is the seat of two filings required, the County Registry and the office of the Secretary of State, counsel in this city are prepared for prompt work.

Maine charters are more liberal, less expensive, and with fewer burdensome restrictions than the charters of New Jersey, or Delaware. With rigid rules as to the maintenance of a clerk's office, substantially the entire regulation with absolute freedom from publicity is left to the stockholders. Corporations are given all the powers of natural persons necessary to accomplish the corporate purposes. The initial fees are lower than in New Jersey Delaware or West Virginia except for the smaller corporations. The annual franchise taxes are much lower; for illustration, a corporation with $5,000,000 capital pays annually, $4,000 in New Jersey, $2,000 in Delaware, $1,060 in West Virginia, $150 in Maine; upon $20,000,000, the amounts would be respectively $4,750, $2,450, $1,810 and $525. Upon smaller corporations, say $500,000, the taxes would be respectively $500, $250, $250 and $25. Even with the smaller corporations the expense at the end of the year is far less than in West Virginia, Delaware or New Jersey by reason of the heavier annual franchise taxes in those states. These taxes are not likely to be increased, nor is the fundamental statute likely to be changed to the prejudice of quasi-foreign corporations. Maine is seeking capital and public sentiment approves the long-established policy of not restricting corporations.

We will send free on application our Mr. Heath's pamphlet "Comparative Advantages of the Corporation Laws of all the States and Territories," a critical study of the system of each state and territory, showing cost, rules of liability, ease of procedure or otherwise, restrictions and other elements of interest to promoters. The work is compact and intended to be a hand-book for the active practitioner anxious to safely economize time.

If the profession abroad could be made to understand that, all things considered, Maine has the safest, simplest, and most economical system in the Union, a fact demonstrated by study of our two pamphlets, all corporations would seek a home in this

state.

HEATH & ANDREWS.

STATUTES OF MAINE

CONCERNING

BUSINESS CORPORATIONS

IN EFFECT, APRIL 21, 1902.

CORPORATE PURPOSES.

How three or R. S. Ch. 48, Sec. 16. Three or more persons may associate may organize themselves together by written articles of agreement, for the into a corpo. purpose of forming a corporation to carry on any lawful busi

themselves

ration for certain enumerated purposes.

ness, including corporations for manufacturing, mechanical, mining or quarrying business and also corporations whose purpose is the carriage of passengers or freight, or both, upon the high seas, or from port or ports in this State to a foreign port or ports, or to a port or ports in other states, or the carriage of freight or passengers, or both, upon any waters where such corporations may navigate; and excepting corporations for banking, insurance, the construction and operation of railroads or corporations aiding in the construction thereof, and the business of savings banks, trust companies or corporations intended to derive profit from the loan or use of money, and safe deposit companies; including the renting of safes in burglar-proof and fire-proof vaults; also excepting telegraph and telephone companies.

-other

excepted.

NOTE. The articles of association require no formalities except the signatures of the incorporators. They should state the corporate purposes in the fullest and clearest manner possible. It is unnecessary to state the corporate powers, thus dispensing with the refinements of the New Jersey and Delaware practice. The various kinds of business should be specifically stated. Subject to the restrictive features of the statutes, such corporations have all the powers necessary to accomplish the corporate purposes. In New Jersey and Delaware express powers are conferred upon condition that they are inserted in the certificate of incorporation. In Maine, by R. S., ch. 48, § 19, the incorpo

Insert between pages 8 and 9 of Heath's "Laws of Maine Concerning Business Corporations."

Legislation of 1903.

See Laws of 1903, Ch. 182, as follows:

Section 2. Section sixteen of chapter forty-eight of the revised statutes is hereby amended by adding the word "anywhere" after the word "business" in line four and by adding thereto the following words: 'but corporations may also be formed hereunder to exercise the following corporate purposes in other states and jurisdictions, namely: the construction and operation of railroads or aiding in the construction thereof, telegraph or telephone companies, and gas or electrical companies, and in all such cases the articles of agreement and certificate of organization shall state that such business is to be carried on only in states and jurisdictions when and where permissible under the laws thereof, and such corporations heretofore organized for the transaction of such business in other states or jurisdictions, if otherwise legally organized and now existing, are hereby declared to be corporations under the laws of this state,' so that said section as amended shall read as follows:

'Section 16. Three or more persons may associate themselves together by written articles of agreement, for the purpose of forming a corporation to carry on any lawful business anywhere, including corporations for manufacturing, mechanical, mining or quarrying business and also corporations whose purpose is the carriage of passengers or freight, or both, upon the high seas, or from port or ports in this state to a foreign port or ports, or to a port or ports in other states, or the carriage of freight or passengers or both, upon any waters where such corporations may navigate; and excepting corporations for banking, insurance, the construction and operation of railroads or aiding in the construction thereof, and the business of savings banks, trust companies or corporations intended to derive profit from the loan or use of money, and safe deposit companies; including the renting of safes in burglar-proof and fire-proof vaults; also excepting tele-. graph and telephone companies, but corporations may also be

formed hereunder to exercise the following corporate purposes in other states and jurisdictions, namely: the construction and operation of railroads or aiding in the construction thereof, telegraph or telephone companies, and gas or electrical companies, and in all such cases the articles of agreement and certificate of organization shall state that such business is to be carried on only in states and jurisdictions when and where permissible under the laws thereof, and such corporations heretofore organized for the transaction of such business in other states or jurisdictions, if otherwise legally organized and now existing, are hereby declared to be corporations under the laws of this state.'

NOTE. The amendment was unanimously adopted at the suggestion of the compiler of this pamphlet to enlarge the corporate policy of the State The section now includes four distinct rules.

By inserting "anywhere" after the word "business," R. S. ch. 48, sect. 16, line 4, (page 8 of this pamphlet) we find the first rule. Corporations may be organized to carry on any lawful business anywhere, except banking, insurance, railroads, savings-banks, trust companies, loaning of money, safe deposit companies, renting of safes, telegraph and telephone companies, and, by virtue of chapters 102 and 103 of Laws of 1895, gas and electrical companies. If the certificate contains none of these excepted purposes, good practice requires the statement of the corporate purposes broadly so as to show by necessary implication, but not expressly, that the business may be carried on anywhere. For illustration, a corporation to engage in the business of selling coal should state its purposes to be "to buy, sell and deal in coal." It is not necessary and much better not to add the word "anywhere," because ch. 229, sect. 10, Laws of 1901, (page 13 of this pamphlet) expressly gives the right to conduct the authorized business anywhere. It is imprudent, in any certificate, under the Maine code or elsewhere, to name any particular state or states in which the business is to be carried on. See Pinney v. Nelson, 183 U. S. 144. The foregoing suggestions avoid the operation of the rule of that case. The section as redrafted required, however, the interpolation of the word "anywhere" to make plain the subsequent features of the amendment.

As a second rule, corporations may now be formed for one or more of the following corporate purposes to be exercised wholly outside of the State of Maine: the construction and operation of railroads or aiding in the construction thereof, telegraph or telephone companies, and gas or electrical companies. The word “railroads,' as here used, includes street railroads. The articles of agreement and the certificate of organization must expressly state that such business is to be carried on only in states and jurisdictions when and where permissible under the laws thereof. We advise using the language of the statute. By reason of Pinney v. Nelson, supra, it is better not to name any particular state in the certificate but to confine the primary assertion of corporate purposes to the statement required by the statute that "such purposes are to be exercised in states and jurisdictions other than the State of Maine and such business is to be carried on only in states and jurisdictions when and where permissible under the laws thereof." If so worded, nothing in Pinney v. Nelson intimates that the Court would hold the rule of that case to be applicable. If in doubt upon this point, counsel could frame a clause for insertion in the certificate expressly stating that the liability of stockholders is to be determined solely by the laws of Maine and the

admission to a foreign state would carry with it the charter contract of the stockholders so worded.

Pinney v. Nelson rests upon the principle that by naming a particular state in the certificate the stockholders have by their charter contract agreed to adopt all the laws of such state applicable to stockholders. The right to engage in interstate commerce without tax, fee or restriction, excludes the power of a foreign state to interfere with the fundamental contract between the stockholders, if the corporate purposes are so broadly stated as to be interstate upon their face. The expression in the amendment "when and where permissible under the laws thereof," was necessary to meet the general rule that, aside from the field of interstate commerce, no state can force into another jurisdiction a corporation of any kind except as permitted by the local laws of such foreign state. Such permission, however, deals with the corporation and cannot define the relations between the individual stockholders and foreign creditors, unless the stockholders in their certificate, following Pinney v. Nelson, name a particular state in which the business is to be carried on. The expression in the amendment simply affirms the general rule of law affecting the admission of foreign corporations and was inserted to make sure that the incorporation itself could not be challenged as void.

The third rule authorizes an incorporation for purposes partly under the first rule and partly under, the second. In such cases, the articles and certificate should contain this statutory statement, "Such corporate purposes so far as they authorize the construction and operation of railroads [or otherwise as the case may come within the excepted purposes] are to be exercised in states and jurisdictions other than the State of Maine and such business is to be carried on only in states and jurisdictions when and where permissible under the laws thereof."

The fourth rule is the denial of the right to incorporate for the following purposes, whether for Maine or abroad: banking, insurance, the business of savings banks, trust companies, corporations intended to derive profit from the loan or use of money, safe deposit companies, and the renting of safes in burglar-proof and fire-proof vaults. No certificate should contain any of these purposes expressly or by implication.

The profession abroad may feel safe in relying upon the policy of Maine as stable as shown by the unanimity with which this statute was adopted. It was the universal opinion of the Legislature that no increase of the franchise tax or other change prejudicial to non-residents is likely to be made or agitated in the future.

[See balance of note at bottom of page 8 and top of page 9 of pamphlet].

POWERS OF DIRECTORS.

See Laws of 1903, ch. 182, as follows:

Section I. Section two of chapter forty-eight of the revised statutes is hereby amended by adding thereto the following words: 'but nothing herein shall prohibit corporations organized under the general law from providing by their by-laws for the division of their directors into classes and their election for a longer term than one year. After the certificate of organization required by law is filed in the office of the secretary of state, directors of all corporations not charged with the performance of any public duty within this state may hold meetings without this state and there transact business and perform all corporate acts not