the certificate of incorporation, the acknowledgment before a magistrate, and the judge's certificate showing that the certificate of incorporation is in compliance with the law.

403.

FORM OF CERTIFICATE OF INCORPORATION KNOW ALL MEN BY THESE PRESENTS, That we,

1. H. M. Grayson, Earle Winthrop, George R. Hart, E. R. Grayson and W. P. Richardson, all of the City of Seattle and of the State of Washington, all being citizens of the United States, and a majority of whom are citizens of the State of Washington, do hereby certify that we do, under and by virtue of the General laws of this State, authorizing the formation of corporations, hereby form a corporation under the name of Seattle Publishing Company.

2. WE DO FURTHER CERTIFY, That the said corporation so formed is a corporation for Publishing, Dealing in and Selling Books, Stationery and Miscellaneous Materials for office and business purposes, and to do whatever may be necessary appertaining to the Book, Stationery and Publishing Business. That the term of existence of said corporation is limited to forty (40) years; and that the corporation is formed upon the articles, conditions and provisions herein expressed, subject in all particulars to the limitations relating to corporations, which are contained in the General Laws of the State.

3. WE DO FURTHER CERTIFY, That the operations of the said corporation are to be carried on in the City of Seattle and the State of Washington, and that the principal office of the said corporation will be located in the City of Seattle and the State of Washington.

4. WE DO FURTHER CERTIFY, That the aggregate of the Capital Stock of the said corporation is Twenty Thousand Dollars ($20,000), and that the said Capital is divided into Two Thousand (2,000) Shares of the par value of Ten Dollars ($10) each.

5. WE DO FURTHER CERTIFY, That the said corporation will be managed by a Board of Directors, and that H. M. Grayson, Earle Winthrop, Geo. R. Hart, E. R. Grayson and W. P. Richardson are the names of the directors who will manage the concerns of the said corporation for the first year. In witness whereof, we have hereunto set our hands and seals this first day of July, in the year nineteen hundred and sixteen.

403a.

ACKNOWLEDGMENT BEFORE MAGISTRATE STATE OF WASHINGTON, CITY OF SEATTLE, to wit: Before the subscriber, a Justice of the Peace of the State of Washington, in and for the City of Seattle aforesaid, personally appeared, on the First Day of July, Nineteen Hundred and Sixteen, H. M. Grayson, Earle Winthrop, Geo. R. Hart, E. R. Grayson, W. P. Richardson, all of the City of Seattle of the State of Washington, and did severally acknowledge the foregoing certificate to be their act and deed.

403b.

JAMES U. DENNIS, J. P.

JUDGE'S CERTIFICATE

I, Henry D. Harlan, one of the Judges of the Supreme Bench of Seattle, do hereby certify that the foregoing certificate has been submitted to me for examination; and I DO FURTHER CERTIFY, that the said certificate is in conformity with the provisions of the law authorizing the formation of the said corporation.

HENRY D. HARLAN.

404. Place of residence. Rule: A corporation legally exists only where the law creating it is in force.

It, unlike natural persons, cannot change its domicile. It has a stationary habitation; but it can do business away from home through agents. A corporation located in Philadelphia was engaged in manufacturing wheels. The company sent a salesman to New Orleans, where he sold to a contractor a large quantity of wheels. The purchaser afterwards sought to avoid the contract because the company was doing business in a state from which it had received no charter. But the purchaser is bound by his contract, for, while the corporation itself cannot travel about from state to state, it can send its agents into other states and transact business in the same way that an individual can.

It can do business outside of the state creating it only by courtesy of other states. But a state never extends this courtesy where the existence of the corporation or the exercise

of its power is prejudicial to its own interests. There is no absolute right of recognition in other states. A state may exclude a foreign corporation entirely, or may restrict it to certain localities, and may exact security for performance of its contracts. To illustrate, a life insurance company is formed in Ohio. The company, wishing to extend its operations into other states, makes application to the Superintendent of Insurance of the State of New York for a license to do business in that state. The Superintendent may refuse to grant such a license, thus excluding the company from that state. And the refusal by the Superintendent of Insurance of New York to grant an Ohio company license is sufficient cause for the Commissioner of Insurance of Ohio to put in force the retaliatory features of the Ohio law.

405. Capital stock and stockholders. The capital stock of a corporation represents the corporate money, property and other valuable rights of the company, and the stockholders are the owners of the property, their interest in the property being measured by the value and number of shares each holds.

QUESTIONS

1. Why are corporations so popular under modern business conditions? 2. Define a corporation.

3. Compare a corporation with a partnership.

4. What are the distinctive characteristics of a corporation?

5. What is meant by legal entity?

6. What is meant by the individuality of a corporation?

7. What is meant by the perpetuity of a corporation?

8. Name the different kinds of corporations.

9. What is a sole corporation?

10. Define a corporation aggregate.

11. Distinguish between a public and a quasi-public corporation.

12. What is a private corporation?

13. Distinguish between an ecclesiastical and a business corporation. 14. How are corporations created?

15. What is the charter of a corporation?

16. What are the general provisions of the laws for the formation of corporations?

17. What should a certificate of incorporation contain?

18. What is the place of residence of a corporation?

19. Can a corporation do business out of the state creating it?'

20. What is the capital stock of a corporation?

21. How is the capital stock divided?

22. Who are the stockholders of a corporation?

"Ultra vires" means beyond the powers, and is a phrase used in corporation law to indicate an act done beyond the power of the corporation or its officers to perform under its charter.

406. What a corporation can do. A corporation derives all its powers from the act of the legislature creating it. Its charter is the measure of its power, and the enumeration of its powers implies the exclusion of all others. The intention of the legislature in incorporating a company is to enable the company to act in a corporate capacity so far, and so far only, as is necessary in order to carry on the business for which the company was formed. A company was granted a charter for the purpose of publishing books, papers, magazines, etc. The business grew to such magnitude that the company decided to manufacture the paper used in its own business; also to supply other publishers with paper. The corporation may be restrained by a stockholder or by the state from engaging in the manufacture of paper, because it is in excess of the powers enumerated in its articles of incorporation. Even though the paper manufactured be exclusively for the company's own purposes it would be exercising unauthorized powers.