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Understanding the Special Franchise of a Corporation and Its Legal Implications
Definition & Meaning
A special franchise of a corporation refers to the specific rights granted by the government that allow a corporation to use public property for a public purpose while generating profit. This includes activities like constructing and operating railroads on public streets. Unlike general corporate franchises, which allow a corporation to operate and conduct business, a special franchise gives permission for particular uses that would otherwise be considered trespassing without this grant.
Table of content
Legal Use & context
Special franchises are primarily used in the context of public utilities and transportation. They are relevant in areas such as:
Public utility law
Transportation law
Corporate law
Entities seeking to build infrastructure, such as railroads or pipelines, may need to apply for a special franchise. Users can manage some aspects of this process using legal templates from US Legal Forms, drafted by qualified attorneys.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A city grants a special franchise to a corporation to build and operate a streetcar line on its public streets. This allows the company to generate revenue from fare collections while providing a public service.
Example 2: A utility company receives a special franchise to lay down gas pipelines in a public right-of-way, enabling it to deliver gas to homes and businesses (hypothetical example).
State-by-state differences
Examples of state differences (not exhaustive):
State
Special Franchise Regulations
California
Requires public hearings before granting special franchises.
New York
Special franchises are subject to specific taxation rules.
Texas
Different criteria for public utility franchises compared to transportation franchises.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Description
Difference
General Franchise
The overall right of a corporation to operate.
A general franchise allows business operations, while a special franchise permits specific uses of public property.
License
A permission to conduct a specific activity.
A license is usually temporary and does not grant property rights, unlike a special franchise.
Common misunderstandings
What to do if this term applies to you
If you believe a special franchise may apply to your situation, consider the following steps:
Research the specific requirements for obtaining a special franchise in your state.
Consult with a legal professional to understand your rights and obligations.
Explore US Legal Forms for templates that can help you navigate the application process.
Find the legal form that fits your case
Browse our library of 85,000+ state-specific legal templates.