# The Attorney General of Texas
December 13, 1979 #ARK WHITE .ttorney General

HonorableGeoge W.Streke, Jr.

Seoretaq **of** State Office **of** the Secretary of State Austin, Texas 787ll OpinionNo. MW- 99 Re: Incorporationof local recording egen* life insurance agents, end physical therapists under the Texas Professional Corporation Act Deer Mr. Strekc You ask several questions regarding incorporation under the Texas Professional Corporation Act, V.T.C.S. art. l628e. Your first question is as followa: Can the Secretary of State approve **ertkles** of

incorporation pursuent to the Texas Professional Corporation Act thet have es a purpose the authority to act es a local recording agent under the Texas Insurance Code? Article 2L14 **of** the Texas Insurance Code, which provides for the licensing of local recording agents, was emended by the sixty-sixth, legislature to permit iezuence ofalicense to “aTexas Cotporetion omenieed **or** existing under the Texas Business Corporation Act or the Texes Professional Corporetion Act.

. . .” ins. Code art 2L14,SS(c)@ Acts 1979, 66th Leg., ch. 800, et 2043. Prior to this amendment, a license **for** a locel recordng egent could be issued only to a colporetion organized or existing under the Texes Business Corporation Act (TBCA). Acts l969,6lst Leg., ch. 225,S3, et 668. A.cotporetion may not be ogenieed under the TBCA if it engages in eny activity which requires alicense fromthe state end if a corporation may not hold such a licenma. Tex. Bus. Corp. Act. Ann., art 2.OlB(2). The learned professions could not, es a general matter, incorporate under the TBCA end this could not derive the tex advantages **of** doing business in corporate form. See Hell, Professional Incolporetion inTexas- A Current Look, 48Tex. L.Ev. 84 (1969). ln 1969the legislature enacted the Texas Professional Corporation Act (TPCA), V.T.C.S. art. l628e, effective January 1, 1970. The TPCA authorized the formation of corporations to

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HonorableGeorge W.Strake, Jr. - PageTwo (NW- 99)

render a “professional service,” defined as any personal service which cannot be rendered without obtaining a license and which could not legally be performed by a corporation priorto the passage of the TPCA. V.T.C.S.art 1528e,S3. Corporations could be licensed as local recording agents prior to the effective date **of** article l528e, and thus the TBCA wasthe appropriate statute for fncolporation oflocal recording agents The recent amendment to article 2L14**of** the Insurance Code permits issuance ofa license to corporations organized under the TPCA for the purpose of acting as local recordng agents Inour opinion, this amendment should be construed as anauthorization for local recording agents to incorporate under the TPCA. InAttorney General Opinion M-551 (1970) this office construed the following amendment to the architecture statute, V.T.C.S. art 2494 as specifically authorizing the profession of architecture to be performed byacorporation:

A firm, partnership or corporation carrying on the practice of professional engineering

. . . may engage in the practice of architecture inthisState.

. . . Acts 1969, 6Jst Leg., ch. 802, S8, et 2360. This language was held to authorize the practice of architecture under the TBCA, despite language in the TPCA making that statute expressly applicable to architecture. V.T.C.S.art 1528e,SS(a);Attorney General Opinion M-551(1970). See also R. Hamilton, Corporations end Partnerships, 24SW. L. J. 9L98 fl97OL Construed asauthorization for incorporation of local recording agents under the TPCA, section 3(c)(l) of article 21.14becomes en exception to the general proviso making the TPCA inapplicable to professions which could incorporate under the TBCA prior to 1970. In case of conflict between a general provision end a special provision dealing with thesame subject, the former iscontrdled bythe letter. Trinity Universal Ins Co. v. McLaughlin, 373S.W.%d 66 (Tex. Civ. App. - Austin 19631,reh. den., 374 SW.2d 350, no writ Moreover, the amendment to article 2L14,as the more recently enacted statute, prevails inthe event ofconflict with earlier enacted provisions. State v. Easeley, 404S.W.Sd

296(Tex. 1966). Inanswer to your first question, youare authorized to approve articles of incorporation pursuant to the Texas Professional Cotporation Act for performance asa local recorcing agent under theTexas Insurance Code. Yoursecond question is as follows Can the Secretary **of** State approve articles of incorporation pursuant to the Texas Professional Corporation Act that have as a purpose the authority to act as a life insurance agent under the Texas Insurance Code? The sixty-sixth legislature emended section 4(d) of article 2LO7-1of the Texas Insurance Code to allow the licensing as a life insurance agent of a corporation formed under the Texas Professional Corporation Act as well es one formed under the Texas Business Corporation Act. Priorto the enactment of the TPCA, corporations could not be licensed as life insurance agents See Acts 1955, 54th Leg., ch. 213, S4(d), at 623. -

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HonorableGeorge W. Strake, Jr. - PageThree **(MW-** 99)

However, article 2L07-1 was amended in 1977 to allow the licensing of colporations formed under the TBCA. Acts 1977, 65th Leg., ch. 579, S5, at 1428. Now the 1979 amendment to article 2LO7-1 allows the licensing ofcorporations formed under theTPCA. Inour opinion, the Secretary of State may approve articles of incorporation pursuant to the TPCA for the purpose of serving as a life insurance agent under the Texas Insurance Code. Service as a life insurance agent fits the definition of “professional service” under section 3(a) of article 1526e,V.T.CS. It cannot be rendered without obtaining alicense, see Ins. Code art 2LO7-1,S3, end prior to the enactment of the TPCA, it could not be performed by a corporation. Moreover, the reasoning relied upon in our answer to your first question alsorequires en affiimetive answer toyour second question. Yourthirdquestion is as follows: Shoulda corporation having as a purpose the authority to act as a physical therapist be incorporated under the Texas Professional Colporetion Act or theTexas Business Colporetion Act? Whenthe TPCA was enacted, physical therapists were not requiredtobe licensed in Texasandyour office allowed their incorporation under the TBCA. Since January 1.1972, physical therapists have been required to be licensed by the Texas Board of Physical Therapy Examiners See V.T.C.S. art 45l2e; Acts 1971,62nd Leg., ch 836, SS8, 18,et 2542. Your office in&s us that physical therapists have incorporated under both the TPCA andthe TBCA. In our opinion, the Texas Professional Colporetion Act is the appropriate statute under which physical therapists should incorporate. The definition of “professional service” in the TPCA consists of two parts: (1)any type of personal service whichcannot be rendered without obtaining a license and (2)which prior to the passage of the TPCA could not by reason of law be performed by a corporation. Inour opinion, these two conditions are linkedso that the second condition is premised upon the assumption that licensing was required of a particular profession prior to the passage of the TPCA. The professions listed as examples insection 3 of article l528e were all licensed professions prior to the enactment ofthe TPCA. See e. 38, et 63 (attorneys); V.T.C.S.art 4la, s”” V.T.C.S. ah 30s; Acts J9l9,36th Leg., ch. 8; Acts 1945,49th Leg., ch 315,et 517(certified public accountants); V.T.C.S. arts. 4548, 4548a; Acts 1919, 36th Leg., ch 31, et 50 (dentists); V.T.C.S. art 7465a, S‘I;Acts 1953,53rd Leg., ch. 342, et 844 (veterinarians). We do not believe the second con&ion is applicable to professions which could be practiced without alicense prior to the enactment ofthe TPCA. Therefore, the fact that physical therapists could incorporate prior to the enactment of the TPCA would not prevent them from incotporeting under that statute. Physical therapists may not now, in our opinion, incorporate under the TBCA. They are within the article 2.OlB(2) exclusion to that statute because they engage inanactivity which requires a license and the license cannot be granted acorporation. Anexamination of article 4512e,V.T.C.S., indicates that a physical therapist license maybe issued onlyto individual applicants and not colporetions. See SS3, 8,13, 19. See also Attorney General Opinion H-442 at 5(1974).Thus, they may nolonger be incorporated underthe THCA.

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Yourfinal question is as follows Ifa corporation may ba formed for a purpose authorized under the Texas Business Corporation Act, is the formation **of** a corporation under the Texas Professional Corporation Act for that same purpose necessarily prohibited by the Texas Professional Cotporetion Act? Webelieve that the TBCA end the TPCA were intended to be mutually exclusive when the latter statute was enacted Inprior opinions, this office has treated them as mutually exclusive. Attorney General OpinionH-442 (1974) states as follows This Office has held that byvirtue of these provisions, after the effective date of the TPCA, any profession except the practice of medicine can be incorporated end the services can be performed by a professional corporation- Attorney General Opinion No. M-551 @370XTheonlyquestion Isunder whichact may those engaged ina particular activity Incoiporete. The constmction of the TPCA which we adopted in answering your question concern@ the incorporation ofphysical therapists isbased onthe assumption that professions wllIbe able to Incotporete under one or the other of the two statutes However, as our answers to your first two questions show, the TBCA and the TPCA are no longer mutually exclusive. The legislature clearly has the power to chqe the mutually exclusive character of the two statutes, and we believe it has done so in its amendments to the Insurance Code See w 187S.W.2d917(Tex. Civ. App. - Austin, writ ref ’d) (one legislature c=t bind its successors). Inthe absence of express language like that Included in the recent amendments to the Insurance Code, we believe the mutually exclusive character ofthe two statutes persists SUMMARY The Secretary of State may approve articles of incotporation pursuant to the Texas Professional Corporation Act that have as a purpose the authority ‘to act as a local recording agent or a life insurance agent under the Texas Insurance Code. Physical therapists may incotporete under the Texas Professional Corporation Act but not under the Texas Business Corporation Act The Texas Business Corporation Act end the Texas Professional Corporation Act are as a general matter mutually exclusive, but the legislature has acted to permit specific professions to incotporete under either statute.

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Attorney General ofTexas

**P. 309** HonorableGeorge W.Strake, Jr. - PageFive (MJ+99)

JOHNW.PAINTER,JR. First Assistant Attorney General TBDL. HARTLEY Executive Assistant Attorney General Prepared bySusanGarrison Assistant Attorney Qeneral APPROVED: OPINION

COMMITTEE C. Robert Heath, Chairman DavidB.Brooks BobGammage SusanGarrison RickGilpin TomPollan WilliemGReid NancyRicketts Bruce Yow@hod

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