e corporation.

An UNLIMITED LIABILITY corporation is one in which the stockholders
are liable as partners, each for the full indebtedness.

A LIMITED LIABILITY corporation is one in which the stockholders, in
case of the failure of the corporation, are liable for the amount of
their subscriptions. The name _limited_ is required by law to appear
after the name of the company. If a subscription is entirely paid up
there is no further liability--that is to say, the property of a
shareholder cannot be attached for any debts of the company.
Understand clearly that the name _limited_ printed after the name of a
company does not indicate in any way that the capital or credit of the
company is limited, only that the liability of the shareholders of the
company is limited to the amounts of their shares.

A DOUBLE LIABILITY corporation is one in which, in case of failure,
the stockholders are further liable for amounts equal to their
subscriptions. All national banks are double liability companies. If A
owns $5000 stock in a national bank, and the bank fails, he loses his
stock; and if the liabilities of the bank are large he may be obliged
to pay a part or the whole of an additional $5000.

XVI. BONDS

When a railroad company, or a city or any other corporation desires to
borrow money it is a common practice to issue instruments of credit
called BONDS. A bond means something that binds. Bonds bear the same
relation to the resources of a corporation that mortgages do to real
estate.

Corporation bonds are issued for a period of years. They usually have
coupons attached which are cut off and presented at regular intervals
for the payment of interest. A bondholder of a corporation runs less
risk than a stockholder, first, as to interest: the corporation is
obliged to pay interest on its bonds, but may at its own pleasure
_pass_ its dividends; secondly, the bondholder is a creditor, while
the stockholder of the corporation is the debtor. On the other hand,
if a concern is very successful, a shareholder may receive large
dividends, while the bondholder receives only the stipulated interest.
A _bond_ is evidence of debt, specifying the interest, and stating
when the principal shall be paid; a _certificate of stock_ is evidence
that the owner is a part-owner in the corporation or company, not a
creditor, and he has no right to regain his money except by the sale
of his stock, or through the winding up of the company's busines