Honorable Claude Isbell 

secretary of state 

Capitol Station 

Austin, Texas Attention: J. Byron Brown 

Opinion No. O-7309 

Re: Filing the charter of 

the Texas Real Estate 

Dear Sir: Association. 

We have received your letter of July 19, 1946, which 

is quoted as follows: 

"Submitted herewith is a photostatic copy of 

the charter of the TEXAS REAL ESTATE ASSOCIATION 

which has been presented to our office to be filed. 

Such charter states as its purpose clause the following: 

"'The corporation is being formed for the purpose of establishing and maintaining uniformity 

in the commercial usages pertaining to reel estate transactions throughout the State of Texas, 

to acquire, preserve and disseminate valuable 

business information and to adopt rules, regulations and standards concerning transactions 

connected with real estate, and through educational methods, meetings of members, and dissemination of literature, to better business 

conditions in connection with real estate matters. Said association shall have the power to 

provide and maintain suitable offices to perform its incorporated purposes.' 

"The attorney6 for the said association have requested that such be filed under Sub-Section 105 of 

Article 1302, Revised Civil Statutes, 1925, and contend that the proper filing fee is $10.00 and that 

such corporation should be exempt from franchise taxes. 

"It has been the policy of this office to require 

similar associations to file under Sub-Section 53 of 

Article 1302, Revised Civil Statutes, 1925. 
Honorable Claude Isbell, page 2 (o-7309) 

“I would be pleaeed if you would answer the following: 

“1. Should the Secretary of State file this 

charter? 

“2. If so, under which Sub-Section of Article 

1302 does the purpose clause fall? 

“3. What Is the proper filing fee and franchise tax to be charged?” 

We shall proceed to answer your questions in the order 

presented. You have stated that the attorneys for this proposed 

corporation have requested that the charter be filed under Section 

105 of Article 1302, V. A. C. 9. We quote that section es follows: 

"105. Corporations may be created for one 

or more of the following purposes, namely: Religious, Charitable, Literary, Scientific or Educational. Acts 194.5, 49th Leg., p. 119, ch. 81, § 1.” 

It is apparently the intention of the incorporators to 

place their corporation within en “educational” purpose, as that 

term is used in the foregoing section, by adding to their purpose 

clause the phrase “through educational methods.” The establishment end uniformity of commercial usages and the preservation as 

well es dissemination of information pertaining to real estate 

may be in 6ome small measure educational but if so it exists only 

incidentally es education is not the principal object of an aasociation of this nature. As such, it is our opinion that the purpose of the association here does not come within the term educational es used in Section 105 of Article 1302, V. A. C. 9. (A 

detailed discussion of corporations organized for educational purposes is stated In an opinion of thie office addressed to you dated 

May 1, 1946 and numbersd O-7212.) 

You have further stated that it has been the policy of 

your office to require corporations with similar purpose clauses 

to file under Section 53 of Article 1302, V. A. C. S., which we 

quote as follows: 

“53. To organize cotton exchanger, chambers 

of commerce and boards of trade, with power to 

provide end maintain liultable rooms for the conduct of their businees, and to establish and maintain uniformity in the commercial uses of cities 

end towns, to acquire, preserve end disseminate 

valuable business information, end to adopt rules, 
Honorable Claude Isbell, page 3 (o-7309) 

regulations end standards of claesiflcation, which 

shall govern all transactions with the cotton trade, 

end with other commodities where standarda and classifications ere required, end generally to promote 

the interest of trade and increase the facilities 

of commercial transactions. Acts 1899, p. 58.” 

A comparison of the above quoted Section of Art. 1302 

with that of the purpose clause of this association reveals a 

close similarity of language. It is our opinion that Section 53 

we8 designed to authorize the formation of a corporation such as 

we have here. In fact, it is obvious that this purpose clause 

wee framed pursuant to the language contained in Section 53 with 

the addition of the phrase "through educational methods", which, 

in our opinion, doe6 not change its effect. 

From a reading of Section 53, it is seen that a cotton 

exchange, e chamber of commerce or e board of trade may lncorporate thereunder. The association here may be classified within 

the term "board of trade" es a group of men organized for the 

advancement of business in the field of real estate. A "board 

of trade" has frequently been defined by our courts and is done 

so simply end adequately in the cese of Northwestern Municipal 

Association v. United States, D. C. Minn., 22 F. Supp. 18, a6 

follows: 

"A 'Board of Trade' is e body of men organized 

for the advsncement and protection of business interests." 

Consequently, we may Say that if you are otherwi6e EatiEfled with the charter, you may file seme under Section 53 of Article 

1302, v. A. c. S. 

The proper fees to be charged by the Secretary of State 

upon the filing of a charter ere determined by Article 3914, V. A. 

C. S., the pertinent parts of which we quote below: 

"Upon filing of each charter, amendment or eupplement thereto of a corporation for the 6UppOI-t. of 

public worship, any benevolent, charitable, educational, missionary, literary or scientific undertaking, 

the maintenance of a library, the promotion of a public cemetery not for profit, end the encouragement 

of agriculture and horticulture, to aid its member6 

in producing and marketing agricultural product6, or 

for applying, raising, breeding, fattening or marketing livestock, a filing fee of Ten ($10.00) Dollars, 

end for filing the semi-annual financial statement 
Honorable Claude Isbell, page 4 (O-7309) 

of such agricultural products or livestock production, Ten ($10.00) Dollars, which shell include the 

annual license fee. 

"Upon filing each charter, amendment or supplement thereto of a private corporation created for any 

other purpose intended for mutual profit or benefit, 

e filing fee of Fifty ($50.00) Dollars. . . ." (Emphasis added) 

As we have determined that the association here does 

not have en educational purpose, it follows that it fells within 

the language emphasized above end that the proper filing fee is 

Fifty ($50.00) Dollars. 

Article 7084, V. A. C. S., authorizes a franchise tax 

for every domestic end foreign corporation chartered or authorized to do business in Texas. We quote below only that pert of 

the statute which we believe applicable to the facts here? 

(1 

. . . provided, that such tax shell not be less 

then Twenty ($20.00) Dollars in the cese of any corporation, including those without capital stock, end 

provided further that the tax shall in no case be computed on a sum less then the assessed value, for State 

ad valorem tax purposes, of the property owned by the 

corporation in this State." 

Pursuant to the above statutory wording, it is our opinion that the minimum of Twenty ($20.00) Dollars annual franchise 

tax should be assessed against the corporation proposed here. 

In conclusion, we must, of course, determine the applicability of the franchise tax exemption statute to this proposed 

corporation; namely, Article 7094, V. A. C. S., which we quote 

in part es follows: 

"The franchise tax imposed by this chapter 

shell not apply to , . . or to corporations having no capital stock end organized for the exclusive purpose of promoting the public interest 

of any city or town. e .' 

We have set out above the only possible phrase of the 

Article under which this corporation might qualify. It is fundamental law that where e tax is levied by .a general law end one 

claims en exemption therefrom by reason of en exemption statute, 

he is required to bring himself clearly within the exemption. 

The exemption statute, es pertinent here, requires a corporation 
Honorable Claude Isbell, page 5 (O-7309) 

to be organized for the exclusive purpose of promoting the public 

interest. We cannot say that this corporation is so organized. 

On the contrary, we gether from a reading of the entire charter 

end the general nature of the orgenization that the primary purpose of the association is essentially for the private benefit 

of its members. The leading Texas case in this regard is McCallum 

v. Associated Retail Credit Men of Austin, 41 S. W. (2d) 45, wherein our Supreme Court held that the Credit Men's Association of 

Austin, whose purpose clause and organization we6 very similar 

to the one presented here, we6 not exempt from the payment of the 

franchise tax. The Court made the following observations: 

"The Association's charter purposes reed as follows: 

"'The purpose for which it is formed is to ecquire, preserve, end disseminste valuable business 

information, end to adopt rules end regulations in 

connection therewith.' 

"A careful reading of the entire statement of 

facts demonstrates that the primary purposes of the 

Association, es disclosed by the charter end its mode 

end manner of operation, ere not for the exclusive 

purpose of promoting the public interest of e city 

or town, but for the personal benefit of its members. 

Certainly, the Legislature never intended to exempt 

such a corporation from the tax imposed by Article 

7084." 

It follows from our foregoing statements that the proposed corporation here is not exempt from the payment of the franchise tax es levied by Article 7084, V. A. C. S., eupra. 

We trust that this satisfactorily enswers your inquiry. 

APPROVED AUG 9, 1946 

/s/ Carlos C. Ashley 

FIRST ASSISTANT 

ATTORNEY GENERAL 

JKA-bw-lm 

Very truly your* 

ATTORNEY GENERAL OF TEXAS 

By /s/ Jack K. Ayer 

Jack K. Ayer 

Assistant 

APPROVED 

OPINION 

COMMITTEE 

BYJs/ BWB 

CHAIRMAN