August 27, 1940. 

Hon. J. M. Falkner 

Banking Commissioner 

Austin, Texas, 

Attention: " 

Mr. H. L. Bengtson, 

Deputy Commissioner 

Dear Sir: 

Opinion No. V-673. 

Re: The necessity for a 

Texas corporation to 

maintain complete 

books and records at 

its HomeOffice rather than at the office 

of its parent company 

in another state. 

Your letter requesting an opinion by this office on the above titled subject matter is as follows: 

"Re: Community Finance and Thrift 

Corporation Dallas, Texas 

"Dear Sir: 

'"The above ,captioned corporation is 

a Loan and Brokerage Company, organized under the laws of this State with Article 

1303b, Revrsed Civil Statutes of ,Texas, as 

amended, as its purpose clause: Its charter defines the City of Dallas, Dallas County, Texas, as its principal place of business. The capital stock of said corporation is $50,000.00, all of which has been 

paid in. Subject corporation enjoys the privilege of issuing and selling single payment 

and installment payment certificates under 

the provisions of Section 7, particle 1524a, 

Revised Civil Statutes of Texas, as amended 

by Acts of 1945, 49th Legislature, H.B. 430. 

Collateralization of certificates issued in 

compliance with the amended portion of Section 7 of Article 1524a seemingly does not 

apply to corporations having a minimum capital of $50,000.00 where such sales are made 

to debtors who are at the time indebted to 

the issuer, but does obligate the Banking 

. .’ 
Hon. J. M. Falkner - Page 2 (V-673) 

Commissioner of Texas to make examination 

to the same extent as if collateral were 

required. 

"As a matter of further explanation, 

the subject corporation is reported to be 

.a wholly-owned subsidiary of the Family Finance Corporation, a Delaware corporation, 

which corporation owns all of the stock of 

its subsidiary units and controls their 

operations through Security Bankers Management Corporation, Wilmington, Delaware. 

"Subject corporation has also established approximately seven branch offices 

in Texas and, from a supervisory rtandpoint 

as related to the examining responsibility 

of this Department, it is the considered 

opinion of this office that the corporation 

at its principal place of business, as defined in its charter, namely, Dallas, Texas, 

should maintain a system of record controls 

as it affects itself and branch offices, 

which will enable the Banking Commissioner 

of Texas to determine from an examination > 

of such record controls the financial condition of the corporation, The fact is 

that all records of the Dallas office, as 

well as those of its branah offiaes, are 

maintained at the office of the Family Finance Corporation ,at Wilmington, Delaware, 

the result of which makes it wholly impossible to determine from an examination the 

solvency of the domestic corporation without consulting the records at Wilmington, 

Delaware. 

"Therefore, the question we desire to 

submit to you for an opinion is: 

"As a Domestic Corporation, would it not 

be compelled to keep and maintain all 

books and record controls at its defined 

place of business rather than at the office of the so-called parent company in a 

foreign State?" 
,- 

18 Bon. j. M. Falkner - Page s (V-673)~ .., .,, ,.’ . , 

We are of the opinion,~ your question should be 

answered in the affirmati~v'e. 

Arti’clb 1358' ~of,'. &he: Rev!i,sed, Civ.il'&at,utes, 

governing private corporations,' declaresi;: :,+.: ~, .,, 

"Each corporati'on or joint -stock'company'~of every description, whether organized and acting under a,special charter or 

'3 general law,,,of 'thi.s~,state, shall keep its 

principal office within this state." 

NC& the w&d. "office" as used here does not 

mean me,rely the building and furniture. It means the 

place of transacting,i.ts corporate business in the ordinary way thatcorporate affairs are transacted, and 

includes all pr,oper and necessary books, records, files, 

and the like. 

One of thereasons for this requirement, if 

reasons for. the statute.were required, has been stated 

by you. The corporation IP subject to visitation and 

supervFsion~,.Py. theBanking, Commissioner, who transacts 

his official-bus:inessWithin the territorial limits of 

the State, except in those instances where, he is specially authorized to go beyond. A further and similaP 

reason is found in Article 1366 of the Revised Civil 

Statutes, declaring: 

"Every corporation, domestic or foreign, 

doing business in Texas shall permit the Attorney General or any of his authorized assistants or representatives to make examination of all the books, accounts, records, ,min- ' 

utes, letters, memoranda, documents, checks, 

vouchers, telegrams, constitution and bylaws, and every record of said corporation as 

oft&n as he may deem hecessary." 

This contemplates that such examination may 

be done within the State of Texas where the corporation 

has its principal place of business and not in some other State in the office and possession of some other cor- 

,poration not under the supervision, or subject to the 

examination of the Attorney General. 
-. - 

Mon. J. M. Falkrier - Page 4 (V-673) 

A corporation organized and doing business under the lawn o$ the State of Texas is 

required to keep its books and records at its 

principal office in the State. 

Ycurs very truly, 

ATTOlU?EXGElTEFtALOFTEXAS 

0S:wb Assistant