# GENERAL

Him. Zollie Steaklep Opinion.No. 

### WW491 Secretary of Stat8 Austin,.Texas Re: ‘Wk+W a foreign corporaticaa .that is, a’limited psrt.&er~must **tde out**  **a permit**  **to** do business in the:Stde if the limited partnership engages in certain LIP sited activities ,in the State; aud whether+ the term *‘persons+*, as used- in Section 2 of .t+ Taras De&.Mrr S$eakley:
.’ Uniform Limited Partnership Act, :inclades partnerships.
: kok haves stated and asked the following:

. *m opfi&ux of your ‘offtce hisrespectfuRy requested m consideratton of. the,.foDowing:

. :+A limited partnership-is being formed on the basis of-Article 

### 613fi of Vern.on,*s Civil 6btutes to be kuown as Venazolano Petroleum. Ltd. The partnership is being formed to acquire’an undivided tnterest in certain hydrocarbon conces~sions granted by 

### tha Republic. of Venezuela and to jotnin the exploration and development of said conceas.ions, and it will not engage .in any activities except such as 

### relate to its properties in **Venezueb+.** San Jacinto Ve~zolano, C. A., ‘a Delaware corporation qualified In Texas. and registered in Venezuela, will be sole general partner and the limited partners Will cbnsist Of a group of persons, some of .whom.are indtvtduals. **some** partnershtps-and some corporations.. The only activity which the General Partner’may perform for the partnership in Texas will be the .kaeping of books -and records of transactiona carried out in Venesuefa, the 

### filing. of a ‘United States Income..Tax Return (Form 

### lO65). the exerciss Of general .suparvtston’over operating personnel in~Vanez;uela 

### and possibly in some instances the negotiation Of contracts to be performed iu Venesueg..Hon. Zollie Steakley. page 2 (WW-191)

“The questions presented under the submitted facts are: “1. Will’s corporate limited partner be required to take out a permit to do business if the partnership engages in no other activities than those stated above?

‘
.‘2. Is a partnership regarded as a ‘person* within the meaning of Section 2 of the Texas Uniform Partnership **Act,** entitled to become a partner’ either initially or by substitution?? ~.: **A** foreign -corporation which becomes a limited partner in ,a Texas,.:limited.partnership and contributes capital to the partnership is transacting business in the Smte so as to require qualification in the State if the; atts of the partnership would constitute transacting business in the State if done by theforeign’corpdration alone or if the actions of the foreign corpbration constitute transacting business in the State. Harris v. Golumbia :Water & Light Co., 108 Term. 245, 67 S.W. 811.: Ashland Lumber Co. v. Detroit SaltCo..: ll4.Wis. 6~6.89 N.W. 904; Fletcher’s Corporations (Pert&Ed.) 85OQ,;Vol.: 17; p. ‘5.53. The extent to which the foreign corporation is transacting.business~in the State is to be measured-by .its’capital contribution or investment in the limited partnership. People ex rel Badische Anilii & Soda Fabrik v. Roberts,: Comptroller. (Court of Appeals. N.Y., 1897) 46 N.E. 161; Sec. 10 (a) of the Texas Uniform Limited Partnership **Act** (codified as Article:6,132a, Sec.’ 10a. Vernon’s:Texas Civil Statutes); and 32 Tex. Jur. 312. Partnership, 5 61. If this were not so,~foreign-rorporations could circumvent compliance with statutory requirements for obtaining a certificate of authority:+transact.business in **the Stat&.**  *******Fletcher ’** **i** Corporations, § 8517, VoLl7, pa 686. ..* _j :

-Ti&uestion~whether certain acts:constitute the transacting of business in the State is.mainly, a question of fa&.. **‘ Ally**  the combined acts of the foreign corporation, -and&i this instance the..acts~.of thelimited partnership and the corporate ‘general partneri:must.be ‘considered;~ Security Co. v. Panhandle .National Bank, (Texas Sup&t,., ,1908)1’57 S.W. 22, Fletcher% Corporations (Perm.Ed,) Sec..-8464; Vol:l7, pi 465.

It is rignificant. that Ef.the limited partnership was not ~transacting business.in .the.State, there would not’seem to be’any reason~.f.or the limited partnership to”registerwith the Secretary~of State. Further. it is noted that the -requirementof Articles 8.01 of the Texas Bus.iness Corporation Act is ‘*to bansact~businkss!‘: T:here hisa diatinction~ between

‘Ltransactig businesses and zA!doingbusiness ‘Y Leas-activity .is.ixecessary .tohave, “tranaactm~~business?’ than~to ‘constituta?‘daing bustness? See Smythe v. Ft. WorthGlass and Sand Go;;.(Tex&rp.Ct., 

### 19iz), 142 SW. lI57.Hom.~Z~llie Steaklep,. page 3; (WW-191):.

and the:authoaities cited a&.discuss.ed, Although Section B of Article 8.01 of:tiie-Texas: Bnaiites~s Gorp,mation:Act puts at rest.many old **issues,** Secy tionA of Article 8.81 invokes the requirement of procuring a, certificate 

### of. authority more strictly and based on less activity or fewer acts or occurrences than the old requirements of.what constitutad “doing.. business’, The answer tom

your first question is-~ yes:.. As to.your: aea%nd quest&it is. a rula under &rstatutes, thatin statntory conatrnctian the omdinarp signification shall h+ applied, to words, except. word.6 of art or words. connected: with a par.tiouI+ trade or subject matter. Section, Irof Article 10.,~ Vernon% Taxas. diuiLSt&utea, A partnership is not ordinarily. thoug,ht.of a.s a. person. under Texas: i&v+- 32.TexJur.. 221,Partnership~Sbcc !k. .: ._ .~:. :. i. ( :.

‘:I: :_ <I A partnership Ea variously xiewed: as an~entity. a?pd; as. .an:aggrega,ta of individuals,- frequently: separately: viewed oneven the same’page of a decision:or. ofa treatise.. 32:TeleJrrr, 22i..223:, Pri&mrs.hip, Set, 5.; Third Annual 0.U. & fiasco Institute, Southwestern LegaX Foundation, pp. 268~ 270. However, it is. not. viewed as. a paraon~ asthat~.term: is normally used.. It is 

### our opinion that such. mrm aa; Mpersons.* as used: in:t&is..act. is not a word of art nor a-word connected with a particular trade or .subject. matter. The: individual partners of a ~partnerahip may become li&ite& partners. in a Texas limited partnership,. hut.they agust dii so: in thei& fodi&iduaI capacities.

Iatbe kase.of Port Arthur Trust Company v,‘h&&lrow,. 291.S..W, 2d 312. our .Supreme Con& cites. Art&La 23,. Sac, 2pVernon& Texas Civil Statutes. which. pr,ovides that the term “~$arson.- g.eneralE~ shall include corporations.. Tliere is noi such statute providing that the term Upetson” shaIl ganera~lly includes partnerships~, Although some states s.uch aspOkra.- homa view. a:partnership assuch aidistinct entity as to be. capable of,becoming a member of.another firm, we de not.beliive, that: such vtaw x.egsrding a partnarship has. been: accepted~ by the Texas courts, Compare Eouaton: v, **McCrory,** 140 Okra, a:282 P, 149 and McPaddin,.. Wtesa h Kyle Land COv. Texas Rice Land Co.., Ter,C.iv.App,,. 253 S,Bc,. 9l6+ affirmed Tex.Com.. App.. 265.S&W. 888~ See **CiIa%cock:k** Price, 92Tex, 271.:47.S.YL 9.65 (l89.8); Martii~ v.’ Hemphi& 237 ELW.. 558 (1922);;.and Ab,oussie v- Abouasie, 270 S.:WKI

__ 2d 636 (Tax. Civ.Appb., 1954):~err.ref.. snd’ the a partnership unde~r.Texas law aa con&red to Oklahoma and Louisiana law at 9iSouthwestern Law Jouroa;l.~l74~. and 175.. In many recent~iiastances the hgis&ature has expressly pro.vidad in a$statute that the term “person” shall include partnership;,, This prac-

. tice has been so. frequent that the faUure to.donso would: seem: axgnificant in those cases where there is no express provision for such. definition 01Hon.. Zollie Steakley, page 4 (WW-191)

inclusion.’ See Articles’ 5577a. 1528~; 4476,~9ll6, 936, 5948, 7149; 7047b, 7057.a. 5664, all Vernon% Texas Civil **Statutes.** The answer to your second question is no.

A foreign corporation which has entered into a Texas ~limited partnership as‘alimited partner must take’out s certificateof authority to transact business in this~State if the actions,of the partnership or of the foreign corpora; ” ‘tion,constitute’the transacting **of** business in the State under,Article 8.01 of the ‘Texas Business~Corporation Act,

. if done directly or alone by the foreign corporation. The

. acts descr,ibed in this request do constitute transacting bus’iness in~the.State< The term “persons”,, as used’in the Texas Uniform Limited Partnership Act, does not. , include .partnerships.

. .
LJ:pc ~'. :. :, .' ._ APPROVED:
..
., ~OPINIGN~ COMMITTEE:

, 1Tame.a.E. Ludlum,..Chairma,n,

,,’ .: .: H. Grady Chandler .. .‘.~, J. W. ~Wheele:r: _. : Byron F. Fullerton Very truly yours,

.., WU XhLSON Attorney General of Texas

:. Assistant

REVIEWED FOR. TBE ATTORNE’Y GENERAL ” BY: Geo;.P; BIackburn: “~~ “~,~ ”

_ . .. ./ ., ‘:‘~.,.-~‘,

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