The usual par value of a share of stock is $100. That is, if a company organize with a capital of $50,000, they will have 500 shares to sell. Each person who buys or subscribes for the stock, that is, who joins the company, receives a certificate of stock. These certificates are transferable at the pleasure of the owners. The transfer is made by a form of indorsement on the back of the certificate.

The men subscribing in this way become responsible for the good management of the business, and are -obliged to act according to the laws of the state in which the company is organized. Usually they are responsible individually for the liabilities if the concern should become bankrupt.

Every person who subscribes owns a part of the business and is called a shareholder. All the shareholders must meet together, and out of their number they choose a certain number of directors. The directors choose a president and other necessary officers and fix the amount of salary which shall be paid such officers for their work. As a rule directors have no salaries attached to their positions. A regular meeting of all the shareholders is held at least once a year to elect the directors and hear the reports of the officers. It is necessary to file a statement of resources and liabilities each year with the secretary of state. Corporations are now also required to file a statement of their affairs with the collectors of internal revenue.