Relating to the applicability of certain laws governing corporations to limited liability companies.
Impact
The bill's provisions include redefining key terms such as 'shares' to encompass 'membership interests' and substituting terminology related to corporate structure. For instance, terms like 'directors' will now include 'managers' for manager-managed LLCs and 'members' for member-managed LLCs. These changes not only promote clarity but also potentially streamline compliance requirements for LLCs by integrating established corporate governance norms into their operational frameworks.
Summary
Senate Bill 1773 aims to clarify and expand the applicability of certain corporate laws to limited liability companies (LLCs) in Texas. This bill modifies existing statutes in the Business Organizations Code to explicitly extend specific regulatory frameworks typically associated with corporations, such as those defined in Sections 21.223 to 21.226, to LLCs and their related parties. The intent behind these amendments is to align the regulatory treatment of LLCs more closely with traditional corporations, which could enhance consistency in business operations across these entities.
Contention
While the bill serves to standardize regulations for LLCs, it may bring about discussions concerning the flexibility and operational autonomy of such entities. Some stakeholders may view these changes as beneficial for providing LLCs with greater clarity on governance and operational expectations, while others might argue that this could impose undue restrictions on LLCs that prefer a more flexible or unique governing structure. The implications of these legal adjustments could influence how LLCs manage their internal affairs and comply with Texas state law.
Relating to the establishment of the Texas Mircale Act (TMA), allowing for certain fees, authorizing certain ad valorem tax incentives for economic development, specifically certain tax relief from school district taxes for certain corporations and limited liability companies that make large investments that create jobs in this state, to authorizing the imposition of certain fees, and the repeal of Chapter 313 of Texas Tax Code and the Economic Development Act of the 77th Legislature.
Relating to state contracts with Chinese companies and investments in Chinese companies and certain companies doing business with China; authorizing a civil penalty.