Nebraska State Constitution Article XII-1

Article XII-1


Legislature to provide for organization, regulation, and supervision of corporations and associations; limitation; elections for directors or managers; voting rights of stockholders.

The Legislature shall provide by general law for the organization, regulation, supervision and general control of all corporations, and for the organization, supervision and general control of mutual and co-operative companies and associations, and by such legislation shall insure the mutuality and co-operative features and functions thereof. Foreign corporations transacting or seeking to transact business in this state shall be subject, under general law, to regulation, supervision and general control, and shall not be given greater rights or privileges than are given domestic corporations of a similar character. No corporations shall be created by special law, nor their charters be extended, changed or amended, except those corporations organized for charitable, educational, penal or reformatory purposes, which are to be and remain under the patronage and control of the state. The Legislature shall provide by law that in all elections for directors or managers of incorporated companies every stockholder owning voting stock shall have the right to vote in person or proxy for the number of such shares owned by him, for as many persons as there are directors or managers to be elected or to cumulate such shares and give one candidate as many votes as the number of directors multiplied by the number his shares shall equal, or to distribute them upon the same principal among as many candidates as he shall think fit, and such directors or managers shall not be elected in any other manner; Provided, that any mutual or cooperative company or association may, in its articles of incorporation, limit the number of shares of stock any stockholder may own, the transfer of such stock, and the right of each stockholder or member to one vote only in the meetings of such company or association. All general laws passed pursuant to this section may be altered from time to time, or repealed.


  • Neb. Const. art. XI, sec. 1 (1875);
  • Transferred in 1907, art. XIb, sec. 1;
  • Amended 1920, Constitutional Convention, 1919-1920, No. 34;
  • Transferred by Constitutional Convention, 1919-1920, art. XII, sec. 1;
  • Amended 1972, Laws 1971, LB 762, sec. 1.


1. Organization

2. Regulation and supervision

3. Miscellaneous

1. Organization

This section applies to the granting of franchises and corporate privileges. Omaha Nat. Bank v. Jensen, 157 Neb. 22, 58 N.W.2d 582 (1953).

Provision hereof that foreign corporation shall have no greater rights than domestic refers to granting of franchises and corporate privileges rather than taxation. State ex rel. Beatrice Creamery Co. v. Marsh, 119 Neb. 197, 227 N.W. 926 (1929).

Law providing for organization of sanitary drainage district did not violate provision that no corporation shall be created by special law. Whedon v. Wells, 95 Neb. 517, 145 N.W. 1007 (1914).

2. Regulation and supervision

This section permits repeal of statutes under which domestic corporations were formed. State ex rel. Neff v. Christian Brotherhood of American Burial Assn., 186 Neb. 525, 184 N.W.2d 643 (1971).

Existence of Department of Insurance may be traced to Constitution providing for regulation and supervision of corporations, companies and associations. Clark v. Lincoln Liberty Life Ins. Co., 139 Neb. 65, 296 N.W. 449 (1941).

Fraternal benefit corporation cannot incorporate old line insurance company and subscribe for capital stock under guise of cooperation. Folts v. Globe Life Ins. Co., 117 Neb. 723, 223 N.W. 797 (1929).

Statute authorizing amendment of articles of incorporation to change life insurance business from assessment to stock basis, held valid. Leininger v. North Amer. Nat. Life Ins. Co., 115 Neb. 801, 215 N.W. 167 (1927).

Corporations receive their charters only by general law, and are subject to reserve power of the lawmaking body of alteration and amendment. Lincoln Street Railway Co. v. City of Lincoln, 61 Neb. 109, 84 N.W. 802 (1901).

3. Miscellaneous

A provision in a lease to which the state is a party which requires the state upon termination of the lease to pay the costs of reletting the property, including the costs of alterations incurred by the owner in placing the property in condition for reletting, violates this Article and section of the Constitution of Nebraska. Ruge v. State, 201 Neb. 391, 267 N.W.2d 748 (1978).

Educational Service Units Act sustained as constitutional. Frye v. Haas, 182 Neb. 73, 152 N.W.2d 121 (1967).

Act creating the Nebraska Grid System violated this section and was held unconstitutional. Wittler v. Baumgartner, 180 Neb. 446, 144 N.W.2d 62 (1966).

Classification of cities into classes and subclasses does not violate this section. State ex rel. Wheeler v. Stuht, 52 Neb. 209, 71 N.W. 941 (1897).

Act creating a corporation for canal construction was in violation of this section. State ex rel. Patterson v. Comrs. of Douglas County, 47 Neb. 428, 66 N.W. 434 (1896).