Name of instrument. creating

corporation.

Articles of incorporation, what

corporations, and are repealed, subject to the provisions of this section.

NOTE.-Heyneman vs. Blake, 19 Cal., p. 579.

289. The instrument by which a private corporation is formed is called "articles of incorporation."

290. Articles of incorporation must be prepared, to contain. setting forth:

1. The name of the corporation;

2 The purpose for which it is formed;

3. The place where its principal business is to be transacted;

4. The term for which it is to exist, not exceeding fifty years;

5. The number of its Directors or Trustees, and the names and residences of those who are appointed for the first year;

6. The amount of its capital stock, and the number of shares into which it is divided;

7. If there is a capital stock, the amount actually subscribed, and by whom.

NOTE.-Stats. 1868, p. 539; People vs. Chambers, Supreme Ct. of Cal., 1871; Carlisle vs. Cahawba & M. R. R. Co., 4 Ala., p. 70; Field vs. Cooks, 16 La. An., p. 154; Williams vs. F. T. A. Association, 26 Ind., p. 316; Becht vs. Harris, 4 Minn., p. 504; Atlantic and Ohio R. R. Company vs. Sullivant, 5 Ohio State R., p. 279; Ferrana vs. Vanocelles, 23 Ill., p. 459; Walker vs. Devereux, 4 Paige Ch., p. 229; Valk vs. Crandall, 1 Sand. Ch., p. 179; Commonwealth vs. Central Pass Railway, 52 Penn. St. R., p. 512; People vs. Kingston and Middletown T. P. Co., 23 Wend., p. 193. There must be a substantial compliance with all the forms of law, by persons seeking to form a corporation, before the corporation can be considered in being.-Harris vs. McGregor, 29 Cal., p. 124. The omission of such acts as are declared necessary steps in the process of incorporation will be fatal, even collaterally, when the fact of incorporation can be questioned.-Mokelumne H. M. Co. vs. Woodbury, 14 Cal., p. 424. But the proceedings will not be held invalid for slight defects or omissions.

S. V. Water Works vs. San Francisco, 22 Cal., p. 434.
The failure to describe the place of business of the
corporation as the "principal place of business," is a
mere technical error, which does not invalidate.-Ex
parte S. V. Water Works, 17 Cal., p. 132. A certifi
cate of incorporation which does not set forth the name
of the city or town and county in which the principal
place of business of the corporation is to be located
does not establish the existence of a corporation.-
Harris vs. McGregor, 29 Cal., p. 124.

291. The articles of incorporation of any railroad, wagon road, or telegraph organization must also state: 1. The kind of road or telegraph intended to be constructed;

2. The place from and to which it is intended to be run, and all the intermediate branches;

3. The estimated length of the road or telegraph line;

4. That at least ten per cent of the capital stock subscribed has been paid in to the Treasurer of the intended corporation.

NOTE.-See note to Sec. 290.

292. The articles of incorporation must be subscribed by five or more persons, three of whom must be citizens of this State, and acknowledged by each before some officer authorized to take and certify acknowledgments of grants of real property.

acknowledge the

same.

Prerequi

site to

articles.

293. Each intended corporation named in Section 291, before filing articles of incorporation, must have filing actually subscribed to its capital stock, for each mile of the contemplated work, the following amounts, to

wit:

1. One thousand dollars per mile of railroads;

Amounts to be sub

be affixed.

2. One hundred dollars per mile of telegraph lines; scribed to 3. Three hundred dollars per mile of wagon roads.

NOTE.-Stats. 1853, pp. 114, 169; 1861, p. 607. See

note to Section 294.

Prerequisite to filing articles of corporations for profit.

Oath of
officer to
subscrip-
tion of
stock and
payment
of ten
per cent.

аш

To file
articles
with
County
Clerk and
Secretary
of State,
and receive
certificate.

294. Before the articles of incorporation of any corporation referred to in the preceding section are filed, there must be paid for the benefit of the corporation, to a Treasurer elected by the subscribers, ten per cent of the amount subscribed.

NOTE.-Stats. 1850, p. 370, Secs. 156, 157; People vs. Chambers, Sup. Ct. Cal., 1871. The following authorities affirm the necessity of a strict compliance with the statutes in regard to payment of the percentage, in order to acquire an indefeasible title to a corporate franchise, where such payment is made a condition, and establish the doctrine that no substitute, however equivalent or bona fide it may be, will satisfy the statutory requirement for money, or vest any right as against the State.-Eaton vs. Aspinwall, 19 N. Y., p. 119; People vs. Troy House Co., 44 Barb., 634; Haviland vs. Chace, 39 Barb., p. 283; Taggart vs. Western Maryland R. R. Co., 24 Md., p. 588; People vs. Rensselaer Insurance 38 Barb., p. 323; Paterson vs. Arnold, 45 Penn. St. R., p. 415.

295. Before the Secretary of State issues to any such corporation a certificate of the filing of articles of incorporation, there must be filed in his office an affidavit of the President, Secretary, or Treasurer named in the articles, that the required amount of the capital stock thereof has been actually subscribed, and ten per cent thereof actually paid to a Treasurer for the benefit of the corporation.

NOTE. See note to Sec. 294.

296. Upon the filing of the articles of incorporation in the office of the County Clerk of the county in which the business of the company is to be transacted, and a copy thereof with the Secretary of State, the Secretary of State must issue to the corporation, over the great seal of the State, a certificate that such articles, containing the required statement of facts, have been filed in his office; and thereafter the persons signing the same, and their associates and assigns, are a body politic and corporate, by the name stated

existence.

in the certificate, and for the term of fifty years, unless Term of it is in the articles of incorporation otherwise stated, or in this Part otherwise specially provided.

NOTE.-As the law stood prior to the adoption of the Code, corporations had a legal existence from the date of filing the certificate of incorporation in the County Clerk's office.-Mokelumne Hill Mining Co. vs. Woodbury, 14 Cal., p. 424.

297. A copy of any articles of incorporation filed in pursuance of this Chapter, and certified by the Secretary of State, must be received in all the Courts and other places as primary evidence of the facts therein

stated.

NOTE.-Stats. 1862, p. 199; 1853, p. 83; 1850, p. 370,

Sec. 158; 1861, p. 566, Sec. 17.

298. The owners of shares in a corporation which has a capital stock are called stockholders. If a corporation has no capital stock, the corporators and their successors are called members.

299. If a member of a corporation dies, resigns, or is removed, a majority of the remaining members may elect another in his place.

Certified
certificate
facie

copy of
to be prima

evidence
of its
contents.

Who are

members

and who stockhold

ers of a

corporation.

When
die succes-

members

sors to be elected.

ARTICLE II.

BY-LAWS, DIRECTORS, ELECTIONS, AND MEEtings.

SECTION 301. Adoption of by-laws, when, how, and by whom. 302. Directors, election of, etc.

303. By-laws may provide for what.

304. By-laws recorded and how amended.

305. How many and who to be Directors.

306. Corporation at first meeting to elect Directors and adopt

by-laws.

307. Elections, how conducted.

308. Organization of Board of Directors, etc.

309. Dividends to be made from surplus profits.

310. Removal from office of Directors, etc.

311. Justice of the Peace may order meeting when.

312. Majority of stock must be represented, and a majority

vote together, otherwise it is fraudulent.

Adoption

of by-laws.

and by

whom.

SECTION 313. All stock may be represented in votes.

ан

301.

314. Election may be postponed.

315. Complaints and quo warranto and proceedings thereon

regarding elections.

316. False certificate, report, or notice to make officers liable. 317. Meeting by consent to be valid.

318. Proceedings at meeting to be binding.

319. Meetings, where held.

320. When no provision in by-laws for regular meetings, special meetings, how called.

Every corporation formed under this Title

when, how, must, at a meeting of its stockholders or members, to be held within one month after filing articles of incorporation, adopt a code of by-laws for its government not inconsistent with the Constitution and laws of this State. Notice of such meeting, by order of the acting President, specifying its object, must be published two weeks in some newspaper published in the county where the meeting is to be held; or if none is published therein, then in a paper published in an adjoining county. In the adoption of the by-laws, each stockholder has as many votes as he holds shares of stock; if there is no capital stock, each member has one vote. A majority of all the subscribed capital stock, or of the members, if there is no capital stock, is necessary to adopt the by-laws, or any one of them.

NOTE.-Stats. 1850, p. 348, Sec. 7; 1862, p. 540; 1861, p. 85. The power to make by-laws is incident to corporate existence. It exists without express provisions conferring it.-City of London vs. Vanacker, 1 Ld. Raymond, p. 496; Child vs. Hudson Bay Co., 2 P. Wms., p. 207; Martin vs. Nashville Building Association, 2 Clow., p. 418. At common law the power was exercised by the entire body of corporators (Rex vs. Westwood, 7 Bing., pp. 1, 90; 2 Dow & C., p. 21), but need not be exercised in writing (Union Bank vs. Ridgley, 1 Harr. & G., p. 324), nor under seal.-Dunston vs. Imperial Gas Co., 3 Barn. & Ad., p. 125. The power to prescribe by-laws extends only to the officers and members of the corporation, and upon them are binding and obligatory.-Mechanics' Band vs. Smith, 19 Johns., p. 115; Worcester vs. Essex Bridge Co., 7 Gray, p. 457; Anacosta Tribe vs. Murbach, 13 Md., p.