LEGAL PHASES OF COOPERATIVE ASSOCIATIONS. 13 



stock except preferred stockholders, while preferred stock entitles the owner 

 to a priority in dividends. 



Usually the dividend rate on preferred stock is fixed, while that 

 on common stock in commercial corporations is not generally fixed. 



Under the statutes of many of the States the right to vote at 

 meetings of the stockholders is limited to the common stockholders, 

 and many of the statutes providing for the incorporation of co- 

 operative associations authorize by-laws limiting the right to vote 

 to common stockholders of the corporation. 



The capital stock is usually divided into equal portions called shares ; and 

 a share of the capital stock of a corporation is the interest or right which the 

 owner has in the management of the corporation, in its surplus profits, and 

 upon dissolution in all its assets remaining after the payment of its debts.^' 



Shares of stock are usually represented by certificates of stock. A 

 certificate of stock is not the stock itself but simply evidence of its 

 ownership, just as a deed is evidence of the ownership of land. A 

 stockholder or shareholder is one who owns one or more shares of stock. 

 One may be a stockholder, although no certificate of stock has been 

 issued to him,^^ just as one may be the owner of other personal 

 property, although he has never received a bill of sale thereto. 



STOCK— HOW PAro FOR. 



Stock, as a rule, may be paid for with cash, labor, or other prop- 

 erty. There are in most States statutory provisions relative to pay- 

 ing for stock otherwise than with cash, and these should be ascer- 

 tained and carefully followed. Stock may, in the absence of charter 

 or statutory provisions, be issued in payment for property. The 

 property, however, should be reasonably worth the par value of the 

 stock paid for it. It is the general rule that in order for a payment 

 for stock to be good as against the corporation or creditors thereof, 

 it must be paid for in money or what may fairly be considered as 

 money's worth.^^ 



VOTING UNIT. 



At common law a stockholder or member of a corporation has but 

 one vote on questions coming before meetings of stockholders, ir- 

 respective of the number of shares held by him.^^ Statutes or char- 

 ters in the case of business corporations generally, prescribe that each 

 share of stock shall be entitled to one vote. Unless each share of 



» J4 C. J. 384. 



s'' In re Culvers estate, 145 Iowa 1, 123 N. W. 743. 



38 In re Manufactures Box & Lumber Co., 251 Fed. 957. 



39 Taylor v. Griswold, 14 N. J. Law 222, 27 Amer. Dec. 33; Simon Borg & Co. v. New 

 Orleans City Ry. Co., 244 Fed. 617, 619; Matter of Rochester Dist. Tel. Co. (N. Y.), 

 40 Hun. 172 ; 7 R. C. L. 339. 



