HEATTORNEY GENERAL 

OFTEXAS 

Gerald C . Mann 

AUSTIN II.TEXAS 

Eouorable Sidney Letham 

Secretary of state 

Austin, Texas 

Dear Sir: Opinion Ilo. O-5508 

Re: Adoption of Cooperative 

Marketing Act (Chapter 8, 

Title 93, Revleed Civil 

Statutes) by corporstione 

organized under Article 

1302, subdivision 81; and 

payment of franchise taxes. 

In your letter of llovember 8, 1943, regarding the above captioned 

matter, you ask the following queetione: 

1. "Should thie office under the provlaioua of 

Article 5760 approve and file amendments to charters 

of corporatloue organized under the provleloue of Title 

32 of the Revised Civil Statutes changing the corporate structure of said corporations to come under 

the provialous of Chapter 8, Title 93 of the Revised 

Civil Statutes? 

2. "If your answer to the first question la in 

the afffrmatlve, should auoh a corporation after coming 

under the provlelons of Chapter 8, Title 93 continue 

to pay franciee taxes to this department?" 

You handed ua in connection therewith the original charter of 

the Booker Rqulty Union Rxhange, a corporation created May 17, 1920, under 

the provisions of Subdlvlslou 81, of Article 1302, Vernon's Annotated 

Civil Statutes, together with two (2) amendments, filed September 10, 

1940, and July 7, 1941. 

Both amendments were approved and filed with the Secretary of 

State D The 1940 amendment adopted the provisiona of the Cooperative 

Marketing Act (Chapter 8, Title 93, Revised Civil Statutea), and the 1941 

amendment increased the capital stock of the association from $31,238.00 

to $40,000.00. 

The pertinent statutes are: 
Honorable Sidney Latham, Page 2, 0-5508 

"To construct orpurchase, or purchase and maintain 

milla, gins, cotton compresses, grain elevators, wharves, 

and public warehouses for the storage of products 

and coamodltles by grain elevator and public warehouse 

companies; the loan of money by such elevator and 

public warehouse companies; and to act as general 

coamerclal brokers and as custom brokers in the 

United States sod foreign countries." (Subdivision 

81, Article l302, Revimed Civil Statutes) 

"An association may be organized to engage 

in any activity in connection with the production, 

cultivation, and care of citrus groves or the 

markatiug or selling of agricultural products 

and citrus fruits produced by and marketed for 

its members, or in the harvesting, preaervlng, 

drying, processing, canning, atorlug, handling, 

shipping, or utilization thereof, or the manufacturing 

or marketing of the by-products thereof; or in 

connection with the manufacturing, selling, or 

supplying to its members of machinery, equipment 

or supplies; or in the financing of tho above 

enumerated activities; or in any one or more 

of the activities specified herein. Provided, 

however, any such activities may extend to non-members 

and to the production, cultivation, and care of lands 

owed or cultivated by them and their products 

llmited by Article 5738 as heretofore amended." 

(Article 5740, Cooperative Marketing Act). 

"Each association formed under this Act 

must prepare and file Articles of Incorporation, 

setting forth: (a) The name of the association. 

(b) The purposes for which it is formed. (c) 

The Place where its principal business will be 

transacted. (d) The term for vhlch it is to 

exist, not exceeding fifty (50) years. (e) 

The nmber of directors thereof, vhloh must not 

be less than five (5) and may be any number In 

excess thereof, and the term of office of such 

directors. (f~) If organized without capital 

stock, whether the property rfghts and interest 

of each member shall be equal or unequal; and 

if unequal, the Articles shall set forth the 

general rule or rules applicable to all members 

by which the property rfghts and interests, respectively, of each member may and shall be determined and fixed; and the association shall have 
m. . 

Honorable Sidney Latham, Page 3, 0-5508 

to power to admit new members who shall be entitled to share in the property of the assoclatlou with the old members, in accordance with 

such general rule or rules. This provision of 

the Articles of Incorporation shall not be altered, amended or repealed except by the written 

consent or the vote of three-fourths of the mmbars. (g) If organized with capital stock, the 

amount of such capital stock and the number of shares 

into which it is divided and the par value 

thereof. The capital stock may be divided into 

preferred and common stock. If so divided, the 

Articles of Incorporation must contain a etatement of the number of shares of stock to which 

preference is granted and the number of shares 

of stock to vhlch no preference is granted and 

the nature and extent of the preferences and 

privileges granted to each. The Articles must 

be subscribed by the incorporators and acknowledged by one of them before an officer authorized 

by the law of this State to take and certify 

acknowledgments of deeds and conveyances; and shall 

be filed in accordance with the provisions 

of the general oorporatlon law of this State; 

and when 80 filed the said Articles of Incorporation, or certified copies thereof, shall be 

received in all courts of this State, and other 

places, a8 prima facie evidence of the facts coutalned therein, and of the due incorporation of 

such association, O * . .' (Article 5744, Cooperative Marketing Act) 

"Any corporation or aesooiation organized 

under previously existing statutes, may by a 

majority vote of its stockholders or members 

be brought under the provisions of this chapter 

by limitlog its membership and adopting the 

other restrictions aa provided herein. It 

shall make out in duplicate a statement signed 

and sworn to by ft.6 directors, upon forms supplied by the Secreta~ of State, to the effect 

that the corporation or association has by a 

maJorlty vote of its stockholders or members 

decided to accept the benefits and be bound by 

the provisions of this chhpter. Articles of 

Incorporation shall be filed as required in 

the eighth article of this chapter, except 

that they ehall be signed by the members of the 
Honorable Sidney Latham, Page 4, 0-5508 

board of directore. The flllng fee shall be the 

same as for filing an amendment to Articles of 

Incorporation." (Article 5760, Cooperative 

Uarketlng Act) 

Article 5760, last quoted above, provides that an Aseociation 

may adopt the provisions of the Cooperative Marketlug Act by: (1) Ita 

Directors filing a worn statement with the Secretary of State to the effect 

that by a majority vote of its stockholders, it has decided to accept the 

benefits and be bound by the provisions of Chapter 8, of Title 93, of 

the Revised Civil Statutes, as amended; (2) Filing articles of lncorporatlon as required by Article 5744, Vernon's Annotated Civil Statutes, 

signed by the members of the Board of Directors. 

An examiuation of the instruments submitted discloses that the 

Booker Bquity Union Exchange has complied with these requirements, and 

that the papere they submitted are in order except that when it was decided 

to come under the provisions of Chapter 8, of Title 93, it filed what was 

denominated au amendment of its charter rather than new articles of 

incorporation. 

However, the ameudmeut filed In your office September 10, 

1940, contains all that is required by Article 5744 for articles of lnoorporatlou, and is signed and acknovledged by the directora. It was 

accompanied by the statement required by Article 5760. 

Your first question is therefore ansvered in the affirmative; 

and this will apply to other corporations desiring to change their corporate structure to come under the provisiona of Chapter 8 of Title 93, 

when such an amendment contains all the information required by Articles 

5744 and 5760, and is executed as there preacrlbed. 

Article 5764, Vernon's Annotated Civil Statutes, is pertinent 

to your second question, and reads as followsz 

"Each association organized hereunder shall 

pay tc the Commlseloner an annual license fee of 

ten dollars but shall be exempt from all franchise 

or license taxes. For ffllng articles of lncorporatfon, an association organized hereunder shall 

pay ten dollars, and for filing an amendment thereto, two dollars and fifty cents." 

You are advieed that, in our opinion, when a corporation changes 

its corporate structure In the manner provided in Article 5760, supra. 

it is entitled to the benefits of Article 5764 just as a corporation 

orignlally organized under the provisions of the Cooperative Marketing 
Honorable Sidney Latham, Page 5, 0-5508 

Act, and le exempt from the payment of franchise taxes. 

very truly yours 

AlTOFdIlETGElVXBALOF!FEfAS 

BY 

Jama D. Smullen 

A~alstant 

JD9:ff