Ausns 11. TExAn

September 22, 1958

Hon. Zollie Steakley OpinionNo. WW-503 Secretary of State Capitol Station Re: Austin, Texas The authorityof the Secretary of State to accept and file Articles of Incorporation which include, in part, the following purpose clause: "To establish, maintain, and carry on a general currency exchangebusinessand in connectiontherewithto issue checks, travelers'checks,money orders, and other negotiable instruments,but without banking,

or insurancepriviDear Mr. Steakley: discounting, leges.

Your request for the opinion of this office is in part as follows:

"The opinion of your office is respectfully requestedconcerning the authority of this office to accept and file Articles of Incorporation which include, in part, the followingpurpose clause under which it proposed to engage in business in this State:

"'To establish,maintain and carry on a gellera1 currency excha se b siness and in connection therewithto issue Ehecki travelers'checks. w orders, and other negotiable instruments but without banking,discountingor insuranceprivileges.' (Emphasis

added)
"Insofaras I have been able to ascertain, it has been the uniform departmentalconstruction of this office since'theenactment of the Business Corporation

Act that the sale or issuance of money orders and travelers'checks constituted one of the purposes of banking and the BusinessCorporation Act was not applicable to such corporations under the provisionsof Article 2.Olb&)a and 9.14A. It is furthernoted that there is no provisionunder Article 1302, R.C.S. for authorizinga corporation.. -

Hon. Zollie Steakley, page 2 (WW-503)

to engage in business for the purpose of carrying on a general currencyexchange business or issuing or selling travelers'checks or money orders.l'
Article 2.Ol.A,

Business CorporationAct, provides that '*(c) Corporationsfor profit may be organizedunder this Act for any lawful purpose or pur oses. under the provisionsof Article 2.01B( f . . .I' However, )(a) no corporation
can be organizedunder the Act if any one or more of its purposes is to operate a bank.

It appears from your request that the uniform departmental constructionof the office of the Secretary of State has been that the sale or issuance of money orders or travelers' checks constitutedone of the purposes of banking.

In Opinion No. WW-440 (pp. 6~7 and 9-12) this office held that under the provisionsof the Business Corporation Act where articles of incorporation were submitted containingpurpose clauses identicalwith or similar to purpose clauses authorized under the provisionsof Title 32, Chapters 1 and 2, Vernon's Civil Statutes, and particularly Article 1302, without the qualifyingwords or clauses of limitationcontained therein, such qualifyingwords or clauses of~~limitation would have to be added before you would be authorized to grant a charter or amendment thereto to a domestic corporation,or issue a certificateof authority to a foreign corporation. The purpose clause referred to in your letter of request specifically states that the corporation shall be "withoutbanking, discountingor insuranceprivileges,"and therefore it is not subject to the disqualification referred to in Opinion ww-440.

You further note that there is no provision in Article 1302, v.c.S., authorizing a corporation to engage in business for the purpose of carryingon a general currency exchange business or issuing or selling travelers' checks or money orders. While it is true that prior to the enactment of the Business Corporation Act a corporationcould only be formed in this State for one of the purposesauthorized by legislative enactment,nevertheless it is a matter of common knowledge that one of the legislativepurposes in enacting the BusinessCorporation Act was to permit a corporationto be organizedfor any lawful purpose, or, stated conversely for any purpose not prohibited by law, even though prior to the effectivedate of the Business CorporationAct a corporationcould not be formed for such lawful purpose because the Legislaturehad not specifically authorized or designatedsuch purpose as a lawful purpose for which a corporation could be created._ ,

Hon. Zollie Steakley,page 3 m-w-503)

The establishment, maintenance,

and conduct of a general currency exchange business in connection with which the corporationcould issue checks, travelers'checks money orders, and other negotiable instrumentsis a lawful business. State v. Currency Services. Inc 218 S.W.2d 600 (Sup.Ct.MO. 1949). Therefore, since the pu$ose clause referred to is a lawful purposeyou would be authorized to accept and file the proposed articles of incorporation unless the purpose clause could be construed to be for the purpose of operatinga bank, and thereforeprohibitedunder the provisionsof Article 2.01B(4)(a).

We have already noted the qualifying words or limiting clause that the corporation shall be "withoutbanking, discounting

. . .'privileges." These words of limitation should be sufficientto render the proposed corporationsubject.to forfeiture of its charter by appropriatelegal action in case it violated its corporate purposeby engaging in the banking business. However, it is well settled law in Texas that a corporation may be chartered for the purpose of engaging in certain business activitieswhich are also engaged in by banks without enga ing in the banking business. Xalis ki v. Gossett, 109 S.W.2d 3 0 34-k iCiv.App.1937 error ref.); 6 Be&m& SrW 2d 95 ",;

ct n Cred (:;53, it Ass n v. Zeiss, 193 Tex. 152, 264

For example see sub-divisions 48 and 45 'Article1302 and Article 1303tb), V.C.S., and compare Article 342-301;'Attorney Generals' inions, BiennielReport of 1912-1914,p. 342; Attorney Genera Is Opinion No. WW-440. ?

It is the opinion of this office that the proposed purpose clause contained in your letter of request is. for a lawful purpose not prohibitedby Article 2.01B(4)(a). >
SUMMARY
The Secretary of State has the authority to accept and file articles of incorporation which include, in part, the following purpose clause:

"To establish,maintain and carry on a general currencyexchange business and in connection therewith to issue checks, travelers'checks,Hon. Zollie Steakley, page 4 (Ww-503)

money orders and other negotiable instruments, but without {anking,discounting,or insurance privileges.t'

Yours very truly,

WILL WXLSON Attorney General of Texas

CKR:wb

APPROVED:

OPINION COMMITTEE 

## I C. K. Richards Assistant

Gee. P. Blackburn,Chairman Wallace P. Finfrock Howard Mays Milton Richardson

RBVIEWED FOR THE ATTORNEY GENERAL

BY: W. V. Geppert