233 N.W. 386 | Mich. | 1930
Plaintiff was organized May 26, 1899. Its period of corporate existence was 30 years, ending May 26, 1929. It took the steps necessary to extend its corporate life for another 30 years. Its authorized capital stock shown by its articles of association executed to extend its corporate life was $1,000,000. August 29, 1929, the corporation filed its annual report showing the condition of its business as of May 26, 1929, the date of its reincorporation, showing capital stock $1,000,000 and surplus $94,855.62. Subsequently the corporation filed a report showing this condition as of December 31, 1928, when its capital stock was $1,000,000 and its surplus $101,582.97. Plaintiff claims it is entitled to be treated as a new corporation, and that it should only pay the fees required upon the organization of a new corporation. Defendant contends plaintiff should pay the annual franchise fee and the additional fees on the extension of its corporate life.
By Act No. 72, Pub. Acts 1927, plaintiff was obligated, in the month of July or August, to file a *480 report in duplicate with the secretary of State showing its condition at the close of business on the 31st day of December, or upon the date of the close of its fiscal year, next preceding. Every such corporation organized on or after January 1st and prior to August 31st of any one year should file a report in duplicate showing the condition of its business at the date of incorporation and pay a filing fee and a privilege fee of $10.
In Ray Corporation v. Secretary of State,
"All corporations whose terms of corporate existence shall have expired, or shall be about to expire by limitation, and who shall seek to extend or renew such corporate existence, in accordance with law, shall be regarded as new corporations for the purpose of the payment of the fees provided by this act, and shall be required to pay such fees before the extension or renewal of such corporate existence."
We think the intention of the legislature, by this statutory amendment, was to compel corporations extending or renewing their corporate existence in accordance with law to pay the fees provided by the act before the extension or renewal of such corporate existence, and that this must necessarily be limited to the payment of such fees as a new corporation just organizing would be compelled to pay; but that this would not exempt the corporation from paying the fees which it was required to pay under *481 the provisions of section 4, Act No. 85, Pub. Acts 1921 (Comp. Laws Supp. 1922, § 11361 [41), as amended by Act No. 140, Pub. Acts 1927, at the time of filing its annual report with the secretary of State as required by section 5, chap. 2, pt. 5, Act No. 84, Pub. Acts 1921 (Comp. Laws Supp. 1922, § 9053 [173]), for the privilege of exercising its franchise and of transacting its business within the State.
The effect of Act No. 84, Pub. Acts 1921 (Comp. Laws Supp. 1922, § 9053 [1] et seq.), and of Act No. 85, Pub. Acts 1921 (Comp. Laws Supp. 1922, § 11361 [1] et seq.), as amended, when construed together, is to compel a corporation extending its corporate existence to pay a franchise fee to be a corporation as well as a franchise fee for transacting its business in the State as a corporation. As pointed out in Union Steam PumpSales Co. v. Secretary of State,
"There is a distinction and a well recognized one between the franchise to be a corporation and the franchise to do business as a corporation. One is the franchise 'to be,' the other the franchise 'to do.' One belongs to the corporators, the other to the corporation."
The franchise fee imposed upon the corporators upon the execution of their articles of association for the purpose of extending or renewing corporate existence is to be paid by them. The franchise fee to do business as a corporation is to be paid by the corporation. We think the corporation tax appeal board arrived at a correct conclusion, and its order is affirmed.
WIEST, C.J., and BUTZEL, CLARK, McDONALD, SHARPE, NORTH, and FEAD, JJ., concurred. *482