12 BULLETIN" 1106, TJ. S. DEPARTMENT OF AGRICULTURE. 
In probably all of the States there are penal statutes prescribing 
punishments for various acts by officers and agents of the corpora- 
tion. Typical among such offenses are securing subscriptions to 
stock by fictitious persons or deceiving State officials by false en- 
tries or records as to the assets of the corporation. In some States 
directors of corporations are personally liable to creditors of the 
corporation in the event that they create debts beyond the pre- 
scribed capital stock. 
An officer or director of a corporation at common law may re- 
sign at will, 33 and a statute providing that directors shall hold 
office for one year and until their successors have been elected and 
qualified does not prevent resignation during the year. 34 
WHO MAY BECOME MEMBERS. 
The question of who may become stockholders or members of a 
corporation is worthy of consideration. Fundamentally a corpora- 
tion has the right to determine to whom it will sell stock or issue 
membership certificates. On the other hand, a corporation can not 
make an individual a member or stockholder of it without his con- 
sent. Within constitutional limits a State undoubtedly could by 
statute require corporations incorporated under it to admit to mem- 
bership all who apply and meet certain conditions or who belong to 
a certain class, but as a rule this is not done. 
SUBSCRIBER, STOCK, CAPITAL STOCK. 
"A subscriber is one who has agreed to take stock from the cor- 
poration on the original issue of such stock." 35 The shares of stock 
into which the capital stock of the corporation is divided may con- 
sist of common stock or common and preferred stock. In Cook on 
Corporations it is said : 
By common stock is meant that stock which entitles the owners of it to an 
equal pro rata division of profits, if any there be ; one stockholder or class of 
stockholders having no advantage, priority, or preference over any other share- 
holder or class of stockholders in the division. By preferred stock is meant 
stock which entitles its owners to dividends out of the net profits before or in 
preference to the holders of the common stock. Common stock entitles the 
owner to pro rata dividends equally with all other holders of the 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 meet- 
ings of the stockholders is limited to the common stockholders, and 
"Ewald v. Medical Society, 130 N. Y. S. 1024; (reversed on other grounds, 144 App. 
Div. 82). 
34 Briggs v. Spaulding, 141 U. S. 132, 154. 
35 Cook on Corporations, vol. 1 , p. 43. 
