Case Information

*1 ‘: .,, OFFICE OF THE ATT’ORNEY GENERAL OF TEXAS 4.. AUSTIN

somrable Ueorge H. Fhagsmrd

8tete Comptroller OS Publio Aaoounta

AUdibl, %WSS

We hsvo raaelved

en opinhm fr01~ this deptm

or not it ie neooarmv to p

upon 90% of authorlaed

mm-par talus atook of 8 T

c 388S1on, 4nsotod lo 15, of XouBe will Xo. 6.

6 departmnt hold; quoted language to 0 tax 6n ori&aal r t&4, ooa?poretion’8 rubrorlptloa em- olueion aa the non-taxsbiXfty of 6 stook do08 aot 4xtcnG to end em- onoe outetondlng fn the hands of t&e publio and hae been purohased by tbe oorporatfoa for reaolc.

~uoh stook la not original iam atook end $8 taxable.

*. . . .* ?!bolptcr 19A ::!: the} hQb~d Civil .FYsttUtes Tarea, 1925; bafnp, 'rtfclee 2:‘38a to 169@m, inelusive, ia the Texea MAW dut!l!q~ tith non-per oorporetione. ,L.rticle 153&k, RU'JTL), proridso:

*Upon the organization, undrr the law8 of of an private oorporkition rm pro- thie 3.ate, tit , . . . praric x on my be atede for the iseu- anon of oheros of its staok without nor~nal or per value. Every auoh shsra &ml1 bs uqual in elf. respcotc to avery other suoh sham, ccroept that the charter or 4ny 4aondment thoreor may proriCe that suoh nharcr d10u1d be airride iato Different ola884a, tha sharoa of seoh elan4 to ham preferonoos, dr%lgaatione, rtcphtr,' privf- legoa md powers e.nd be subject to nuoir:~~rastrio- tlons, llmltatimu3 and ~u4llficntions em shell ba rtated lo thr ohnrter or aAy emsndrmnt ther4oi. any 14w of thla 3iet4 ropulring thee p4r +eluo ot shares a? stook of oorporabion be atetea in any oert.ifLoabe, report, or other inntrumont paper shall be oozapliad with bl rtatiw, in ro- spaat to shar44 tdthout nominal or per'valuo, that auoh stoob ie without par velus, and wherever the mouAt of atoelc is required to be stated, th4 number or mob 8har48 without nor4k41 or per vslue chal.1 Se stated an4 that ouoh rhanea exe sZthout no&Aal or par v491ue."

Artiale 1518b, aupra, pmvld48t Tubry oartl~loate i6sued for share8 or amok without notinel or par relue ahall hew plelnlg stet%d on fta feoe the n&xber ot sharer; nhioh it rrpr4eents snb the elftea thsrlrof, e4Af-l ahall Act set forth eny par ~a&&4 or Valus in 60llara of suoh ehesa4. i!o such"oartiiio%te 4hall oxgmss or atote thGI=aQCI eny rats 09 tividend, ~lWf%NlnOe a4 Lo assets in liqUi&atitiAh CL* prio% at *ioh such s3arbs may be retloemed sroept SC dollase eAd osnoz par ahere."

$oporsble *George ii. ?hoppara, Pa80 3

ArtIole 15380, eupra, prorlaesr Vorporetlone mey isrue and diepoae of their +uthorized shares having no nomIne or per rolue for auah aoneibrrrtion ee nmy be prtisoribd In the orI&nel charter or any amendment thereof; or, Ir no Oonei%erotion is 80 pre8orllm%, then for euah conaIaeretIon a8 my be rua by the atookhold0ra at o meting %uly oalled and hold for that purpose, by the boml of dlreotore when aoting under (yenoral or SpeoIal authority grunted by the etoak- holders ( or by the board of direatom when l otlng under general authority oonferreQ by the original eherter tmr amendmmatr thereof; swh ooneldera- tlon to be In the iorm of monay paid, labor done or property eotually reeeired. J&y and all sharer, without nominal or par velue imu ror the ooni sideration preaorlbed or rlud Ln aooordanoe nlth the prorleiona of thie seotion rhall.be fully pa&l etoek end not liable to ray rurther aall or aeeece- zent thereon, nor shall the aub&orlber or holder be lleble for ouy iurther paymenta.*

Artlole 15384, aupra, protiaesr *ao r p o retiona l uthborbisg the lwuawe of rherea of its (their) stook wlahout napliuel par value shall furnish to, end file with, the Feoretary of Sata nt the tine of filing ahar- tar or emendxwnt to a oherter authorixlng the In- auence or such stook oertlfioste authentloated by the bwx-porPtora Oci to oriafnal ahmter, end by 8 majority or the dlreotors aa any amend- ment thereof, in the mennor required by the lrvm of thie ?tate as to an original oharter of In- oorporatlan, oetting forth the ioltcnring:

*(e) The nureber or ahares with a per or taoe value an% the of shame wIthout nom- InoX or per value that my be feeueb by the cor- porstion en% the 4lasee8, If any, lnto whioh euoh shares 6re dirfded.

', . . .

gonoreblo UeorRe N. Che:)pard, Page 4

"id) The aheres without nomIual, or par value subeorlbed and the actual oonaitlem- tion reoelrad by the oorporatlon for such ahareai an6 upon raoelrin,? such oertifioate It shall be the duty of the f3oretary of :taha, on payment or orrloe reaii and franehlae tax duo, to rile and ca- oora the oherter, or amenbmnt thanof, of auah oorporetlon an0 to give hfa omrtlrIoate ahowinG the reoora theraor, provided, howevar, the #took- holder8 or any oorporatlon cruthor'trind: the Imu- 81148 0r shares or its atook wIthout norain or par value shall be requirea, In good faith, to aubacrlbs an% per for at leant ten per oeat of the authorized share@ to ba laaud without nom& nal or par value kr0r8 6al% corporation shall be oharterad or hare its eharter ~andad 80 aa to authorlee the iaauaaae o? aharea without par noszlnar ralue$ protldad further that In no event the amount ao paid shall b8 lma than $25,000.00.*

Row the raoba @en in your request, we pther that there ia no doubt but that our opinion Ho. O-3594 lm applloable to the lO$ of the authorized aharea of non-par talue oorporatlona thet are required to ba aubaorlbad and paid ror soooraing to eub8eotIon (4) ai Artlole 15384, aupra. This requmat oonoarna tha texablllty of the mining 90$ or the authorized, but maubaorlba6, non-par value atoek o;C auoh oopporetloa.

:::e rind nothlng ln tha law dealing with non-par eorporatlona whlah would Indloata that the 90$ of tha non- par value mminal value atook that la authorized an4 \UI- aubsoribeb ahou.lU ba tared under the prorlelonn of mild Rouw Bill MO. 8. We believe that It is an orIgi.nal Luaus of ths stook or mob a aorporatfon W!tIl auoh tW aa tit10 the stook haa pfi844a to original aubaortbers or sale corporate atook. Ye think tho rule aa 8rpreaaeO in our opln- ion ?lo. O-3594, an% oopled herein, la appllosble an% oontral- llng; in answerI% the question subsltted by you.