Corporations are
creatures of the law. So are trusts, but they are very different.
A
corporation is a legal person. It can sue in its own name. It can
be sued. It can own property. If a corporation owns a factory
building, for example, and one of the stockholders dies, the estate
of the stockholder includes his or her shares of stock, but not the
factory building.
A trust is not a legal person. Hanson
v. Birmingham, 92 F.Supp 33 (N.D. Iowa 1950).
A
trust is a relationship. So is an estate. Each is a legal
relationship between the trustee (or Executor for an estate), the
property held in trust (or in the estate) and the people who benefit
from the property held in the trust (or estate), the beneficiaries.
The trustee of a trust holds the legal title of the property in the
trust for the benefit of the income beneficiary and ultimately for
the benefit of the person entitled to the property in the end.
Property in the trust is referred to as the corpus or principal of
the trust (or estate).
Corporations come in 2 kinds in the U. S. The first kind is a
“for profit” or business corporation. The other kind is a “not for
profit” or charitable corporation.
In Iowa business corporations are subject in the first instance
to Chapter 490 of the Code of Iowa.
In Iowa, non-profit corporations are subject to Chapter 504A of
the Code of Iowa.
Because they only
exist on paper, corporations are artificial persons. In
one of the two discussions that follow under this topic, I will
explain exactly what those papers are. They are usually kept in a
special form of loose leaf book known as a corporate record book.
So if you can picture a dark red book with dividers for legal papers
that have been filed in the office of the Secretary of State, you
can picture about all there is to see when it comes to looking at
the legal entity known as the corporation. Stripped naked from the
red record book, it’s typically only about half an inch or less of
paper. That’s it.
Big corporations, usually incorporated in Delaware, are not
really different than little corporations incorporated in Iowa.
Each will have the same basic set of paperwork that is the legal
skeleton that everything hangs on. The paramount document is the
Articles of Incorporation. The next in line are the bylaws. The
Articles have to be consistent with the statute that the
state of
incorporation has enacted. The Bylaws have to be consistent with
the Articles and not inconsistent with the Statute. A record must
be made of the meetings of the shareholders and of the Board of
Directors. That record is in the form of minutes. Minutes are not
a verbatim transcript. They are merely a concise synopsis of what
was done. Preferably, each Article is numbered, each by-law is
numbered and each resolution adopted by the shareholders or by the
directors is also numbered. This page was written on 04190. Home
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CORPORATIONS 