The Attorney General of Texas
December 13, 1979
#ARK WHITE
.ttorneyGeneral
Honorable Geoge W.Streke, Jr. Opinion No. MW-9 9
Seoretaq of State
Office of the Secretary of State Re: Incorporation of local record-
Austin, Texas 787ll ing egen* life insurance agents,
end physical therapists under the
Texas Professional Corporation
Act
Deer Mr. Strekc
You ask several questions regarding incorporation under the Texas
Professional Corporation Act, V.T.C.S. art. l628e. Your first question is as
followa:
Can the Secretary of State approve ertkles of
incorporation pursuent to the Texas Professional
Corporation Act thet have es a purpose the authority
to act es a local recording agent under the Texas
Insurance Code?
Article 2L14 of the Texas Insurance Code, which provides for the
licensing of local recording agents, was emended by the sixty-sixth,
legislature to permit iezuence of a license to “a Texas Cotporetion omenieed
or existing under the Texas Business Corporation Act or the Texes
Professional Corporetion Act. . . .” ins. Code art 2L14, S S(c)@ Acts 1979,
66th Leg., ch. 800, et 2043. Prior to this amendment, a license for a locel
recordng egent could be issued only to a colporetion organized or existing
under the Texes Business Corporation Act (TBCA). Acts l969,6lst Leg., ch.
225, S 3, et 668.
A.cotporetion may not be ogenieed under the TBCA if it engages in
eny activity which requires a license from the state end if a corporation may
not hold such a licenma. Tex. Bus. Corp. Act. Ann., art 2.OlB(2). The
learned professions could not, es a general matter, incorporate under the
TBCA end this could not derive the tex advantages of doing business in
corporate form. See Hell, Professional Incolporetion in Texas - A Current
Look, 48 Tex. L.Ev. 84 (1969). ln 1969 the legislature enacted the Texas
Professional Corporation Act (TPCA), V.T.C.S. art. l628e, effective
January 1, 1970. The TPCA authorized the formation of corporations to
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Honorable George W. Strake, Jr. - Page Two (NW-99)
render a “professional service,” defined as any personal service which cannot be rendered
without obtaining a license and which could not legally be performed by a corporation
prior to the passage of the TPCA. V.T.C.S. art 1528e, S 3. Corporations could be licensed
as local recording agents prior to the effective date of article l528e, and thus the TBCA
was the appropriate statute for fncolporation of local recording agents
The recent amendment to article 2L14 of the Insurance Code permits issuance of a
license to corporations organized under the TPCA for the purpose of acting as local
recordng agents In our opinion, this amendment should be construed as an authorization
for local recording agents to incorporate under the TPCA. In Attorney General Opinion
M-551 (1970) this office construed the following amendment to the architecture statute,
V.T.C.S. art 2494 as specifically authorizing the profession of architecture to be
performed by a corporation:
A firm, partnership or corporation carrying on the practice of
professional engineering . . . may engage in the practice of
architecture in this State. . . .
Acts 1969, 6Jst Leg., ch. 802, S8, et 2360. This language was held to authorize the
practice of architecture under the TBCA, despite language in the TPCA making that
statute expressly applicable to architecture. V.T.C.S. art 1528e, S S(a); Attorney General
Opinion M-551 (1970). See also R. Hamilton, Corporations end Partnerships, 24 SW.L. J.
9L98 fl97OL Construed as authorization for incorporation of local recording agents under
the TPCA, section 3(c)(l) of article 21.14 becomes en exception to the general proviso
making the TPCA inapplicable to professions which could incorporate under the TBCA
prior to 1970. In case of conflict between a general provision end a special provision
dealing with the same subject, the former is contrdled by the letter. Trinity Universal Ins
Co. v. McLaughlin, 373 S.W.%d66 (Tex. Civ. App. - Austin 19631, reh. den., 374 SW.2d
350, no writ Moreover, the amendment to article 2L14, as the more recently enacted
statute, prevails in the event of conflict with earlier enacted provisions. State v. Easeley,
404 S.W.Sd296 (Tex. 1966). In answer to your first question, you are authorized to approve
articles of incorporation pursuant to the Texas Professional Cotporation Act for
performance as a local recorcing agent under the Texas Insurance Code.
Your second question is as follows
Can the Secretary of State approve articles of incorporation
pursuant to the Texas Professional Corporation Act that have as a
purpose the authority to act as a life insurance agent under the
Texas Insurance Code?
The sixty-sixth legislature emended section 4(d) of article 2LO7-1 of the Texas
Insurance Code to allow the licensing as a life insurance agent of a corporation formed
under the Texas Professional Corporation Act as well es one formed under the Texas
Business Corporation Act. Prior to the enactment of the TPCA, corporations could not be
licensed as life insurance agents -See Acts 1955, 54th Leg., ch. 213, S 4(d), at 623.
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Honorable George W. Strake, Jr. - Page Three (MW- 99)
However, article 2L07-1 was amended in 1977 to allow the licensing of colporations
formed under the TBCA. Acts 1977, 65th Leg., ch. 579, S 5, at 1428. Now the 1979
amendment to article 2LO7-1allows the licensing of corporations formed under the TPCA.
In our opinion, the Secretary of State may approve articles of incorporation pursuant to
the TPCA for the purpose of serving as a life insurance agent under the Texas Insurance
Code. Service as a life insurance agent fits the definition of “professional service” under
section 3(a) of article 1526e, V.T.CS. It cannot be rendered without obtaining a license,
see Ins. Code art 2LO7-1, S 3, end prior to the enactment of the TPCA, it could not be
performed by a corporation. Moreover, the reasoning relied upon in our answer to your
first question also requires en affiimetive answer to your second question.
Your third question is as follows:
Should a corporation having as a purpose the authority to act as a
physical therapist be incorporated under the Texas Professional
Colporetion Act or the Texas Business Colporetion Act?
When the TPCA was enacted, physical therapists were not required to be licensed in
Texas and your office allowed their incorporation under the TBCA. Since January 1.1972,
physical therapists have been required to be licensed by the Texas Board of Physical
Therapy Examiners See V.T.C.S. art 45l2e; Acts 1971, 62nd Leg., ch 836, SS 8, 18, et
2542. Your office in&s us that physical therapists have incorporated under both the
TPCA and the TBCA.
In our opinion, the Texas Professional Colporetion Act is the appropriate statute
under which physical therapists should incorporate. The definition of “professional
service” in the TPCA consists of two parts: (1)any type of personal service which cannot
be rendered without obtaining a license and (2) which prior to the passage of the TPCA
could not by reason of law be performed by a corporation. In our opinion, these two
conditions are linked so that the second condition is premised upon the assumption that
licensing was required of a particular profession prior to the passage of the TPCA. The
professions listed as examples in section 3 of article l528e were all licensed professions
prior to the enactment of the TPCA. See e. V.T.C.S. ah 30s; Acts J9l9,36th Leg., ch.
38, et 63 (attorneys); V.T.C.S. art 4la,s”” 8; Acts 1945, 49th Leg., ch 315, et 517 (certified
public accountants); V.T.C.S. arts. 4548, 4548a; Acts 1919, 36th Leg., ch 31, et 50
(dentists); V.T.C.S. art 7465a, S ‘I; Acts 1953, 53rd Leg., ch. 342, et 844 (veterinarians).
We do not believe the second con&ion is applicable to professions which could be
practiced without a license prior to the enactment of the TPCA. Therefore, the fact that
physical therapists could incorporate prior to the enactment of the TPCA would not
prevent them from incotporeting under that statute.
Physical therapists may not now, in our opinion, incorporate under the TBCA. They
are within the article 2.OlB(2)exclusion to that statute because they engage in an activity
which requires a license and the license cannot be granted a corporation. An examination
of article 4512e, V.T.C.S., indicates that a physical therapist license may be issued only to
individual applicants and not colporetions. See SS 3, 8,13, 19. See also Attorney General
Opinion H-442 at 5 (1974). Thus, they may nolonger be incorporated under the THCA.
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Honorable George W. Strake, Jr. - Page Pour @tW-99 )
Your final question is as follows
If a corporation may ba formed for a purpose authorized under the
Texas Business Corporation Act, is the formation of a corporation
under the Texas Professional Corporation Act for that same
purpose necessarily prohibited by the Texas Professional
Cotporetion Act?
We believe that the TBCA end the TPCA were intended to be mutually exclusive
when the latter statute was enacted In prior opinions, this office has treated them as
mutually exclusive. Attorney General Opinion H-442 (1974)states as follows
This Office has held that by virtue of these provisions, after the
effective date of the TPCA, any profession except the practice of
medicine can be incorporated end the services can be performed by
a professional corporation- Attorney General Opinion No. M-551
@370X The only question Is under which act may those engaged in a
particular activity Incoiporete.
The constmction of the TPCA which we adopted in answering your question concern@
the incorporation of physical therapists is based on the assumption that professions wllI be
able to Incotporete under one or the other of the two statutes However, as our answers
to your first two questions show, the TBCA and the TPCA are no longer mutually
exclusive. The legislature clearly has the power to chqe the mutually exclusive
character of the two statutes, and we believe it has done so in its amendments to the
Insurance Code See w 187 S.W.2d 917 (Tex. Civ. App. - Austin, writ ref’d)
(one legislature c=t bind its successors). In the absence of express language like that
Included in the recent amendments to the Insurance Code, we believe the mutually
exclusive character of the two statutes persists
SUMMARY
The Secretary of State may approve articles of incotporation
pursuant to the Texas Professional Corporation Act that have as a
purpose the authority ‘to act as a local recording agent or a life
insurance agent under the Texas Insurance Code. Physical
therapists may incotporete under the Texas Professional
Corporation Act but not under the Texas Business Corporation Act
The Texas Business Corporation Act end the Texas Professional
Corporation Act are as a general matter mutually exclusive, but
the legislature has acted to permit specific professions to
incotporete under either statute.
&gy;g *
Attorney General of Texas
P. 309
Honorable George W. Strake, Jr. - Page Five (MJ+99)
JOHN W. PAINTER, JR.
First Assistant Attorney General
TBD L. HARTLEY
Executive Assistant Attorney General
Prepared by Susan Garrison
Assistant Attorney Qeneral
APPROVED:
OPINIONCOMMITTEE
C. Robert Heath, Chairman
David B. Brooks
Bob Gammage
Susan Garrison
Rick Gilpin
Tom Pollan
Williem G Reid
Nancy Ricketts
Bruce Yow@hod
P. 710