### T~EATTORXB~Y 

### GESERAL
OFTESAS

Honorable Martin Dies, Jr. Opinion No.+551 Secretary of State State Capitol Building Re: ..Construction of Senate Bill Austin, Texas 70711 589,,Acts of the 61st Legislature, Regular Session,

Dear Mr. Dies: 1969, Ch. 779, p. 2304 (The .TexasProfessional Corporation Act).

Your request for an opinion on the above subject matter poses the followingquestions:

"1. When the Professional CorporationAct becomes effectiveon January 1, 1970, will the ProfessionalAssociationAct be applicableonly to physicians,surgeons, and other doctors of medicine, since the definition of ‘professional service' .inSection 3 of the ProfessionalAssociation Act limits the provisions of that Act only to professionalservices.which 'by law cannot'be performedby a corporation'?

“2. Other than those professions licensed by the Texas State Board of Medical Examiners, what professions,if any, are included within the phrase 'physicians, surgeons, and other doctors of medicine' as used in Section 3 of the Texas ProfessionalCorporation Act?

‘3. Does the amendment (Chapter 802, Ac’ts of the 61st Legislature, Regular Session) ts X-title 249a, Vernon's Annotated Civil Statutes,(architecture statute) have the effect of excluding architects from the provisionsof the Texas ProfessionalCorporation Act?
"4. .Mustthe name of'a ProfessionalCoTporation includewords of incorporation in compliance with Article 2.OSA(l) of the Texas Business CorporationAct?

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‘ 5, Must a ProfessionalCorporationdesignate and maintain a registered office and agent within the State of Texas in compliance with Articles 3.02A(lO) and 2.09 of the Texas Business Corporation

Act?”

At the outset we note that the Professional Corporation Act (S.B. 589), the ProfessionalAssociation Act (S.B. 745), and the amendment to the architecturestatute 0i.B.516), were all passed at the Regular Session of the Sixty-first Legislature, 1969. These three acts are in pari materia with the Texas Business CorporationAct, and all four acts must be construed in that context. QUESTIONS 1 C 2

The 61st Legislature in its Regular Session,passed "The Texas Professional Corporation Act", Senate Bill 589, Chapter 779, page 2304, which,becomeseffective January 1, 1970.

.

Section 3 of the above act sets forth a definition of "Professional

Service" tion'. and also defines a 'ProfessionalCorporaThis section reads as follows:

"Sec. 3, as used in this Act, unless the context otherwise requires, the term:'

:atlonof the generality of the foregoingprovisions of this definition, the personal services renderedby architects, attorneys-at-law, certified public accountants,dentists, public accountants and veterinarians

; provided, however, that physicians, surgeons and other doctors of medicine are specifically

excluded from the operationsof this Act, since~

there are establishedprecedentsallowing them to associate for the practiceof medicine in joint stock companies. "(b) 'Professional Corporation*

means a corporation.organized under this.Act for the solexon:Martin Dies, Jr., page 3 (M-551)

and specific purpose of renderingprofessional service and which has as its shareholdersonly 'individuals

who themselvesare duly licensed or otherwise duly authorized within this state to render the same professionalservice as the corporation.' (Emphasis added.)

In construing the above.quotedstatutoryprovisions this office concluded in Attorney General's Opinion M-539 (1969) that the provisions of Senate Bill 589 do not apply to corporations which perform professional serviceswhich could be legally performed by a corporationprior to the passage of the act. Attorney General's Opinion M-539 concluded that since a corporation could be legally organized under the Texas Business CorporationAct for the purpose of performingengineering services, the provisions of the Texas ProfessionalCorporationAct do not apply to professional engineering services or to corporations which perform such services.

fessional organized fessional Section 6 states that the purpose of the Texas ProCorporationAct was to authorize corporationsto be for the purpose of rendering.onespecific type of proservice and services ancillary thereto.

not apply formed by In view of Section 3 of Senate Bill 589, the bill does

to any professionalservicewhich could have been pera corporationprior to the.passageof this act. In

. .._- _ -. ..a addition tne b~l toes not appry to pnysicians, surgeons MCI other doctors of medicine licensedby the Texas State Board of Medical Examiners, since these individualsare specifically exempted. Corporationsare not legally authorized to practice medicine in view of the provisionsof Article 4505, Vernon's Civil Statutes. Rockett v. Texas.State,.Board of Medical Examiners, 287 S.W.26 190 (Tex.Civ.App. 1956, error ref. n.r.e.).
Senate Bill 745, Acts of the 61st Legislature,Regular Session, 1969, Ch. 840. p. 2513, authorizes the formation of a professional association. Section 2 of Senate Bill 745 provides:

* (A) Fornation. Any one.or..more persons duly licensed to practice a.professionunder the laws of this state may, by complyingwith this Act, form a professionalassociation,a.8 distinguished from either a partnershipor a. corporation,by associatingthemselves for the purpose of performingprofessionalservices and



### -262thHon. Martin Dies, Jr., page 4 (M-551)

dividing the gains therefromas stated in articles of associationor bylaws.',, '(B). Activities. No professionalassociation organized pursuant to this..Act shall engage in more than one type of professional service.
* (C) Licenses. All hembers of the association shall.be.licensed to performthe type of professional service for which the-association is formed.”

In view of the provisionsof Section 2 of Senate Bill 745, a professional associationis not a corporationand the act applies to any person licensed to practice a professionunder the laws of this State. Professionalservice as used in the provisions of Senate Bill 745 (Professional AssociationAct) is defined in Section 3 of Senate Bill 745 as follows:

*As used in this Act, the term 'professional service8 means any type of personal service to the public which requires as a condition precedent to the rendering of such service the obtaining of a license, and which serviceby law cannot be performed by a corporation. The term 'license' includes a license, certificateof registration or any other evidence of the satisfactionof state requirements.'

After the effectivedate, the Texas ProfessionalCorporation Act (SenateBill 589), the only pro?essional service which 'is not permitted to be performedby a corporation is the professional service rendered by individuals licensed by the Texas State Board of Medical Examiners. In view of the provisions of Section 3 of Senate Bill 745 (Professional AssociationAct), it is our opinion that after January 1, 1970, the effectivedate of the ProfessionalCorporationAct, the ProfessionalAssociation Act applies only to individualslicensed by the Texas State Board of Medical Examiners. Our conclusion follows the.fact that after January 1, 1970, any professi'on except the practice of medicine, can be incorporatedand the services can by law be performed by a corporation.

'QUESTION 3

House Bill 516, Acts of the 61st Legislature,Regularnon. Martin Dies, Jr., page 5 (M-551)

Session, 1969, Ch. 802, p. 2377, relating to architects, specifically authorises.the profession of architectureto be performed by a corporation. Said act became effectiveJune 14, 1969. Therefore the question presented is whether the phrase aprior to the passage of this **Act ”**  **,** contained in Section 3 of the Professional Corporation **Act,** has the effect of excluding architects from its provisions since architectural services after June 14, 1969, could ",;,e;f;rmed **by** a corporationpursuant to the provisions of House

. The phrase "date of passage- has been construed by the 3udiciarv of this State to mean the date the act becomes ooerative is a law. Scales v. Marshall, 96 Tex. 140, 70 S.W. 945 (1902); Glaveston, h. h.S;A..Ry Co. Y. State, 81 Tex. 572, 17 S.W. 67 (1891)j Calvert.v...Gene;al Asphalt Co.. 409 S.W.2d 935 (Tex.Civ. App. 1966).

The effective date of the ProfessionalCorporation Act (Senate Bill SBg).is.January1;!970, and its.prov$sionsdo not apply to.corporations which perform professionalservices .which could legally be performed by a corporationprior to the passage ;fg;;; act (January1, 1970). Attorney General's Opinion M-539

. Therefore in answer to your.third question our answer is "yes'. You are advised that the provisions**of ’** **the** Professional CorporationAct do not apply to architects.orto corporationsperforming architecturalservices. Bowever, after June 14, 1969, architects could incorporate under the Texas Business Corporation Act, and they may continue to be so incorporated. $&lESTXGNS

4 L 5 subaivis,ion

(A) of Article 2.05 of the Business Corporation**Act requires**  that the corporate**name** shall contain -the word corporation,company or..incorporated, **or** shall contain an abbreviationof such words and @hall contain additional words as may be required by law. Section 5 of Senate Bill 589 (Prcfessional

Corporation Act) provides that the Texas Business Corporati&n**Act** rhall be applicable to-professional corporations exaept to the extent that the provisionsof the Texas Burinesa .Corporation.

**Act** conflict with the provilioniof the Professional Corporation **Act.**Hon. Rartin Dies, Jr., page 6 (M-551)

In **answer** to Question 5 you **are** likewise advised that the provisions.

of Subdivision 10 of Article 3.02A and the provisions of Article 2.09 of the Texas Business CorporationAct are applicableto corporations formed under the Professional CorporationAct.
SUMMARY

The ProfessionalCorporationAct (SenateBill 589, **Acts** of the 61st Legislature,**Regular** Session, 1969, Ch. 719, p. 2304) applies to all professions which could not incorporateprior **to** the effective date of the act (January 1, 1970). **After** January 1, 1970, the provisions of the ProfessionalAssociation**Act** (SenateBill 745, Acts of the 61st Legislature,Regular Session, 1969, Ch. 040, p. 2513) are applicable only to individualslicensed to practicemedicine by the Texas State 'Board of Medical Examiners. The effect.of,the 1969 amendment to the architecture statute.(Chapter 802, Acts of the 61st Legislature, amendingArticle 259a, Vernon's Civil Statutes)was to exclude architectsfrom the provisions of the Texas.**Pro** fessionalCorporation Act, but architects**may** incorporateunder the Texas Business Corporation Act. The provisions of Article 2.OSA(l), 2.09 and 3.02A(lO)of the Texas Business CorporationAct **are** applicable to all corporationsformed under the ProfessionalCorporation **Act.n**

Prepared by John Reeves AssistantAttorney GeneralRon. Martin Dies, Jr., page 'I 

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APPROVED: OPINION COMMITTEE

Kerns Taylor, Chairman Alfred Walker, Co-Chairman Sam Jones Bill Allen Richard Chote Wardlow Lane

MEADE F. GRIFFIN Staff Legal Assistant

NOLA WHITE First Assistant



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