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Official Opinion 98-4

Official Opinion 98-4

March 24, 1998
To: 

Executive Secretary
State Ethics Commission

Re: 

Corporations which are not otherwise engaged in business activities or professions regulated by the Secretary of State are not regulated entities under O.C.G.A. § 21-5-30.1. Examining boards connected to the Secretary of State which issue professional and business licenses are under the jurisdiction of the Secretary of State for the purpose of the statute.

This responds to your request for an official opinion concerning the application of the Ethics in Government Act to campaign contributions to candidates seeking election to the office of Secretary of State. First, you inquire whether business corporations should be considered a regulated entity under the jurisdiction of the Secretary of State by virtue of the legal requirements that such corporations register and make certain reports to the Secretary of State. Secondly, you ask "whether boards connected to the office of Secretary of State are 'under the jurisdiction of' the Secretary of State for the purposes of O.C.G.A. § 21-5-30.1."

Generally, O.C.G.A. § 21-5-30.1(b) prohibits campaign contributions to an "elected executive officer" or a candidate seeking election to such office from persons or entities regulated by the office. The Secretary of State is identified as such an "elected executive officer." O.C.G.A. § 21-5-30.1(a)(3). A "regulated entity" is defined in the statute as "any person who is required by law to be licensed by an elected executive officer or a board under the jurisdiction of an elected executive officer, any person who leases property owned by or for a state department, or any person who engages in a business or profession which is regulated by an elected executive officer or by a board under the jurisdiction of an elected executive officer." O.C.G.A. § 21-5- 30.1(a)(5).

Under the Georgia Business Corporation Code, the Secretary of State has certain responsibilities relating to filing and issuance of documents relating to incorporation, certification of corporate existence and authority to transact business, annual registrations and registered agents. See, e.g., O.C.G.A. §§ 14-2-128, -201.1, -203, -502, -1501, -1622. The Secretary of State is authorized to prescribe forms for such filings and to charge filing fees. O.C.G.A. §§ 14-2-121, -122.

Under O.C.G.A. § 14-2-125, the Secretary of State is required to file corporate documents which conform to the statutory requirements of O.C.G.A. § 14-2-120 relating to form, language and proper execution. The Secretary of State may refuse to file documents which fail to meet statutory requirements and his filing or refusal to file such documents is specifically described by law as "ministerial." O.C.G.A. § 14-2-125(d). See Comment to O.C.G.A. § 14-2-401.

Under certain circumstances relating to corporations required by law to be chartered by the Secretary of State, such as banks, trust companies, railroads, canal and navigation companies and telegraph companies, the Secretary of State may declare a corporate charter forfeited for failure to file annual registrations, where the charter was fraudulently obtained, or where the corporation continues, after notice, to "violate the laws of this state in a manner likely to injure the public or the corporation's shareholders, creditors, or debtors." O.C.G.A. § 14-4-160. Although this power to declare a corporate charter forfeited is considerable, it is not a part of a particularized regulatory scheme wherein the business of a chartered corporation is controlled by regulations promulgated by the Secretary of State. To the extent that the "business" of this corporation is regulated, it is regulated by other agencies – for example, banks by the Department of Banking. See, e.g., O.C.G.A. § 7-1-92.

Thus the Secretary of State's powers regarding business corporations are essentially administrative and ministerial. The authority of the Secretary of State is most aptly described as relating to the corporate existence of these business entities, but not to the particular sector of the economy, i.e., the kind of "business" engaged in by the entity. It cannot be said that the Secretary of State licenses or regulates the "business" being carried out by a particular corporation simply because the corporation came into being through the ministerial acts of the Secretary of State. Thus, such corporations would not constitute regulated entities for the purposes of O.C.G.A. § 21-5-30.1.

In response to your second question concerning the examining boards which are connected to the Secretary of State, it is my opinion that the General Assembly intended these boards to be considered "under the jurisdiction of the Secretary of State." As you know, the cardinal rule in the construction of statutes is that the intent of the General Assembly in enacting a statute must be ascertained, and that a statute must receive a construction which will give effect to that legislative intent and purpose. O.C.G.A. § 1-3-1(a); City of Roswell v. City of Atlanta, 261 Ga. 657 (1991); City of Jesup v. Bennett, 226 Ga. 606 (1970).

In legal parlance, the word "jurisdiction" generally relates to the power of a court to decide a matter, to deal with a question after hearing relevant evidence. Williams v. Fuller, 244 Ga. 846, 849 (1979). It has been defined as a "term of comprehensive import embracing every kind of judicial action." Black's Law Dictionary, 853 (6th ed. 1990). However, in common usage, the word has been considered synonymous with terms such as "authority," "legal power," "purview," "sphere," and "supervision." See William C. Burton, Legal Thesaurus, 303 (1980). Therefore, in determining the legislative intent of O.C.G.A. § 21-5-30.1, it is proper to evaluate the authority, purview and sphere of influence of the Secretary of State over the examining boards.

A "state examining board" is defined as "any board, bureau, commission, or other agency of the executive branch of state government which is created for the purpose of licensing or otherwise regulating or controlling any profession, business, or trade and which is placed by law under the jurisdiction of the joint-secretary." O.C.G.A. § 43-1-1(2) (emphasis added). Under O.C.G.A. § 43-1-2, the Secretary of State is authorized to appoint a joint-secretary for the examining boards. Under this statute, the Secretary of State sets the salary of the joint-secretary and the joint-secretary serves at the pleasure of the Secretary of State.

The description given by the General Assembly to examining boards as being "under the jurisdiction" of the joint-secretary and the fact that the joint-secretary is appointed by and serves at the pleasure of the Secretary of State reveals a legislative determination that the examining boards are "under the jurisdiction" of the Secretary of State for the purposes of O.C.G.A. § 21-5- 30.1. This is so, even though the Governor may appoint the members of each examining board, and the Senate retains confirmation authority. See O.C.G.A. §§ 43-1-14, -16. This determination is supported by the Secretary of State's ability to influence and direct much of the day-to-day activities surrounding the examining boards.

The Secretary of State has approval authority over the joint-secretary's employment of personnel and any contracts necessary to provide support and services to the examining boards. O.C.G.A. § 43-1-2(c), (d). The Secretary of State also has approval authority over the selection of a deputy joint-secretary and the appointment of executive directors for the examining boards. O.C.G.A. § 43-1-2(e).

Furthermore, the joint-secretary is required to keep all records of the examining boards, schedule examinations, receive applications for licenses, schedule hearings, and collect fees. "All orders and processes of the state examining boards shall be signed and attested by the joint- secretary . . . ." O.C.G.A. § 43-1-3(a), (b).

The joint-secretary is vested with the power to conduct investigations as he deems necessary for the enforcement of the laws regulating the businesses, professions and trades licensed by the boards, and he may issue subpoenas for this purpose. O.C.G.A. § 43-1-19(h). Thus, the joint- secretary, as the Secretary of State's designee, is empowered to engage in activities which are the essence of administrative actions to enforce compliance with regulatory laws.

In light of the above, it is clear that the Secretary of State's sphere of influence and authority relative to the examining boards is considerable. This, when taken in conjunction with the General Assembly's own description of the examining boards as being under the "jurisdiction" of the joint-secretary, and the fact that the joint-secretary is appointed by and "serves at the pleasure" of the Secretary of State, is a strong indication of the General Assembly's intent.

Moreover, it would appear none of the other "elected executive officers," as defined by O.C.G.A. § 21-5-30.1(a)(3), has jurisdiction over boards which issue licenses or regulate business or professions. Therefore, the reference in O.C.G.A. § 21-5-30.1 to boards which issue licenses and regulate businesses and professions was most likely directed specifically to the boards connected with the Secretary of State.

Therefore, it is my official opinion that a corporation which is not otherwise engaged in a business or profession which is regulated by the Secretary of State is not a regulated entity under O.C.G.A. § 21-5-30.1. In addition, the examining boards connected to the Secretary of State which issue licenses and regulate businesses and professions are under the jurisdiction of the Secretary of State for the purposes of the statute.

Prepared by:

MICHAEL E. HOBBS
Counsel to the Attorney General


There are particular corporations which engage in businesses or professions which are regulated by the Secretary of State, such as a dealer registered under the Georgia Securities Act of 1973, O.C.G.A. § 10-5-1 et seq., or cemetery companies or preneed dealers under O.C.G.A. § 44-3-130 et seq. Business corporations which do not engage in such regulated activities would not fall within the restrictions of O.C.G.A. § 21-5-30.1(b). This is so even if the corporation issues stock subject to registration under the Securities Act because, again, the Secretary of State as Commissioner of Securities is not concerned with the particular business or profession of a company, but is concerned with all issues of stock.