FORM OF ORGANIZATION 17 



cers, contain the rules governing finances and dividends, and 

 regulations as to meetings, amendments, and special provisions. 



Rights and Liabilities of Individual Stockholders. The 

 powers of individual stockholders are vested in the board of 

 directors, but each individual has the right to attend stock- 

 holders' meetings and to cast one vote for each share of stock 

 he holds. He can participate in dividends in proportion to his 

 holdings in the corporation. In case of dissolution of the cor- 

 poration he has a right to share, proportionately to his holdings, 

 in whatever amount is left after the liabilities of the company 

 have been paid. 



The stockholder of a creamery corporation, in case of in- 

 solvency, is liable to the full amount for which he has subscribed 

 and in some states assessments may be made against the stock. 



Capital Stock. The capital stock of a corporation is the 

 aggregate amount of stock which the company is allowed by 

 its charter to issue. This capital stock is divided into shares. 

 The size of these shares is left to the discretion of stockholders, 

 but is usually one hundred dollars each. The definition of kinds 

 of stock is frequently controlled by statute but may usually 

 be considered as follows: 



1. Common Stock. This is the general stock of the corpora- 

 tion the stock which, without special provisions, shares in 

 profits. If no special stock is issued by the company, all of its 

 stock is common stock. The holder of common stock partici- 

 pates in profits. He has the right to attend all meetings of 

 the company, can vote on his stock, and shares in the assets 

 of the company in proportion to the shares of stock he holds. 



2. Preferred Stock. This is stock which has been sold under 

 a guaranty that it will net a definite per cent dividend if the 

 same is earned by the company. If less is earned, the entire 

 earnings will then be divided among the holders of preferred 

 stock. The dividend on the common stock is declared after the 

 holders of preferred stock have all been satisfied. If the cor- 

 poration becomes insolvent, the preferred stock is redeemed 

 after the debts have been paid and before any of the common 

 stock has been redeemed. 



