2 BULLETIN 1106, U. S. DEPARTMENT OF AGEICULTURE. 



INCORPORATED ASSOCIATIONS OR CORPORATIONS. 



NATURE AND CHARACTERISTICS. 



A point to be made clear at the outset is that an incorporated co- 

 operative association, whether formed with or without capital stock, 

 is a corporation just as much as an incorporated organization formed 

 to manufacture automobiles, farm implements, or steel. It is true 

 that incorporated cooperative associations are a particular type of 

 corporation, just as incorporated commercial concerns or charitable 

 organizations are particular types. As nearly all cooperative asso- 

 ciations are incorporated, and as it is highly desirable, as a rule, 

 that they should be, the greater part of this bulletin will be devoted 

 to a consideration of incorporated associations, and whenever the 

 word " association " is used herein, unless otherwise specified, an in- 

 corporated association is meant. 



Under the circumstaances a discussion of some of the character- 

 istics of corporations will be in order. These characteristics, it 

 will be kept constantly in mind, are the characteristics of incor- 

 porated cooperative associations, as well as of other corporations. 

 The term " incorporation " is used with reference to corporations 

 which do not have capital stock as well as to those which have capital 

 stock. It describes the act of creating a corporation. A corpora- 

 tion is an artificial entity created by the law ; it is a creature of the 

 law. The definition of a corporation which is probably more widely 

 employed in this country than any other is that given by Chief 

 Justice Marshall in the Dartmouth College case,^ where he defines 

 a corporation as " an artificial being, invisible, intangible, and ex- 

 isting only in contemplation of the law." 



The existence of a corporation is separate and apart from the 

 stockholders or members who are interested in it.^ Just as Smith 

 and Jones are different persons, so a corporation is a legal entity 

 distinct from its stockholders or members. Individuality, if the 

 term may be employed, is the dominant distinguishing quality of a 

 corporation. The stockholders or members of a corporation, as well 

 as its officers and directors, may change constantly, but the exist- 

 ence of the corporation is not affected tliereby. It lives on as 

 unaffected by these changes as a man is unaffected by changes of 

 clothing. As an engine is separate from the engineer who runs it, 

 so a corporation is separate from its stockholders. The stock- 

 holders do not have title to the property of a corporation. They 

 can not transfer the legal title thereto, although all of them join 

 in the execution of papers purporting to transfer the property.^ 



1 Dartmouth College v. Woodward, 4 Wheat. 518. 



= Aiello V. Crampton, 201 Fed. 891. 



s City of Winfield v. Wichita Natural Gas Co., 267 Fed. 47. 



