North Carolina Constitution Article VIII, Corporations
Here is a summary and breakdown of Article VIII – Corporations of the North Carolina Constitution:
North Carolina Constitution – Article VIII: Corporations
Purpose:
This article governs the formation, regulation, and powers of corporations in North Carolina, both public and private. It outlines the role of the General Assembly and restrictions on corporate activity.
Section-by-Section Summary:
Section 1. Chartering corporations.
The General Assembly has the power to charter corporations, but no corporation may be created except under general laws. This means special laws for specific corporations are prohibited.
Section 2. Corporate powers.
Corporations may exercise powers only as permitted by law. They are subject to regulation, alteration, or repeal by the General Assembly.
Section 3. Limited liability.
Shareholders in corporations are not individually liable for corporate debts beyond the amount of their investment. This section affirms the principle of limited liability.
Section 4. Eminent domain.
Corporations cannot take private property for public use without just compensation, and the process must comply with due process of law.
Section 5. Regulation of rates.
The General Assembly may regulate the rates and services of public utility corporations and similar businesses for the protection of the public.
Key Points:
General incorporation laws only: No special legislation for individual corporations.
Corporations are subject to regulation, amendment, or termination by the state.
Limited liability is protected for shareholders.
Eminent domain by corporations must follow due process and require compensation.
Utilities and similar corporations can be regulated in the public interest.
Why It Matters:
Article VIII ensures corporations operate within a legal and publicly accountable framework. It prevents favoritism, supports economic fairness, and gives the legislature the authority to adjust corporate behavior when needed.
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