Ark. Code Ann. § 4-26-204 (2020)
General powers
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Each corporation, by virtue of its existence as such, shall have power:
- To have perpetual succession by its corporate name unless a limited period of duration is stated in its articles of incorporation;
- To sue and be sued, in its corporate name;
- To have a corporate seal which may be altered at will and to use the seal by causing it or a facsimile to be impressed or affixed or in any other manner reproduced; but the use of a seal by the corporation will be optional and not mandatory;
- To elect or appoint officers and agents of the corporation and define their duties and fix their compensation;
- To make, alter, and repeal bylaws not inconsistent with its articles of incorporation or with the laws of this state for the administration and regulation of the affairs of the corporation;
- Subject to any restrictions in its articles of incorporation, to make contributions or gifts to corporations, trusts, community chests, funds, foundations, or associations organized and operated exclusively for religious, charitable, literary, scientific, or educational purposes or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private stockholder or individual, and may make contributions or gifts to governmental units and agencies to be used for any lawful purpose when these contributions or gifts are authorized or approved by its board of directors;
- In time of war or engagement of the United States Armed Forces in hostile military operations, to transact any lawful business in aid of the United States in connection therewith;
- Subject to any restrictions in its articles of incorporation, to invest its funds as it sees fit, including specifically and without limiting the generality of the foregoing, the power to acquire controlling interests in, or the entire ownership of, other corporations whether engaged in the same or different kinds of business;
- To cease its corporate activities and surrender its corporate franchise.
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To effectuate the purposes stated in its articles of incorporation, and subject to any limitation prescribed by this chapter or by its articles of incorporation, every corporation shall also have power:
- To acquire, by purchase, lease, gift, will, or otherwise, and to own, hold, improve, use, and otherwise deal in and with real and personal property, or any interest therein, wherever situated;
- To sell, convey, lease, exchange, transfer, and otherwise dispose of all or any part of its property and assets;
- To enter into contracts of guaranty or suretyship or make other financial arrangements for its customers, suppliers, subsidiaries, and others with whom it transacts business; also, where in the opinion of the directors action should be taken to promote good employer-employee relationships, it may make undertakings of such character for the benefit of any of its employees. The term “employees” is not to include any officer or director or any person holding as much as ten percent (10%) of the shares entitled to vote for the election of directors;
- To procure for its benefit insurance on the life of any employee or officer whose death might cause financial loss to the corporation, and to this end, the corporation is deemed to have an insurable interest in its employees and officers;
- To acquire, by purchase, subscription, gift, will, or otherwise, and to own, hold, vote, sell, mortgage, lend, pledge, or otherwise dispose of, and otherwise use and deal in and with any or all of the shares or other interests in, or obligations of, other domestic or foreign corporations or the obligations of any associations, partnerships, or individuals or any direct or indirect obligations of the United States or of any government, state, territory, governmental district, or municipality or of any instrumentality thereof;
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To enter into general partnership agreements with another corporation or corporations whether organized under the laws of this state or otherwise or with any individual, individuals, or partnerships but only on condition that the action is authorized by the articles of incorporation or, in the absence of such charter authorization, by the holders of at least a majority of the outstanding shares of each class entitled at that time to vote at an election of directors; and, even though no charter authority therefor exists, a corporation, without prior stockholders' approval and merely on the authorization of its board of directors, may:
- Become a limited partner; or
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Enter into a joint adventure arrangement with any domestic or foreign corporation or corporations or any individual, individuals, or partnership, provided the joint adventure contemplates:
- The joint prosecution of a single undertaking; or
- The prosecution of successive joint undertakings or business activities over a period not exceeding five (5) years; the joint activities after the expiration of this period to be restricted to acts of liquidation, including the completion of any projects commenced during the five-year period; and the joint arrangement not to be extended except under stockholders' authority as above provided;
- To make contracts and incur liabilities, borrow money, issue its notes, debentures, bonds, and other obligations, and secure any of its obligations by mortgage, pledge, security interest, or other form of encumbrance upon all or any of its property including after-acquired property, franchises, and income;
- To lend money for its corporate purposes, including the power to lend money to its employees where such action tends to promote good employer-employee relationship; to invest its funds from time to time in such manner as may be approved by the board;
- To pay pensions and establish pension plans, pension trusts, profit-sharing plans, stock bonus plans, stock option plans, and other incentive plans for any or all of its directors, officers, and employees;
- To conduct its business, carry on its operations, and have offices and exercise the powers granted by this chapter anywhere in the world;
- To have and exercise all additional powers necessary or convenient to effect any or all of the purposes for which the corporation is organized.
- It shall not be necessary to set forth in the articles of incorporation any of the powers enumerated in this section, but the powers shall exist and may be exercised by the corporation, whether or not set forth in the articles.
History. Acts 1965, No. 576, § 4; 1968 (1st Ex. Sess.), No. 48, § 1; A.S.A. 1947, § 64-104.
Cross References. Property, taking by corporation, compensation, Ark. Const., Art. 12, § 9.
Unfair Practices Act, § 4-75-201 et seq.
Research References
Ark. L. Rev.
Note, Hall v. Staha: Arkansas Courts Adopt the Business Judgment Rule as a Tool of Judicial Review and Analyze the Issue of Excessive Executive Compensation, 47 Ark. L. Rev. 959.
U. Ark. Little Rock L.J.
Webber, Arkansas Corporate Fiduciary Standards — Interested Directors' Contracts and the Doctrine of Corporate Opportunity, 5 U. Ark. Little Rock L.J. 39.
Case Notes
Accommodation Paper.
Private corporation, with the consent of all its stockholders and directors, may execute commercial paper as an accommodation. Murphy v. Ark. & La. Land & Improv. Co., 97 F. 723 (W.D. Ark. 1899) (decision under prior law).
Contracts.
The legislature is authorized to regulate the powers of corporations to enter into contracts when the regulation would not be subversive to any vested rights or the objects of the charter. Ark. Stave Co. v. State, 94 Ark. 27, 125 S.W. 1001 (1910) (decision under prior law).
Conveyances.
There is a presumption in favor of power of corporation to make conveyances. Cotton v. White, 131 Ark. 273, 199 S.W. 116 (1917) (decision under prior law).
Seal of corporation affixed to deed constituted a prima facie showing that corporation was regularly incorporated and that the officers were authorized to make the deed. Oliver v. Henry Quellmalz Lumber & Mfg. Co., 170 Ark. 1029, 282 S.W. 355 (1926) (decision under prior law).
Indebtedness.
The authority of the officers of a private corporation to execute a mortgage for valuable consideration conveying the corporate property to themselves individually could not be questioned by subsequent creditors of the corporation, where neither the stockholders nor existing creditors complained. Stallings v. Galloway-Kennedy Co., 171 Ark. 24, 283 S.W. 41 (1926) (decision under prior law).
Mergers.
Evidence that two corporations formed a partnership, sold their merchandise to the partnership, and appointed one person as manager of the partnership to handle all merchandising and accounting operations established a prima facie case of de facto merger of the corporations entitling minority stockholders to be paid for their stock. Pratt v. Ballman-Cummings Furn. Co., 254 Ark. 570, 495 S.W.2d 509 (1973).
Right to Sue.
Fact that two corporations have directors or other officers in common does not of itself prevent one from maintaining an action at law against the other. G.W. Jones Lumber Co. v. Wisarkana Lumber Co., 125 Ark. 65, 187 S.W. 1068 (1916) (decision under prior law).
Corporation which has failed to file report and pay franchise tax may sue so long as the attorney general has not proceeded to annul its charter. Jones v. Bank of Commerce, 131 Ark. 362, 199 S.W. 103 (1917) (decision under prior law).
Where an action is commenced by a corporation after its charter has been forfeited, subsequent reinstatement is not retroactive and does not vest the corporation with a right to prosecute the action. Sulphur Springs Recreational Park v. Camden, 247 Ark. 713, 447 S.W.2d 844 (1969) (decision under prior law).
Cited: James v. J.F.K. Carwash, Inc., 275 Ark. 141, 628 S.W.2d 299 (1982); First Commer. Bank, N.A. v. Walker, 333 Ark. 100, 969 S.W.2d 146 (1998); Marcum v. Wengert, 344 Ark. 153, 40 S.W.3d 230 (2001).