The business affairs of a corporation are managed by a board of directors, not fewer than three, each of whom must be a stockholder. They are elected by the stockholders and their terms, etc., are prescribed in the articles of incorporation. They are the general agents of the corporation; they may issue and sell stock; declare dividends; appoint or elect officers to manage the business of the corporation and act as its agents; make loans; execute mortgages on the corporation's property; buy property needed; and in general perform all such duties as the by-laws and charter given by the State permit. This includes not only those specifically stated but those necessary to carry out the provisions of the by-laws and charter. The directors and officers of a corporation cannot legally engage in ultra vires acts, that is, acts beyond the scope of the corporation's charter powers. If they exceed, or attempt to exceed, these powers, the stockholders or creditors may apply for an injunction to restrain them. This would be so, even if the majority of the stockholders consented to the violation, for a minority may always insist that the limits of the charter powers be observed. If neither of the parties to an ultra vires contract has started to perform his part the courts will not compel him to do so. In most courts it has been held that if either party to an ultra vires contract has done his part the other party will be compelled to perform. If both parties have performed the courts will let the matter remain as they find it. The directors are bound to exercise reasonable care in the conduct of the corporation's affairs, and are liable for negligence, dishonesty, or breach of trust (for they are in a position of trust in their relation to the stockholders).

Form For Meeting Of Directors For Organization Of New Board

Form For Meeting Of Directors For Organization Of New Board

(City or town)....................(date)

A meeting of the newly-elected Directors of the

....................Bank of......................

was called to order by the Cashier immediately after adjournment of the annual meeting of the stockholders, it appearing that

Messrs..........................................

.................................................................................

..................................................................................

.................................................................................

had taken the prescribed oaths of director, and were present at this meeting.

On motion, duly seconded, Mr....................

was elected President at a salary of $...............

per annum.

On motion, duly seconded, Mr...................

was elected Vice-President at a salary of $...........

per annum.

On motion, duly seconded, it was

Resolved, that the Directors be paid $.........

for each attendance at Board Meetings and $.........

each for services on committees.

(Here record any other business that transpired.)

There being no further business, the meeting on motion adjourned.