CORPORATIONS ‑- FORMATION ‑- NATURAL PERSONS

CORPORATIONS ‑- FORMATION ‑- NATURAL PERSONS.

Under § 2, chapter 185, Laws of 1933 (RCW 23.01.020) a corporation may not be one of the required three or more natural persons required to form a corporation.

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                                                                    July 25, 1962

Honorable Victor A. Meyers
Secretary of State
Legislative Building
Olympia, Washington

                                                                                                              Cite as:  AGO 61-62 No. 147

Dear Sir:

            By letter previously acknowledged, you requested an opinion of this office on a question which we paraphrase as follows:

            Under § 2, chapter 185, Laws of 1933 (RCW 23.01.020) may a corporation be one of the required three original incorporators?

            We answer your question in the negative.

                                                                     ANALYSIS

            Section 2, chapter 185, Laws of 1933 (cf. RCW 23.01.020) provides in pertinent part as follows:

            "Three or more natural persons of full age, at least two-thirds of whom are citizens of the United States or of its territories, incorporated or unincorporated or possessions, may form a corporation under this act for any lawful business purposes . . ."  (Emphasis supplied.)

            In the early case ofDenny Hotel Co. v. Schram, 6 Wash. 134, 32 Pac. 1002 (1893) our supreme court concluded that, under the law as it existed at that time, a corporation could not be an incorporator.  Although it has been the policy of this office not to issue an opinion on a question previously decided by our supreme court, we point out that the statute under which theDenny Hotel case, supra, was decided [Code 1881, § 2422 (§ 1498, Gen. Stat.)] differed in several respects with § 2, chapter 185, Laws of 1933  [[Orig. Op. Page 2]] (RCW 23.01.020).  Code 1881, § 2422, provided in part as follows:

            "Any two or more persons, who may desire to form a company for one or more of the purposes specified in the preceding section, shall make and subscribe written articles of incorporation in triplicate, . . ."  (Emphasis supplied.)

            In theDenny Hotel case, supra, at page 137, the court observed as follows:

            ". . . We do not think that a corporation was within the contemplation of the legislature when they used the expression 'two or more persons,' in § 1498, Gen. Stat.  It is true that § 1709, Code Proc., provides that the term 'person' may be construed to include the United States, this state, or any state or territory, or any public or private corporation, as well as an individual.  But it does not follow, by any means, that the term 'person' is always to be construed as a private corporation any more than it is always to be construed as the United States.

            "Morawetz on Private Corporations, § 433, says:  'A corporation cannot, in the absence of express statutory authority, become an incorporator by subscribing for shares in a new corporation; nor can it do this indirectly through persons acting as its agents or tools;' citing Central R. R. Co. v. Pennsylvania R. R. Co., 31 N.J. Eq. 475.  The author, continuing, says: 'The right of forming a corporation is conferred by the incorporation laws only upon persons acting individually, and not upon associations.'"

            It is noted that the conclusion in this case was reached even though the statute at that time [Code 1881, § 2422, § 1798, Gen. Stat.] provided that "two or more persons" rather than "three or more natural persons" could incorporate.1/

             [[Orig. Op. Page 3]]

            In volume 2, § 47, Model Business Corporation Act Annotated at page 140, an annotation regarding the requirement that incorporators be natural persons reads in part as follows:

            "Alaska, Colorado, Idaho, Illinois, Indiana, Kansas, Louisiana, Minnesota, Missouri, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Texas, Virginia, Washington, Wisconsin, Wyoming, the District of Columbia and Puerto Rico expressly require that incorporators be 'natural persons'.  Many other jurisdictions have age, citizenship, or residence requirements which imply that incorporators must be natural persons. . . ." (Emphasis supplied.)

            Under the provisions of § 2, chapter 185, Laws of 1933 (RCW 23.01.020) the term "natural persons" is coupled with age and citizenship requirements.  Thus, the decision in theDenny Hotel case, supra, has been fortified.  For authorities from other jurisdictions supporting our conclusion herein see 14 C.J., § 81-g,American Ball Bearing Co. v. Adams, 222 Fed. 967 (D.C. N.D. Ohio 1915);Park Heights et al. v. Brooks & Brooks Corp., 94 Atl. 83 (N.J. 1915).