Untitled Texas Attorney General Opinion ( 1946 )

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
JKA:mrj