By-laws Of Hopkins Manufacturing Company
( Originally Published 1918 )
1. Certificates of Stock shall be in form approved by the Board of Directors, both as to Preferred and Common, clearly stating the rights and privileges of each class in relation to the other, and shall be numbered consecutively and issued in numerical order from the stock certificate book. They shall be signed by the President and Secretary, and be sealed with the corporate seal of the corporation. A record of each certificate issued shall be kept and entered upon the stub thereof.
2. Transfers of Stock shall be made only upon the books of the corporation, and before a new certificate is issued, the old certificate, properly endorsed, shall be surrendered. Surrendered certificates shall be cancelled and attached to their proper stubs in the stock certificate book. The stock books of the corporation shall be closed twenty days before general elections and ten days before dividend days.
3. Lost Certificates. The Board of Directors may order and direct that new certificates of stock be issued in place of any certificates of the corporation claimed to be lost or destroyed, and in connection with such new issue, may require that a bond or other security be given to the company not less than the par value of such lost or destroyed certificates, as indemnity against any loss or claim that may be made upon the corporation by reason of the issue of such new certificates, and shall mark upon the stub of such lost or destroyed certificates the fact that they have been cancelled by reason of such loss, making reference to the new certificates issued in lieu thereof.
4. Treasury Stock of the corporation shall include such issued and outstanding stock of the company as may be acquired by purchase, donation or otherwise, and shall be held subject to disposal by the Board of Directors. Such stock shall neither 'vote nor participate in dividends while held by the corporation.
ARTICLE II. STOCKHOLDERS
1. The Annual Meeting of the stockholders of the corporation, for the purpose of electing directors and the transaction of such other business as may properly come before such meeting, shall be held at the principal office of the corporation in the Borough of Manhattan, in the City, County and State of New York, on the first Monday of March in each year, at two o'clock in the afternoon.
2. Special Meetings of the stockholders shall be held at the principal office of the corporation, and may be called by the President at his discretion, and must be called by him when so directed by resolution of the Board of Directors or when requested so to do in writing, by stockholders owning and holding one-third of the issued and outstanding capital stock of the corporation.
3. Notice of Meetings, written or printed, for every regular or special meeting of the stock-holders, shall be prepared and mailed to the last known post office address of each stockholder as shown by and appearing upon the stock books of the corporation, not less than ten days prior to such meeting. If such meeting be a special meeting, then the notice thereof, shall in addition to the other contents state the object or objects thereof, and no other business shall be transacted at any such special meeting save as specified in the notice. No notice need be given of adjourned meetings.
4. A Quorum at any meeting of the stockholders, save as may be otherwise prescribed by statute, shall consist of a majority of the voting stock of the corporation, represented. in person or by written proxy filed with the Secretary. A majority of such quorum shall be necessary to decide any question coming before the meeting. If a quorum be not present at any duly called meeting, a majority of those present may adjourn the meeting from day to day, but until a quorum be present, may transact no business.
5. Voting at Elections of Directors shall be by ballot, and shall also be by ballot on any other matter submitted to a stockholders' meeting when so requested by not less than one-fourth in interest of the stockholders present at such meeting. ' Each stockholder shall be entitled to one vote for each share of stock held by him having voting powers or privileges, and such vote may be cast in person or by proxy conferred in writing.
6. The Election of Directors shall be held at the annual meeting of stockholders and shall be conducted by two inspectors of election, appointed after the first election by the President.
7. The Presiding Officer at meetings of the stockholders shall be the President, or in his absence or disability, the Vice-President. In the absence or disability of both of these officers, a Chairman shall be chosen by the stockholders present who shall preside at such meeting. In the absence of the Secretary, the presiding officer shall appoint a Secretary pro tem.
8. The Order of Business at the annual meetings and as far as possible at all other meetings of the stockholders shall be:
1. Roll Call.
2. Reading and Disposal of Any Unapproved Minutes.
3. Annual Reports of Officers and Committees.
4. Election of Directors.
5. Unfinished Business.
6. New Business.
ARTICLE III. DIRECTORS
1. The Business and Property of the corporation shall be managed by a Board of five Directors, who shall be (not required to be—New York provision) stockholders, and who shall be elected annually by ballot by the stockholders for the term of one year, and shall serve until the election and qualification of their successors. (If the directors are to be classified, so that a certain proportion shall retire annually instead of the en-tire board, such provisions as correspond to those of the charter in that regard should be incorporated into this paragraph in lieu of the one year term above. Any vacancy occurring in the Board during the term, may be filled by the remaining members of the Board for the unexpired term. Directors shall receive no compensation for their services as such.
2. The Regular Meetings of the Board of Directors shall be held at the principal office of the corporation in the Borough of Manhattan, in the City of New York on the first Tuesday of each month at 2 o'clock in the afternoon, if not a legal holiday, but if a legal holiday, on the next succeeding day.
3. Special Meetings of the Board of Directors to be held at principal office of the corporation, in the City of New York, may be called at any time by the President, or by any three members of the Board, or may be held at any time and place without notice, by unanimous written con-sent of all the Directors or by the presence of all members at any such meeting.
4. Notices of both regular and special meetings of the Board shall be mailed by the Secretary to each member not less than three days prior to such meeting, and notices of special meetings shall state the purposes thereof. No failure or irregularity of notice of any regular meeting shall invalidate such meeting or any of the proceedings thereat. No other business shall be transacted at any special meetings of the Board other than that specified in the notice thereof, unless by unanimous consent of all of the members of the Board. No notice shall be required to be given of adjourned meetings.
5. A Quorum at any meeting of the Board shall consist of a majority of the entire Board. A majority of such quorum shall be necessary to decide any matters coming before the meeting. If a quorum be not present at any duly assembled meeting, a majority of those present may adjourn the meeting from day to day until such a quorum be present, but may transact no other business until such quorum be present.
6. Officers of the Corporation shall be elected by ballot by the Board of Directors at their first meeting after the election of Directors each year. If any office becomes vacant during the year, the Board of Directors shall fill the same for unexpireçd term. The Board of Directors shall fix the compensation of the officers and agents of the corporation.
7. Voting. Each Director shall have but one vote upon all matters coming before the meetings of the Board.
8. The Presiding Officer at all meetings of the Directors shall be the President, or in his absence or disability, the Vice-President. In case of the absence or disability of both of these officers, the Directors present at any meeting shall appoint a Chairman who shall preside at such meeting. In the absence of the Secretary, the presiding officer shall appoint a Secretary pro tern.
9. The Order of Business at any regular or special meeting of the Board of Directors shall be:
1. Reading and Disposal of Any Unapproved Minutes.
2. Reports of Officers and Committees.
3. Unfinished Business.
4. New Business.
ARTICLE IV. OFFICERS
1. The Officers of the Corporation shall be a President, who shall be elected from the Directors, a Vice-President, a Secretary and a Treasurer, all of whom shall be elected for the term of one year, and who shall serve until their successors are duly elected and qualified. The Board may, in its discretion, elect a General Manager, who need not be a Director, for such term and upon such compensation and with such powers and duties as the Board may decide to be for the best interests of the corporation.
2. The President shall preside at all meetings, and shall have general supervision of the business and affairs of the corporation; shall sign or countersign all certificates, contracts and other instruments of the corporation as authorized by the Board of Directors or required by law; shall make reports to the Directors and stockholders and do and perform all such other duties as are incident to his office or as may be properly required of him by the Board. In the absence or disability of the President, the Vice-President shall have and exercise all of his duties, powers and functions.
3. The Secretary shall issue notices for all meetings of both stockholders and directors, and keep their minutes; shall have charge of the corporate seal and the corporate stock books; shall sign with the President all instruments and documents requiring such signature; shall make such reports and perform such other duties as are incident to his office or as are properly required of him by the Board of Directors.
4. The Treasurer shall have the care and custody of all moneys and securities of the corporation, and shall keep and maintain regular books of account and balance the same each month. He shall sign or countersign such instruments as require his signature; shall perform all duties incident to his office or that may properly be required of him by the Board of Directors. He shall, if required by the Board of Directors, give such bond as may be fixed, for the faithful performance of his duties, and with such sureties as the Board may determine.
ARTICLE V. DIVIDENDS AND FINANCE
1. Dividends shall be declared and paid only from the surplus profits of the corporation and at such times as the Board of Directors shall determine, and no dividends shall be declared that will impair the capital of the corporation.
2. No Indebtedness shall be contracted nor liability incurred, nor contract made by or on behalf of the corporation in excess of one thou-sand dollars, unless the same be authorized either by vote of a majority of the Board of Directors at a meeting of the Board, or by the written concurrence of such a majority, though not convened in a formal meeting.
3. Disposition of Surplus Earnings of the corporation shall be subject to the action of the Board of Directors, who shall have the right to decide whether all or what proportion thereof shall be set aside either for the declaration of dividends or for additions to the working capital of the corporation, or for both.
4. The Moneys of the corporation shall be de-posited in the name of the corporation in such bank or banks as the Board of Directors shall from time to time decide, and the same shall be drawn out and paid only by the check of the corporation, signed by the Treasurer and counter-signed by the President.
ARTICLE VI. SEAL
1. The Corporate Seal of the corporation shall consist of two concentric circles between which shall appear the name of the corporation, and in the center there shall be subscribed, "Incorporated, 1921, New York," and such seal as impressed upon the margin thereof, is hereby adopted as the Corporate Seal of the corporation.
ARTICLE VII. AMENDMENTS
I. These By-Laws may be amended, repealed or altered in whole or in part, by a majority of the entire issued and outstanding capital stock of the corporation ("possessing voting powers and privileges"—provided there be an issue of non-voting preferred stock) at any regular meeting of the stockholders, or at any special meeting where notice of such proposed action has been given in the call for such meeting.
2. Necessary Additional By-Laws not repugnant to, but in conformity hereto, may be passed from time to time by the Board of Directors, as may be required in their judgment, to facilitate the business of the corporation, but subject to the action of the stockholders at any subsequent meeting thereof. But such power shall not ex-tend to the amendment, alteration or repeal of the By-Laws by the Board.
Election of Directors.—In the States where the Directors are not named in the charter or certificate of incorporation, their election by the incorporators should properly follow the adoption of the By-Laws. In New York and some other States, being named in the certificate of incorporation, no action by the incorporators is necessary, for the Board is already in existence, and the adoption of the By-Laws by the incorporators and the transaction of such other business as may come before the meeting of the incorporators, provides a fully organized corporation, over whose activities the Board is qualified to act as soon as it shall have elected its officers.
Where the Directors are to be elected by the incorporators, it is customary, and in some States necessary, that the election be by ballot and under the supervision of tellers or inspectors of election, usually two in number, either appointed by the presiding officer or as specified in the statutes. The election should always be by ballot, irrespective of statutory provision.
Where there is no opposition, after the respective nominations are made and seconded, the secretary of the meeting may be authorized to cast the ballot of the incorporators present for the officers thus nominated, and so save time and detail. But as has been intimated, such a motion that the secretary cast the ballot of the meeting must be by unanimous vote, for a single negative vote makes it necessary for individual ballots to be taken.
The result of the election, and the manner in which the vote was taken, and whether by individual ballot or by that of the secretary on motion unanimously carried, must be spread upon the minutes of the meeting.
Issue of Stock for Property.—Under the statutes of nearly all of the States, the Board of Directors is the proper and final authority to conclude a purchase of property for the uses and purposes of the corporation, where the same is to be paid by an issue of its capital stock. But among corporation lawyers it is deemed the better practice to have the proposal first submitted to the meeting of the stockholders and there acted upon by them, and if they approve, then to refer it to the Directors with their recommendation, leaving the final decision with the Directors, inasmuch as the statutes generally provide that it is the duty of the Directors to declare that the property is useful and necessary for the purposes of the corporation and of the fair and reasonable value asked therefor.
In submitting the matter to the stockholders, their action, especially if unanimous, precludes any participant in the meeting from later objecting to the transaction.
Where such action is taken, the matter usually comes in the form of a written proposal, accompanied with such authentication and verification as will permit the meeting to act intelligently upon the matter, and after it is read, discussion usually follows, and a resolution passed approving the transaction and referring it to the Directors for their final decision, and acceptance, provided, in their judgment the property is of the fair value asked.
The proposal and the substance of the accom panying data, together with the action of the stockholders, should be spread upon the minutes of their meeting, in order that those present and participating may be bound by the record of the proceedings had.
Other Business.—In most cases there will be other business to be brought before the first meeting of the incorporators, depending upon the circumstances peculiar to each. Careful reference to the statutes of the State at the time of incorporating should be had to ascertain whether there are any other matters that require action at the first meeting of incorporators. Laws are constantly changing, and the safe method is to consult them as they stand at the time of proceeding under them, and not rely upon their former requirements and provisions.
In general, where there exists any doubt as to the power and authority of the Board of Directors to do or perform a certain act, the matter can safely be taken up at the meeting of the stockholders and by them referred to the Directors with power to proceed according to their judgment after investigation. In this way the action of the Directors is fortified by that of the general body of the stockholders.
But in ordinary routine matters, it should be remembered that the Directors have charge of the management of the business and affairs of the corporation, for which purpose they are elected, and that unnecessary action by the stockholders might only embarrass the Board in their action.
FORM OF MINUTES OF FIRST MEETING OF INCORPORATORS
The following will serve as a guide in most cases as to the form in which the minutes of the first meeting of incorporators should be prepared and as to what they should contain :
HOPKINS MANUFACTURING COMPANY
Minutes of First Meeting of Incorporators,
Held March 11, 192 .
Pursuant to written call and waiver of notice signed by all the incorporators, the first meeting of incorporators and stockholders of the Hopkins Manufacturing Company was held at the office of John W. Hopkins, No. 253 Broadway, in the Borough of Manhattan, in the City, County and State of New York, on the 11th day of March, 192 , at 10 o'clock in the forenoon.
Mr. Samuel J. Smith called the meeting to order and on motion, Mr. John W. Hopkins was elected Chairman and Mr. Howard Thompson was appointed Secretary of the meeting.
The Secretary presented and read the call and waiver of notice of the meeting, pursuant to which the same was held, and on motion it was ordered entered in the minute book following the minutes of this meeting.
The proxy of Mr. Henry P. Truman appointing Harvey L. Wilcox his representative was presented, and no objection being made, same was ordered entered in the minute book following the waiver of notice of the meeting.
The Chairman presented a certified copy of the Certificate of Incorporation and stated that the original had been filed and recorded in the office of the Secretary of State of the State of New York, at Albany, N. Y., on the 7th day of March, 192_, and a duplicate original thereof had also been filed in the office of the Clerk of the County of New York on the 9th day of March, 191. On motion, duly seconded and carried, the same was accepted as the charter of the corporation and was ordered spread upon the minute book pre-ceding the minutes of this meeting.
The Secretary then presented a proposed form of By-Laws, which was read and adopted, article by article, and also in its entirety, and was on motion ordered entered in the minute book, following the call and waiver of the meeting.
The Chairman announced that the next business in order was the election of five Directors as provided in the Certificate of Incorporation and the By-Laws, and thereupon appointed Messrs. Charles M. Moulton and Alfred B. Holmes to be Inspectors of Election. Said Inspectors were duly sworn and proceeded to open the polls and receive ballots. All the stockholders entitled to vote at said election having voted in person or by proxy (or, the Secretary, on motion duly made and unanimously carried, being instructed to cast the ballot of the stockholders present in person or by proxy, in favor of the nominees), the polls were closed, and the Inspectors presented their report that the ballots were cast as follows :
For Directors. Votes.
John W. Hopkins 10
The above were thereupon declared the duly elected Directors of the corporation. It was ordered that the oath and report of the Inspectors be entered in the minute book, following the en-try of the By-Laws.
In pursuance of the instructions of the foregoing minutes, the following instruments are entered in the minutes:
Preceding the minutes: Certificate of Incorporation.
Inspectors of Election.—In New York and New Jersey it is required that Inspectors of Election be appointed. In New York it is necessary that their oath and report, or certificate, as it is called, be filed in the office of the County Clerk. In New Jersey they need not be sworn nor is their report required to be filed. Most States do not require that such Inspectors be appointed, but it is usually done as the safer course.
Payment of Subscriptions.—In certain States, New Jersey, for example, thirty days' notice must be given before a corporation can enforce pay-ment of subscriptions to the capital stock. In such States it is customary to include in the minutes, a waiver of notice of assessments and an agreement to pay, as and according to call of the Directors. In Illinois, fifty per cent of the subscription must be paid to the "commissioners" at the time of the organization and the balance as called by the Directors.
First Meeting of Directors.—Following the first meeting of the incorporators comes that of the Directors. It is usually held immediately following that of the incorporators and at the' same place, although that is not required. The same procedure in calling the meeting is followed as in the case of that of the incorporators. Either a majority of the Directors unite in a call for the meeting, fixing the time, place and stating the purposes, or the more customary procedure is followed of having all of the Directors sign a waiver of notice.
FORM OF WAIVER
Call and Waiver of Notice—First Meeting of Directors
We, the undersigned, being all of the Directors of Hopkins Manufacturing Company, do hereby call the first meeting of its Directors to be held at the office of John W. Hopkins, No. 253 Broad-way, in the Borough of Manhattan, in the City, County and State of New York, March 11, 192., at 2 o'clock in the afternoon, for the purpose of electing officers of the company (if property is proposed to be purchased, add ; acting upon a proposition for the purchase of certain business and property payable in the preferred and common stock of the corporation), and for the trans-action of all such other business as may be necessary or desirable in connection with the completion of the organization of the company and the promotion of its business, and we do hereby waive any and all statutory and by-law requirements as to the notice of the time, place and purposes of such first meeting, and do hereby con, sent to the transaction thereat of such business as may come before the meeting pertaining to the business and affairs of the company.
Dated, New York City, March 11, 192_.
JOHN W. HOPKINS, SAMUEI, T. SMITH, RICHARD J. BROWN, HOWARD THOMPSON, HENRY P. TRUMAN.
Opening the Meeting.—The same proceedings are followed in organizing the first meeting of the Directors as in the first meeting of the incorporators. A majority of the Directors appearing at the time and place appointed for holding the meeting, one of their number calls the meeting to order and a temporary chairman and secretary are named.
Proof of Notice of the Meeting.—The Secretary should call for proof of the call for the meeting or the waiver thereof signed by all the Directors, and if found correct, should be ordered entered upon the minutes of the meeting. Roll call should then be had to determine the names of those present and that they constitute a quorum or a majority of the Board. These steps taken, the meeting is ready to proceed.
Election of Officers.—The Chairman should present the By-Laws adopted by the meeting of the incorporators and state that the first business was the election of the officers of the corporation as therein provided. Whether so specified in the By-Laws or not, the election should be by ballot.
After the nominations are made and seconded, if there be not more than one nomination for each office, it is both proper and customary for the Secretary, on motion, to be instructed to cast the ballot of the meeting for the officers thus nominated. If there be more than one nomination for a single office, separate ballots must be taken. In the case of separate ballots being taken, the Chairman should appoint two tellers to receive and count the votes and announce the result.
Permanent Officers Take Charge.—As soon as the result of the election is announced, the newly-elected President and Secretary take charge of the meeting and conduct it from then on. If either or both are absent the temporary officers continue on through the meeting. If, as in New Jersey, the Secretary is required to be sworn, his oath should at once be administered, so as to qualify him to act from his election, and such oath entered upon the minutes of the meeting.
Treasurer's Bond.—If the Directors decide that the Treasurer should give a bond for the faithful performance of his duties, the same should be arranged and executed with such sure-ties and in such amount as may be directed, and filed with the Secretary, so that he may be duly qualified to act in that capacity. In most cases, where such a bond is required, it is arranged that a surety company furnish the same at the expense of the corporation.
Adoption of Stock Certificate Forms.—In some states it is provided that the stock certificates shall be in form as prescribed by the Directors, and irrespective of such requirement, it is advisable that the Directors so act, that there may be no doubt as to the proper form thereof. It is customary for the proposed forms to be submitted to the meeting, even if they have been already informally agreed upon in advance and the certificates printed, and to have their form adopted by the Directors and entered upon the minutes. After their form has been agreed upon the Secretary should be authorized to procure them in bound book form, together with the seal of the corporation, minute books and other necessary books, records, stationery, etc.
Financial Provisions.-Resolutions should be passed designating the bank or banks in which the corporate funds be deposited, and providing for their withdrawal in conformance to the requirements of the by-laws as to signature and counter-signature, a copy of which resolution should be furnished each bank, certified by the secretary, and the signatures of the officers who are to sign such checks.
If additional funds are to be raised, a resolution should provide that subscriptions be opened for the stock of the corporation to the extent determined, fixing the terms of payment and any other matters in that regard.
Miscellaneous Provisions. -- In most cases there will be a number of miscellaneous matters to be disposed of at the first meeting, such as the selection of officers for the corporation, executing leases, the organization of the office and sales forces, the appointment of state agents and offices where the corporation is organized in a state other than the one where its principal business is to be conducted.
If all these matters cannot be consummated in one day, it is customary to adjourn the meeting, so as to keep it alive until all matters are disposed of.
Upon the consummation of this first meeting of the directors, the corporation is fully organized and ready to proceed to carry on the business for which it was created.
FORM OF MINUTES OF FIRST MEETING OF DIRECTORS
The form of minutes here given will indicate the usual matters coming up at first meetings of directors, and can be modified to meet most cases.
HOPKINS MANUFACTURING COMPANY
Minutes of First Meeting of Directors
Held March 11, 192_.
Pursuant to written call and waiver of notice signed by all of the directors, the first meeting of the board was held at the office of John W. Hopkins, No. 253 Broadway, in the Borough of Manhattan, in the City, County and State of New York on the 11th day of March, 192-, at 2 o'clock in the afternoon.
Mr. Samuel J. Smith called the meeting to order and on motion, Mr. John W. Hopkins was elected temporary chairman and Mr. Howard Thompson was appointed temporary secretary.
There were present Messrs. John W. Hopkins, Samuel J. Smith, Richard J. Brown, Howard Thompson and Henry P. Truman, constituting the entire membership of the Board.
The Secretary presented and read the call and waiver of notice of the meeting, pursuant to which the same was held, and on motion it was ordered entered upon the minute book following the minutes of this meeting.
The Chairman then presented the By-Laws adopted by the stockholders at their first meeting and stated that the first business thereunder was the election of a President, Vice-President, Secretary and Treasurer, to serve for the ensuing corporate year and until the election and acceptance of their successors. The following officers were thereupon elected by unanimous vote:
President John W. Hopkins
Vice-President Samuel J. Smith
Secretary Howard Thompson
Treasurer Henry P. Truman
The permanent officers thereupon took charge of the meeting (where necessary for the secretary to be sworn, add, "the Secretary-elect having first been duly sworn.")
On motion duly seconded and carried, the bond of the Treasurer was fixed at $5,000, and the Treasurer, in compliance with such action, presented a bond in that amount signed by himself as principal and the Officials' Indemnity Company of New York City, as surety, which was thereupon approved by the Board as to form and surety, and ordered received and filed in the custody of the Secretary.
(Where no bond is required, state "On motion duly seconded and carried, no bond shall be required of the Treasurer until further action by the Board.)
The Secretary then presented for approval forms of stock certificates for preferred and common stock, and the same were, on motion adopted as the stock certificates of the corporation, and ordered spread upon the Minute Book following the minutes of this meeting.
On motion duly made, seconded and unanimously carried it was RESOLVED that the corporation lease the building at No. 129 Clear-water Avenue, New York City, now occupied by John B. Gibson, as its plant, factory and offices, at a rental of not more than $250 per month, either by new lease from the owners or by assign-ment of the present lease held by Mr. Gibson, and that the regular meetings of the Board be held thereat unless otherwise directed.
Upon motion duly made, seconded and carried, it was RESOLVED, That the Treasurer be and he hereby is instructed to open an account for and in the name of the corporation in the Mercantile Commercial Bank of the City of New York, and to deposit therein all funds of the corporation coming into his possession, the same to be with-drawn only on check of the corporation signed by the Treasurer and countersigned by the President.
The following motions were adopted unanimously;
That the Secretary be instructed to have books of the stock certificates in form approved by the Board prepared and to procure the corporate seal and any and all other books, records, stationery and office supplies as are now necessary for the uses of the corporation.
That the Treasurer make payment of the cost and expenses in connection with the incorporation and organization of the company.
That the Treasurer purchase such books of account as may be required for the proper record of the company's business.
(It is proper to fix the salaries of the officers by action of the Board. Any other matters coming before should be disposed of by motion.)
There being no further business to come before the meeting, on motion, the same was adjourned.
HOWARD THOMPSON, Secretary.
JOHN W. HOPKINS, President.
In pursuance of the instructions of the foregoing minutes, the following instruments are entered in the order given:
Call and Waiver of Notice.
Secretary's Oath (Where required by law). Forms of Stock Certificates.
Certificate of Election of Officers (Where required). HOWARD THOMPSON, Secretary.
Illinois Procedure.—In Illinois, after receipt of the "application," so called, the Secretary of State issues a "license to open books of subscription, "which authorizes the parties named to complete the organization by having the stock subscribed for according to law, to give notice to subscribers of the holding of the meeting to elect directors, etc. Such notice of the first meeting is required to be mailed to each subscriber at least ten days prior to the meeting, but the usual course is for all of the subscribers to sign a waiver, which is held sufficient, fixing therein the time, place and purposes of the meeting.
Subscriptions Paid to Commissioners.-All subscriptions to the capital stock must be paid to the "commissioners" named in the license, whether cash or property, and to the extent of fifty per cent of the authorized capital prior to the completion of the organization of the company. In order for both the commissioners and the directors of the corporation to escape liability in accepting property in lieu of cash great care must be taken in fixing the value of the property by appraisal and inventory, and a full record of their proceedings should be entered in the Minute Book for their protection.
Meeting of Subscribers.—The same formalities as to the opening and conduct of the first meeting of the subscribers should be followed as in other states. The number of directors is fixed at this meeting, and corresponds to the number stated in the "application." Directors may be classified so that the terms of only a portion shall expire any one year.
Report and Certificate of Organization.--A report in proper form of these proceedings is pre-pared and forwarded to the Secretary of State, who issues and forwards to the "commissioners" a certificate of complete organization, which must be recorded in the office of the Recorder of Deeds of the county wherein the corporation has its principal office before the corporation can proceed further.
Completion of Organization.—Upon the recording of the certificate, the by-laws are adopted, officers elected and the Board of Directors takes over from the "commissioners" the payments made to them on account of subscriptions and passes upon any action of the "commissioners" in accepting property in lieu of cash, makes its own appraisal and passes its own resolutions regarding its value, etc., all of which are evidenced by proper entries in the minute books and by spreading upon the record all proposals, appraisals and other data upon which they arrived at their conclusion.
The other customary resolutions as to form of stock certificates, deposits of corporate funds, offices, payment of expenses, salaries, etc., are followed out as in organizations held under the laws of other states.