Texas House Bill HB3506

Texas 2021 - 87th Regular

Caption

Relating to registered and protected series of domestic limited liability companies; authorizing fees.

Impact

The modifications introduced by HB3506 are expected to streamline the process of managing multiple business ventures under a single LLC structure. By allowing this multi-faceted approach, the bill intends to encourage the formation of series within LLCs, which can lead to more efficient asset management and liability protection. The establishment of specified fees for the formation and modification of registered series reinforces the state’s administrative framework for regulatory compliance and may generate additional revenue for state agencies managing these registrations.

Summary

House Bill 3506 amends the Business Organizations Code to enhance the regulation and registration of domestic limited liability companies (LLCs). The bill introduces provisions for establishing registered and protected series within LLCs, allowing these series to carry distinct rights and obligations. This change aims to provide businesses more flexibility in managing their assets and liabilities while operating under a limited liability framework. Each series can operate independently, with specific rights and responsibilities, thus enabling more nuanced financial and operational structuring for companies.

Contention

Debate surrounding HB3506 may arise primarily from concerns related to the regulatory environment and the implications of allowing such series structures. While proponents argue that the bill fosters innovation and adaptability in business practices, critics may point to the potential for complexity and misuse of the series structure, alleging it could create loopholes in liability protections. Additionally, discussions may highlight the need for clear regulations governing the interaction between series and their parent LLCs to prevent any ambiguity regarding liability and asset ownership.