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 his respectfuRy 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 his a diatinction~ between 

‘Ltransactig businesses and zA!doingbusiness ‘Y Leas-activity .is.ixecessary 

.to have, “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, Ir of 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, 2 p Vernon& 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 asp Okra.- 

homa view. a: partnership assuch ai distinct 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 9i Southwestern 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. don so would: seem: axgnificant 

in those cases where there is no express provision for such. definition 01 
Hon.. 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: “~~ “~ ,~ ” 

_ . . . 

./ ., ‘:‘~.,.-~~~ ‘,