Untitled Texas Attorney General Opinion

HEATTORNEY GENERAL OFTEXAS AUSTIN II.TEXAS Gerald C . Mann Eouorable Sidney Letham Secretary of state Austin, Texas Dear Sir: Opinion Ilo. O-5508 Re: Adoption of Cooperative Marketing Act (Chapter 8, Title 93, Revleed Civil Statutes) by corporstione organized under Article 1302, subdivision 81; and payment of franchise taxes. In your letter of llovember8, 1943, regarding the above captioned matter, you ask the following queetione: 1. "Should thie office under the provlaioua of Article 5760 approve and file amendments to charters of corporatloue organized under the provleloue of Title 32 of the Revised Civil Statutes changing the cor- porate structure of said corporations to come under the provialous of Chapter 8, Title 93 of the Revised Civil Statutes? 2. "If your answer to the first question la in the afffrmatlve, should auoh a corporation after coming under the provlelons of Chapter 8, Title 93 continue to pay franciee taxes to this department?" You handed ua in connection therewith the original charter of the Booker Rqulty Union Rxhange, a corporation created May 17, 1920, under the provisions of Subdlvlslou 81, of Article 1302, Vernon's Annotated Civil Statutes, together with two (2) amendments, filed September 10, 1940, and July 7, 1941. Both amendments were approved and filed with the Secretary of State D The 1940 amendment adopted the provisiona of the Cooperative Marketing Act (Chapter 8, Title 93, Revised Civil Statutea), and the 1941 amendment increased the capital stock of the association from $31,238.00 to $40,000.00. The pertinent statutes are: Honorable Sidney Latham, Page 2, 0-5508 "To construct orpurchase, or purchase and maintain milla, gins, cotton compresses, grain elevators, wharves, and public warehouses for the storage of products and coamodltles by grain elevator and public warehouse companies; the loan of money by such elevator and public warehouse companies; and to act as general coamerclal brokers and as custom brokers in the United States sod foreign countries." (Subdivision 81, Article l302, Revimed Civil Statutes) "An association may be organized to engage in any activity in connection with the production, cultivation, and care of citrus groves or the markatiug or selling of agricultural products and citrus fruits produced by and marketed for its members, or in the harvesting, preaervlng, drying, processing, canning, atorlug, handling, shipping, or utilization thereof, or the manufacturing or marketing of the by-products thereof; or in connection with the manufacturing, selling, or supplying to its members of machinery, equipment or supplies; or in the financing of tho above enumerated activities; or in any one or more of the activities specified herein. Provided, however, any such activities may extend to non-members and to the production, cultivation, and care of lands owed or cultivated by them and their products llmited by Article 5738 as heretofore amended." (Article 5740, Cooperative Marketing Act). "Each association formed under this Act must prepare and file Articles of Incorporation, setting forth: (a) The name of the association. (b) The purposes for which it is formed. (c) The Place where its principal business will be transacted. (d) The term for vhlch it is to exist, not exceeding fifty (50) years. (e) The nmber of directors thereof, vhloh must not be less than five (5) and may be any number In excess thereof, and the term of office of such directors. (f~) If organized without capital stock, whether the property rfghts and interest of each member shall be equal or unequal; and if unequal, the Articles shall set forth the general rule or rules applicable to all members by which the property rfghts and interests, re- spectively, of each member may and shall be de- termined and fixed; and the association shall have m. . Honorable Sidney Latham, Page 3, 0-5508 to power to admit new members who shall be en- titled to share in the property of the assocla- tlou with the old members, in accordance with such general rule or rules. This provision of the Articles of Incorporation shall not be al- tered, amended or repealed except by the written consent or the vote of three-fourths of the mm- bars. (g) If organized with capital stock, the amount of such capital stock and the number of shares into which it is divided and the par value thereof. The capital stock may be divided into preferred and common stock. If so divided, the Articles of Incorporation must contain a etate- ment of the number of shares of stock to which preference is granted and the number of shares of stock to vhlch no preference is granted and the nature and extent of the preferences and privileges granted to each. The Articles must be subscribed by the incorporators and acknowl- edged by one of them before an officer authorized by the law of this State to take and certify acknowledgments of deeds and conveyances; and shall be filed in accordance with the provisions of the general oorporatlon law of this State; and when 80 filed the said Articles of Incor- poration, or certified copies thereof, shall be received in all courts of this State, and other places, a8 prima facie evidence of the facts cou- talned therein, and of the due incorporation of such association, O * . .' (Article 5744, Co- operative Marketing Act) "Any corporation or aesooiation organized under previously existing statutes, may by a majority vote of its stockholders or members be brought under the provisions of this chapter by limitlog its membership and adopting the other restrictions aa provided herein. It shall make out in duplicate a statement signed and sworn to by ft.6directors, upon forms sup- plied by the Secreta~ of State, to the effect that the corporation or association has by a maJorlty vote of its stockholders or members decided to accept the benefits and be bound by the provisions of this chhpter. Articles of Incorporation shall be filed as required in the eighth article of this chapter, except that they ehall be signed by the members of the Honorable Sidney Latham, Page 4, 0-5508 board of directore. The flllng fee shall be the same as for filing an amendment to Articles of Incorporation." (Article 5760, Cooperative Uarketlng Act) Article 5760, last quoted above, provides that an Aseociation may adopt the provisions of the Cooperative Marketlug Act by: (1) Ita Directors filing a worn statement with the Secretary of State to the effect that by a majority vote of its stockholders, it has decided to accept the benefits and be bound by the provisions of Chapter 8, of Title 93, of the Revised Civil Statutes, as amended; (2) Filing articles of lncor- poratlon as required by Article 5744, Vernon's Annotated Civil Statutes, signed by the members of the Board of Directors. An examiuation of the instruments submitted discloses that the Booker Bquity Union Exchange has complied with these requirements, and that the papere they submitted are in order except that when it was decided to come under the provisions of Chapter 8, of Title 93, it filed what was denominated au amendment of its charter rather than new articles of incorporation. However, the ameudmeut filed In your office September 10, 1940, contains all that is required by Article 5744 for articles of lnoor- poratlou, and is signed and acknovledged by the directora. It was accompanied by the statement required by Article 5760. Your first question is therefore ansvered in the affirmative; and this will apply to other corporations desiring to change their cor- porate structure to come under the provisiona of Chapter 8 of Title 93, when such an amendment contains all the information required by Articles 5744 and 5760, and is executed as there preacrlbed. Article 5764, Vernon's Annotated Civil Statutes, is pertinent to your second question, and reads as followsz "Each association organized hereunder shall pay tc the Commlseloner an annual license fee of ten dollars but shall be exempt from all franchise or license taxes. For ffllng articles of lncor- poratfon, an association organized hereunder shall pay ten dollars, and for filing an amendment there- to, two dollars and fifty cents." You are advieed that, in our opinion, when a corporation changes its corporate structure In the manner provided in Article 5760, supra. it is entitled to the benefits of Article 5764 just as a corporation orignlally organized under the provisions of the Cooperative Marketing Honorable Sidney Latham, Page 5, 0-5508 Act, and le exempt from the payment of franchise taxes. very truly yours AlTOFdIlETGElVXBALOF!FEfAS BY Jama D. Smullen A~alstant JD9:ff