102. Certificate of Stock. Written certificates are usually furnished shareholders, by corporations, as evidence of membership. These certificates are made transferable, in order that they may be indorsed by a shareholder, and made payable to a purchaser. When so indorsed, the purchaser is entitled to have the shares transferred on the books of the company, showing that he is a shareholder in the company. A certificate of stock does not of itself constitute ownership. It is merely evidence of ownership. A person may be a stockholder in a corporation by making a valid subscription, and by paying for the same, regardless of having received a certificate of stock. The following is a common form of stock certificate:
| The Consolidated Tack Co. | |
| Cleveland, Ohio. | |
| Incorporated under the laws of the state of Ohio. | |
| No. 99 | No. of shares -15- |
| Capital stock $1,000,000.00 | |
| This certifies that John Smith is the owner of fifteen shares of$100 each of the capital stock of The Consolidated Tack Co., transferableonly on the books of the company, in person or by attorney,upon surrender of this certificate properly indorsed. Inwitness whereof said corporation has caused this certificate to besigned by its duly authorized officers, and to be sealed with theseal of the corporation. At Cleveland, Ohio, this 1st day of October, A. D. 1909. | |
| Jack Brown, | Tom Jenkins, |
| Treasurer. | President. |
| Corporate | |
| Seal. | |
Blank for transfer, on back of certificate.
For value received................ hereby sell, assign and transfer unto.............,............ shares of the capital stock represented by the within certificate, and do hereby irrevocably constitute and appoint.............. to transfer the said stock on the books of the within named corporation.
Dated................190..
_______________________
In the presence of
___________________
103. Directors of a Corporation. The managing officers of a corporation are called directors. They are the representatives elected by the stockholders, or members of the corporation, to transact the business of the corporation. While in the absence of statutory regulations a director need not be a stockholder, practically all states require directors to be stockholders.
Directors are authorized to act as agents for the corporation in the management of the corporation's business. Their authority is limited not only by the charter of the corporation, but by the regulations, and by-laws of the corporation as well. The directors of a corporation are not authorized by virtue of their office to dispose of the entire assets of the corporation, neither can they transfer their right to act as directors to others. They have the right to purchase property, to sell and mortgage assets of the corporation within the limits prescribed by the charter, regulations and by-laws of the corporation.
The directors of a corporation must act as a board. They are not permitted to act by proxy. The majority of the entire number of directors constitutes a quorum for the purpose of doing business. They may employ agents to make and carry out contracts, and perform ministerial acts of the corporation, but cannot delegate their discretionary powers as directors. Unless provided otherwise by statute, directors must hold their meetings within the state under whose laws the corporation is created. Notice of the meeting giving the place, time and purpose must be given to all the directors before a valid meeting can be held. Directors, like agents, cannot act for their own private interests if opposed to those of their corporation. Directors who privately profit to the disadvantage of the corporation are liable in damages for such acts to the corporation. It is generally conceded that a director may contract with his corporation, if no fraud is used, and if a quorum of directors without him consents. Directors are liable to the corporation for their dishonesty or negligence.