Abstract The article discusses the property rights of stockholders under the 1933 Illinois Business Corporation Act. Throughout the article the rights of the stockholders are treated as contract rights. It is, true that the contract rights of stockholders are subject to the provisions in the articles of incorporation and the general incorporation act. So, theoretically, it would seem that when directors exercise powers, which they can exercise under the provisions of the articles and the act, they are complying with the terms of the contract under which stockholders contribute their capital. It is possible under the Illinois Act to remove the stockholder's pre-emptive right to subscribe to additional stock in the corporation when it is issued. This is accomplished by making explicit provision to that effect in the articles of incorporation. The articles need not give the directors the power to fix the consideration to be received for shares or to value the property exchanged for shares. The Business Corporation Act provides that the consideration for the issuance of shares may be paid, in whole or in part, in money, in other property, tangible or intangible, or in labor or services actually performed for the corporation.
Walter F. Frese (Sat,) studied this question.