LEGAL PHASES OF COOPERATIVE ASSOCIATIONS 19 
HOW STOCK IS PAID FOR 
Stock, as a rule, may be paid for with cash, other property, or 
labor. In most States there are statutory provisions relative to 
paying for stock otherwise than with cash, and these should be 
ascertained and carefully followed. In the absence of charter or 
statutory provisions, stock may be issued in payment for property, 
but the property 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 the 
equivalent of the money value. 93 
STOCK AND NONSTOCK ASSOCIATIONS 
A stock corporation is a corporation that has capital stock. As 
evidence of these shares certificates of stock are usually issued. The 
owners of these certificates of stock, by acquiring them, become its 
shareholders or stockholders, and thus become the " owners " of 
the corporation. 
Capital stock and stock certificates or stock are generally regarded 
as characteristics of a business corporation. That is, business cor- 
porations usually have capital stock and usually issue certificates 
of stock. This need not necessarily be true. For it should be remem- 
bered that corporations are creations of the legislature and that it 
can, within constitutional limitations, endow them with such powers 
and limitations as seem advisable. The State, then, can create busi- 
ness corporations without the elements mentioned. True, this is not 
generally done, but the power to do so undoubtedly exists. It must 
be borne in mind that the legislature has complete control, within 
constitutional limitations, of the creation of corporations. It may 
make no provision for their creation, or it may grant to those created 
closely limited or very wide powers. 
Nonstock corporations do not have capital stock and usually are 
not commercial organizations. They usually issue certificates of 
membership to their members evidencing the right of the members 
in the corporation. Some of the more common of the corporations 
of this type are incorporated churches, clubs, or social organizations. 
In the early history of business corporations having capital stock, 
certificates of stock evidencing the shares into which the capital 
stock of the corporation had been divided were not issued, but as 
time went on some corporations issued certificates of stock evidencing 
the interest of shareholders in the corporation. The convenience and 
desirability of stock certificates which could be readily transferred 
from hand to hand were so apparent that it soon came to be looked 
upon as a right of a member of a business corporation to have certifi- 
cates of stock issued to him. And at the present time purchasers of 
stock may generally require the corporation to issue certificates of 
stock. 
From an early date stock certificates were assigned and trans- 
ferred, and this assignability is generally regarded as one of their 
leading qualities. Generally speaking, the policy of the law is 
93 In re Manufacturers' Box &, Lumber Co., 251 F. 957. 
