Editor's notes.

- In light of the similarity of the statutory provisions, decisions under former Code 1868, § 1678; former Code 1873, § 1679; former Code 1882, § 1679; former Civil Code 1895, § 1852; and former Civil Code 1910, § 2216, are included in the annotations for this Code section.

Corporations may act as reasonably necessary to effectuate express powers.

- Although corporations have only such powers as are granted in the charter, yet if an express power is granted, this carries with it the right to do any act which may be found reasonably necessary to effectuate the power expressly granted. What is and what is not too remote from the main purpose must be determined by the particular facts of each case. Snook v. Georgia Imp. Co., 83 Ga. 61, 9 S.E. 1104 (1889); National Bank v. Amoss, 144 Ga. 425, 87 S.E. 406, 1918A Ann. Cas. 74 (1915) (decided under former Code 1882, § 1679 and former Civil Code 1910, § 2216).

The word "necessary" is to be given a reasonable construction, and not to be so construed as to hamper and obstruct, or practically prevent, the profitable and reasonable exercise of the corporate powers and the conduct of the corporate business. J.L. Young Co. v. Minchew, 42 Ga. App. 228, 155 S.E. 356 (1930) (decided under former Civil Code 1910, § 2216).

Every person is charged with notice of limitations on powers of corporation fixed by law. First Nat'l Bank v. Monroe, 135 Ga. 614, 69 S.E. 1123, 32 L.R.A. (n.s.) 550 (1911) (decided under former Civil Code 1910, § 2216).

Power to contract.

- The power to make contracts would seem to be an incident to every corporation, unless the charter provides the contrary. Wood Hydraulic Hose Mining Co. v. King, 45 Ga. 34 (1872) (decided under former Code 1868, § 1678).

Extent of corporate contractual power.

- Many contracts may be made which are not in an absolute sense essential to the conduct of business, and yet may be legitimate as advancing the principal business or rendering it more profitable. Such contracts would not be invalid. Kohlruss v. Zachery, 139 Ga. 625, 77 S.E. 812, 46 L.R.A. (n.s.) 72 (1913) (decided under former Civil Code 1910, § 2216).

Power to pass bylaws.

- It is within the power of a corporation to pass such bylaws as are not inconsistent with its charter and the purposes for which it was created. Interstate Bldg. & Loan Ass'n v. Wooten, 113 Ga. 247, 38 S.E. 738 (1901) (decided under former Civil Code 1895, § 1852).

Bylaws must be reasonable.

- If the bylaws of a corporation are so unreasonable as to shock one's ideas of right and justice, a court of equity will interpose if property be at stake. Hussey v. Gallagher, 61 Ga. 86 (1878) (decided under former Code 1873, § 1679).

Power to amend bylaws.

- As an incident to its power to pass bylaws, a business corporation may make amendments to its bylaws which are not inconsistent with its charter or constitution. Crittenden v. Southern Home Bldg. & Loan Ass'n, 111 Ga. 266, 36 S.E. 643 (1900); Interstate Bldg. & Loan Ass'n v. Wooten, 113 Ga. 247, 38 S.E. 738 (1901) (decided under former Civil Code 1895, § 1852).

While given amendments to the bylaws of a corporation are, under its charter and constitution, allowable, they are not, as to a particular stockholder, fraudulent or void merely because made without the stockholder's knowledge, or because the stockholder "has never ratified, acquiesced in, or consented to the same." Maynard v. Interstate Bldg. & Loan Ass'n, 112 Ga. 443, 37 S.E. 741 (1900); Crittenden v. Southern Home Bldg. & Loan Ass'n, 111 Ga. 266, 36 S.E. 643 (1900) (decided under former Civil Code 1895, § 1852).

Change in bylaws cannot impair vested rights.

- While a private corporation may at any time exercise in a lawful manner its inherent right to amend, alter, or repeal its bylaws, no amendment, alteration, or repeal thereof can have the legal effect of defeating any vested right of its stockholders. This is true because, under the fundamental law of the land, power to adopt bylaws impairing the obligation of a contract cannot be constitutionally conferred upon a corporation. Interstate Bldg. & Loan Ass'n v. Wooten, 113 Ga. 247, 38 S.E. 738 (1901) (decided under former Civil Code 1895, § 1852).

Insurance company bylaw amendment binding on insured.

- An amendment to the bylaws of an insurance company, merely for the purpose of regulating its mode of business, and adding no new condition to the policies already issued, is binding on the insured. Georgia Masonic Mut. Life Ins. Co. v. Gibson, 52 Ga. 640 (1874) (decided under former Code 1873, § 1679).

Bylaws providing for expulsion of member.

- Corporations have the power to pass bylaws providing for expulsion of members, but they have not an uncontrollable discretion in the enforcement of such bylaws. In a proper case, the bylaws may be construed by the court. State ex rel. Waring v. Georgia Medical Soc'y, 38 Ga. 608, 95 Am. Dec. 408 (1869) (decided under former Code 1868, § 1678).

Bylaws concerning officers' salaries.

- A bylaw providing that official salaries are to be fixed by the president and directors of a corporation is within the legal competency of a corporation to establish, and an officer accepting an appointment and serving with knowledge of such bylaw is to be understood as undertaking the performance of duties for such salary as may be fixed by a fair and honest execution of the bylaw. Eagle & Phoenix Mfg. Co. v. Browne, 58 Ga. 240 (1877) (decided under former Code 1873, § 1679).

Bylaw cannot impose liability for corporate debts on shareholders.

- When neither the charter of a corporation nor any general statute imposes on the individual members liability to pay its debts, such liability cannot be imposed by a bylaw of the corporation, and in such case equity will not entertain a bill against the stockholders to enforce such liability. Reid v. Eatonton Mfg. Co., 40 Ga. 98, 2 Am. R. 563 (1869) (decided under former Code 1868, § 1678).

Power to assign corporate assets to officers while corporation insolvent.

- Sound public policy forbids assignment to officers of a corporation of any of the corporate assets while the corporation is insolvent, with a view to prefer them as creditors for antecedent debts. Jones v. Ezell, 134 Ga. 553, 68 S.E. 303 (1910) (decided under former Civil Code 1910, § 2216).

Power to form partnership must be authorized by charter.

- The power to form a partnership is not one of those which is common to all corporations, and charter authority is necessary. Gunn v. Central R.R., 74 Ga. 509 (1885); South Carolina & Ga. R.R. v. Augusta S.R.R., 107 Ga. 164, 33 S.E. 36 (1899) (decided under former Code 1882, § 1679 and former Civil Code 1895, § 1852).

Am. Jur. 2d.

- 18A Am. Jur. 2d, Corporations, §§ 1 et seq., 45 et seq.

C.J.S.

- 18 C.J.S., Corporations, §§ 132 et seq, 143 et seq., 154 et seq. 19 C.J.S., Corporations, §§ 651 et seq., 673.

ALR.

- Validity of obligation given by corporation for a personal debt of officer or stockholder, 47 A.L.R. 78.

Liability of corporation for contracts of subsidiary, 38 A.L.R.3d 1102.