Untitled Texas Attorney General Opinion

..... OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN GROVERSELLERS ATTORNEY GENERAL Honorable Claude Iabell Seoretary of State Austin, Texas ATTJZEJTICN: Mr. J. L. Llogarity,Charter Diris Dear sir: :yehave receive 1945, whloh is quoted, in "Thie otfloe has e a Departmental ed ololl Statutm, from the pay- their pux$oso ptarpcmeaof the t thle Department oan t euoh oorporatlonr or suoh taxes. The orations eubjeot to the al praotloe sack to ini ions of Seotlon 2 of the Texas Revised Civil Statutea, h LQgislature passed Sonata Bill No. 8 reported in Bernon'? Texas Seseion uw Serpioe aa Chapter al, page ll.9. %a hare been presented with a proposed charter, a photortatlo aopy of vrhiohwe attaoh hereto, for the above mentioned oorporation, and following 0~ Departmental praatfce mentioned a- bove reoueated that the propoeed OorpOratfOn set 189 Honorable Claude l8bell - page 2 out in its charter apeciflaally what eatlvlties It Intended to support. In reply to our re;?caet Per suoh information to be InserteU In the pro- posed charter, we reoeivsd a letter frc;n the attorney for the applloant oalling our attention to the pasaege OS Senate Bill 19, mentioned sbovs. i':e also enolose herewith a photo8tatio copy of the letter from the ag~~lioanteattorney so that you sight be able to 8ee their poiiltof vie%. *In the light of the above and oonslderlng the enolosed doaumecte will you please advise u8 with respect to the followings ~1. Should the Secretary ai’Stats tiln the enolosed charter? "2. ye the Seoretary of State aorreot In hi8 Iuterpretatlon of your prevloue opinion8, In that he has the suthority, and I.tis his hty to reqdra the Informtion described In the first paragraph of thfe letter to be oontainsd in oharterrrof oor- poration aseking to be exeqt from the payaent of franohias taxes? ~3. Does the passage of'Senate Bill No. 19 aterred to above In any way cffeot the prerlou8 opinion8 that you have heretoron, issued with re8peOt to the oonstruotion and apsiioation Of :-,sotI.on 2 of Artiole 1302 of the Texas Revised civil Statute8, 1925." Senate ~I11 19, 49th Legislature, 1946, presently appears In V. h. 0. S., Title 32, ah. 1, Art. 1302, Sea. 105, which reads as follows: "Art. 1302. Purposes. *The purposes for whloh private oorporatious may be Soricsd8x0: ". . . . *XX. Corporations xay be created for one or more of the following pwpoaes, nmmly, 3digiOue, Charitable, Literary, S'oientlfio or Eduoatlonal. Acts 1945, 49th Leg., p. 119, ch. 81, .%a. 1." c Honorable olauae Dbell - pace 3 Paretofore, persoca interested ln forming a oor- poratlon for religious puqxsea did so by authority of aub- division 1 of Art. 1302; for oharitable and eduoational pur- posaa, by authority 01 aubdfvislon 2 oi',Art.X302; and for literary and soientlflo undertakings, by authority of sub- division 3 or eaia Artiole. A oorporatlon oould be legally formed for any one or more of the purposes set out in any one of these subdlvieions, but not for two or more purposea esdeslgnated in two or more subdivisions. see Damaey v. TOd, 95 T. 614, t3m. ;I.135; Borden Y. Trespalacloua Rioe end Irr. Co., Cfr. App.,82 5. Y. 463. Consequently, the Legislature, realizing that certain organizations epplyiag for lnoorporntlon wished to oombine the purposes mentioned in the aiorementlonea sub- dlVi8iOn8 in order t0 improve the cltlzenmhlp and welfare of thla state, passed Senate Bill 19, (Subdivlslon 105 of Art. X5002),supra, whioh state8 in the emergenoy clause thereor the reason for its passage in tha following worde: "The Saot that Foundations end 8imilar organi- zations now are prohibited from inoorporating un- der the laws of'the State of Texas, Por the oom- bined purpoaes naned in this Aot, resulting in ' loaa of muoh needed tinanoial eupport for aotivi- ties of importanoe to the citizenship and welfare of this state, oraatea an emergenay and 8n im- peratlve pub110 necessity that the Constitutional RUl3 recuirlng bills to be read ln eaoh House on three several days . . . ." Thus it la aeon trom the above language that the Logislsture passed thltiAct to legalize a combination or purposes for lncorporatlon. The Leglal.aturedid not, however, change the well ,) settled law in this state apyl1oabl.eto the manner of set- ting out suah purposes ln the charter apgllcatfon, whether they be separated or combined. This law la well illustrated by the languaga of the Supre?xeCourt of Texas in ,Tohnston, et al, v. Townsend, Seoretnry of ijtqte,(124 S. Z. 417) a8 follows: Honorable calude Iabell - pago 4 RA Charter lnust8p6Oify tha purpOaa iOr whloh tha oorporatlon IIIto ba oreated. This should be don& with sufflolaat olaernsaa to en- able the Seoretary or State to sea that the pur- pose specified Is one provided for by the Stetuta, and to derlno with 101~ oertainty the soope or the bualness or undertaking to be pursued.n Tha purpose olauss of the charter applloatlon hare under oonaldsratlon reads aa follows: vooond# The purpoee ior which It 18 rormed Is ior~loua, oharltable, literary, solentlflo and educational purpo608, aa authorlsed by eald ohaptar 81 or the Aote of the 49th Leglelature.W The above olaum 8eta out exaotly but,onI thuar word6 used in the #trtute, 1. a., subdivision 105-S o Artlole 13OS. It 18 generaIly lnsufflolcmt for the oharter to 8trte the purpose of ths oorporetlon In the exaot language of the statute without further darlnltlon or purpo~?Nbaoause the Seoretary or Stata is than unable to determine with osrtainty the moopo of the buaimsa or undertaking. In other worde, the incorporators must 8tata what the proposed lnoorporatlon intend8 to do rather than ei'etetmcmt of oonoluslons 1111 B lte purpoee. Smith '1.wortham, 106 Tex. 106, 157 S. 'a.740; Opinions or theaAttorney (ranoral,Book 39, pe~ges1 through 63; Book 30, page 1, 191; Book 31, pa@ 447; Opinion No. O- 2903, dated February 34, 1941; Hlldebrand on Texas Corpor- atlona, Vol. 1, oh. 3, Sao. 36. NOW under thlr Aot, the luoorporatore may have a flexible and lnolualrs purpose s yet It is lnoumbent upon them to state the oharaotar and roope of the prdposed oor- poration in the oharter appllaatlon so that the Seoratary ot State may determine with reasonable osrtainty whether this undertaking Is aotually for the purposes as lleted. It la our opinion that in view of the lnoluslre but limited language used in the purpose clause of tha ohar- tar, you are justified lh requiring rurther elaboration with Honorable Claude Isbell - pa,@ 5 respeot to the purposes of this propoam? oorporatlon, and therefore your rirBt xeation la enswered In the nepntlve. your second -uestlon Is anewered in the aff’irmtlve, and your third ~:uestlonIn the negative, except ineorar as subdlvlalon 105 of Artlole 1302 now permits a combination or oertnln purposes whioh were roraerly separated. very truly your8 BY Eugene Alvie AsaiEtaot