Court Opinion

ID: 4138932
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:42:00.272696+00
Date Added: 2024-06-11T14:19:35.230483
License: Public Domain

676

        OFFICE   OF THE   ATTORNEY     GENERAL    OF TEXAS
                              AUSTIN

Honorable Claude Isbell
Secretary of State
Capitol Station
Austin, Texas
Attention:   Luther Estes
Dear Sir:

          Xe have received yo
which is quoted as follows:

                                                 ection with

                                   il Corporation, a
                                   bout July 17, 1946,
                                   ertificate of re-
                                   ffice classified
                                   ent to its original
                      rgoration and demanded payment
                      iling fee of $50.00 as provided
                      914 R.C.S. of Texas as amended.
                e 1537 R.C.S. of Texas provides
                foreign corporation, after a per-
    mit has been granted it to do business in this
Honorable Claude Isbell, Page 2

    State, shall immediately file with the Secretary of State
    a certified copy of any amendment or supplement to its
    original articles of incorporation when any such amendment
    or supplement to its original articles of incorporation
    is filed in the state territory or foreign country under
    whose laws such,corporation is incorporated.'
         "Article 3914 provides that, and we quote in part,
    'Upon obtaining a permit under Article 1529 and upon fil-
    ing a certified copy of any amendment or supplement under
    Article 1537, each foreign corporation shall pay the
    following fees: - - - (Certain fees are here set out
    based upon issued capital stock which we deem unneaessary
    to outline) - - - ; provided that the minimum filing fee
    for any amendment or supplement shall be Plfty ($50.00)
    Dollars.'
         "Under our interpretation of the foregoing articles,
    we believe that the certificate of reduction of capital,
    above referred to, is properly classified as a supplement
    to the original articles of Incorporation and, therefore,
    subject to the minimum filing fee of $50.00. 'fhe corpora-
    tion, however, has contended that the certificate is not
    an amendment to the charter or articles of.~incorooration
    and that the fee has erroneously been assessed. In fur-
    ther support of their contention they claim that the
    capital was reduced without affecting the total number of
    shares authorized. It must be noted, however, that both
    Articles 1537 and 3914 refer to any amendment or supple-
    e,    and we are basing our assessment strictly upon the
    fact that the instrument is a supplement.
           "In the light of the provisions of Articles 1537 and
3914 supra, we request your opinion on the following ques-
     tion:
          'Does the filing of a certificate of reduction of
     capitel by a foreign corporation constitute an amendment
     or supplement to the original articles of incorporation a;:d,
     therefore, subject to the payment of the minimum filing
     fee of $50.007"
          Article 1537, V.A.C.S., authorizes the filing of
amendments or supplenents to the original articles of incor-
poration of foreign corporations, as fOlloWS!
          RArticle 1537.   Amendments to charter.
                                                          ,I:
     *
                                                                678
HonorableClaude Ishell,Page 3

         "Each foreigncorporation,aPtor a permit *
    baa been grantedIt to do bueinesain this State
    ahall imediatol~ file with the Seoretarrof Stats

    rmehanrendment
                or rtuplementti3its origbal ti-
     ticlaaof incorporat
                       f:
                        on ia filed in the state ter-

         'Pheproriaioneof Article 39X4,V.A.C.S.,amoxq
otherthings,enumqatssthe fses the Secret     of 3tata is
requirbdto ohargaforeignaorpuratiasapon=-ii
                                          f ing certi-
fied o Lee of amendmentsor supplements,the relevantparta
      "B we quote a# follwst
of whit
                 3914. Setrrdtary
         *Artisl.e             of State,
         W&e Searetaryof State ti authorizedand
    retpairbd
            to chargefar the use of the State the
    followingothbr foear
         ?I4   . l

          The Ckrtificateof Reductionof Ca ital of this
foreign corporationwhich is doing busineaaEn Texas haa been
filed in the offiesof the Secreteryof State for the Stats
of Delaware. A5 aueh, ff the instrumentis an amendmentto
the originalarticlesof incor ration on file in the State of
Delaware,it clearlycomeawit            ovisions of Article
1537 supra,uhioh roquireoa             topy thereoPto be
file& with the Secretaryof State of Texas. It uill then fur-
ther incur the paymentof the nininuu filing fea requiredby
the underlinedportionof hrticle  3’?&, oupra.

         The statutesof both Toxm end Delawareapedfi-
tally prescribetho mannerby which a corporationmay I‘e-
                                                                 679

Honorable Claude Iabell, Page 4

duce itm capital stock and each requires certificates to be
filed in the respective offioee of the Secretaries of State.
          For a statute to constitute an amendment to a cor-
porate charter, it is generally required that such statute
correct, improve, reform or alter the original articles of
incorporation. Yher&the Legislature has enacted a statute
authorizing a corporation to mortgage its property or in-
crease Its capital stock r w     other fundamental change a
tha charter or ita basic f-eatures, & & an ainendment  z

the oharter, whether termed 80 or not. 18C.J.S. Corpora-
tion-        It is our opinion that the reduction of capital
of this aorcoration bv the amount of one million seven hundred
fifty thousand ~dollar; (#1,750.000,00) by the retirin< of
175,000 shares of common stock of the par value of $10.00 per
share is a material alteration of the original articles of
inaorporation.
          It is consequently our further opinion that the fil-
ing of the certified copy of the certificate of reduction of
capital hereunder consideration may properly be classified as
an amendment to the corporation's original articles of incorpora-
tion and as such is subject to the payment of the minimum fil-
ing fee of $50.00 as prescribed by Article 3914, Y.A.C.S.
                                  Very truly youss,
                              ATTORNEY GENERAL OF TEXAS

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