properly addressed to the postoffice address of the stockholder. The directors may, by by-law prescribe other

penalties for a failure to pay the installments that may from time to time become due, but no penalty working a forfeiture of stock, or of the amounts paid thereon shall be declared as against any estate before distribution shall have been made or against any stockholder before demand shall have been made for the amount due thereon either in person or by a written or printed notice duly mailed to the proper address of such stockholder at least thirty days prior to the time when such forfeiture is to take effect: Provided, that proceeds of said sale over and above the amount due on said shares shall be paid to the delinquent stockholder.

§ 8. Every assignment or transfer of stocks on which there remains any portion unpaid shall be recorded in the office of the recorder of deeds of the county within which the principal office is located, and each stockholder shall be liable for the debts of the corporation to the extent of the amount that may be unpaid upon the stock held by him, to be collected in the manner herein provided. No assignor of stocks shall be released from any such indebtedness by reason of any assignment of his stock, but shall remain liable therefor, jointly with the assignee, until the said stock be fully paid. Whenever any action is brought to recover any indebtedness, against the corporation, it shall be competent to proceed against any one or more stockholders at the same time to the extent of the balance unpaid by such stockholders upon the stock owned by them, respectively, whether called in or not, as in cases of garnishment. Every assignee or transferee of stock shall be liable to the company for the amount unpaid thereon, to the extent and in the same manner as if he had been the original subscriber.

9. The General Assembly shall at all times have power to prescribe such regulations and provisions as it may deem advisable, which regulations and provisions shall be binding on any and all corporations formed under the provisions of this Act: And, provided, further, that this act shall not be held to revive or extend any private charter or law heretofore granted or passed concerning any corporation.

§ 10. All corporations organized under this law, whose powers may have expired by limitation or otherwise, shall continue their corporate capacity during the term of two years for the purpose only of collecting the debts due said corporation and selling and conveying the property and effects thereof.

§ 11. Such corporations shall use their respective names for the purposes aforesaid, and shall be capable of prosecuting and defending all suits in law or equity.

§ 12. The dissolution, for any cause whatever, of any corporation