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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 8750
Experience:  30 years of corporate, litigation and international law
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If the "ARTICLES OF INCORPORATION" OF A TEXAS CORPORATION were

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If the "ARTICLES OF INCORPORATION" OF A TEXAS CORPORATION were filed with the Texas Secretary of State in 1972, what would be the requirements of that corporation by the State of Texas, to remain, a valid and legal entity that could be converted to a Limited Partnership in Texas? How would this transition be effected, should, the original, directors and Board of directors, as well as the stock holders, be completely, different, people, with no real, proof of how they acquired, the stock? How would the conversion of the original, Incorporation converting to a Limited Partnership be effected by the fact that the LTD.'s business has no similarity to the type of business described in the the Articles of Incorporation filed with the Texas Secretary of State in 1972?
Submitted: 2 years ago.
Category: Business Law
Expert:  Richard - Bizlaw replied 2 years ago.

bizlaw :

On the first part of the question, you would have to file your annual corporate reports and pay your annual taxes. Those are the two things that you would need to do. On the second part of the question, did the corporation terminate but continue to operate as a business? Was the corporation converted to a limited partnership while your husband was a shareholder?




This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.


Customer: replied 2 years ago.
I think, based on the limited information available to me, that the Corporation terminated, but, continued to operate as a business, in numerous, and varied, entities. The only actions the secretary of state has on file is the original, Certificate and articles of incorporation in 1972. In 1983 and 1995 a statement of change of registered office and registered agent, were filed for the Corp, but nothing else. My husband and his two brothers and business partners, were all alive and represented in the Articles of Conversion of the Corporation, to a Limited Partnership in 2000, that all of the shares of stock had always belonged to them,(instead of their father and uncle who were the original stock holders)and would be converted to Limited partnership shares. It seems to me that none of this is legal and possibly fraudulent and I am trying to confirm that. I will pay you a big bonus for your time. I know this is complicated!
Expert:  Richard - Bizlaw replied 2 years ago.

Here is what appears to have happened even though the documentation was not performed. The conversion of the corporation could have been accomplished by transferring all the assets and liabilities of the corporation to the Limited Partnership (LP) in exchange for all the equity of the LP. The LP would then have the assets and the former shareholders of the corporation would be the owners of the LP and the corporation would be dissolved. Under this scenario all the shareholders would be limited partners. If some shareholders were left out of such a transaction, those left out shareholders would have a complaint. I think this is what essentially happened but it was not documented and since all were involved there was no one to complain. Unless the father and uncle complained, the conversion would work. Getting from corporation to the LP does not appear to have any fraud involved at least none that anyone who had a right to complain about complained about. So there is no basis to attack the conversion to the LP.

 

The interest of the shareholders in the LP as a percentage of ownership would be the same as it was in the corporation. What I think the forensic accountants then had to do is to trace through the interest of the partners in the LP in each of the entities in which it had an interest. This would arise if the for example, they invested in real property and brought in other partners to buy and manage a particular property. In this scenario the LP might own 40% of one project and 70% of another project. To determine your interest in all the different project, you would see what percentage the partnership in a project and then what percentage the partner, your husband, had in the partnership to determine what interest he had in the particular entity. This process gets more complicated if the partners in the LP did not always participate equally (in terms of their percentage interest in the LP) in each project in which the LP was involved.

 

I think this is what may have been the situation with your husband. I hope this has been helpful. If you have more questions or need more explanation, please let me know.

 

This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.

Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 8750
Experience: 30 years of corporate, litigation and international law
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