The Honorable Martin Dies, Jr. Opinion No. M- 600 

Secretary of State 

State Capitol Building Re: What statutes control 

Austin, Texas the Secretary of State 

In his administrative 

Forfeiture of charters 

and certificates of 

authority of corporations 

For Failure to timely pay 

Franchise taxes; and what 

statutes apply to his 

reinstatement OF such 

Dear Mr. Mes: charters and certificates? 

Your opinion request presents the FoIlowIng questions: 

"1 . Article 12.17(2), Taxation-General, 

Vernon's Civil Statutes, Article 7.01B(l), 

Texas Business Corporation Act, and Article [1396-j 

7.01B(l), Texas Non-Profit Corporation Act all 

provide For admlnlstratlve ForFelture by the 

Secretary of State For+FalIure to pay Franchise 

tax. Under which of the above statutes should 

the Secretary of State Forfeit the charter of 

domestic corporations and Certificate of Authority of foreign corporations for Failure to pay 

franchise tax in the time prescribed by law? 

2. Does the $50.00 reinstatement Filing 

Fee and the twelve month limitation In Article 

7.01E. Texas Business Corporation Act and Article 

[:396-l 7.01E, Texas Non-Profit Corporation Act 

apply to reinstatement provisions of Article 

12.17 3(b) Taxation-General, Vernon's Civil Statutes?" 

In answer to your First question, it,ls the opinion of this 

office that the Secretary of State may Forfeit the charter or 

certlflcate of authority of a business corporation For Failure 

to pay Franchise taxes under authority of Article 7.01B(l), 

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. . 

Hon. Martin Dies, Jr., page 2 (M- 600) 

Texas Business Corporation Act and Article 8.16B(l) of the 

same Act, respectively, or under the authority of Article 12.17, 

Title 122A, Taxation-GenEal, Vernon's Civil Statutes. Likewise, 

the Secretary of State may forfeit the charter or certificate 

of authority of a non-profit corporation under authority of 

Article 1396-7.OlB(l),, Texas Non-Profit Corporation Act and 

Article 8.15B(l), of the same Act respectively z under the 

authority of Article 12.17, supra. 

1969. 

These statutes were passed by the 61st Legislature In 

The language of Articles 7.01 and 8.16, Texas Business 

Corporation Act and Articles 7.01 and 8.15, Texas Non-Profit 

Corporation Act are Identical In so far as they prescribe a 

procedure by which the Secretary of State may Forfeit charters 

and certificates of authority of the respective corporations 

and thereafter reinstate such charters and certificates where 

the requirements For reinstatement, set out In those statutes, 

are met. 

Article 12.17, supra, as amended In 1969, Is a relnactment of the procedures theretofore given under Article 12.17 and 

provides additional procedures whereby charters of domestic 

corporations and certificates of authority of Foreign corporatlan~,admlniatratlvely Forfeited as provided by that Title, may 

be rbvlved by the Secretary of State when the requirements For 

reinstatement set out In the statute, are met. 

The grounds For Forfeiture under 12.17, supra, are fallure 

to pay the Franchise tax , or File Franchise tax reports. The 

grounds For forfeiture under the provisions of the Texas Business 

Corporation and Texas Non-Profit Corporation Acts, also Include 

Failure to pay the Franchise tax or File Franchise tax reports. 

Article 12.17, supra, and the other provisions of the 

Texas Business Corporation Act and Texas Non-Profit Corporation 

Act, provide different procedures For the Forfeiture and revival 

of charters and certificates of authority by the Secretary of 

State. Articles 7.01 and 8.16, Texas Business Corporat.lon Act 

and Articles 7.01 and 8.15, Texas Non-Profit Corporation Act, 

were passed on the same day and are the last expression of the 

Legislature. In so Far as there Is any conflict between Article 

12.17 and these later statutes In the Texas Business Corporation 

and Texas Non-Profit Corooratlon Acts. the latest exoresslon of 

the Legislature would co&rol. De Jei~s de ia 0, In-Fe 

154 Crlm.Rep. 326, 227 S.W.2d 212 (1950). 

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Hon. Martin Dies, Jr., page 3 (M- 600) 

We do not regard the statutes as conflicting. We observe 

at the outset Section 9, of Senate Bill No, 603, which includes 

the amendments to Articles 7.01 and 8.15, of the Texas NonProfit Corporation Act, and S.B. No. 604, which Include the 

amendments to Articles 7.01 and 8.16, of the Texas Business 

Corporation Act. These two sections read as Follows: 

"Nothing In this Act shall Invalidate any 

of the procedures hereby changed by this Act which 

have been Initiated prior to the effective date of 

this Act, and under such circumstances &ing the 

Secretary of State and any other state agency affected 

Is authorized to proceed under the appropriate procedures authorized prior to this Act or as changed 

by this Act." (The word "and!' In brackets was lneluded In Sec. 9, of the Texas Non-Profit Cotiporatlon, 

Act only.) 

said: 

In 14 Tex.Jur.2d 642, Corporations, Section 544, it Is 

"Although dissolution or Forfeiture of a 

charter terminates the existence of a corporation, 

our constitution and statutes preserve a distinction 

between Forfeiture of a charter and dissolution. 

Statutory provisions relating to Forfeitures of 

charters are found in portions of the Revised 

Statutes deemed to remain effective after enactment of the Business Corporation Act. With one 

exception, provisions relating to involuntary 

dissolutions are Found In the Business Corporation 

Act." 

Keeping In mind the above distinction In the statutes, 

dealing with different subject matter, we conclude that the 

statutes concerned are not amendatory of one another,. and they 

do not present any conflict. Under Article 12.17, supra, dealing with Franchise taxes only, the Secretary of State is required 

to determine that the corporation taxpayer has 'no assets From 

which a Franchise tax judgment could be pafd. Under the other 

cited statutes, dealing with corporations generally, no such 

requirement is provided therein. Our courts will adopt a construction of the statutes which avoids any conflict wherever 

possible. 

The statutes clearly demonstrate the Intent of the Legis- 

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. I 

Hon. Martin Dies, Jr., page 4 (M- 600) 

lature to provide the Secretary of State with both the Forfeiture and reinstatement procedures set out In Article 12.17, 

and the forfeiture and reinstatement procedures set out In the 

Texas Business Corporation Act and the Texas Non-Profit Corporation Act. The Secretary of State therefore may Forfeit and 

reinstate charters and certificates of authority under either of 

the procedures provided, and the choice of remedies would be 

dictated by the Facts of each case. 

In answer to your second question, It Is the opinion of 

this office that the reinstatement Filing Fees and the twelve 

month limitation in Article 7.OlE, Texas Business Corporation 

Act, and Article 7.01E, Texas Non-Profit Corporatlon'Act, do not 

apply to relnstatementaor Forfeitures under the provisions of 

Article 12.17, supra. These First two Articles are identical, 

except For the amount of the relnstatement~Flllng Fee, and provide, In part, as Follows: 

"E. Any corporation dissolved by the 

Secretary of-State under the provlslo& of 

Section B of this Article may be remd 

by the Secretary of State at any time within 

a-period of tweive months From the date of 

such dissolution, . . . Reinstatement Filing 

Fee of $50.00 L$25.Og shall accom any the 

application For reinstatement." (925.00 For 

Non-Profit Corporations.) (Pmphasls ours.) 

This statutory language expressly limits the refnstatement 

requirements mentioned above to corporations dissolved by the 

Secretary of State under the provisions of Section 3 of Article 

7.01 of the Texas Business Corporation Act and Section 9 of 

Article 7.01 of the Texas Non-Profit Corporation Act. 

SUMMARY 

The Secretary of State may administratively 

Forfeit charters and certificates of authority 

of corporations For Failure to pay Franchise taxes 

under authority of Articles 7.01 and 8.15, Texas 

Business Corporation Act, For business corporations, 

or under Articles 7.01 and 8.16, Texas Non-Profit 

Corporations Act, For Non-Profit Corporations. The 

Secretary of State may alSo Forfeit charters and 

certificates of authority under the authcrity of 

Article 12.17, Title 122A, Taxation-General, V.C.S., 

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. 

Hon. Martin Dies, Jr., page 5 (M- 6001 

where that statute Is applicable. 

The reinstatement Filing Fees and the 

twelve month llmltatlon provided For relnstatlng charters Forfeited under Section B of 

Article 7.01, of the Texas Business Corporation 

Act or under Section B of Article 7.01, of the 

Texas Non-Profit Corporation Act, do not apply 

to forfeitures made under authority of Article 

12.17, supra. 

s very truly, 

Prepared by Wardlow Lane 

Assistant Attorney General 

APPROVED: 

OPINION CCMMITTEE 

Kerns Taylor, Chairman 

Bill Allen, Acting Co4halrman 

Thomas F. Sedberry 

Robert Davis 

William J, Craig 

Ed Esquivel 

MEADE F. GRIFFIN 

Staff Legal Assistant 

ALFRED WALKER 

Executive Assistant 

NOLA WHITE 

Ffrst Assistant 

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