The location of new companies of the national guard shall be determined by the military board, and shall be at such points as in their opinion the best interests of the state shall be conserved and the efficiency of the organization maintained. The national guard companies shall be distributed through the state, as far as it can be done without too great expense being entailed upon the state and the requirements of rapid mobilization will admit. The method of organization and muster will be in accordance with the regulations adopted by the military board and approved by the governor.

Companies shall, in general, be mustered out and discharged when they become inefficient, and, falling below the minimum number of enlisted persons required by statute, they fail to recruit a sufficient membership within a reasonable time; such discharges to be made by action of the military board, on the recommendation of the regimental commander; but the governor as commander in chief of the militia shall have power to muster out and discharge at any time any company of the national guard comprising the active militia of the state.