Court Opinion

ID: 4134116
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:46:15.81196+00
Date Added: 2024-06-11T14:34:13.787205
License: Public Domain

T~EATTORXB~Y               GESERAL
                         OFTESAS

Honorable Martin Dies, Jr.       Opinion No.+551
Secretary of State
State Capitol Building           Re: ..Constructionof Senate Bill
Austin, Texas 70711                   589,,Acts of the 61st Legis-
                                      lature, Regular Session,
                                      1969, Ch. 779, p. 2304 (The
                                      .TexasProfessionalCorporation
Dear Mr. Dies:                          Act).

          Your request for an opinion on the above subject
matter poses the following questions:
          "1. When the Professional CorporationAct
     becomes effective on January 1, 1970, will the
     ProfessionalAssociation Act be applicable only
     to physicians, surgeons, and other doctors of
     medicine, since the definition of ‘professional
     service'.in Section 3 of the Professional As-
     sociation Act limits the provisions of that Act
     only to professionalservices.which 'by law can-
     not'be performed by 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,(architecturestatute) have the effect
     of excluding architects from the provisions of
     the Texas ProfessionalCorporation Act?
          "4. .Mustthe name of'a ProfessionalCoTpora-
     tion include words of incorporation in compli-
     ance with Article 2.OSA(l) of the Texas Business
     CorporationAct?

                               -2626-
Hon. Martin Dies, Jr., page 2   (M-551)

         ‘5,  Must a Professional Corporationdesig-
    nate and maintain a registered office and agent
    within the State of Texas in compliancewith
    Articles 3.02A(lO) and 2.09 of the Texas Business
    CorporationAct?”
          At the outset we note that the ProfessionalCorporation
Act (S.B. 589), the ProfessionalAssociationAct (S.B. 745), and
the amendment to the architecturestatute 0i.B. 516), were all
passed at the Regular Session of the Sixty-firstLegislature, 1969.
These three acts are in pari materia with the Texas Business
Corporation Act, and all four acts must be construed in that con-
text.
                         QUESTIONS 1 C 2
          The 61st Legislature in its Regular Session, passed "The
Texas ProfessionalCorporation Act", Senate Bill 589, Chapter 779,
page 2304, which,becomes effective January 1, 1970.      .
         Section 3 of the above act sets forth a definition of
"ProfessionalService" and also defines a 'ProfessionalCorpora-
tion'. This section reads as follows:
          "Sec. 3, as used in this Act, unless the
     context otherwise requires, the term:'

         :atlonof the generality of the foregoingpro-
     visions of this definition, the personal services
     rendered by architects, attorneys-at-law,certified
     public accountants,dentists, public accountants
     and veterinarians; provided, however, that physi-
     cians, surgeons and other doctors of medicine are
     specificallyexcluded from the operationsof this
     Act, since~there are established precedentsallow-
     ing them to associate for the practice of medicine
     in joint stock companies.
          "(b) 'ProfessionalCorporation*means a
     corporation.organizedunder this.Act for the sole
xon:Martin Dies, Jr., page 3 (M-551)

     and specific purpose of rendering professional
     service and which has as its shareholdersonly
     'individualswho themselves are duly licensed or
     otherwise duly authorizedwithin this state to
     render the same professionalservice as the
     corporation.' (Emphasisadded.)
            In construing the above.quotedstatutory provisions
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 services which could be legally per-
formed by a corporation prior 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 Corporation Act
for the purpose of performing engineering services, the pro-
visions of the Texas ProfessionalCorporation Act do not apply
to professional engineering services or to corporationswhich
perform such services.
          Section 6 states that the purpose of the Texas Pro-
fessional Corporation Act was to authorize corporations to be
organized for the purpose of rendering.onespecific type of pro-
fessional service and services ancillary thereto.
          In view of Section 3 of Senate Bill 589, the bill does
not apply to any professional service which could have been per-
          a corporation
formed by .  .._- _     prior to
                              -. the.passage
                                     ..a     of this act. In
addition tne b~l toes not appry to pnysicians, surgeons MCI
other doctors of medicine licensed by the Texas State Board of
Medical Examiners, since these individuals are specifically
exempted. Corporations are not legally authorized to practice
medicine in view of the provisions of Article 4505, Vernon's
Civil Statutes. Rockett v. Texas.State,.Board of Medical Exam-
iners, 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)            Any one.or..morepersons
                  Fornation.
     duly licensed to practice a.professionunder
     the laws of this state may, by complying with
     this Act, form a professional association,a.8
     distinguished from either a partnership or a.
     corporation, by associating themselves for the
     purpose of performing professionalservices and

                               -262th
Hon. Martin Dies, Jr., page 4    (M-551)

     dividing the gains therefrom as stated in arti-
     cles of associationor bylaws.',,
          '(B).Activities. No professional associa-
     tion organized pursuant to this..Actshall en-
     gage in more than one type of professional serv-
     ice.
           * (C) Licenses. All hembers of the associa-
     tion shall.be.licensedto performthe type of
     professional service for which the-association
     is formed.”
          In view of the provisions of Section 2 of Senate Bill
745, a professional associationis not a corporation and the act
applies to any person licensed to practice a profession under
the laws of this State. Professionalservice as used in the
provisions of Senate Bill 745 (ProfessionalAssociation Act) 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 service by law cannot be
     performed by a corporation. The term 'license'
     includes a license, certificateof registration
     or any other evidence of the satisfaction of
     state requirements.'
          After the effective date, the Texas ProfessionalCorpora-
tion Act (Senate Bill 589), the only pro?essional service which
'isnot permitted to be performed by a corporation is the pro-
fessional 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 (ProfessionalAssociation Act),  it
is our opinion that after January 1, 1970, the effective date of
the Professional Corporation Act, the Professional Association
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'onexcept the practice of
medicine, can be incorporatedand the services can by law be per-
formed by a corporation.
                        'QUESTION 3
          House Bill 516, Acts   of the 61st Legislature, Regular
non. Martin Dies, Jr., page 5 (M-551)

Session, 1969, Ch. 802, p. 2377, relating to architects, specifi-
cally authorises.theprofession of architectureto be performed by
a corporation. Said act became effective June 14, 1969. There-
fore 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 corporation pursuant 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;alAsphalt 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$sions do not
apply to.corporationswhich 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
Corporation Act do not apply to architects.orto corporations per-
forming architecturalservices. Bowever,  after June 14, 1969,
architects could incorporate under the Texas Business Corporation
Act, and they may continue to be so incorporated.
                         $&lESTXGNS4 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
  (PrcfessionalCorporation Act)  provides that the Texas Business
 Corporati&n Act rhall be applicable to-professionalcorporations
 exaept to the extent that the provisions of the Texas Burinesa
             Act conflict with the provilioni of the Professional
 .Corporation.
 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 pro-
visions of Article 2.09 of the Texas Business Corporation Act
are applicableto corporations formed under the Professional
Corporation Act.
                            SUMMARY
          The Professional CorporationAct (Senate Bill
     589, Acts of the 61st Legislature,Regular Session,
     1969, Ch. 719, p. 2304) applies to all professions
     which could not incorporate prior to the effective
     date of the act (January 1, 1970). After January
     1, 1970, the provisions of the ProfessionalAs-
     sociationAct (Senate Bill 745, Acts of the 61st
     Legislature,Regular Session, 1969, Ch. 040, p.
     2513) are applicable only to individualslicensed
     to practice medicine by the Texas State 'Boardof
     Medical Examiners. The effect.of,the1969 amend-
     ment to the architecture statute.(Chapter802,
     Acts of the 61st Legislature, amending Article
     259a, Vernon's Civil Statutes) was to exclude
     architects from the provisions of the Texas.Pro-
     fessional Corporation Act, but architectsmay in-
     corporate under 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 Professional Corporation Act.n

Prepared by John Reeves
Assistant Attorney General
Ron. Martin Dies, Jr., page 'I (M-551)

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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