that this act take effect and be in force from and after its passage, and it is so enacted.

Approved May 16, 1907.

Takes effect ninety days after adjournment.

TAXES PRESCRIBING FRANCHISE TAXES TO BE PAID BY CORPORATIONS.

An Act prescribing franchise taxes to be paid by private, domestic and foreign corporations for the exercise of the privilege of doing business within the State of Texas, and providing for the collection thereof; prescribing conditions upon which foreign corporations may obtain permits to do business, and for the surrender of such permits; fixing a basis for the computation of the amount of such taxes and providing for reports of officers of such corporations in connection therewith, and making it a misdemeanor to fail or refuse to make such report, and fixing a penalty therefor; prescribing the times and manner of making payments of such franchise taxes; providing for penalties for failure to make prompt payments of such taxes, providing for the forfeiture without judicial ascertainment of the right of such defaulting domestic or foreign corporation to do such business because of failure to pay taxes and penalties as prescribed by this Act, and for the revival of such rights; providing for the forfeiture by a judgment of any court of competent jurisdiction of the charter of such defaulting corporation because of failure to pay such taxes and penalties within the time allowed by this Act for payment thereof; extending the time within which and prescribing conditions upon which such domestic and foreign corporations which are now in default in payment of franchise taxes and penalties may pay same and have their right to do business revived, and providing that failure of any such domestic corporation to do so shall constitute a sufficient ground for forfeiture of its charter, prohibiting officers and stockholders of such defaulting corporations from doing business in or under the corporate name of such corporation or using signs or advertisements such as those used by such corporations and providing punishment therefor, exempting certain classes of corporations from the provisions of this Act; fixing venue of civil suits to enforce the provisions of this Act; requiring clerks of courts to certify to the Secretary of State the status of such suits; prescribing the duties and powers of the Secretary of State under the provisions of this Act; repealing Articles 52431 and 5243j, as amended by Chapter 19 of the General Laws of the Twenty-ninth Legisla ture, and Chapter 72 thereof, and any and all laws in conflict with the provisions of this Act, and declaring an emergency.

Be it enacted by the Legislature of the State of Texas:

SECTION 1. Except as herein provided each and every private domestic corporation heretofore chartered, or that may hereafter be chartered under the laws of this State, shall, on or before the first day of May of each year, pay in advance to the Secretary of State a franchise tax for the year following, which shall be computed as follows, viz: Fifty cents on each one thousand dollars, or fractional part thereof, of the authorized capital stock of such corporation, unless the total amount of capital stock of such corporation issued and outstanding, plus its surplus and undivided profits, shall exceed its authorized capital stock, and in that event the franchise tax of such corporation for the year following shall be fifty cents on each one thousand dollars of capital

stock such corporations issued and outstanding, plus its surplus and undivided profits; provided, that such franchise tax shall not in any case be less than ten dollars. Provided, that where the authorized capital exceeds one million dollars such franchise tax shall be fifty cents for each one thousand dollars up to and including one million dollars and for each additional one thousand dollars, in excess of one million dollars, it shall be twenty-five cents.

SEC. 2. Except as herein provided, each and every foreign corporation authorized or that may hereafter be authorized to do business in this State, shall on or before the first day of May of each year pay in advance to the Secretary of State a franchise tax for the year following, which shall be computed as follows, viz: One dollar on each one thousand dollars or fractional part thereof of the authorized capital stock of the corporation up to and including one hundred thousand dollars; and two dollars on each five thousand dollars or fractional part thereof of such stock in excess of one hundred thousand dollars and up to and including one million dollars; and two dollars on each twenty thousand dollars or fractional part thereof of such stock in excess of one million dollars, and up to and including ten million dollars, and two dollars on each fifty thousand dollars of such stock in excess of ten million dollars; unless the total amount of the capital stock of such corporation issued and outstanding, plus its surplus and undivided profits, shall exceed its authorized capital stock, and in that event the franchise tax of such corporation for the year following shall be: two dollars on each one thousand dollars or fractional part thereof, of the authorized capital stock of such corporation, issued and outstanding, plus its surplus and undivided profits, up to and including one hundred thousand dollars; and two dollars on each five thousand dollars, or fractional part thereof of such stock, surplus and undivided profits in excess of one hundred thousand dollars, and up to and including one million dollars; and two dollars on each twenty thousand dollars, or fractional part thereof of such stock, surplus and undivided profits in excess of one million dollars, and up to and including ten million dollars; and two dollars on each fifty thousand dollars of such stock, surplus and undivided profits in excess of ten million dollars; provided that such franchise tax shall not in any case be less than twenty-five dollars.

SEC. 3. Whenever a private domestic corporation is chartered in this State, and whenever a foreign corporation is authorized to do business in this State, and such corporation shall be required to pay in advance to the Secretary of State, as its franchise tax from that time down to and including the 30th. day of April next following, only such proportionate part of its annual franchise tax, as herein above prescribed, as the period of time between the date of filing of its articles of incorporation or the issuance of its permit to do business, as the case may be, and on the first day of May next following, bears to a calendar year. Nothing in this Act shall effect the amount of the franchise tax to be paid by any corporation for the period of time ending with April 30th, 1907, excepting only such domestic corporations as may be chartered after this Act shall take effect and such foreign cor

porations as may, after this Act shall take effect, apply to the Secretary of State for a permit to do business within this State.

SEC. 4. For the purpose of determining the amount of the first franchise tax payment required by this Act of any domestic corporation which may be hereafter chartered, or of any foreign corporation which may hereafter apply for a permit to do business within this State, and also for the purpose of determining the correctness of any report which is provided for in this Act, the Secretary of State may, whenever he may deem it necessary or proper to protect the interests of the State, require any one or more of the officers of such corporations to make and file in the office of the Secretary of State an affidavit or affidavits in writing, which shall be subscribed by such officers, and by him sworn to before some officer who is by law duly authorized to administer oaths, and verified by his seal of office, setting forth fully the facts concerning the amount of the surplus and undivided profits, respectively, if any, of such domestic or foreign corporation; and until the Secretary of State shall be fully satisfied as to the amount of such surplus and undivided profits, respectively, if any, he shall not file the articles of incorporation of such proposed domestic corporation, or issue such permit, or accept such franchise tax.

SEC. 5. For the purpose of ascertaining and determining the amount of any annual franchise tax prescribed by this Act, excepting only the first tax to be paid by any domestic corporation which may hereafter be chartered, or of any foreign corporation which may hereafter be authorized to do business in this State; the president, vicepresident, general manager, secretary, treasurer and superintendent of each and every domestic or foreign corporation embraced within the provisions of this Act, shall annually and between the first and tenth days of March, and also, whenever called upon by the Secretary of State to do so, report to the Secretary of State, in writing, and under oath, as required by Sec. 4, of this Act, the total amounts of the capital stock issued and outstanding, and the surplus and undivided profits, respectively, if any, of such corporation on the first day of March next preceding; and the Secretary of State may ascertain such facts from other sources; and if the true aggregate of such amounts shall exceed the authorized capital stock of such corporation as disclosed by its then current original or amended articles of incorporation, the amount of its annual franchise tax for the year beginning the first day of May, next thereafter shall be thereon collected and paid; otherwise, its annual franchise tax shall be calculated and paid upon the amount of its authorized capital stock as shown by its aforesaid original or amended articles of incorporation. The making and filing by any one of such officers of such corporation of the record required by this Section shall relieve the other officers of such corporation from the duty of making any report required by this Section, except such report or reports as may be required by the Secretary of State.

SEC. 6. In the event of increase in the authorized capital stock or any domestic or foreign corporation, it shall also pay, in advance, a supplemental franchise tax thereon for the remainder of the year down to and including the 30th. dav of April next thereafter, the amount of which shall be determined as is provided in Sections 3 of this Act in

case of the first franchise tax payment to be made under this Act by a Domestic corporation which may be hereafter authorized to do business within this State.

SEC. 7. Every person required by this Act to make any annual report to the Secretary of the State, who shall for a longer period than five days, and every person who shall for more than ten days after the mailing by the Secretary of State demand upon him for any other report, which the Secretary of State is by this Act authorized to require, fail or refuse to make such report shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be fined in any sum not less than fifty dollars and not more than two hundred dollars, and each day of such failure or refusal after the expiration of said five days or said ten days, as the case may be, shall constitute a separate offense. The Secretary of State shall keep a record of the mailing of any and all notices and demands for reports provided for by this Act.

SEC. 8. Any corporation, either domestic or foreign, which shall fail to pay any franchise tax provided for in this Act when the same shall become due and payable under the provisions of this Act, shall thereupon become liable to a penalty of twenty-five per cent of the amount of such franchise tax due by such corporation, and if the amount of such tax and penalty be not paid in full on or before the 1st. day of July thereafter, such corporation shall for such default forfeit its right to do business in this State, which forfeiture shall be consummated without judicial ascertainment by the Secretary of State entering upon the margin of the record kept in his office relating to such corporation, the words "right to do business forfeited," and the date of such forfeiture, and any corporation whose right to do business. shall be thus forfeited shall be denied the right to sue or defend in any other courts of this State, except in a suit to forfeit the charter of such corporation, and in any suit against such corporation on a cause of action arising before such forfeiture no affirmative relief shall be granted to such corporation unless its right to do business in this State shall be revived as provided by this Act. And each and every director and officer of any corporation whose right to do business within this State shall be so forfeited, shall as to any and all debts of such corporation which may be created or incurred, with his knowledge, approval and consent, within this State, after such forfeiture by any such directors or officers, and before the revival of the right of such corporation to do business, be deemed, and held liable thereon in the same manner and to the same extent as if such directors and officers of such corporation were partners.

SEC. 9. The Secretary of State shall, during the month of May of each year, notify each domestic and foreign corporation which may be or become subject to a franchise tax, under any law of this State which has failed to pay such franchise tax on or before the 1st. day of May that unless such overdue tax together with said penalty thereon shall be paid on or before the 1st day of July next following the right of such corporation to do business in this State will be forfeited without judicial ascertainment. Such notice may be either written or printed and shall be verified by the seal of the office of the Secretary of State, and shall be addressed to such corporation and mailed to the postoffice

named in its articles of incorporation as its principal place of business or to any other known place of business of such corporation, and a record of the date of mailing such notice shall be kept by the Secretary of State. Such notice and said record thereof shall constitute legal and sufficient notice thereof for all the purposes of this Act. Any corporation whose right to do business may have been forfeited as provided in this Act, shall be relieved from such forfeiture by paying the Secretary of State any time within six months after such forfeiture the full amount of the franchise tax and penalty due by it, together with an additional amount of five per cent of such tax for each month or fractional part of a month which shall elapse after such forfeiture; provided that such amount shall in no case be less than five dollars. When such tax and all such penalties shall be fully paid to the Secretary of State he shall revive and re-instate the right of the corporation to do business within this State by cancelling the words "right to do business forfeited," upon his record and endorsing thereon the word "revived," and the date of such revival. If any domestic corporation whose right to do business within this State shall hereafter be forfeited under the provisions of this Act, shall fail to pay the Secretary of State on or before the first day of January next following the revival amounts necessary to entitle it to have its right to do business revived under the provisions of this Act, such failure shall constitute sufficient grounds for the forfeiture by a judgment of any Court of competent jurisdiction of the charter of such domestic corporation.

SEC. 10. Every private corporation heretofore chartered under the laws of this State, and every foreign corporation whose right to do business within this State has heretofore been forfeited as provided by law solely because of its failure to pay within the time provided by law any franchise or franchise tax and penalty or penalties prescribed by law, shall be permitted and authorized to pay to the Secretary of State on or before the first day of September, 1907, the aggregate amount of its franchise tax or taxes and the penalty thereon as provided by law, calculated for the entire period of time beginning with the day upon which the first unpaid franchise tax payment became due and ending the day of said payment, and upon such payment being made to the Secretary of State he shall cancel such previous forfeiture of the right of such corporation to do business within this State and shall endorse upon the margin of the record kept in his office relating to such corporation the word "Revived," and the date of such revival.

Failure of any such domestic corporation to pay such aggregate amount on or before the first day of May, 1907, shall constitute sufficient grounds for the forfeiture by a judgment of any court of competent jurisdiction of the charter of such domestic corporation it being provided, however, that none of the provisions of this Section shall apply to any corporation whose right to do business within the State, or whose charter may have been legally forfeited for any other reason than those mentioned in this Section.

SEC. 11. Should any foreign corporation which may have or hereafter obtain a permit to do business within this State desire at any time to withdraw from doing business in this State it may surrender such permit to the Secretary of State, who shall thereupon mark or stamp