Henry Winthrop Ballantine

A Critical Survey of the Illinois Business Corporation Act

HENRY WiNTHROP BALLAN=NE** T HE new 1933 Illinois Business Corporation Act springs from the patient, unselfish labors of lawyers, legal scholars, accountants and officials who have given freely of their time and thought for several years toward its preparation and passage. No doubt the major burden of drafting has fallen most heavily on one or two men. The new act is part of a notable legislative movement, sponsored for the most part by bar association committees, which has been carried on in the last few years in Ohio, Indiana, California, Louisiana, Michigan, Minnesota, Washington, and Pennsylvania. This movement has been influenced to a greater or less extent by the Uniform Business Corporation Act and also by the Delaware General Corporation Law. The new Pennsylvania Business Corporation Law of 1933 is largely founded upon the Illinois draft of 1931, although also influenced by the California General Corporation Law of 1931. As one who has devoted much time since 1928 as draftsman for the State Bar Committee to doctoring up the superannuated corporation laws of California, the writer has been invited to comment upon the new Illinois act. It is not necessary here to praise the good points of the new law or to point to the improvements made upon the Illinois General Corporation Act of i9i9. Rather it seems advisable, with all deference to the Committee, to attempt a critical testing of the leading provisions of the new act in comparison with other modern acts, particularly the California General Corporation Law, with a view to calling attention to certain doubtful points that may possibly call for further study and revision. In California the work of revision has required the continuing efforts of the State Bar Committee and its draftsman prior to, and during, the last three legislative sessions. * Acknowledgment is made for cooperation to Fletcher Lewis, Esq., of the Chicago Bar,

Corporate Capital and Restrictions upon Dividends under Modern Corporation Laws

Corporate Capital and Restrictions Upon Dividends Under Modem Corporation Laws MUCH progress has been made in recent years toward more scientifically drafted corporation laws which aim to give efficiency and scope to the management and at the same time to impose reasonable safeguards against corporate abuses. New corporation acts have recently been adopted in California, Illinois, Indiana, Idaho, Louisiana, Michigan, Minnesota, Ohio, Pennsylvania and Washington. These laws have been stimulated by suggestions contained in the Uniform Business Corporation Act.1 Increasing interest is being shown in the possible need and advantage of a federal incorporation law.2 The Companies Act of Canada, 1934, became effective October 1, 1934. It is said to be intended as a model for uniform legislation throughout the Provinces. It contains stringent provisions for protection of creditors and requirements as to financial statements to shareholders. No part of the entire corporate mechanism, a vital instrumentality in modem business, investment and speculation, is more complicated or more poorly designed and comprehended than the legal capital requirements and the attempted safeguards against unsafe distributions of assets to the shareholders such as improper dividends, share purchases and distributions following reductions of legal capital. Many economists now favor liberal dividend distributions as against undue expansion of plants and the piling up of needless surpluses, investment