Holding company

“ The directors are the officers or agents of the corporation, and represent the interests of that abstract legal entity, and of those who own the shares of its stock. One of the objects of creating a corporation by law is to enable it to make contracts; and these contracts may be made with its stockholders as well as with others. In some classes of corporations, as in mutual insurance companies, the main object of the act of incorporation is to enable the company to make contracts with its stockholders, or with persons who become stockholders by the very act of making the contract of insurance. ”

“ They have the power of defining how and when and in what shape and under what supervision it shall start into existence and begin to act as a trading corporation.” Such a control over the destinies of the company involves correlative obligations towards it, and one of these obligations is that the promoter must not take advantage of the company’s helplessness. ”

“ Shares are of various kinds—ordinary, preference, deferred, founders’ and management. Into what classes of shares the original capital of the company shall be divided, what shall be the amount of each class, and their respective rights, privileges and priorities, are matters for the consideration of the promoters of the company, and must depend on its special circumstances and requirements. ”

“ When any person takes stock in a railroad corporation, he has entered into a contract with the company, that his interests shall be subject to the direction and control of the proper authorities of the corporation to accomplish the object for which the company was organized. ”

“ The typical business corporation of the last century, owned by a small group of individuals, managed by their owners, and limited in size by their personal wealth, is being supplanted by huge concerns in which the lives of tens or hundreds of thousands of employees and the property of tens or hundreds of thousands of investors are subjected, through the corporate mechanism, to the control of a few men. ”

“ On the one hand, the approved methods of corporation finance may in some measure be resorted to by a private firm, Without formal conversion of the concern into the corporate form; and on the other hand, an incorporated company may continue to carry on its business after the manner usual with privately owned concerns. ”

“ More or less, they crowd upon and overlap each other, but without losing their identity, and so, while we cannot say that a joint stock company is a corporation, we can say * * * that the joint stock company is a partnership with some of the powers of a corporation. ”

“ The argument supposes the corporation to have been originated for the management of an individual concern, to be founded upon contract between individuals, having private trade and private profit for its great end and principal object. ”

“ When the employer is in danger of losing valuable assistants, he sometimes gives them a share in the business. In the ordinary partnership, two or more men divide the ownership and duties, agreeing as to the division of control. Coöperation among workmen, though rare, gives an unusual opportunity for the discovery of special talent. The dominant form of organization to-day is that of the stock company, or corporation, the ownership of which is divided among the holders of shares of stock, or of certificates of membership. ”

“ The relation between a corporation and its beneficiaries may or may not amount to a trust in the proper sense of the term. A share in a company is not the beneficial ownership of a certain proportion of the company’s property, but the benefit of a contract made by the shareholder with the company, under which he is entitled to be paid a share of the profits made by the company, and of the surplus assets on its dissolution. A share is a chose in action—an obligation between the company and the shareholder. ”

“ These purchases on these terms were authorized by the stockholders and directors of the purchasing company, and by the respective stockholders and directors of the selling companies, and the deeds were delivered and duly recorded. ”

“ Before speaking of the plan of industrial representation to which our president has referred, I want to say just a few words outlining my views as to what different interests constitute a company or corporation.
Every corporation is made up of four parties: Stockholders, directors, officers and employees. ”

“ When any corporation acquires the shares or certificates of stock, franchise, or other rights, or the physical properties or any part thereof of any other corporation for the purpose of preventing or lessening, or where the effect of such acquisition tends to affect or lessen, competition, whether such acquisition is accomplished directly or through the instrumentality of trustees or otherwise. ”

“ An artificial person of this sort is now recognized under most systems of law. It can be formed, as a rule, only with the consent of the sovereign power, and is described as a 'societe,' or 'compagnie,' 'anonyme,' an 'Actiengesellschaft,' or 'joint-stock company limited.' A less pure form of such a corporation is a company the shareholders in which incur an unlimited personal liability. ”

“ Its creation (except where the corporation is sole) is the investing of two or more persons with the capacity to act as a single individual, with a common name, and the privilege of succession in its members without dissolution, and with a limited individual liability. The right and privilege, or the franchise, as it may be termed, of being a corporation, is of great value to its members, and is considered as property separate and distinct from the property which the corporation itself may acquire. ”

“ The choses in action of a corporation, its rolling stock, and personal property, according to the principles of the common law, have their situs at the domicile or place of business of the company. Mayor, etc., of Gallatin v. ”

“ In any considerable change of personnel, the partnership rights of the factors will have to be considered; and one of the gravest and most difficult subjects of consideration will be, how to reconcile the rights of these gentlemen in a share of profit with that reorganization which the commercial interests of the Company evidently require. ”

“ The Shareholders will have the opportunity of subscribing for this new Preferential Stock, which is issued solely to protect their property. Those proprietors who subscribe to it are manifestly not injured in any way, as they absorb the whole profits of the Company. ”

“ Secondly, The directors of a joint-stock company have always the management of a large capital, the joint stock of the company, a part of which they may frequently employ, with propriety, in building, repairing, and maintaining such necessary forts and garrisons. But the directors of a regulated company, having the management of no common capital, have no other fund to employ in this way, but the casual revenue arising from the admission fines, and from the corporation duties imposed upon the trade of the company. ”

“ Ownership of a majority of its stock constitutes the control of a corporation, when the inquiry is whether a combination or monopoly has been formed to stifle competition between two or more rival and competing railroads. ”

“ Now, persons dealing with the managers of a corporation must take notice of the limitations imposed upon their authority by the act of incorporation. Their powers are conceded in consideration of the advantage the public is to receive from their discreet and intelligent employment, and the public have an interest that neither the managers nor stockholders of the corporations shall transcend their authority.' 21 How. ”

“ It is true these expressions have not all the weight of authority, for they were not necessary to the decisions made, but they are worthy of consideration, and they are in accordance with what seems to be sound reason. When, as in this case, the stock of two companies is consolidated, the stockholders become partners, or quasi partners, in a new concern. ”

“ Certainly it is absurd to say that the business of such companies will bear an exact or any proportion to the stocks and bonds which they may own. Unless we are much mistaken, most people who want to send things by express employ a company simply because it is there, and they see its sign is out. ”

“ A partnership, association, or other unincorporated body of individuals outside the United States, or a corporation incorporated within any country other than the United States, and was entirely owned at such time by subjects or citizens of nations, states, or free cities other than Germany or Austria or Hungary or Austria-Hungary and is so owned at the time of the return of its money or other property hereunder ”

“ In a recent case in the House of Lords, the permission which the Legislature gives to the promoters of a company was paraphrased as follows:—'You may meet together and form yourselves into a company, but in doing that you must tell all who may be disposed to deal with you the objects for which you have been associated. ”

“ No officer of agent of any corporation, joint-stock company, or association, and no member or agent of any firm, or preson directly or indirectly interested in the pecuniary profits or contracts of such corporation, joint-stock company, association, or firm, shall be employed or shall act as an officer or agent of the United States for the transaction of business with such corporation, joint-stock company, association, or firm. ”

“ Article 575 provided that every private corporation, as such, has power 'to enter into any obligation or contract essential to the transaction of its authorized business,' and article 589, that 'no corporation created under the provisions of this title shall employ its stock, means, assets, or other property, directly or indirectly, for any other purpose whatever than to accomplish the legitimate objects of its creation.' Sayles' Civil St. ”

“ Shares of corporations are owned by individuals who have never seen and never desire to see their company’s office or plant and who do not possess any of the pride of ownership that used to come to a partner in a business enterprise when he watched his product, the product of his own strength and brain, moving to market. ”

“ In these pits the members make sales and purchases exclusively for future delivery, the members dealing always as principals between themselves, and being bound practically, at least, as principals to those who employ them when they are not acting on their own behalf. ”

“ The incorporation of a single individual is not legally possible in this country.
The corporation, because of its peculiar advantages over other forms of business organization, has become the accepted form for most large enterprises. The gathering together of large capital funds, the ease and efficiency of management and control, continuous life, the facility of transfer of ownership, and the limited liability of the stockholders, make the corporate form attractive to the investor and absolutely necessary to the large businesses carried on today. ”

“ In a partnership each member of the firm is a general agent for the partnership, and his acts bind the firm. In the case of a corporation, a shareholder, by virtue of the fact that he is a shareholder, has no power to bind the corporation. The position of a shareholder is very similar to that of a voter. The corporation is run by its board of directors. ”

“ The fact that the company has interests in, and even controls, these concerns at the beginning, and that all these business branches work together, conducting their financial transactions through the same bank, has led the settlers to believe that everything is permanently owned and controlled by the company. ”

“ Every company is a distinct corporation, being incorporated by grants from the crown, or acts of parliament, and having certain rules, liberties, and privileges, for the better support and government of their several trades and mysteries: many of them are endowed with lands to a great value, and have their masters, wardens, assistants, clerks, and other officers, to direct and regulate their affairs, and to restrain and punish abuses incident to their several trades ”

“ Association.-Associations and joint-stock companies include associations, common law trusts, and organizations by whatever name known, which act or do business in an organized capacity, whether created under and pursuant to State laws, agreements, declarations of trust, or otherwise, the net income of which, if any, is distributed or distributable among the shareholders on the basis of the capital stock which each holds, or, where there is no capital stock, on the basis of the proportionate share or capital which each has or has invested in the business or property of the organization. ”

“ Conversely, when a flourishing partnership or similar private firm has gained an assured footing of good-will, in the way of any or all of the items enumerated under that term above, its lot, as prescribed by modern business exigencies, is to go up into a corporation, either by simple conversion into the corporate form or through coalition with other firms into a larger corporate whole. ”

“ It enables the owner to contest the question of alienage directly by a traverse of the office. It affords an opportunity for the public to know the nature, the value, and the extent of its acquisitions, pro defectu hoeredis. ”

“ Such beneficiaries do not ordinarily, and as mere cestuis que trust, plan a common effort or enter into a combination for the conduct of a business enterprise. Undoubtedly the terms of an association may make the taking or acquiring of shares or interests sufficient to constitute participation, and may leave the management, or even control of the enterprise, to designated persons. ”

“ Much of the property of the country is in the hands of incorporated or joint-stock companies; the business in which they are engaged being of a magnitude requiring an outlay of capital that can be met only by associated wealth. ”