Iowa Constitution Article VIII - CORPORATIONS.
Iowa Constitution – Article VIII: Corporations
This article governs the formation, regulation, and limitations of corporations within the state of Iowa. It emphasizes public accountability and legislative control, especially over financial and transportation-related corporations.
Section 1 – Legislative Authority
The General Assembly is responsible for passing general laws for the creation, organization, and regulation of corporations.
No special corporate charters are to be created—all corporations must be formed under general laws.
Section 2 – Powers Limited by Law
Corporate powers and privileges must be limited and defined by law.
Corporations cannot exercise any power not explicitly granted by law.
Section 3 – Corporate Property Liable for Debts
Corporate property is liable for the corporation’s debts, similar to how individual debts work.
Section 4 – Public Interest Corporations
The state retains the authority to regulate corporations involved in public interest (e.g., railroads, utilities) to prevent abuse and ensure fairness.
Section 5 – Railroads as Common Carriers
Railroads are declared public highways.
The owners are treated as common carriers, meaning they must serve all customers fairly and are subject to government regulation.
Section 6 – Consolidation Prohibited
Consolidation or common control of competing railroads is prohibited to prevent monopolies and protect fair competition.
Section 7 – State Not to Be a Stockholder
The State of Iowa cannot become a stockholder in any corporation for profit.
Section 8 – Banking Rules
Restrictions are placed on the creation of banks and banking institutions, including:
The General Assembly must pass general banking laws.
Banks must provide ample security for their circulation.
🔍 Summary:
Article VIII of the Iowa Constitution is aimed at:
Ensuring transparency and fairness in corporate formation,
Restricting state involvement in private corporations,
Preventing railroad monopolies,
And requiring general laws (not special favors) for corporations.
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