Pertinent Questions.

Why are partnerships formed?  May one person invest money while another invests skill?  Is a person who receives a percentage of his sales by way of salary a partner?

Why cannot a partner sell his interest without consulting the other members of the firm?  Why may the fraudulent act of a partner dissolve the firm?  Why does the death of a member end the firm—­that is, why not let his heir succeed to his right in the firm as he succeeds to his real estate?

May the private property of a partner be taken to satisfy the debts of his firm?  May the firm’s property be taken to satisfy the debt of one of its members?  Can men dissolve their debts by dissolving their partnership?  If one partner continues the business agreeing to pay all indebtedness of the firm, is the retiring partner released from obligation in relation to the debts?  Show the justice of each requirement in case of special partners.

CHAPTER XXXIV.

CORPORATIONS.

Purpose—­Partnership enables a number of persons, as we have seen, to accomplish by combining their property and skill what would be unattainable by them acting individually.

But the individual responsibility involved in partnership, and the difficulty of transferring interest, render necessary some other mode of combining capital for carrying on enterprises requiring vast resources, and, from their nature, demanding long time and freedom from interruption for their accomplishment.  For instance, no one would dare to assume personal responsibility for the debts of a railroad, nor could such an enterprise be managed if every transfer of interest dissolved the company.  The desired limitation of responsibility and facility of transfer of interest are secured by the formation of corporations.

Nature.—­But responsibility there must be, or the combination could transact no business.  And responsibility depends upon personality—­a thing cannot be held responsible.  As this personality does not exist aside from the persons of those uniting their resources, it must be created.  The creative power is the legislature.  The personality created is the corporation. [Footnote:  From the Latin corpus, corporis, a body.] A corporation is, therefore, an artificial or fictitious person, created under general law or by a special act of the legislature, [Footnote:  This special act defining the powers and duties of the corporation is called its charter.] and capable of acting within prescribed limits as if it were a natural person, but beyond those limits incapable of acting at all.