Court Opinion

ID: 4140807
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:03:26.22397+00
Date Added: 2024-06-11T14:37:13.852768
License: Public Domain

HEATTORNEY                   GENERAL
                                OFTEXAS

                               AUSTIN     II.TEXAS
Gerald C . Mann

   Eouorable Sidney Letham
   Secretary of state
   Austin, Texas

   Dear Sir:                                   Opinion Ilo. O-5508
                                               Re: Adoption of Cooperative
                                                    Marketing Act (Chapter 8,
                                                    Title 93, Revleed Civil
                                                    Statutes) by corporstione
                                                    organized under Article
                                                    1302, subdivision 81; and
                                                    payment of franchise taxes.

             In your letter of llovember8, 1943, regarding the above captioned
   matter, you ask the following queetione:

             1.   "Should thie office under the provlaioua of
        Article 5760 approve and file amendments to charters
        of corporatloue organized under the provleloue of Title
        32 of the Revised Civil Statutes changing the cor-
        porate structure of said corporations to come under
        the provialous of Chapter 8, Title 93 of the Revised
        Civil Statutes?

             2.   "If your answer to the first question la in
        the afffrmatlve, should auoh a corporation after coming
        under the provlelons of Chapter 8, Title 93 continue
        to pay franciee taxes to this department?"

             You handed ua in connection therewith the original charter of
   the Booker Rqulty Union Rxhange, a corporation created May 17, 1920, under
   the provisions of Subdlvlslou 81, of Article 1302, Vernon's Annotated
   Civil Statutes, together with two (2) amendments, filed September 10,
   1940, and July 7, 1941.

             Both amendments were approved and filed with the Secretary of
   State D The 1940 amendment adopted the provisiona of the Cooperative
   Marketing Act (Chapter 8, Title 93, Revised Civil Statutea), and the 1941
   amendment increased the capital stock of the association from $31,238.00
   to $40,000.00.

               The pertinent statutes are:
Honorable Sidney Latham, Page 2, 0-5508

         "To construct orpurchase, or purchase and maintain
    milla, gins, cotton compresses, grain elevators, wharves,
    and public warehouses for the storage of products
    and coamodltles by grain elevator and public warehouse
    companies; the loan of money by such elevator and
    public warehouse companies; and to act as general
    coamerclal brokers and as custom brokers in the
    United States sod foreign countries." (Subdivision
    81, Article l302, Revimed Civil Statutes)

          "An association may be organized to engage
     in any activity in connection with the production,
     cultivation, and care of citrus groves or the
     markatiug or selling of agricultural products
     and citrus fruits produced by and marketed for
     its members, or in the harvesting, preaervlng,
     drying, processing, canning, atorlug, handling,
     shipping, or utilization thereof, or the manufacturing
     or marketing of the by-products thereof; or in
     connection with the manufacturing, selling, or
     supplying to its members of machinery, equipment
     or supplies; or in the financing of tho above
     enumerated activities; or in any one or more
     of the activities specified herein. Provided,
     however, any such activities may extend to non-members
     and to the production, cultivation, and care of lands
     owed or cultivated by them and their products
     llmited by Article 5738 as heretofore amended."
     (Article 5740, Cooperative Marketing Act).

          "Each association formed under this Act
     must prepare and file Articles of Incorporation,
     setting forth: (a) The name of the association.
     (b) The purposes for which it is formed. (c)
     The Place where its principal business will be
     transacted. (d) The term for vhlch it is to
     exist, not exceeding fifty (50) years. (e)
     The nmber of directors thereof, vhloh must not
     be less than five (5) and may be any number In
     excess thereof, and the term of office of such
     directors. (f~) If organized without capital
     stock, whether the property rfghts and interest
     of each member shall be equal or unequal; and
     if unequal, the Articles shall set forth the
     general rule or rules applicable to all members
     by which the property rfghts and interests, re-
     spectively, of each member may and shall be de-
     termined and fixed; and the association shall have
m.   .

         Honorable Sidney Latham, Page 3,   0-5508

              to power to admit new members who shall be en-
              titled to share in the property of the assocla-
              tlou with the old members, in accordance with
              such general rule or rules. This provision of
              the Articles of Incorporation shall not be al-
              tered, amended or repealed except by the written
              consent or the vote of three-fourths of the mm-
              bars. (g) If organized with capital stock, the
              amount of such capital stock and the number of shares
              into which it is divided and the par value
              thereof. The capital stock may be divided into
              preferred and common stock. If so divided, the
              Articles of Incorporation must contain a etate-
              ment of the number of shares of stock to which
              preference is granted and the number of shares
              of stock to vhlch no preference is granted and
              the nature and extent of the preferences and
              privileges granted to each. The Articles must
              be subscribed by the incorporators and acknowl-
              edged by one of them before an officer authorized
              by the law of this State to take and certify
              acknowledgments of deeds and conveyances; and shall
              be filed in accordance with the provisions
              of the general oorporatlon law of this State;
              and when 80 filed the said Articles of Incor-
              poration, or certified copies thereof, shall be
              received in all courts of this State, and other
              places, a8 prima facie evidence of the facts cou-
              talned therein, and of the due incorporation of
              such association, O * . .' (Article 5744, Co-
              operative Marketing Act)

                   "Any corporation or aesooiation organized
              under previously existing statutes, may by a
              majority vote of its stockholders or members
              be brought under the provisions of this chapter
              by limitlog its membership and adopting the
              other restrictions aa provided herein. It
              shall make out in duplicate a statement signed
              and sworn to by ft.6directors, upon forms sup-
              plied by the Secreta~ of State, to the effect
              that the corporation or association has by a
              maJorlty vote of its stockholders or members
              decided to accept the benefits and be bound by
              the provisions of this chhpter. Articles of
              Incorporation shall be filed as required in
              the eighth article of this chapter, except
              that they ehall be signed by the members of the
Honorable Sidney Latham, Page 4, 0-5508

    board of directore.  The flllng fee shall be the
    same as for filing an amendment to Articles of
    Incorporation." (Article 5760, Cooperative
    Uarketlng Act)

          Article 5760, last quoted above, provides that an Aseociation
may adopt the provisions of the Cooperative Marketlug Act by: (1) Ita
Directors filing a worn statement with the Secretary of State to the effect
that by a majority vote of its stockholders, it has decided to accept the
benefits and be bound by the provisions of Chapter 8, of Title 93, of
the Revised Civil Statutes, as amended; (2) Filing articles of lncor-
poratlon as required by Article 5744, Vernon's Annotated Civil Statutes,
signed by the members of the Board of Directors.

          An examiuation of the instruments submitted discloses that the
Booker Bquity Union Exchange has complied with these requirements, and
that the papere they submitted are in order except that when it was decided
to come under the provisions of Chapter 8, of Title 93, it filed what was
denominated au amendment of its charter rather than new articles of
incorporation.

          However, the ameudmeut filed In your office September 10,
1940, contains all that is required by Article 5744 for articles of lnoor-
poratlou, and is signed and acknovledged by the directora. It was
accompanied by the statement required by Article 5760.

          Your first question is therefore ansvered in the affirmative;
and this will apply to other corporations desiring to change their cor-
porate structure to come under the provisiona of Chapter 8 of Title 93,
when such an amendment contains all the information required by Articles
5744 and 5760, and is executed as there preacrlbed.

          Article 5764, Vernon's Annotated Civil Statutes, is pertinent
to your second question, and reads as followsz

          "Each association organized hereunder shall
     pay tc the Commlseloner an annual license fee of
     ten dollars but shall be exempt from all franchise
     or license taxes. For ffllng articles of lncor-
     poratfon, an association organized hereunder shall
     pay ten dollars, and for filing an amendment there-
     to, two dollars and fifty cents."

          You are advieed that, in our opinion, when a corporation changes
its corporate structure In the manner provided in Article 5760, supra.
it is entitled to the benefits of Article 5764 just as a corporation
orignlally organized under the provisions of the Cooperative Marketing
Honorable Sidney Latham, Page 5, 0-5508

Act, and le exempt from the payment of franchise taxes.

                                                       very truly yours

                                                  AlTOFdIlETGElVXBALOF!FEfAS

                                                  BY
                                                           Jama   D. Smullen
                                                                   A~alstant

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