In all cases of private charters granted to corporations since January 1, 1863, the state reserves the right to withdraw the franchise unless such right is expressly negatived in the charter.
(Orig. Code 1863, § 1636; Code 1868, § 1681; Code 1873, § 1682; Code 1882, § 1682; Civil Code 1895, § 1880; Civil Code 1910, § 2239; Code 1933, § 22-1202; Code 1933, § 22-5102, enacted by Ga. L. 1968, p. 565, § 1.)
Law reviews.- For survey article on business associations, see 34 Mercer L. Rev. 13 (1982).
JUDICIAL DECISIONS
Editor's notes.
- In light of the similarity of the provisions, decisions under former Code 1868, § 1681, and former Code 1882, § 1682, are included in the annotations for this Code section.
Includes power to modify.
- The power to withdraw an entire franchise necessarily includes the power to modify or restrict the exercise of it. West End & A. St. R.R. v. Atlanta St. R.R., 49 Ga. 151 (1873) (decided under former Code 1868, § 1681).
If the corporation has made contracts, valid under the laws of the state at the time they were made, the state cannot unmake them, or impose other or different terms on the corporation, to its injury, and for the benefit of the other contracting party. Coast-Line R.R. v. Mayor of Savannah, 30 F. 646 (S.D. Ga. 1887) (decided under former Code 1868, § 1682).
If rights vested, there is no state control.
- The state under former Code 1882, § 1682 (see now O.C.G.A. § 14-5-3) has no control over vested rights and interests, acquired by the company, and not constituting a part of the act of incorporation. Coast-Line R.R. v. Mayor of Savannah, 30 F. 646 (S.D. Ga. 1887) (decided under former Code 1868, § 1682).
Corporation's power to impair shareholders' rights differs from state's power.
- There is a substantial difference between corporation's attempting to reserve right to impair vested rights of its shareholders through altering or amending its internal structure and retention by state of power to modify or withdraw charters granted to corporations created by the state. Baugh v. Citizens & S. Nat'l Bank, 248 Ga. 180, 281 S.E.2d 531 (1981).
Repeal by implication.
- Since in an act of incorporation the legislature has reserved the right of repeal (which would seem to be in every instance since the adoption of this section), repeal may be by implication of a precedent affirmative statute so far as it is contrary thereto. West End & A. St. R.R. v. Atlanta St. R.R., 49 Ga. 151 (1873) (decided under former Code 1868, § 1681).
RESEARCH REFERENCES
Am. Jur. 2d.
- 18 Am. Jur. 2d, Corporations, § 78 et seq.