Colorado § 7-103-102 - General powers.

§ 7-103-102. General powers.

(1) Unless otherwise provided in the articles of incorporation, every corporation has perpetual duration and succession in its domestic entity name and has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, including the power:

(a) To sue and be sued, complain, and defend in its entity name;

(b) To have a corporate seal, which may be altered at will, and to use such seal, or a facsimile thereof, including a rubber stamp, by impressing or affixing it or by reproducing it in any other manner;

(c) To make and amend bylaws;

(d) To purchase, receive, lease, and otherwise acquire, and to own, hold, improve, use, and otherwise deal with, real or personal property or any legal or equitable interest in property, wherever located;

(e) To sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property;

(f) To purchase, receive, subscribe for, and otherwise acquire shares and other interests in, and obligations of, any other entity; and to own, hold, vote, use, sell, mortgage, lend, pledge, and otherwise dispose of, and deal in and with, the same;

(g) To make contracts and guarantees, incur liabilities, borrow money, issue notes, bonds, and other obligations (which may be convertible into or include the option to purchase other securities of the corporation), and secure any of its obligations by mortgage or pledge of any of its property, franchises, or income;

(h) To lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment;

(i) To be an agent, an associate, a fiduciary, a manager, a member, a partner, a promoter, or a trustee of, or to hold any similar position with, any entity;

(j) To conduct its business, locate offices, and exercise the powers granted by articles 101 to 117 of this title within or without this state;

(k) To elect directors and appoint officers, employees, and agents of the corporation, define their duties, fix their compensation, and lend them money and credit;

(l) To pay pensions and establish pension plans, pension trusts, profit sharing plans, share bonus plans, share options and rights plans, and benefit or incentive plans for any of its current or former directors, officers, employees, and agents;

(m) To make donations for the public welfare or for charitable, scientific, or educational purposes;

(n) To make payments or donations and to do any other act, not inconsistent with law, that furthers the business and affairs of the corporation;

(o) To indemnify current or former directors, officers, employees, fiduciaries, or agents as provided in article 109 of this title;

(p) To limit the liability of its directors as provided in section 7-102-102 (2)(d);

(q) To cease its corporate activities and dissolve;

(r) To impose restrictions on the transfer of its shares; and

(s) To renounce in its articles of incorporation or by action of its board of directors any specified corporate opportunities or specified classes or categories of corporate opportunities that may be presented to the corporation or one or more of its officers, directors, or shareholders as provided in section 7-102-102 (2)(e).

Source: L. 93: Entire article added, p. 746, § 1, effective July 1, 1994. L. 96: (1)(i) amended, p. 1313, § 10, effective June 1. L. 2000: IP(1) and (1)(a) amended, p. 977, § 52, effective July 1. L. 2003: IP(1) amended, p. 2315, § 223, effective July 1, 2004. L. 2019: (1)(p), (1)(q), and (1)(r) amended and (1)(s) added, (SB 19-086), ch. 166, p. 1927, § 30, effective July 1, 2020.

ANNOTATION

Law reviews. For article, "Organizational Problems of the Small Business Corporation", see 27 Dicta 79 (1950). For article, "The New Colorado Corporation Act", see 35 Dicta 317 (1958). For article, "The Colorado Corporation Act of 1959: Some Aspects of Private Industrial Incentive Plans", see 32 Rocky Mt. L. Rev. 164 (1960). For comment on Herald Co. v. Seawell (472 F.2d 1081 (10th Cir. 1972)), see 45 U. Colo. L. Rev. 131 (1973). For article, "Corporate Indemnification: Parts I and II", see 13 Colo. Law. 1404 and 1634 (1984). For article, "The 1985 Proposed Revisions to the Colorado Corporation Code", see 14 Colo. Law. 34 (1985). For article, "1985 Amendments to the Colorado Corporation Code", see 14 Colo. Law. 2173 (1985). For article, "Colorado Expands Protections For Corporate Directors", see 16 Colo. Law. 1387 (1987). For article, "Corporate Director Liability", see 65 Den. U. L. Rev. 59 (1988). For article, "1988 Update on Colorado Tort Reform Legislation — Part II", see 17 Colo. Law. 1949 (1988). For article, "Conflicts of Interest and the Director's Duty of Loyalty", see 17 Colo. Law. 1969 (1988).

Annotator's note. Since § 7-103-102 is similar to § 7-3-101 as it existed prior to the 1993 recodification of the "Colorado Business Corporation Act", articles 101 to 117 of title 7, cases construing that provision and its predecessors have been included in the annotations to this section.

The statutory powers of a corporation are specifically enumerated. Herald Co. v. Seawell, 472 F.2d 1081 (10th Cir. 1972).

Corporations may be formed for any lawful purpose, and when so formed, they become bodies corporate and politic. Crystal Park Co. v. Morton, 27 Colo. App. 74, 146 P. 566 (1915).

And of natural persons. A private corporation formed under the provisions of this section for the purpose of carrying on a lawful business has all the rights, powers, and privileges of a natural person engaged in the same business. Crystal Park Co. v. Morton, 27 Colo. App. 74, 146 P. 566 (1915).

Thus corporations may acquire fee simple title. Where a corporation is empowered to acquire real estate without limitation in point of estate, it has the right to acquire a title in fee simple. Radetsky v. Jorgensen, 70 Colo. 423, 202 P. 175 (1921).

So also a corporation may condemn land for a private way of necessity where the nature of its business and the situation of its property require the way and where, under like conditions, other persons not corporate may condemn. Crystal Park Co. v. Morton, 27 Colo. App. 74, 146 P. 566 (1915).

And a corporation is entirely competent to transfer its property through such agency as it may designate. Bliss v. Harris, 38 Colo. 72, 87 P. 1076 (1906).

May bring action benefitting parent corporation. Even though the contract involved was entered into for the ultimate benefit of plaintiff's parent corporation, plaintiff is a real party in interest entitled to bring the action without joining its parent corporation. P & M Vending Co. v. Half Shell of Boston, Inc., 41 Colo. App. 78, 579 P.2d 93 (1978).

Moreover, a right-of-way granted by a company does not cease with the expiration of its charter, but, having previously been conveyed, its grantee may thereafter continue the use of the same. Bailey v. Platte & Denver Canal Milling Co., 12 Colo. 230, 21 P. 35 (1888).

Ultra vires no defense to notes where corporation has general power to incur indebtedness. Where a water users' association was granted the general power to borrow money, to incur and promise to pay indebtedness, and to perform any other necessary or appropriate acts to acquire, maintain, and operate irrigation works, it had the general power to borrow money and to make its notes to repay it. Hence it was no defense to such notes that the money borrowed was used in furtherance of an ultra vires contract. Grand Valley Water Users' Ass'n v. Zumbrunn, 272 F. 943 (8th Cir. 1921).

Adoption and implementation of an employees stock trust plan is clearly within the power and authority granted by this section to a corporation. Herald Co. v. Seawell, 472 F.2d 1081 (10th Cir. 1972).

And the fact that a corporation has a substantial financial loss in its transfer of treasury stock to an employee's stock trust is of no consequence, for subsection (1)(p) anticipates and authorizes a corporation to create such plans "wholly or partly at the expense of the corporation". Herald Co. v. Seawell, 472 F.2d 1081 (10th Cir. 1972).

Moreover, corporations through their directors may pay employees extra compensation in the way of a bonus; and if properly authorized, it is neither a fraud upon dissenting stockholders nor against public policy, for the stage has long since been passed in which stockholders, who merely invest capital and leave it wholly to management to make it fruitful, can make absolutely exclusive claim to all profits against those whose labor, skill, ability, judgment, and effort have made profits available. Herald Co. v. Seawell, 472 F.2d 1081 (10th Cir. 1972).

However, it is not a legitimate corporate activity to give away the resources of the corporation, no matter how worthy or needy the donee may be, nor is it permissible by payment of excessive salaries or allowances to divert funds from stockholders to officers or directors without lawful reason. There is a distinction between using one's own resources for charitable projects or for proxy or control contests and using the resources of the corporation for those purposes. The law does not permit the use or diversion of corporate funds for purely personal purposes, no matter what form that diversion may take. Herald Co. v. Bonfils, 315 F. Supp. 497 (D. Colo. 1970), rev'd on other grounds sub nom. Herald Co. v. Seawell, 472 F.2d 1081 (10th Cir. 1972).

But subsection (1)(o) permits a corporation to indemnify its officers and directors as against expenses incurred by them in connection with the defense of an action to which they are made parties by reason of having been such officer or director except in relation to matters as to which they shall be adjudged in such action to be liable for negligence or misconduct in the performance of duty; the statute permits a division of fees where a director or officer is not completely vindicated. Herald Co. v. Bonfils, 315 F. Supp. 497 (D. Colo. 1970), rev'd on other grounds sub nom. Herald Co. v. Seawell, 472 F.2d 1081 (10th Cir. 1972).

No attorneys fees for officer attacking corporate acts. Subsection (1)(o) does not permit an award of attorneys fees to an officer who attacks corporate acts. Breniman v. Agricultural Consultants, Inc., 648 P.2d 165 (Colo. App. 1982).