OFFICE OF THE AlTORNEY GENERAL OF T’EXAS 

AUSTIN 

You hsvs 

1~8 the eonstruotion 

VLed Civil statuts8 

iJleuraAnae 0oERpRn1atl. 

Opinion Ho 1 

?e: c0fiaOiida4237 0r in ana* 

v a 

+ 

aoqmnies under t. 400SO& 

'I 3.C.S. 19 

nubbnrilit to rel questions Fotolv0r m 

Tax 0 0 1*8 0 0&0lidttti08 

e8 04 'an 5041 Vemoa*r I?.- 

0r , 0r 

alder Art*. 5040 

hutare MdOF th. 

t neau8arg to *mend 

h it Bmhllo~ 6apltal oboak 

5erger. . . . and req,uire 

BfmRta aB repremz%ti.Rng the 

eiore insuranira ocmpmla8 dolnd a 

rinsof4 wNah are and hvo Been subrtanticontrolling sto8kholdare and rrhioh have 

as.aotual.LJ aompatlng with @ash other, 

hamp have b4.n~ pradoualy ortpuxlasQ under 

1116 Rtete, atap unite or ocarolidate upon mapliaooe with the terns, or thir law. Suoh aonsol~dation 

shall not be m9otmted in riolatiori or the anti-trwt 

and *ntl-monopoly lawn or this State. Berore auy rooh 

aousolld8tian shall take plaar Elm psrtlos holding art leas8 

two-thirda of the capital ntook of aaeb of the oeeganlos 
h. 0. P. Lookhert, pa%s 2 

shell vats in Zevor thereor at e separete aeetlnng or the 

etookholdere of eaah aoapaay aalled ror euah purpoee. 

Suah neatln$ map bs salled in bhe smnaer provided in 

the by-lawa of the Faepestlve 0os;malee OF the Iawe ondor 

tile& suab ooqmnlee are o~izeaiaed, 14 oalltig eprahl 

awtijpig~ or etookhOldeF8, esoe# that eaoh ntoakboldor 

ehall~,.be notlried by aall. of the time end plaae and obfeot 

or 8wh 8+watg.* 

.b.rtr 5041 pravi4art 

%%ch kapaaiee ptopoeiag to eoaeolldste aey unite 

their aer;ate OS eap pert thersor and beoole inoorpmeted 

in ona body m&r th* nupe or my OII, OF aolpa of a& 

oarpeniar cc’ &&a~ eny otthas aam4 thet may bo a ilq!j UwJb Mb iea lre teelk a a uo i% oorp QF stitte atno l l tQokhe OF B 

OS eeoh of the ooqariiee ao.neelldatod, the eotwl value 

or whioh 8Doek fa t&a am ocwpuyl ehall beer the came proportion to the eotual valw et. b&%atoak eurrwSueU by 

l uoh l tooklwl4~r 

r~Qar:og maah 

+ We entlti Beebe ot the mapany IPI 

0 

asw ooqmny, rhloh ““x% 

::,, 8ese tb the MtiFe ae~ata of the 

aa l he21 be ago@4 qmn by the beard 

or dlreatora or 088h”~o 

holder8 (holding tw6- 

1 gtsorldaQl theti l eid hooks* the rtook) rmr~ et the 

muting pwwiue4 r0r .ta, thi,weaodiry l r tia ld*lo@a e, 

tha vahetlon ,ci aemte t&a samnittea ot Hieakhaldon 

appointed br their reageattre bmrdr or dlreotore; 8r 

*2. orpr mqmaq aey teki owir all the aeeete of 

the other aa%pas@e ptopoefm to oonmlldrta an4 ieme 

6tO6k to theirrtiookbO’ld8Fs iS th* ~FOp6Stt66 tht th. 

valuq,or 06el~ esoek b6we ta bha eatire value 09 the 

ad&i of ~$hc. a++qq 6n vi&oh they asa rtoakkol~m?@, 

aad for thijs gmrpcrrre the aapikl etoak ei 6uoh pureslrrlng 

emmy trry be inoreeeed, te now OF mey b* herearter provld.4 by l.ew. 

“3:. In ~880 or awealfdatioe M~V the fleet 8 t1o11 

pfovided in the rlret eubdivfeion hereof, the Weeies P BBer 

ehsll upon proof tarnished of ooqlteeoe with the tenan 

hereof’ WXI beilM: l tlefied thet tba pFWmed oan*olidetlc#l 

is ror the brrt interseta of Ohs llay holdem et the 

reepotivo 06?~pmlem and MLde iii r ~@8e)rdt8nOt9 With leW&RU 

e; ~~~~~~~~h~Q~~~~~ P%. 

nnd delltar a aharter CO *aOh LL@W O~puY* 
#&. 0. P. xmkhart, pa@ 3 

"4. SuQh ewwolidatfao shall uork a df8uolution of 

the oompamie~ absorbd, but shall in 80 wise prrjudiaa the 

right of aZig 4xadftor of azip 6uoh oorporatian to har4 pap 

want O? hia debt out ot tha assets end property thwsof, 

nor shall w oreditor be thereby daprived of, nor prajudiOti iA .A$' Si&ht Of 80tkOn than peAfling @I' rxhtin& 01 

whiah msy thsreaftm aslm a@Autt said oo~pany, and mr- 

+icro or S~QIW Qf the proper offi44rs or a&eats of ssah 

new tar r4orglrnlldd aorporatlon aball be doam saitioiant 

aa to all or any of aaah 04qmni4s. 

"5, AlI pOli410a of insuraaoa oatstaadlsg agsla8t 

all s&oh aompaaies rhali by raamn of rueh aonselidatitwz 

br arsumsd by ~tlha rcrorgluriad ronpaty, aaQ they *hall carry 

oat the tesiw Of suoh pdlioy on th4 

r 

t ot the lnsuror end 

be astitlad 60 all the rlglhta and pr rllagaa thsmof and the 

;;;;m48 8oo~letiniF: on aaah polfog prior to sa0k aon8ollda- 

.I 

It till' ba &ba&xrad that the firat option pro+lQe& 

br Art. 504l pro~ldas teea n0vA80116e~tloA* and oontem letas 

zp 

thr 

orgpmlaation of a naw aorposn$lpn to take over the baa sass and 

urotr or the croanolidatlng, obspaalas; nbilr the sa0oad O~%OA 

aontsr fat48 a *m4rg4rP", with one vf' tha eorporatioo6 eontlaabg 

it8 us f stume, but l eqd.rlng Eke a'68ets OS tha othesrri 

11n the 0880 qf the "ooaablLidntfOn*, 110 e A4B Of 

the olmrtor of either of the corpwatians 18 iarolva vkdta- ) 

tatas oont4mplatoa thr issuanos ol a sew abrter 60 a 31s~ mm-*. 

'PhO 0Epikl. Rt?UOtUSO Of th0 “A4W 0mw” Il.86 ZtOt 4XO.d tee 

aapltal struotwe or aithar of t&s aonsolldstina; BOQpU3lasf all 

that 10 reqalred Is .+&at the aapital steak of thr4aw 0oapaAy~ 

be distributed among the stoakholdar8 of the 0QA8QliQatkrg 8014 

orstlons in sush ammaw thr6t *the actual vaLlaO* 02 the sto0k 

L the mw oosporatlon gdtan to eaah storkheldw "shall bw tha 

saaa proportion to tim aotual velua of the steak swrrs&itra4* by 

sa6h 8tookbolPer *an tba~antirs assots of tha OOmpaAY aUSS*nd~iag 

aash atook beara to thn aatlrs asaat&+f the A- OwQW.* 

i.., 
m. 0l.P. Lsakharti, page 1, 

IA wbioh ther ire stookhoL40rsa, ths tnormso I@ not man5atvryg 

,the, 0apital #took may s&saia the mm, baa say be rsa 

Aetgl(((; the st@akholdors ai tbc abaorblne and ths ebsor 

pesti-@ 

Ii ad, ampany. 

The 8eOanb branch Of pow question ingulres whsthar 

upon *oonrollQatSon* , or apen *aorger” with SA 8ttsnCant larseas* 

IA tha Oapita’l #tOOk Of the 8~WIving oo&qaAy for tha pltrpoae of 

l ff$ 0tiAM g .ppVStiO+Mt Plnong tha #tookholders Of t&e respaet~M~@oqaaio# of lts&ock, partlotiar assets as& ba deai@at& 

aa rqpreaaatlng the aagltsl steel la the woonsolIUatadw 0-w 

0~ the Qple hand, et as reproseating the Increa8o In cupit swok 

la the %ar@ax* on the o6har. 

XA tlilr 0i3nneotlon, toa asu oonemaed with the l tseo t 

ffh/. 4720 upon oonsolldatioas OF aargars undar Art. 5040 an& 

l 

hrti. 4720 prorld*sr 

Vihon the fkst reotlag of the 8toakholdscs shall bm 

hali3 end tha ofriears a? tha OoapaJly ela&r9* the pm#i&wlt 

or l rerstnry shall notify t&o Comlaslon~r~ arnd he aball 

thmroupoa lmmdiataly make, or oauae to be u&o, at t&s 0x0 

pan80 ot the oaapuby, a fall and thorsagh axamiaatlvn thumb. 

Xf he rinds t&d all of the erpltel atoak of the ooopuiy, 

awuattn& to not less thm oaa hundred thousaad dollars, hss 

boon tally p&Q up an& Ss In the ou8to&y e? the nff&sars, 

aIth8r la oaah ov seoarltlaa of t&s olsss in whloh sash o(*r 

paalaa ars l uthariaad bl this chqtaprbo bweet or lsaa tbeIir 

funds, ho shall ~~QWI ta 6wh aoa~paay a aaftifiaate ai authority to traaaast aaoh kind or kLnda ot i~snrranes ba&ers~ritbln 

this stat* as sash 0rmm8 glsg B 

P 

yly tar. WH% as m&y be aathorIaad by fita ohartaet wbiPh aertir cats shall axpjra #&I t&e 

last day ot Plabroary aart aitor ths data 31 it8 is#uan~& 

Before suah stitiflorte la Iasned, AQt l45e thaiI tw@ OffiO~S 

of EUOR company shall emout atd file with ths GosYissiBd~ 

a sworu eohedule of all the. astratr of ~the ooqany -b&tad 

84 hita upon suth esamfnatlaa , shoriug ths valqa UsraW, EDsa$har wItA s stern ststaaent that the 65a4 ere bona ifda, 

%a wuon<io~ral and urianaumbarea pso-party of the oeqaaY 

gad are rotth the emurats tatat#l in suoh aohdtalo. HO o~~II&@ 

or fir& aattiffcate or aatbority ohall bo &ra~bml axeapt l.A 

a6dordty hsrmith, regardleas ef the data 0% iillne 0r tha 

utialto of inaorporation with the Comalralcw6r.* 

&rer 0. P. Iaekhwt, pets 6 
8. ?Y. ?ni+ahild 

Aari88M8