In 1898 this section was amended in its present form.

The object of the amendment was to require the certificate of incorporation to state the exact location of the principal office.

In addition, by Chap. 173 of the Laws of 1898 (Sec. 43a), it is required to state the name of the agent in the principal office, and in charge thereof, and upon whom process against the corporation may be served. It is usual to state it in this form: "The location of the principal office in "this State is at No. street, in the City of

"County of

The name of the agent therein and in "charge thereof, and upon whom process against the corporation may be "served, is

The policy of the State of New Jersey, as indicated by the Act of 1898, is first to compel all corporations to have a registered office in the State of New Jersey and with a known and published agent in charge thereof, authorized to transfer stock and to receive process against the corporation, and then to give corporations power to do business anywhere out of the State of New Jersey and in foreign countries without designating any place of business out of the State. The agent may be changed from time to time by the directors.

So far as the laws of New Jersey are concerned, corporations have no principal office outside the State of New Jersey. They have the full right to do business anywhere out of the State, providing suitable provi sion is made in the charter. (Vide Section 7.)

III. Objects.-Companies may be formed under this act for any lawful purpose or purposes except such as are expressly prohibited by Section 6, ante, and probably others not recited in that section, for which separate acts have been provided.

Associations not for pecuniary profit are required to be organized under Chap. 181, Laws of 1898 (P. L. 1898, p. 422).

This section formerly read "the objects for which," etc. This amendment and the amendment of Section 6 in 1899 were intended to answer affirmatively the question which has been frequently asked, whether a company may be formed under this act for more than one object or purpose.

This being the important part of the certificate of incorporation, great care should be taken that the objects and purposes of the company are stated in the fullest and clearest manner possible, because the company cannot undertake any business not authorized by its charter, and not even the fullest sanction given by the shareholders will make valid an act which is outside the powers of the company. Directors undertaking any such business may become personally liable for loss, and great inconvenience follows from companies having too limited powers. It is often questioned how far it is necessary to detail in extenso in the certificate of incorporation the powers of the company. The answer is plain. The balance of disadvantage decidedly attaches to too narrowly defined objects.

88

$ 8

It is easier to compress, so to speak, the business of a company within the limits of large objects and broad powers than to develop in the face of narrowly defined objects.

The powers of the corporation cannot be enlarged by the by-laws. (Stewart v. Odd Fellows' Mut. Life Ins. Co., 12 N. J. L. J., 110.)

It is customary to insert general words, such as" in general to carry "on any other business whether manufacturing or otherwise." But it must be understood that the courts limit such words to operations of a nature similar to the business previously mentioned, and will not include any wholly fresh business.

IV. Stock. There is no limit as to the amount of capital stock which a corporation formed under this act may have. It is necessary that the total amount should be not less than $2,000, and it is necessary that $1,000 of stock should be subscribed by the incorporators, this constituting the amount of capital stock with which the company will commence business.

The par value of the shares may be fixed at any amount. The question has been asked whether the par value of the shares could be expressed in foreign standards of value, as English pounds sterling. It would seem, however, from the language used, that the monetary standard of the United States is intended. There could be no objection, however, it is apprehended, to the issuing of shares with an exchange value in foreign money, in order that certificates issued in foreign countries might be issued bearing both the United States value and its equivalent in the money of the foreign country.

This section, before it was amended, required the amount" with which the company would commence business to be stated. It was thought that this required the company to have at least $1,000 paid into its treasury before it could commence business. It seems clear now, however, that the company may commence business at once and may call the subscriptions to its capital stock at such time as the directors find convenient. The law does not require that this $1,000 shall be paid in cash. It may be paid in property if the directors so decide. One of the subscribers may pay the subscriptions of the others, in cash or property. (Vail v. Phillips, 14 N. J. L. J., 45.) The capital stock subscribed by the incorporators should not be more than two-thirds preferred stock.

In view of the fact that the cost of filing the certificate of incorporation is the same (¿. e., $25) for any amount of total authorized capital not exceeding $125,000, it is customary to insert in the certificate power to issue stock to the amount of $100,000 or $125,000. The company may then at such times as the business requires issue stock up to the amount limited without filing a certificate of increase of capital stock under Section 27.

Where there is more than one kind of stock the certificate of incorporation should contain the designation and description of each class and state the terms on which each class is to be issued. Preferred stocks may, if desired, be made subject to redemption at any time after three years from the issue thereof at not less than par (Sec. 18). Dividends on preferred stock may be fixed at any rate not exceeding 8 per cent. per

annum. Special voting powers may be given to the holders of any class § 8 of stock. For a description of some of the kinds of preferred stock which may be created see notes to Section 18, post.

V. Names and post office addresses of incorporators.-There must be at least three incorporators, who must be natural persons. It is not necessary that any of them should be a resident of New Jersey. (Central R. R. of N. J. v Penn. R. R. Co., 31 N. J. Eq., 475.)

This section formerly required the residence of each incorporator to be given. This was changed to post office address in the section as amended, and, therefore, this section is subject to the operation of Chapter 173 of the Laws of 1898 (Section 43a, post), which provides that the post office address of the principal office of the company may be given as the post office address of the stockholder in any certificate filed. By this means incorporators residing in other States are not required to make public their addresses for the benefit of the tax authorities of those States. This subdivision also requires that the aggregate of the subscriptions of the incorporators shall be the amount of capital stock with which the company will commence business, which is required to be stated under the preceding subdivision.

VI. Duration. Formerly the maximum period of duration was fifty years, but by the Revision of 1896 this limitation was stricken out and the existence, if not limited in the certificate of incorporation, is perpetual. The statute formerly required the certificate of incorporation to state "the date on which the existence of the corporation shall begin." Section to now provides that the corporate existence begins on filing the certificate in the office of the Secretary of State. The fixing of any other date would be inconsistent with Section 10 and therefore of no effect.

VII. Additional powers.-This is one of the most important provisions of the Corporation Act and tests the skill of counsel in drawing charters and in effectively laying the foundation of the corporate structure. It will be noted that under this section provisions "creating, defining, "limiting and regulating the powers of the corporation,” &c., may be inserted. The words " creating and defining" are new, and carry to its logical result the principle laid down in Ellerman v. Chicago Junc. Ry., &c., Co., 49 N. J. Eq., 217, that the certificate of incorporation is equivalent to a special act of the Legislature.

This practically puts it in the power of the incorporators to decide for themselves the powers which the corporation shall have in addition to the powers expressly given by the act and is in effect a delegation to them of the lawmaking power of the Legislature.

This provision may also be construed as meaning that whereas incorporators are enabled to create and define the powers which the corporation shall possess, in addition to those given by Section 1, that the certificate of incorporation shall then become the measure of the company's powers, and that powers not expressly or impliedly given by it are excluded.

Various limitations and regulations of the powers of the corporation, the stockholders and the directors may be made; power may be given to the directors to make and alter by-laws (Sec. 11); directors may be classified (Sec. 12); power exclusively to choose a class of directors may be conferred on any class of stockholders (Sec. 12); the amount of interest required to be represented at any meeting other than the annual election of directors to constitute a quorum may be prescribed, provided it is not more than a majority of shares (Sec. 17); power to the directors to sell or mortgage any or all of the corporate property without the assent of the stockholders or with the assent of a majority or two-thirds of the stockholders; restrictions on the power of stockholders to examine the corporate books of account; voting qualifications may be provided-for example, that each stockholder shall have a certain number of shares of stock to entitle him to one vote (Sec. 37). Other similar limitations and regulations might be made.

Under Section 17 as amended in 1901 (p. 33, post) a provision may be inserted in the certificate of incorporation that any action which now requires the consent of the holders of two-thirds of the stock at any meeting after notice to them given, or requires their consent in writing to be filed, may be taken upon the consent of and the consent given and filed by the holders of two-thirds of the stock of each class represented at such meeting in person or by proxy.

The simple statement in affirmative language of the matters required by the Corporation Act to be contained in the certificate of incorporation of a company does not amount to such a limitation upon the future action of its stockholders as will prevent a change in the purposes of the corporation by the consent of two-thirds in interest of the stockholders under the same act. (Meredith v. N. J. Zinc & Iron Co., 44 Atl. Rep., 55.)

Cumulative voting.-Under Chapter 172 of the Laws of 1900, provision may be made in the certificate of incorporation for cumulative voting. (Sec. 35a, post.)

9. Authentication and record of certificate. Copy evidence.

The certificate of incorporation shall be proved or acknowledged as required for deeds of real estate, and recorded in a book to be kept for that purpose in the office of the clerk of the county where the principal office of such corporation in this state shall be established, and, after being so recorded, shall be filed in the office of the secretary of state; said certificate, or a copy thereof, duly certified by the secretary of state, shall be evidence in all courts and places.

P. L. 1846, p. 65; P. L. 1849, pp. 300, 301; Act of 1875, § 12.

Within the State of New Jersey the acknowledgment may be taken by the Chancellor, a Justice of the Supreme Court, any attorney at law admitted to practice by the Supreme Court, a Master in Chancery, a Judge

of any Court of Common Pleas, a Commissioner of Deeds, a clerk of the § 10 Court of Common Pleas of any county, a Deputy County Clerk, a Surrogate or Deputy Surrogate of any county, or a Register of Deeds of any county. ("An Act respecting conveyances [Revision of 1898]," § 22, P. L. 1898, pp. 670, 678, as amended by Chap. 138, Laws of 1901.)

All acknowledgments must be in the form prescribed by the New Jersey statute.

A Notary Public in New Jersey has no authority to take an acknowledgment.

Acknowledgments out of New Jersey should, if practicable, be taken by a Master in Chancery of New Jersey or by a Foreign Commissioner of Deeds for New Jersey authorized to act in the place where the acknowledgment is taken. If a Master in Chancery or Commissioner is not available the acknowledgment may be taken by a Notary Public or other officer, but in such case it is necessary to attach to the certificate of acknowledgment a certificate of the County Clerk or other officer performing similar duties, substantially as follows ("An Act respecting conveyances [Revision of 1898],” § 23):

State of

County of

I,

of the

Clerk of the County of

and also Clerk Court for the said County, the same being a Court of Record, do hereby certify, That , whose name is subscribed to the Certificate of the proof or acknowledgment of the annexed instrument, and thereon written, was, at the time of taking such proof and acknowledgment, a Notary Public in and for said County, duly commissioned and sworn, and authorized by the laws of said State to take the acknowledgments and proofs of deeds or conveyances for lands, tenements or hereditaments in said State of And further, that

I am well acquained with the handwriting or such Notary Public, and verily believe that the signature to said certificate of proof or acknowledgment is genuine.

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed the seal of the said Court and County, the day of

See further as to taking acknowledgments out of the State, P. L. 1898, pp. 678-9.

The omission of an immaterial part of the acknowledgment by an incorporator, as a failure to state that the contents of the certificate were made known to him, and the omission of a certificate of notaryship to state that the notary was authorized by the laws of his State to take acknowledgments and proof of deeds, do not render the incorporators liable as partners. (Stout v. Zulick, 48 N. J. Law, 599.)

10. Corporate existence begins on filing certificate.

Upon making the certificate of incorporation and causing the same to be recorded and filed as aforesaid, the persons so associating, their successors and assigns, shall from the date of such.