307. Introduction. Business enterprises as conducted today are so extensive in their scope and character that the capital and experience of the individual, or even the partnership, is insufficient to cope with all the varying and changing conditions. The individual and the partnership agreement present too many elements of uncertainty to be satisfactory; such matters as death, insanity, limited liability, and concentration of capital must be provided for. The corporation as it exists and is organized today seems to be best fitted for the demands of business as conducted at the present time.

To-day the corporation is a creature of the statutory law. It is a legal entity created for the purpose of enabling a number of persons to engage in business with limited liability, and is in reality the creation of an artificial person to whom is given certain powers, subject to certain restrictions. The great enterprises of the present day are conducted by corporations, and they are largely shaping the affairs of the country. A corporation affords an opportunity for the concentration of large capital and interests.

It also affords a man of large as well as small financial means an opportunity to invest money and to be relieved of the responsibilities of management and a liability measured by the amount of his investment.

308. Definition. It is defined by a great jurist as "an artificial being, invisible, intangible, and existing only in contemplation of law."

309. Perpetuity. Unless specifically limited, a corporation may exist forever, and this is one of the chief reasons why the corporation is such a popular commercial institution at the present time. The original members of a corporation may die or transfer their interests and new members take their places without affecting the continuity or life of the enterprise. In this particular a corporation enjoys a great advantage over a partnership.

The peculiar attribute of the corporation is the franchise, which may be simply the right to exist as a corporate business

enterprise, or it may be a privilege, such, for example, as a right of way enjoyed by a railroad, or the right of eminent domain, and many other rights.

310. Classes. 1. Sole. The great body of corporations is first divided into sole, that of one person; and aggregate, the unification of a number of persons. The best illustration of a sole corporation is that of a bishop or other church dignitary holding property or rights for a community, as a church. There are few of them in America.

2. Aggregate. The aggregate corporation is divided into public and private, and a class falling between these two known as quasi-public corporations.

(a) Public. A public or municipal corporation is one created for political purposes; namely, to carry on the operations of

government. It is an agency created by the state to enable districts, towns, and cities to administer public or local administrative affairs. A public corporation is also known as a municipal corporation. The State is a corporation of this class. It enjoys certain functions which are transmitted by succession in office.

(b) Private. Private corporations are divided into ecclesiastical and business. The former are hardly known in America, but are common in England. The latter is an association of individuals for the purpose of conducting some business enterprise for profit. Our insurance, mercantile and banking establishments are private corporations. Their powers are limited to those expressly granted by the state, and such other implied and understood powers as are necessary to their operation and existence. All other powers are denied.

(c) Quasi-Public. The quasi-public corporation is, as a matter of fact, a private organization, but this distinction may be pointed out since it enjoys a certain public right or franchise to the exclusion of other companies, the law construes its rights and duties more strictly and favorably to the public as against the corporation.

311. How Created. There are three ways by which a corporation may be brought into existence; namely, by prescription, by charter under general statute, and by special statute.

1. By Prescription. The corporation that claims its rights by prescription asserts that it has enjoyed corporate privileges for such a length of time that the law considers that the right to exist as a corporation was given or should be given. "When a man can show no other title to what he claims than that he, and those under whom he claims, have immemorially used and enjoyed it," he claims by prescription. Such is the case with corporations by prescription, but it should be observed that in this country there are no corporations by prescription.

2. By Charter. A charter is direct documentary authority issued under general laws enacted by the legislative department of a state to certain persons to exercise the rights of a corporation.

It defines the rights of the corporate body, and the rule of construction is that all which is not expressly or impliedly granted is withheld. The charter is a contract between the state and the corporation and cannot be withdrawn or amended by the state unless a special reservation is included in the law or charter. The state may, however, declare a forfeiture of the charter for violation of law by the corporation.

3. By Special Statute. Formerly corporations were usually created by a special law enacted by the state legislature, but of late years special incorporating acts are often forbidden under later constitutions in most of the states. Many corporations, however, exist at the present day which were created in this

manner.

312. Corporate Name. It is one of the general requirements that a name must be selected by those asking to be incorporated. The artificial personality of the corporation is recognized in the name under which it transacts business. This name cannot be changed except by permission of the state, and by statute in some states no two corporations in the same state may have the same name.

313. Capital Stock. The capital stock of a corporation. consists of the amount of share interests issued or to be issued to the shareholders. It may be paid for in money or other prop erty. The shares are usually one hundred dollars each face value.

314. Subscription. A subscriber is one who signs for a number of shares. His interest is a proportionate part of the capital stock. Upon the payment of the amount of the subscription, the subscriber becomes a stockholder and is entitled to a stock certificate as evidence of this fact.

315. Kinds of Stock. 1. Common. Common stock is the most usual kind issued, and is entitled to its per cent. of the earnings when a dividend is declared. The holders of this kind of stock are entitled to vote at all stockholders' meetings, each one being entitled to as many votes as he has shares of stock.