Texas 2011 - 82nd Regular

Texas House Bill HB1873 Compare Versions

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1	1	82R20989 E
2	2	By: Giddings H.B. No. 1873
3	3	Substitute the following for H.B. No. 1873:
4	4	By: Quintanilla C.S.H.B. No. 1873
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to business entities and associations.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 1.002, Business Organizations Code, is
12	12	amended by adding Subdivisions (55-a), (69-c), (69-d), and (69-e)
13	13	and amending Subdivision (69-b) to read as follows:
14	14	(55-a) "National securities exchange" means an
15	15	exchange registered as a national securities exchange under Section
16	16	6, Securities Exchange Act of 1934 (15 U.S.C. Section 78f).
17	17	(69-b) "Person" means an individual or a corporation,
18	18	partnership, limited liability company, business trust, trust,
19	19	association, or other organization, estate, government or
20	20	governmental subdivision or agency, or other legal entity [has the
21	21	meaning assigned by Section 311.005, Government Code].
22	22	(69-c) "Plan of conversion" means a document that
23	23	conforms with the requirements of Section 10.103.
24	24	(69-d) "Plan of exchange" means a document that
25	25	conforms with the requirements of Section 10.052.
26	26	(69-e) "Plan of merger" means a document that conforms
27	27	with the requirements of Sections 10.002 and 10.003.
28	28	SECTION 2. Subsection (b), Section 6.101, Business
29	29	Organizations Code, is amended to read as follows:
30	30	(b) Subject to this code and the governing documents of a
31	31	domestic entity, the governing authority of the entity, in advance,
32	32	may provide a record date for determining the owners or members of
33	33	the entity, except that the date may not be earlier than the 60th
34	34	day before the date the action requiring the determination of
35	35	owners or members is originally to be taken.
36	36	SECTION 3. Subsection (a), Section 6.205, Business
37	37	Organizations Code, is amended to read as follows:
38	38	(a) Any photographic, photostatic, facsimile, or similarly
39	39	reliable reproduction of a consent in writing signed by an owner,
40	40	member, or governing person of a filing entity may be substituted or
41	41	used instead of the original writing for any purpose for which the
42	42	original writing could be used[, if the reproduction is a complete
43	43	reproduction of the entire original writing].
44	44	SECTION 4. Subdivisions (1) and (2), Section 8.001,
45	45	Business Organizations Code, are amended to read as follows:
46	46	(1) "Delegate" means a person who, while serving as a
47	47	governing person of an enterprise, is or was serving [as a
48	48	representative of the enterprise] at the request of that enterprise
49	49	as a representative of [at] another enterprise, [or] another
50	50	organization, or [to] an employee benefit plan. A person is a
51	51	delegate to an employee benefit plan if the performance of the
52	52	person's official duties to the enterprise also imposes duties on
53	53	or otherwise involves service by the person to the plan or
54	54	participants in or beneficiaries of the plan.
55	55	(2) "Enterprise" means a domestic entity or an
56	56	organization subject to this chapter. The term includes[,
57	57	including] a predecessor enterprise [domestic entity or
58	58	organization].
59	59	SECTION 5. Subsection (d), Section 8.103, Business
60	60	Organizations Code, is amended to read as follows:
61	61	(d) With respect to a limited partnership, a vote of a
62	62	majority-in-interest of the limited partners in a vote that
63	63	excludes the interest held by each general partner who is not
64	64	disinterested and independent constitutes a determination under
65	65	Subsection (a)(4). For purposes of this subsection,
66	66	"majority-in-interest" means, with respect to limited partners,
67	67	limited partners who own more than 50 percent of the current
68	68	percentage or other interest in the profits of the partnership that
69	69	is owned by all of the limited partners.
70	70	SECTION 6. Subsection (d), Section 8.104, Business
71	71	Organizations Code, is amended to read as follows:
72	72	(d) With respect to a limited partnership, a vote of a
73	73	majority-in-interest of the limited partners in a vote that
74	74	excludes the interest held by each general partner who is not
75	75	disinterested and independent constitutes an authorization under
76	76	Subsection (b). For purposes of this subsection,
77	77	"majority-in-interest" means, with respect to limited partners,
78	78	limited partners who own more than 50 percent of the current
79	79	percentage or other interest in the profits of the partnership that
80	80	is owned by all of the limited partners.
81	81	SECTION 7. Subsection (d), Section 8.105, Business
82	82	Organizations Code, is amended to read as follows:
83	83	(d) Notwithstanding any authorization or determination
84	84	specified in this chapter, an enterprise may pay or reimburse, in
85	85	advance of the final disposition of a proceeding and on terms the
86	86	enterprise considers appropriate, reasonable expenses incurred by:
87	87	(1) a former governing person [managerial official] or
88	88	delegate who was, is, or is threatened to be made a respondent in
89	89	the proceeding;[,] or
90	90	(2) a present or former employee, [or] agent, or
91	91	officer who is not a governing person of the enterprise and who was,
92	92	is, or is threatened to be made a respondent in the proceeding.
93	93	SECTION 8. Section 8.151, Business Organizations Code, is
94	94	amended by adding Subsection (c-1) to read as follows:
95	95	(c-1) With respect to a limited partnership, a vote of a
96	96	majority-in-interest of the limited partners constitutes approval
97	97	of the owners for purposes of Subsection (c).
98	98	SECTION 9. Subsection (b), Section 9.007, Business
99	99	Organizations Code, is amended to read as follows:
100	100	(b) The application for registration must state:
101	101	(1) the partnership's name;
102	102	(2) the federal taxpayer [tax] identification number
103	103	of the partnership;
104	104	(3) the partnership's jurisdiction of formation;
105	105	(4) the date of initial registration as a limited
106	106	liability partnership under the laws of the jurisdiction [state] of
107	107	formation;
108	108	(5) the date the foreign entity began or will begin to
109	109	transact business in this state;
110	110	(6) that the partnership exists as a valid limited
111	111	liability partnership under the laws of the jurisdiction [state] of
112	112	its formation;
113	113	(7) the number of partners at the date of the
114	114	statement;
115	115	(8) each business or activity that the partnership
116	116	proposes to pursue in this state, which may be stated to be any
117	117	lawful business or activity under the laws of this state;
118	118	(9) the address of the principal office of the
119	119	partnership;
120	120	(10) the address of the initial registered office and
121	121	the name and address of the initial registered agent for service of
122	122	process required to be maintained under Section 152.904; and
123	123	(11) that the secretary of state is appointed the
124	124	agent of the partnership for service of process under the same
125	125	circumstances as set forth by Section 5.251 for a foreign filing
126	126	entity.
127	127	SECTION 10. Section 10.002, Business Organizations Code, is
128	128	amended to read as follows:
129	129	Sec. 10.002. PLAN OF MERGER: REQUIRED PROVISIONS. (a) A
130	130	plan of merger must be in writing and must include:
131	131	(1) the name of each organization that is a party to
132	132	the merger;
133	133	(2) the name of each organization that will survive
134	134	the merger;
135	135	(3) the name of each new organization that is to be
136	136	created by the plan of merger;
137	137	(4) a description of the organizational form of each
138	138	organization that is a party to the merger or that is to be created
139	139	by the plan of merger and its jurisdiction of formation;
140	140	(5) the manner and basis of converting or exchanging
141	141	any of the ownership or membership interests of each organization
142	142	that is a party to the merger into:
143	143	(A) ownership interests, membership interests,
144	144	obligations, rights to purchase securities, or other securities of
145	145	one or more of the surviving or new organizations;
146	146	(B) cash;
147	147	(C) other property, including ownership
148	148	interests, membership interests, obligations, rights to purchase
149	149	securities, or other securities of any other person or entity; or
150	150	(D) any combination of the items described by
151	151	Paragraphs (A)-(C);
152	152	(6) the identification of any of the ownership or
153	153	membership interests of an organization that is a party to the
154	154	merger that are to be canceled rather than converted or exchanged;
155	155	(7) the certificate of formation of each new domestic
156	156	filing entity to be created by the plan of merger;
157	157	(8) [(7)] the governing documents of each new domestic
158	158	nonfiling entity to be created by the plan of merger; and
159	159	(9) [(8)] the governing documents of each non-code
160	160	organization that:
161	161	(A) is to survive the merger or to be created by
162	162	the plan of merger; and
163	163	(B) is an entity that is not:
164	164	(i) organized under the laws of any state or
165	165	the United States; or
166	166	(ii) required to file its certificate of
167	167	formation or similar document under which the entity is organized
168	168	with the appropriate governmental authority.
169	169	(b) An item required by Subsections (a)(7)-(9) [(a)(6)-(8)]
170	170	may be included in the plan of merger by an attachment or exhibit to
171	171	the plan.
172	172	(c) If the plan of merger provides for a manner and basis of
173	173	converting or exchanging an ownership or membership interest that
174	174	may be converted or exchanged in a manner or basis different than
175	175	any other ownership or membership interest of the same class or
176	176	series of the ownership or membership interest, the manner and
177	177	basis of conversion or exchange must be included in the plan of
178	178	merger in the same manner as provided by Subsection (a)(5). A plan
179	179	of merger may provide for cancellation of an ownership or
180	180	membership interest while providing for the conversion or exchange
181	181	of other ownership or membership interests of the same class or
182	182	series as the ownership or membership interest to be canceled.
183	183	SECTION 11. Subsection (a), Section 10.008, Business
184	184	Organizations Code, is amended to read as follows:
185	185	(a) When a merger takes effect:
186	186	(1) the separate existence of each domestic entity
187	187	that is a party to the merger, other than a surviving or new
188	188	domestic entity, ceases;
189	189	(2) all rights, title, and interests to all real
190	190	estate and other property owned by each organization that is a party
191	191	to the merger is allocated to and vested, subject to any existing
192	192	liens or other encumbrances on the property, in one or more of the
193	193	surviving or new organizations as provided in the plan of merger
194	194	without:
195	195	(A) reversion or impairment;
196	196	(B) any further act or deed; or
197	197	(C) any transfer or assignment having occurred;
198	198	(3) all liabilities and obligations of each
199	199	organization that is a party to the merger are allocated to one or
200	200	more of the surviving or new organizations in the manner provided by
201	201	the plan of merger;
202	202	(4) each surviving or new domestic organization to
203	203	which a liability or obligation is allocated under the plan of
204	204	merger is the primary obligor for the liability or obligation, and,
205	205	except as otherwise provided by the plan of merger or by law or
206	206	contract, no other party to the merger, other than a surviving
207	207	domestic entity or non-code organization liable or otherwise
208	208	obligated at the time of the merger, and no other new domestic
209	209	entity or non-code organization created under the plan of merger is
210	210	liable for the debt or other obligation;
211	211	(5) any proceeding pending by or against any domestic
212	212	entity or by or against any non-code organization that is a party to
213	213	the merger may be continued as if the merger did not occur, or the
214	214	surviving or new domestic entity or entities or the surviving or new
215	215	non-code organization or non-code organizations to which the
216	216	liability, obligation, asset, or right associated with that
217	217	proceeding is allocated to and vested in under the plan of merger
218	218	may be substituted in the proceeding;
219	219	(6) the governing documents of each surviving domestic
220	220	entity are amended to the extent provided by the plan of merger;
221	221	(7) each new filing entity whose certificate of
222	222	formation is included in the plan of merger under this chapter, on
223	223	meeting any additional requirements, if any, of this code for its
224	224	formation, is formed as a domestic entity under this code as
225	225	provided by the plan of merger;
226	226	(8) the ownership or membership interests of each
227	227	organization that is a party to the merger and that are to be
228	228	converted or exchanged, in whole or part, into ownership or
229	229	membership interests, obligations, rights to purchase securities,
230	230	or other securities of one or more of the surviving or new
231	231	organizations, into cash or other property, including ownership or
232	232	membership interests, obligations, rights to purchase securities,
233	233	or other securities of any organization, or into any combination of
234	234	these, or that are to be canceled, are converted, [and] exchanged,
235	235	or canceled as provided in the plan of merger, and the former owners
236	236	or members who held ownership or membership interests of each
237	237	domestic entity that is a party to the merger are entitled only to
238	238	the rights provided by the plan of merger or, if applicable, any
239	239	rights to receive the fair value for the ownership interests
240	240	provided under Subchapter H; and
241	241	(9) notwithstanding Subdivision (4), the surviving or
242	242	new organization named in the plan of merger as primarily obligated
243	243	to pay the fair value of an ownership or membership interest under
244	244	Section 10.003(2) is the primary obligor for that payment and all
245	245	other surviving or new organizations are secondarily liable for
246	246	that payment.
247	247	SECTION 12. Subsection (a), Section 10.052, Business
248	248	Organizations Code, is amended to read as follows:
249	249	(a) A plan of exchange must be in writing and must include:
250	250	(1) the name of each domestic entity the ownership or
251	251	membership interests of which are to be acquired;
252	252	(2) the name of each acquiring organization;
253	253	(3) if there is more than one acquiring organization,
254	254	the ownership or membership interests to be acquired by each
255	255	organization;
256	256	(4) the terms and conditions of the exchange; and
257	257	(5) the manner and basis of exchanging the ownership
258	258	or membership interests to be acquired for:
259	259	(A) ownership or membership interests,
260	260	obligations, rights to purchase securities, or other securities of
261	261	one or more of the acquiring organizations that is a party to the
262	262	plan of exchange;
263	263	(B) cash;
264	264	(C) other property, including ownership or
265	265	membership interests, obligations, rights to purchase securities,
266	266	or other securities of any other person or entity; or
267	267	(D) any combination of those items.
268	268	SECTION 13. Subsection (a), Section 10.103, Business
269	269	Organizations Code, is amended to read as follows:
270	270	(a) A plan of conversion must be in writing and must
271	271	include:
272	272	(1) the name of the converting entity;
273	273	(2) the name of the converted entity;
274	274	(3) a statement that the converting entity is
275	275	continuing its existence in the organizational form of the
276	276	converted entity;
277	277	(4) a statement of the type of entity that the
278	278	converted entity is to be and the converted entity's jurisdiction
279	279	of formation;
280	280	(5) if Sections 10.1025 and 10.109 do not apply, the
281	281	manner and basis of converting the ownership or membership
282	282	interests of the converting entity into ownership or membership
283	283	interests of the converted entity;
284	284	(6) any certificate of formation required to be filed
285	285	under this code if the converted entity is a filing entity;
286	286	(7) the certificate of formation or similar
287	287	organizational document of the converted entity if the converted
288	288	entity is not a filing entity; and
289	289	(8) if Sections 10.1025 and 10.109 apply, a statement
290	290	that the converting entity is electing to continue its existence in
291	291	its current organizational form and jurisdiction of formation after
292	292	the conversion takes effect.
293	293	SECTION 14. Subsection (b), Section 10.354, Business
294	294	Organizations Code, is amended to read as follows:
295	295	(b) Notwithstanding Subsection (a), subject to Subsection
296	296	(c), an owner may not dissent from a plan of merger or conversion in
297	297	which there is a single surviving or new domestic entity or non-code
298	298	organization, or from a plan of exchange, if:
299	299	(1) the ownership interest, or a depository receipt in
300	300	respect of the ownership interest, held by the owner is part of a
301	301	class or series of ownership interests, or depository receipts in
302	302	respect of ownership interests, that are, on the record date set for
303	303	purposes of determining which owners are entitled to vote on the
304	304	plan of merger, conversion, or exchange, as appropriate:
305	305	(A) listed on a national securities exchange [or
306	306	a similar system]; or
307	307	(B) [listed on the Nasdaq Stock Market or a
308	308	successor quotation system;
309	309	[(C) designated as a national market security on
310	310	an interdealer quotation system by the National Association of
311	311	Securities Dealers, Inc., or a successor system; or
312	312	[(D)] held of record by at least 2,000 owners;
313	313	(2) the owner is not required by the terms of the plan
314	314	of merger, conversion, or exchange, as appropriate, to accept for
315	315	the owner's ownership interest any consideration that is different
316	316	from the consideration to be provided to any other holder of an
317	317	ownership interest of the same class or series as the ownership
318	318	interest held by the owner, other than cash instead of fractional
319	319	shares or interests the owner would otherwise be entitled to
320	320	receive; and
321	321	(3) the owner is not required by the terms of the plan
322	322	of merger, conversion, or exchange, as appropriate, to accept for
323	323	the owner's ownership interest any consideration other than:
324	324	(A) ownership interests, or depository receipts
325	325	in respect of ownership interests, of a domestic entity or non-code
326	326	organization of the same general organizational type that,
327	327	immediately after the effective date of the merger, conversion, or
328	328	exchange, as appropriate, will be part of a class or series of
329	329	ownership interests, or depository receipts in respect of ownership
330	330	interests, that are:
331	331	(i) listed on a national securities
332	332	exchange or authorized for listing on the exchange on official
333	333	notice of issuance; or
334	334	(ii) [approved for quotation as a national
335	335	market security on an interdealer quotation system by the National
336	336	Association of Securities Dealers, Inc., or a successor entity; or
337	337	[(iii)] held of record by at least 2,000
338	338	owners;
339	339	(B) cash instead of fractional ownership
340	340	interests the owner would otherwise be entitled to receive; or
341	341	(C) any combination of the ownership interests
342	342	and cash described by Paragraphs (A) and (B).
343	343	SECTION 15. Subsections (c) and (e), Section 10.355,
344	344	Business Organizations Code, are amended to read as follows:
345	345	(c) A notice required to be provided under Subsection (a) or
346	346	(b) must:
347	347	(1) be accompanied by a copy of this subchapter; and
348	348	(2) advise the owner of the location of the
349	349	responsible organization's principal executive offices to which a
350	350	notice required under Section 10.356(b)(1) or (3) [10.356(b)(2)]
351	351	may be provided.
352	352	(e) Not later than the 10th day after the date an action
353	353	described by Subsection (a)(1) takes effect, the responsible
354	354	organization shall give notice that the action has been effected to
355	355	each owner who voted against the action and sent notice under
356	356	Section 10.356(b)(1) [10.356(b)(2)].
357	357	SECTION 16. Subsections (b), (c), and (d), Section 10.356,
358	358	Business Organizations Code, are amended to read as follows:
359	359	(b) To perfect the owner's rights of dissent and appraisal
360	360	under Section 10.354, an owner:
361	361	(1) if the proposed action is to be submitted to a vote
362	362	of the owners at a meeting, must give to the domestic entity a
363	363	written notice of objection to the action that:
364	364	(A) is addressed to the entity's president and
365	365	secretary;
366	366	(B) states that the owner's right to dissent will
367	367	be exercised if the action takes effect;
368	368	(C) provides an address to which notice of
369	369	effectiveness of the action should be delivered or mailed; and
370	370	(D) is delivered to the entity's principal
371	371	executive offices before the meeting;
372	372	(2) with respect to the ownership interest for which
373	373	the rights of dissent and appraisal are sought:
374	374	(A) must vote against the action if the owner is
375	375	entitled to vote on the action and the action is approved at a
376	376	meeting of the owners; and
377	377	(B) may not consent to the action if the action is
378	378	approved by written consent; and
379	379	(3) [(2)] must give to the responsible organization a
380	380	demand in writing [notice dissenting to the action] that:
381	381	(A) is addressed to the president and secretary
382	382	of the responsible organization;
383	383	(B) demands payment of the fair value of the
384	384	ownership interests for which the rights of dissent and appraisal
385	385	are sought;
386	386	(C) provides to the responsible organization an
387	387	address to which a notice relating to the dissent and appraisal
388	388	procedures under this subchapter may be sent;
389	389	(D) states the number and class of the ownership
390	390	interests of the domestic entity owned by the owner and the fair
391	391	value of the ownership interests as estimated by the owner; and
392	392	(E) is delivered to the responsible organization
393	393	at its principal executive offices at the following time:
394	394	(i) not later than the 20th day after the
395	395	date the responsible organization sends to the owner the notice
396	396	required by Section 10.355(e) that the action has taken effect
397	397	[before the action is considered for approval], if the action was
398	398	approved by [is to be submitted to] a vote of the owners at a
399	399	meeting;
400	400	(ii) not later than the 20th day after the
401	401	date the responsible organization sends to the owner the [a] notice
402	402	required by Section 10.355(d)(2) that the action has taken effect
403	403	[was approved by the requisite vote of the owners], if the action
404	404	was approved by [is to be undertaken on] the written consent of the
405	405	owners; or
406	406	(iii) not later than the 20th day after the
407	407	date the responsible organization sends to the owner a notice that
408	408	the merger was effected, if the action is a merger effected under
409	409	Section 10.006.
410	410	(c) An owner who does not make a demand within the period
411	411	required by Subsection (b)(3)(E) or, if Subsection (b)(1) is
412	412	applicable, does not give the notice of objection before the
413	413	meeting of the owners [(b)(2)(E)] is bound by the action and is not
414	414	entitled to exercise the rights of dissent and appraisal under
415	415	Section 10.354.
416	416	(d) Not later than the 20th day after the date an owner makes
417	417	a demand under Subsection (b)(3) [this section], the owner must
418	418	submit to the responsible organization any certificates
419	419	representing the ownership interest to which the demand relates for
420	420	purposes of making a notation on the certificates that a demand for
421	421	the payment of the fair value of an ownership interest has been made
422	422	under this section. An owner's failure to submit the certificates
423	423	within the required period has the effect of terminating, at the
424	424	option of the responsible organization, the owner's rights to
425	425	dissent and appraisal under Section 10.354 unless a court, for good
426	426	cause shown, directs otherwise.
427	427	SECTION 17. Subsections (a), (d), and (e), Section 10.358,
428	428	Business Organizations Code, are amended to read as follows:
429	429	(a) Not later than the 20th day after the date a responsible
430	430	organization receives a demand for payment made by a dissenting
431	431	owner in accordance with Section 10.356(b)(3) [10.356], the
432	432	responsible organization shall respond to the dissenting owner in
433	433	writing by:
434	434	(1) accepting the amount claimed in the demand as the
435	435	fair value of the ownership interests specified in the notice; or
436	436	(2) rejecting the demand and including in the response
437	437	the requirements prescribed by Subsection (c).
438	438	(d) If the dissenting owner decides to accept the offer made
439	439	by the responsible organization under Subsection (c)(2), the owner
440	440	must provide to the responsible organization notice of the
441	441	acceptance of the offer not later than the 90th day after the date
442	442	the action that is the subject of the demand took effect [An offer
443	443	made under Subsection (c)(2) must remain open for a period of at
444	444	least 60 days from the date the offer is first delivered to the
445	445	dissenting owner].
446	446	(e) If, not later than the 90th day after the date the action
447	447	that is the subject of the demand took effect, a dissenting owner
448	448	accepts an offer made by a responsible organization under
449	449	Subsection (c)(2) or [if] a dissenting owner and a responsible
450	450	organization reach an agreement on the fair value of the ownership
451	451	interests, the responsible organization shall pay the agreed amount
452	452	not later than the 120th [60th] day after the date the action that
453	453	is the subject of the demand took effect [the offer is accepted or
454	454	the agreement is reached, as appropriate], if the dissenting owner
455	455	delivers to the responsible organization:
456	456	(1) endorsed certificates representing the ownership
457	457	interests if the ownership interests are certificated; or
458	458	(2) signed assignments of the ownership interests if
459	459	the ownership interests are uncertificated.
460	460	SECTION 18. Section 11.057, Business Organizations Code, is
461	461	amended by adding Subsection (f) to read as follows:
462	462	(f) "Majority-in-interest" means, with respect to all or a
463	463	specified group of partners, partners who own more than 50 percent
464	464	of the current percentage or other interest in the profits of the
465	465	partnership that is owned by all of the partners or by the partners
466	466	in the specified group, as appropriate.
467	467	SECTION 19. Section 11.402, Business Organizations Code, is
468	468	amended to read as follows:
469	469	Sec. 11.402. JURISDICTION TO APPOINT RECEIVER. (a) A
470	470	court that has subject matter jurisdiction over specific property
471	471	of a domestic or foreign entity that is located in this state and is
472	472	involved in litigation has jurisdiction to appoint a receiver for
473	473	that property as provided by Section 11.403.
474	474	(b) A district court in the county in which the registered
475	475	office or principal place of business of a domestic entity is
476	476	located has jurisdiction to:
477	477	(1) appoint a receiver for the property and business
478	478	of a domestic entity for the purpose of rehabilitating the entity as
479	479	provided by Section 11.404; or
480	480	(2) order the liquidation of the property and business
481	481	of a domestic entity and appoint a receiver to effect that
482	482	liquidation as provided by Section 11.405.
483	483	SECTION 20. Subsection (b), Section 11.404, Business
484	484	Organizations Code, is amended to read as follows:
485	485	(b) A court may appoint a receiver under Subsection (a) only
486	486	if:
487	487	(1) circumstances exist that are considered by the
488	488	court to necessitate the appointment of a receiver to conserve the
489	489	property and business of the domestic entity and avoid damage to
490	490	interested parties;
491	491	(2) all other requirements of law are complied with;
492	492	and
493	493	(3) the court determines that all other available
494	494	legal and equitable remedies, including the appointment of a
495	495	receiver for specific property of the domestic entity under Section
496	496	11.402(a) [11.402], are inadequate.
497	497	SECTION 21. Subsection (a), Section 21.109, Business
498	498	Organizations Code, is amended to read as follows:
499	499	(a) A shareholders' agreement authorized by this subchapter
500	500	ceases to be effective when shares of the corporation are:
501	501	(1) listed on a national securities exchange [or
502	502	similar system]; or
503	503	(2) [quoted on an interdealer quotation system of a
504	504	national securities association or successor system; or
505	505	[(3)] regularly traded in a market maintained by one
506	506	or more members of a national or affiliated securities association.
507	507	SECTION 22. Subchapter C, Chapter 21, Business
508	508	Organizations Code, is amended by adding Section 21.110 to read as
509	509	follows:
510	510	Sec. 21.110. OTHER SHAREHOLDER AGREEMENTS PERMITTED. This
511	511	subchapter does not prohibit or impair any agreement between two or
512	512	more shareholders, or between the corporation and one or more of the
513	513	corporation's shareholders, permitted by Title 1, this chapter, or
514	514	other law.
515	515	SECTION 23. Section 21.203, Business Organizations Code, is
516	516	amended by adding Subsection (c) to read as follows:
517	517	(c) This section and Sections 21.204 through 21.208 do not
518	518	invalidate or impair a corporation's right or power to grant an
519	519	enforceable nonstatutory preemptive right in:
520	520	(1) a contract between the corporation and a
521	521	shareholder or other person; or
522	522	(2) the governing documents of the corporation.
523	523	SECTION 24. Subsection (a), Section 21.206, Business
524	524	Organizations Code, is amended to read as follows:
525	525	(a) An action brought against a corporation, the board of
526	526	directors or an officer, shareholder, or agent of the corporation,
527	527	or an owner of a beneficial interest in shares of the corporation
528	528	for the violation of a preemptive right of a shareholder under
529	529	Sections 21.203 and 21.204 must be brought not later than the
530	530	earlier of:
531	531	(1) the first anniversary of the date written notice
532	532	is given to each shareholder whose preemptive right was violated;
533	533	or
534	534	(2) the fourth anniversary of the latest of:
535	535	(A) the date the corporation issued the shares,
536	536	securities, or rights;
537	537	(B) the date the corporation sold the shares,
538	538	securities, or rights; or
539	539	(C) the date the corporation otherwise
540	540	distributed the shares, securities, or rights.
541	541	SECTION 25. Subsection (b), Section 21.222, Business
542	542	Organizations Code, is amended to read as follows:
543	543	(b) It is a defense to an action brought under this section
544	544	that the person suing:
545	545	(1) has, within the two years preceding the date the
546	546	action is brought, sold or offered for sale a list of shareholders
547	547	or of holders of voting trust certificates [in consideration] for
548	548	shares of the corporation or any other corporation;
549	549	(2) has aided or abetted a person in procuring a list
550	550	of shareholders or of holders of voting trust certificates for the
551	551	purpose described by Subdivision (1);
552	552	(3) has improperly used information obtained through a
553	553	prior examination of the books and account records, minutes, or
554	554	share transfer records of the corporation or any other corporation;
555	555	or
556	556	(4) was not acting in good faith or for a proper
557	557	purpose in making the person's request for examination.
558	558	SECTION 26. Section 21.357, Business Organizations Code, is
559	559	amended to read as follows:
560	560	Sec. 21.357. RECORD DATE FOR PURPOSE OF SHAREHOLDERS'
561	561	MEETING [OTHER THAN WRITTEN CONSENT TO ACTION]. The record date for
562	562	the purpose of determining shareholders entitled to notice of or to
563	563	vote at a shareholders' meeting or any adjournment of the meeting,
564	564	as provided by the directors in accordance with Section 6.101, must
565	565	be at least 10 days before the date of the shareholders' meeting [on
566	566	which the particular action requiring the determination of
567	567	shareholders is to be taken].
568	568	SECTION 27. Subsection (a), Section 21.415, Business
569	569	Organizations Code, is amended to read as follows:
570	570	(a) The act of a majority of the directors present at a
571	571	meeting at which a quorum is present at the time of the act is the
572	572	act of the board of directors of a corporation, unless the act of a
573	573	greater number is required by the certificate of formation or
574	574	bylaws of the corporation or by this code.
575	575	SECTION 28. Section 21.418, Business Organizations Code, is
576	576	amended by amending Subsections (a) and (b) and adding Subsections
577	577	(d) and (e) to read as follows:
578	578	(a) This section applies [only] to a contract or transaction
579	579	between a corporation and:
580	580	(1) one or more [of the corporation's] directors or
581	581	officers, or one or more affiliates or associates of one or more
582	582	directors or officers, of the corporation; or
583	583	(2) an entity or other organization in which one or
584	584	more [of the corporation's] directors or officers, or one or more
585	585	affiliates or associates of one or more directors or officers, of
586	586	the corporation:
587	587	(A) is a managerial official; or
588	588	(B) has a financial interest.
589	589	(b) An otherwise valid and enforceable contract or
590	590	transaction described by Subsection (a) is valid and enforceable,
591	591	and is not void or voidable, notwithstanding any relationship or
592	592	interest described by Subsection (a), if any one of the following
593	593	conditions is satisfied [notwithstanding that the director or
594	594	officer having the relationship or interest described by Subsection
595	595	(a) is present at or participates in the meeting of the board of
596	596	directors, or of a committee of the board that authorizes the
597	597	contract or transaction, or votes or signs, in the person's
598	598	capacity as a director or committee member, a unanimous written
599	599	consent of directors or committee members to authorize the contract
600	600	or transaction, if]:
601	601	(1) the material facts as to the relationship or
602	602	interest described by Subsection (a) and as to the contract or
603	603	transaction are disclosed to or known by:
604	604	(A) the corporation's board of directors or a
605	605	committee of the board of directors, and the board of directors or
606	606	committee in good faith authorizes the contract or transaction by
607	607	the approval of the majority of the disinterested directors or
608	608	committee members, regardless of whether the disinterested
609	609	directors or committee members constitute a quorum; or
610	610	(B) the shareholders entitled to vote on the
611	611	authorization of the contract or transaction, and the contract or
612	612	transaction is specifically approved in good faith by a vote of the
613	613	shareholders; or
614	614	(2) the contract or transaction is fair to the
615	615	corporation when the contract or transaction is authorized,
616	616	approved, or ratified by the board of directors, a committee of the
617	617	board of directors, or the shareholders.
618	618	(d) A person who has the relationship or interest described
619	619	by Subsection (a) may:
620	620	(1) be present at or participate in and, if the person
621	621	is a director or committee member, may vote at a meeting of the
622	622	board of directors or of a committee of the board that authorizes
623	623	the contract or transaction; or
624	624	(2) sign, in the person's capacity as a director or
625	625	committee member, a unanimous written consent of the directors or
626	626	committee members to authorize the contract or transaction.
627	627	(e) If at least one of the conditions of Subsection (b) is
628	628	satisfied, neither the corporation nor any of the corporation's
629	629	shareholders will have a cause of action against any of the persons
630	630	described by Subsection (a) for breach of duty with respect to the
631	631	making, authorization, or performance of the contract or
632	632	transaction because the person had the relationship or interest
633	633	described by Subsection (a) or took any of the actions authorized by
634	634	Subsection (d).
635	635	SECTION 29. Section 21.453, Business Organizations Code, is
636	636	amended by adding Subsections (f) and (g) to read as follows:
637	637	(f) If after the adoption of a resolution under Subsection
638	638	(b) the board of directors of the corporation determines that the
639	639	plan of conversion is not advisable, the plan of conversion may be
640	640	submitted to the shareholders of the corporation with a
641	641	recommendation that the shareholders not approve the plan of
642	642	conversion.
643	643	(g) A plan of conversion for a corporation may include a
644	644	provision requiring that the plan of conversion be submitted to the
645	645	shareholders of the corporation, regardless of whether the board of
646	646	directors determines, after adopting a resolution or making a
647	647	determination under this section, that the plan of conversion is
648	648	not advisable and recommends that the shareholders not approve the
649	649	plan of conversion.
650	650	SECTION 30. Subdivision (1), Section 21.601, Business
651	651	Organizations Code, is amended to read as follows:
652	652	(1) "Issuing public corporation" means a domestic
653	653	corporation that has:
654	654	(A) 100 or more shareholders of record as shown
655	655	by the share transfer records of the corporation;
656	656	(B) a class or series of the corporation's voting
657	657	shares registered under the Securities Exchange Act of 1934 (15
658	658	U.S.C. Section 77b et seq.), as amended; or
659	659	(C) a class or series of the corporation's voting
660	660	shares qualified for trading on [in] a national securities exchange
661	661	[market system].
662	662	SECTION 31. Section 21.603, Business Organizations Code, is
663	663	amended to read as follows:
664	664	Sec. 21.603. BENEFICIAL OWNER OF SHARES OR OTHER [SIMILAR]
665	665	SECURITIES. (a) For purposes of this subchapter [chapter], a
666	666	person is a beneficial owner of shares or other [similar]
667	667	securities if the person individually, or through an affiliate or
668	668	associate, [beneficially owns,] directly or indirectly
669	669	beneficially owns the shares or other securities or has the right[,
670	670	shares or similar securities.
671	671	[(b) A beneficial owner of shares or similar securities is
672	672	entitled, individually or through an affiliate or associate,] to:
673	673	(1) acquire the shares or other [similar] securities
674	674	[that may be exercised] immediately or after the passage [of a
675	675	certain amount] of time according to an oral or written agreement,
676	676	arrangement, or understanding, or on the exercise of conversion
677	677	rights, exchange rights, warrants, or options;
678	678	(2) vote the shares or other [similar] securities
679	679	according to an oral or written agreement, arrangement, or
680	680	understanding; or
681	681	(3) [subject to Subsection (c),] acquire, hold or
682	682	dispose of, or vote the shares or other [similar] securities with
683	683	another person who individually, or through an affiliate or
684	684	associate, beneficially owns, directly or indirectly, the shares or
685	685	other [similar] securities.
686	686	(b) [(c)] A person, however, is not considered a beneficial
687	687	owner of shares or other [similar] securities for purposes of this
688	688	subchapter if:
689	689	(1) the shares or other [similar] securities are:
690	690	(A) tendered under a tender or exchange offer
691	691	made by the person or an affiliate or associate of the person before
692	692	the tendered shares or securities are accepted for purchase or
693	693	exchange; or
694	694	(B) subject to an agreement, arrangement, or
695	695	understanding that expressly conditions the acquisition or
696	696	purchase of shares or securities on the approval of the acquisition
697	697	or purchase under Section 21.606 if the person has no direct or
698	698	indirect rights of ownership or voting with respect to the shares or
699	699	other securities until the time the approval is obtained; or
700	700	(2) the agreement, arrangement, or understanding to
701	701	vote the shares:
702	702	(A) arises solely from an immediately revocable
703	703	proxy that authorizes the person named in the proxy to vote at a
704	704	meeting of the shareholders that has been called when the proxy is
705	705	delivered or at an adjournment of the meeting; and
706	706	(B) would [is] not be reportable on a Schedule
707	707	13D under the Securities Exchange Act of 1934 (15 U.S.C. Section 77b
708	708	et seq.), as amended, or a comparable or successor report.
709	709	SECTION 32. Subdivision (1), Section 21.701, Business
710	710	Organizations Code, is amended to read as follows:
711	711	(1) "Close corporation" means a domestic corporation
712	712	formed under this subchapter or governed by this subchapter because
713	713	of Section 21.705, 21.706, or 21.707.
714	714	SECTION 33. Section 22.230, Business Organizations Code, is
715	715	amended by amending Subsections (a) and (b) and adding Subsections
716	716	(d) and (e) to read as follows:
717	717	(a) This section applies [only] to a contract or transaction
718	718	between a corporation and:
719	719	(1) one or more [of the corporation's] directors,
720	720	officers, or members, or one or more affiliates or associates of one
721	721	or more directors, officers, or members, of the corporation; or
722	722	(2) an entity or other organization in which one or
723	723	more [of the corporation's] directors, officers, or members, or one
724	724	or more affiliates or associates of one or more directors,
725	725	officers, or members, of the corporation:
726	726	(A) is a managerial official or a member; or
727	727	(B) has a financial interest.
728	728	(b) An otherwise valid and enforceable contract or
729	729	transaction is valid and enforceable, and is not void or voidable,
730	730	notwithstanding any relationship or interest described by
731	731	Subsection (a), if any one of the following conditions is satisfied
732	732	[notwithstanding that a director, officer, or member of the
733	733	corporation is present at or participates in the meeting of the
734	734	board of directors, of a committee of the board, or of the members
735	735	that authorizes the contract or transaction, or votes to authorize
736	736	the contract or transaction, if]:
737	737	(1) the material facts as to the relationship or
738	738	interest and as to the contract or transaction are disclosed to or
739	739	known by:
740	740	(A) the corporation's board of directors, a
741	741	committee of the board of directors, or the members, and the board,
742	742	the committee, or the members in good faith and with ordinary care
743	743	authorize the contract or transaction by the affirmative vote of
744	744	the majority of the disinterested directors, committee members or
745	745	members, regardless of whether the disinterested directors,
746	746	committee members or members constitute a quorum; or
747	747	(B) the members entitled to vote on the
748	748	authorization of the contract or transaction, and the contract or
749	749	transaction is specifically approved in good faith and with
750	750	ordinary care by a vote of the members; or
751	751	(2) the contract or transaction is fair to the
752	752	corporation when the contract or transaction is authorized,
753	753	approved, or ratified by the board of directors, a committee of the
754	754	board of directors, or the members.
755	755	(d) A person who has the relationship or interest described
756	756	by Subsection (a) may:
757	757	(1) be present at or participate in and, if the person
758	758	is a director, member, or committee member, may vote at a meeting of
759	759	the board of directors, of the members, or of a committee of the
760	760	board that authorizes the contract or transaction; or
761	761	(2) sign, in the person's capacity as a director,
762	762	member, or committee member, a written consent of the directors,
763	763	members, or committee members to authorize the contract or
764	764	transaction.
765	765	(e) If at least one of the conditions of Subsection (b) is
766	766	satisfied, neither the corporation nor any of the corporation's
767	767	shareholders will have a cause of action against any of the persons
768	768	described by Subsection (a) for breach of duty with respect to the
769	769	making, authorization, or performance of the contract or
770	770	transaction because the person had the relationship or interest
771	771	described by Subsection (a) or took any of the actions authorized by
772	772	Subsection (d).
773	773	SECTION 34. Section 101.054, Business Organizations Code,
774	774	is amended by amending Subsection (a) and adding Subsection (e) to
775	775	read as follows:
776	776	(a) Except as provided by this section, the following
777	777	provisions may not be waived or modified in the company agreement of
778	778	a limited liability company:
779	779	(1) this section;
780	780	(2) Section 101.101, 101.151, 101.206, 101.501,
781	781	101.602(b), or 101.613 [101.502];
782	782	(3) Chapter 1, if the provision is used to interpret a
783	783	provision or define a word or phrase contained in a section listed
784	784	in this subsection;
785	785	(4) Chapter 2, except that Section 2.104(c)(2),
786	786	2.104(c)(3), or 2.113 may be waived or modified in the company
787	787	agreement;
788	788	(5) Chapter 3, except that Subchapters C and E may be
789	789	waived or modified in the company agreement; or
790	790	(6) Chapter 4, 5, 7, 10, 11, or 12, other than Section
791	791	11.056.
792	792	(e) The company agreement may not unreasonably restrict a
793	793	person's right of access to records and information under Section
794	794	101.502.
795	795	SECTION 35. Section 101.106, Business Organizations Code,
796	796	is amended by adding Subsections (a-1) and (a-2) to read as follows:
797	797	(a-1) A membership interest may be community property under
798	798	applicable law.
799	799	(a-2) A member's right to participate in the management and
800	800	conduct of the business of the limited liability company is not
801	801	community property.
802	802	SECTION 36. Subchapter C, Chapter 101, Business
803	803	Organizations Code, is amended by adding Section 101.1115 to read
804	804	as follows:
805	805	Sec. 101.1115. EFFECT OF DEATH OR DIVORCE ON MEMBERSHIP
806	806	INTEREST. (a) For purposes of this code:
807	807	(1) on the divorce of a member, the member's spouse, to
808	808	the extent of the spouse's membership interest, if any, is an
809	809	assignee of the membership interest;
810	810	(2) on the death of a member, the member's surviving
811	811	spouse, if any, and an heir, devisee, personal representative, or
812	812	other successor of the member, to the extent of their respective
813	813	membership interest, are assignees of the membership interest; and
814	814	(3) on the death of a member's spouse, an heir,
815	815	devisee, personal representative, or other successor of the spouse,
816	816	other than the member, to the extent of their respective membership
817	817	interest, if any, is an assignee of the membership interest.
818	818	(b) This chapter does not impair an agreement for the
819	819	purchase or sale of a membership interest at any time, including on
820	820	the death or divorce of an owner of the membership interest.
821	821	SECTION 37. Subsection (a), Section 101.254, Business
822	822	Organizations Code, is amended to read as follows:
823	823	(a) Except as provided by this title and Title 1, each
824	824	governing person of a limited liability company and each officer
825	825	[or agent] of a limited liability company vested with actual or
826	826	apparent authority by the governing authority of the company is an
827	827	agent of the company for purposes of carrying out the company's
828	828	business.
829	829	SECTION 38. Section 101.255, Business Organizations Code,
830	830	is amended by amending Subsections (a) and (b) and adding
831	831	Subsections (d) and (e) to read as follows:
832	832	(a) This section applies [only] to a contract or transaction
833	833	between a limited liability company and:
834	834	(1) one or more [of the company's] governing persons or
835	835	officers, or one or more affiliates or associates of one or more
836	836	governing persons or officers, of the company; or
837	837	(2) an entity or other organization in which one or
838	838	more [of the company's] governing persons or officers, or one or
839	839	more affiliates or associates of one or more governing persons or
840	840	officers, of the company:
841	841	(A) is a managerial official; or
842	842	(B) has a financial interest.
843	843	(b) An otherwise valid and enforceable contract or
844	844	transaction described by Subsection (a) is valid and enforceable,
845	845	and is not void or voidable, notwithstanding any relationship or
846	846	interest described by Subsection (a), if any one of the following
847	847	conditions is satisfied [notwithstanding that the governing person
848	848	or officer having the relationship or interest described by
849	849	Subsection (a) is present at or participates in the meeting of the
850	850	governing authority, or of a committee of the governing authority,
851	851	that authorizes the contract or transaction or votes or signs, in
852	852	the person's capacity as a governing person or committee member, a
853	853	written consent of governing persons or committee members to
854	854	authorize the contract or transaction, if]:
855	855	(1) the material facts as to the relationship or
856	856	interest described by Subsection (a) and as to the contract or
857	857	transaction are disclosed to or known by:
858	858	(A) the company's governing authority or a
859	859	committee of the governing authority and the governing authority or
860	860	committee in good faith authorizes the contract or transaction by
861	861	the approval of the majority of the disinterested governing persons
862	862	or committee members, regardless of whether the disinterested
863	863	governing persons or committee members constitute a quorum; or
864	864	(B) the members of the company, and the members
865	865	in good faith approve the contract or transaction by vote of the
866	866	members; or
867	867	(2) the contract or transaction is fair to the company
868	868	when the contract or transaction is authorized, approved, or
869	869	ratified by the governing authority, a committee of the governing
870	870	authority, or the members of the company.
871	871	(d) A person who has the relationship or interest described
872	872	by Subsection (a) may:
873	873	(1) be present at or participate in and, if the person
874	874	is a governing person or committee member, may vote at a meeting of
875	875	the governing authority or of a committee of the governing
876	876	authority that authorizes the contract or transaction; or
877	877	(2) sign, in the person's capacity as a governing
878	878	person or committee member, a written consent of the governing
879	879	persons or committee members to authorize the contract or
880	880	transaction.
881	881	(e) If at least one of the conditions of Subsection (b) is
882	882	satisfied, neither the company nor any of the company's members
883	883	will have a cause of action against any of the persons described by
884	884	Subsection (a) for breach of duty with respect to the making,
885	885	authorization, or performance of the contract or transaction
886	886	because the person had the relationship or interest described by
887	887	Subsection (a) or took any of the actions authorized by Subsection
888	888	(d).
889	889	SECTION 39. Subsection (b), Section 101.357, Business
890	890	Organizations Code, is amended to read as follows:
891	891	(b) A manager or committee member of a limited liability
892	892	company[, if authorized by the company agreement,] may vote:
893	893	(1) in person; or
894	894	(2) if authorized by the company agreement, by a proxy
895	895	executed in writing by the manager or committee member, as
896	896	appropriate.
897	897	SECTION 40. Subsection (b), Section 101.611, Business
898	898	Organizations Code, is amended to read as follows:
899	899	(b) Section 101.206 [101.207] does not apply to a
900	900	distribution with respect to the series.
901	901	SECTION 41. Subsection (d), Section 151.003, Business
902	902	Organizations Code, is amended to read as follows:
903	903	(d) Receipt of notice by a general partner of a fact
904	904	relating to the partnership is effective immediately as notice to
905	905	the partnership unless fraud against the partnership is committed
906	906	by or with the consent of the partner receiving the notice.
907	907	SECTION 42. Subsection (a), Section 152.304, Business
908	908	Organizations Code, is amended to read as follows:
909	909	(a) Except as provided by Subsection (b) or Section
910	910	152.801(a), all partners are [liable] jointly and severally liable
911	911	for all obligations [a debt or obligation] of the partnership
912	912	unless otherwise:
913	913	(1) agreed by the claimant; or
914	914	(2) provided by law.
915	915	SECTION 43. Subchapter E, Chapter 152, Business
916	916	Organizations Code, is amended by adding Section 152.308 to read as
917	917	follows:
918	918	Sec. 152.308. PARTNER'S PARTNERSHIP INTEREST SUBJECT TO
919	919	CHARGING ORDER. (a) On application by a judgment creditor of a
920	920	partner or of any other owner of a partnership interest, a court
921	921	having jurisdiction may charge the partnership interest of the
922	922	judgment debtor to satisfy the judgment.
923	923	(b) To the extent that the partnership interest is charged
924	924	in the manner provided by Subsection (a), the judgment creditor has
925	925	only the right to receive any distribution to which the judgment
926	926	debtor would otherwise be entitled in respect of the partnership
927	927	interest.
928	928	(c) A charging order constitutes a lien on the judgment
929	929	debtor's partnership interest. The charging order lien may not be
930	930	foreclosed on under this code or any other law.
931	931	(d) The entry of a charging order is the exclusive remedy by
932	932	which a judgment creditor of a partner or of any other owner of a
933	933	partnership interest may satisfy a judgment out of the judgment
934	934	debtor's partnership interest.
935	935	(e) This section does not deprive a partner or other owner
936	936	of a partnership interest of a right under exemption laws with
937	937	respect to the judgment debtor's partnership interest.
938	938	(f) A creditor of a partner or of any other owner of a
939	939	partnership interest does not have the right to obtain possession
940	940	of, or otherwise exercise legal or equitable remedies with respect
941	941	to, the property of the partnership.
942	942	SECTION 44. Subsections (a) and (c), Section 152.406,
943	943	Business Organizations Code, are amended to read as follows:
944	944	(a) For purposes of this code:
945	945	(1) on the divorce of a partner, the partner's spouse,
946	946	to the extent of the spouse's partnership interest, if any, is a
947	947	transferee of the partnership interest [from the partner];
948	948	(2) on the death of a partner:
949	949	(A) if the partnership interest of the deceased
950	950	partner is subject to redemption under Subchapter H, the partner's
951	951	surviving spouse, if any, and an heir, devisee, personal
952	952	representative, or other successor of the partner, to the extent of
953	953	their respective right to the redemption price, are creditors of
954	954	the partnership until the redemption price is paid; or
955	955	(B) if the partnership interest of the deceased
956	956	partner is not subject to redemption under Subchapter H, the
957	957	partner's surviving spouse, if any, and an heir, devisee, personal
958	958	representative, or other successor of the partner, to the extent of
959	959	their respective partnership interest, are transferees of the
960	960	partnership interest[, the partner's surviving spouse, if any, and
961	961	an heir, legatee, or personal representative of the partner, to the
962	962	extent of their respective partnership interest, is a transferee of
963	963	the partnership interest from the partner]; and
964	964	(3) on the death of a partner's spouse, an heir,
965	965	devisee [legatee], [or] personal representative, or other
966	966	successor of the spouse, other than the partner, to the extent of
967	967	their respective partnership interest, if any, is a transferee of
968	968	the partnership interest [from the partner].
969	969	(c) This chapter does not impair an agreement for the
970	970	purchase or sale of a partnership interest at any time, including on
971	971	the death or divorce of an owner of the partnership interest.
972	972	SECTION 45. Subsection (b), Section 152.707, Business
973	973	Organizations Code, is amended to read as follows:
974	974	(b) In settling accounts among the partners, the
975	975	partnership interest of a withdrawn partner that is [not] redeemed
976	976	under Section 152.610 [Subchapter H] is credited with a share of any
977	977	profits for the period after the partner's withdrawal but is
978	978	charged with a share of losses for that period only to the extent of
979	979	profits credited for that period.
980	980	SECTION 46. Section 152.801, Business Organizations Code,
981	981	is amended to read as follows:
982	982	Sec. 152.801. LIABILITY OF PARTNER. (a) Except as
983	983	provided by [Subsection (b) or] the partnership agreement, a
984	984	partner [in a limited liability partnership] is not personally
985	985	liable to any person, including a partner, directly or indirectly,
986	986	by contribution, indemnity, or otherwise, for any [a debt or]
987	987	obligation of the partnership incurred while the partnership is a
988	988	limited liability partnership.
989	989	(b) [A partner in a limited liability partnership is not
990	990	personally liable for a debt or obligation of the partnership
991	991	arising from an error, omission, negligence, incompetence, or
992	992	malfeasance committed by another partner or representative of the
993	993	partnership while the partnership is a limited liability
994	994	partnership and in the course of the partnership business unless
995	995	the first partner:
996	996	[(1) was supervising or directing the other partner or
997	997	representative when the error, omission, negligence, incompetence,
998	998	or malfeasance was committed by the other partner or
999	999	representative;
1000	1000	[(2) was directly involved in the specific activity in
1001	1001	which the error, omission, negligence, incompetence, or
1002	1002	malfeasance was committed by the other partner or representative;
1003	1003	or
1004	1004	[(3) had notice or knowledge of the error, omission,
1005	1005	negligence, incompetence, or malfeasance by the other partner or
1006	1006	representative at the time of the occurrence and then failed to take
1007	1007	reasonable action to prevent or cure the error, omission,
1008	1008	negligence, incompetence, or malfeasance.
1009	1009	[(c)] Sections 2.101(1), 152.305, and 152.306 do not limit
1010	1010	the effect of Subsection (a) in a limited liability partnership.
1011	1011	(c) For purposes of this section, [(d) In this section,
1012	1012	"representative" includes] an obligation is incurred while a
1013	1013	partnership is [agent, servant, or employee of] a limited liability
1014	1014	partnership if:
1015	1015	(1) the obligation relates to an action or omission
1016	1016	occurring while the partnership is a limited liability partnership;
1017	1017	or
1018	1018	(2) the obligation arises under a contract or
1019	1019	commitment entered into while the partnership is a limited
1020	1020	liability partnership.
1021	1021	(d) Subsection [(e) Subsections] (a) does [and (b) do] not
1022	1022	affect:
1023	1023	(1) the liability of a partnership to pay its [debts
1024	1024	and] obligations from partnership property;
1025	1025	(2) the liability of a partner, if any, imposed by law
1026	1026	or contract independently of the partner's status as a partner; or
1027	1027	(3) the manner in which service of citation or other
1028	1028	civil process may be served in an action against a partnership.
1029	1029	(e) [(f)] This section controls over the other parts of this
1030	1030	chapter and the other partnership provisions regarding the
1031	1031	liability of partners of a limited liability partnership, the
1032	1032	chargeability of the partners for the [debts and] obligations of
1033	1033	the partnership, and the obligations of the partners regarding
1034	1034	contributions and indemnity.
1035	1035	SECTION 47. Subsections (a), (f), and (j), Section 152.802,
1036	1036	Business Organizations Code, are amended to read as follows:
1037	1037	(a) In addition to complying with Section [Sections]
1038	1038	152.803 [and 152.804], a partnership, to become a limited liability
1039	1039	partnership, must file an application with the secretary of state
1040	1040	in accordance with Chapter 4 and this section. The application
1041	1041	must:
1042	1042	(1) set out:
1043	1043	(A) the name of the partnership;
1044	1044	(B) the federal taxpayer [tax] identification
1045	1045	number of the partnership;
1046	1046	(C) the street address of the partnership's
1047	1047	principal office in this state or outside of this state, as
1048	1048	applicable; and
1049	1049	(D) the number of partners at the date of
1050	1050	application; and
1051	1051	(2) contain a brief statement of the partnership's
1052	1052	business.
1053	1053	(f) A registration may be withdrawn by filing a withdrawal
1054	1054	notice with the secretary of state in accordance with Chapter 4. A
1055	1055	certificate from the comptroller stating that all taxes
1056	1056	administered by the comptroller under Title 2, Tax Code, have been
1057	1057	paid must be filed with the notice of withdrawal. A withdrawal
1058	1058	notice terminates the status of the partnership as a limited
1059	1059	liability partnership from the date on which the notice is filed or
1060	1060	a later date specified in the notice, but not later than the
1061	1061	expiration date under Subsection (e). A withdrawal notice must:
1062	1062	(1) contain:
1063	1063	(A) the name of the partnership;
1064	1064	(B) the federal taxpayer [tax] identification
1065	1065	number of the partnership;
1066	1066	(C) the date of registration of the partnership's
1067	1067	last application under this subchapter; and
1068	1068	(D) the current street address of the
1069	1069	partnership's principal office in this state and outside this
1070	1070	state, if applicable; and
1071	1071	(2) be signed by:
1072	1072	(A) a majority-in-interest of the partners; or
1073	1073	(B) one or more partners authorized by a
1074	1074	majority-in-interest of the partners.
1075	1075	(j) A document filed under this subchapter may be amended by
1076	1076	filing an application for amendment of registration with the
1077	1077	secretary of state in accordance with Chapter 4 and this
1078	1078	subsection. The application for amendment must:
1079	1079	(1) contain:
1080	1080	(A) the name of the partnership;
1081	1081	(B) the taxpayer [tax] identification number of
1082	1082	the partnership;
1083	1083	(C) the identity of the document being amended;
1084	1084	(D) the date on which the document being amended
1085	1085	was filed;
1086	1086	(E) a reference to the part of the document being
1087	1087	amended; and
1088	1088	(F) the amendment or correction; and
1089	1089	(2) be signed by:
1090	1090	(A) a majority-in-interest of the partners; or
1091	1091	(B) one or more partners authorized by a
1092	1092	majority-in-interest of the partners.
1093	1093	SECTION 48. Subsection (b), Section 152.906, Business
1094	1094	Organizations Code, is amended to read as follows:
1095	1095	(b) In addition to the information required by Section
1096	1096	9.011, the certificate of withdrawal must:
1097	1097	(1) contain:
1098	1098	(A) the federal taxpayer [tax] identification
1099	1099	number of the partnership; and
1100	1100	(B) the date of effectiveness of the
1101	1101	partnership's last application for registration under this
1102	1102	subchapter; and
1103	1103	(2) be signed by:
1104	1104	(A) a majority-in-interest of the partners; or
1105	1105	(B) one or more partners authorized by a
1106	1106	majority-in-interest of the partners.
1107	1107	SECTION 49. Subsection (b), Section 152.910, Business
1108	1108	Organizations Code, is amended to read as follows:
1109	1109	(b) A partner of a foreign limited liability partnership is
1110	1110	not liable for an [a debt or] obligation of the partnership solely
1111	1111	because the partnership transacted business in this state without
1112	1112	being registered.
1113	1113	SECTION 50. Subsection (b), Section 152.911, Business
1114	1114	Organizations Code, is amended to read as follows:
1115	1115	(b) The application for amendment must contain:
1116	1116	(1) the name of the partnership;
1117	1117	(2) the taxpayer [tax] identification number of the
1118	1118	partnership;
1119	1119	(3) the identity of the document being amended;
1120	1120	(4) a reference to the date on which the document being
1121	1121	amended was filed;
1122	1122	(5) the part of the document being amended; and
1123	1123	(6) the amendment or correction.
1124	1124	SECTION 51. Subsection (a), Section 153.004, Business
1125	1125	Organizations Code, is amended to read as follows:
1126	1126	(a) Except as provided by this section, the following
1127	1127	provisions of Title 1 may not be waived or modified in the
1128	1128	partnership agreement of a limited partnership:
1129	1129	(1) Chapter 1, if the provision is used to interpret a
1130	1130	provision or define a word or phrase contained in a section listed
1131	1131	in this subsection;
1132	1132	(2) Chapter 2, other than Section 2.104(c)(2),
1133	1133	2.104(c)(3), or 2.113;
1134	1134	(3) Chapter 3, other than Subchapters C and E of that
1135	1135	chapter and Section 3.151 (provided, that in all events a
1136	1136	partnership agreement may not validly waive or modify Section
1137	1137	[Sections] 153.551 or unreasonably restrict a partner's right of
1138	1138	access to books and records under Section [and] 153.552); or
1139	1139	(4) Chapter 4, 5, 10, 11, or 12, other than Section
1140	1140	11.058.
1141	1141	SECTION 52. Section 153.103, Business Organizations Code,
1142	1142	is amended to read as follows:
1143	1143	Sec. 153.103. ACTIONS NOT CONSTITUTING PARTICIPATION IN
1144	1144	BUSINESS FOR LIABILITY PURPOSES. For purposes of this section and
1145	1145	Sections 153.102, 153.104, and 153.105, a limited partner does not
1146	1146	participate in the control of the business because the limited
1147	1147	partner has or has acted in one or more of the following capacities
1148	1148	or possesses or exercises one or more of the following powers:
1149	1149	(1) acting as:
1150	1150	(A) a contractor for or an officer or other agent
1151	1151	or employee of the limited partnership;
1152	1152	(B) a contractor for or an agent or employee of a
1153	1153	general partner;
1154	1154	(C) an officer, director, or stockholder of a
1155	1155	corporate general partner;
1156	1156	(D) a partner of a partnership that is a general
1157	1157	partner of the limited partnership; or
1158	1158	(E) a member or manager of a limited liability
1159	1159	company that is a general partner of the limited partnership;
1160	1160	(2) acting in a capacity similar to that described in
1161	1161	Subdivision (1) with any other person that is a general partner of
1162	1162	the limited partnership;
1163	1163	(3) consulting with or advising a general partner on
1164	1164	any matter, including the business of the limited partnership;
1165	1165	(4) acting as surety, guarantor, or endorser for the
1166	1166	limited partnership, guaranteeing or assuming one or more specific
1167	1167	obligations of the limited partnership, or providing collateral for
1168	1168	borrowings of the limited partnership;
1169	1169	(5) calling, requesting, attending, or participating
1170	1170	in a meeting of the partners or the limited partners;
1171	1171	(6) winding up the business of a limited partnership
1172	1172	under Chapter 11 and Subchapter K of this chapter;
1173	1173	(7) taking an action required or permitted by law to
1174	1174	bring, pursue, settle, or otherwise terminate a derivative action
1175	1175	in the right of the limited partnership;
1176	1176	(8) serving on a committee of the limited partnership
1177	1177	or the limited partners; or
1178	1178	(9) proposing, approving, or disapproving, by vote or
1179	1179	otherwise, one or more of the following matters:
1180	1180	(A) the winding up or termination of the limited
1181	1181	partnership;
1182	1182	(B) an election to reconstitute the limited
1183	1183	partnership or continue the business of the limited partnership;
1184	1184	(C) the sale, exchange, lease, mortgage,
1185	1185	assignment, pledge, or other transfer of, or granting of a security
1186	1186	interest in, an asset of the limited partnership;
1187	1187	(D) the incurring, renewal, refinancing, or
1188	1188	payment or other discharge of indebtedness by the limited
1189	1189	partnership;
1190	1190	(E) a change in the nature of the business of the
1191	1191	limited partnership;
1192	1192	(F) the admission, removal, or retention of a
1193	1193	general partner;
1194	1194	(G) the admission, removal, or retention of a
1195	1195	limited partner;
1196	1196	(H) a transaction or other matter involving an
1197	1197	actual or potential conflict of interest;
1198	1198	(I) an amendment to the partnership agreement or
1199	1199	certificate of formation;
1200	1200	(J) if the limited partnership is qualified as an
1201	1201	investment company under the federal Investment Company Act of 1940
1202	1202	(15 U.S.C. Section 80a-1 et seq.), as amended, any matter required
1203	1203	by that Act or the rules and regulations of the Securities and
1204	1204	Exchange Commission under that Act, to be approved by the holders of
1205	1205	beneficial interests in an investment company, including:
1206	1206	(i) electing directors or trustees of the
1207	1207	investment company;
1208	1208	(ii) approving or terminating an investment
1209	1209	advisory or underwriting contract;
1210	1210	(iii) approving an auditor; and
1211	1211	(iv) acting on another matter that that Act
1212	1212	requires to be approved by the holders of beneficial interests in
1213	1213	the investment company;
1214	1214	(K) indemnification of a general partner under
1215	1215	Chapter 8 or otherwise;
1216	1216	(L) any other matter stated in the partnership
1217	1217	agreement;
1218	1218	(M) the exercising of a right or power granted or
1219	1219	permitted to limited partners under this code and not specifically
1220	1220	enumerated in this section; or
1221	1221	(N) the merger, [or] conversion, or interest
1222	1222	exchange with respect to [of] a limited partnership.
1223	1223	SECTION 53. Subsection (b), Section 153.158, Business
1224	1224	Organizations Code, is amended to read as follows:
1225	1225	(b) Until an action described by Subsection (a) is taken,
1226	1226	the owner of the partnership interest of the withdrawn general
1227	1227	partner has the status of an assignee under Subchapter F[, Section
1228	1228	153.113, and Section 153.555].
1229	1229	SECTION 54. Subsection (b), Section 153.501, Business
1230	1230	Organizations Code, is amended to read as follows:
1231	1231	(b) The limited partnership may cancel under Section 11.152
1232	1232	an event requiring winding up arising from an event of withdrawal of
1233	1233	a general partner as specified in Section 11.058(b) if:
1234	1234	(1) there remains at least one general partner and the
1235	1235	partnership agreement permits the business of the limited
1236	1236	partnership to be carried on by the remaining general partners and
1237	1237	those remaining general partners carry on the business; or
1238	1238	(2) not later than one year after the event, all
1239	1239	remaining partners, or another group or percentage of partners
1240	1240	specified in the partnership agreement:
1241	1241	(A) agree in writing to continue the business of
1242	1242	the limited partnership [in writing]; and
1243	1243	(B) to the extent that they desire or if there are
1244	1244	no remaining general partners, agree to the appointment of one or
1245	1245	more new general partners.
1246	1246	SECTION 55. Section 153.504, Business Organizations Code,
1247	1247	is amended to read as follows:
1248	1248	Sec. 153.504. DISPOSITION OF ASSETS. On the winding up of a
1249	1249	limited partnership, its assets shall be paid or transferred as
1250	1250	follows:
1251	1251	(1) to the extent otherwise permitted by law, to
1252	1252	creditors, including partners who are creditors other than solely
1253	1253	because of the application of Section 153.207, for the payment or
1254	1254	the making of reasonable provision for payment to satisfy the
1255	1255	liabilities of the limited partnership;
1256	1256	(2) unless otherwise provided by the partnership
1257	1257	agreement, to partners and former partners to satisfy the
1258	1258	partnership's liability for distributions under Section 153.111 or
1259	1259	153.209; and
1260	1260	(3) unless otherwise provided by the partnership
1261	1261	agreement, to partners first for the return of their capital and
1262	1262	second with respect to their partnership interests, in the
1263	1263	proportions provided by Sections 153.208(a) and (b).
1264	1264	SECTION 56. Subsection (a), Section 153.551, Business
1265	1265	Organizations Code, is amended to read as follows:
1266	1266	(a) A domestic limited partnership shall maintain the
1267	1267	following records in its principal office in the United States or
1268	1268	make the records available in that office not later than the fifth
1269	1269	day after the date on which a written request under Section
1270	1270	153.552(a) is received:
1271	1271	(1) a current list that states:
1272	1272	(A) the name and mailing address of each partner,
1273	1273	separately identifying in alphabetical order the general partners
1274	1274	and the limited partners;
1275	1275	(B) the last known street address of the business
1276	1276	or residence of each general partner;
1277	1277	(C) the percentage or other interest in the
1278	1278	partnership owned by each partner; and
1279	1279	(D) if one or more classes or groups are
1280	1280	established under the partnership agreement, the names of the
1281	1281	partners who are members of each specified class or group;
1282	1282	(2) a copy of:
1283	1283	(A) the limited partnership's federal, state,
1284	1284	and local information or income tax returns for each of the
1285	1285	partnership's six most recent tax years;
1286	1286	(B) the partnership agreement and certificate of
1287	1287	formation; and
1288	1288	(C) all amendments or restatements;
1289	1289	(3) copies of any document that creates, in the manner
1290	1290	provided by the partnership agreement, classes or groups of
1291	1291	partners;
1292	1292	(4) an executed copy of any powers of attorney under
1293	1293	which the partnership agreement, certificate of formation, and all
1294	1294	amendments or restatements to the agreement and certificate have
1295	1295	been executed;
1296	1296	(5) unless contained in the written partnership
1297	1297	agreement, a written statement of:
1298	1298	(A) the amount of the cash contribution and a
1299	1299	description and statement of the agreed value of any other
1300	1300	contribution made by each partner;
1301	1301	(B) the amount of the cash contribution and a
1302	1302	description and statement of the agreed value of any other
1303	1303	contribution that the partner has agreed to make in the future as an
1304	1304	additional contribution;
1305	1305	(C) [the date on which additional contributions
1306	1306	are to be made or] the [date of] events requiring additional
1307	1307	contributions to be made or the date on which additional
1308	1308	contributions are to be made;
1309	1309	(D) the events requiring the winding up of the
1310	1310	limited partnership; and
1311	1311	(E) the date on which each partner in the limited
1312	1312	partnership became a partner; and
1313	1313	(6) books and records of the accounts of the limited
1314	1314	partnership.
1315	1315	SECTION 57. Section 200.317, Business Organizations Code,
1316	1316	is amended by amending Subsections (a) and (b) and adding
1317	1317	Subsections (d) and (e) to read as follows:
1318	1318	(a) This section applies [only] to a contract or transaction
1319	1319	between a real estate investment trust and:
1320	1320	(1) one or more [of the trust's] trust managers or
1321	1321	officers, or one or more affiliates or associates of one or more
1322	1322	directors or officers, of the trust; or
1323	1323	(2) an entity or other organization in which one or
1324	1324	more [of the trust's] trust managers or officers, or one or more
1325	1325	affiliates or associates of one or more directors or officers, of
1326	1326	the trust:
1327	1327	(A) is a managerial official; or
1328	1328	(B) has a financial interest.
1329	1329	(b) An otherwise valid and enforceable contract or
1330	1330	transaction described by Subsection (a) is valid and enforceable,
1331	1331	and is not void or voidable, notwithstanding any relationship or
1332	1332	interest described by Subsection (a), if any one of the following
1333	1333	conditions is satisfied [notwithstanding that the trust manager or
1334	1334	officer having the relationship or interest described by Subsection
1335	1335	(a) is present at or participates in the meeting of the trust
1336	1336	managers or of a committee of the trust managers that authorizes the
1337	1337	contract or transaction, or votes or signs, in the person's
1338	1338	capacity as a trust manager or committee member, a unanimous
1339	1339	written consent of trust managers or committee members to authorize
1340	1340	the contract or transaction, if]:
1341	1341	(1) the material facts as to the relationship or
1342	1342	interest described by Subsection (a) and as to the contract or
1343	1343	transaction are disclosed to or known by:
1344	1344	(A) the trust managers or a committee of the
1345	1345	trust managers, and the trust managers or committee of the trust
1346	1346	managers in good faith authorize the contract or transaction by the
1347	1347	approval of the majority of disinterested trust managers or
1348	1348	committee members, regardless of whether the disinterested trust
1349	1349	managers or committee members constitute a quorum; or
1350	1350	(B) the shareholders entitled to vote on the
1351	1351	authorization of the contract or transaction, and the contract or
1352	1352	transaction is specifically approved in good faith by a vote of the
1353	1353	shareholders; or
1354	1354	(2) the contract or transaction is fair to the real
1355	1355	estate investment trust when the contract or transaction is
1356	1356	authorized, approved, or ratified by the trust managers, a
1357	1357	committee of the trust managers, or the shareholders.
1358	1358	(d) A person who has the relationship or interest described
1359	1359	by Subsection (a) may:
1360	1360	(1) be present at or participate in and, if the person
1361	1361	is a trust manager or committee member, may vote at a meeting of the
1362	1362	trust managers, or of a committee of the trust managers, that
1363	1363	authorizes the contract or transaction; or
1364	1364	(2) sign, in the person's capacity as a trust manager
1365	1365	or committee member, a unanimous written consent of the trust
1366	1366	managers or committee members to authorize the contract or
1367	1367	transaction.
1368	1368	(e) If at least one of the conditions of Subsection (b) is
1369	1369	satisfied, neither the trust nor any of the trust's shareholders
1370	1370	will have a cause of action against any of the persons described by
1371	1371	Subsection (a) for breach of duty with respect to the making,
1372	1372	authorization, or performance of the contract or transaction
1373	1373	because the person had the relationship or interest described by
1374	1374	Subsection (a) or took any of the actions authorized by Subsection
1375	1375	(d).
1376	1376	SECTION 58. Subsections (b) and (f), Section 252.011,
1377	1377	Business Organizations Code, are amended to read as follows:
1378	1378	(b) A statement appointing an agent must contain:
1379	1379	(1) the name of the nonprofit association;
1380	1380	(2) the federal taxpayer [tax] identification number
1381	1381	of the nonprofit association, if applicable;
1382	1382	(3) the address in this state, including the street
1383	1383	address, if any, of the nonprofit association or, if the nonprofit
1384	1384	association does not have an address in this state, its address out
1385	1385	of state; and
1386	1386	(4) the name of the person in this state authorized to
1387	1387	receive service of process and the person's address, including the
1388	1388	street address, in this state.
1389	1389	(f) A statement appointing an agent may be canceled by
1390	1390	filing with the secretary of state a written notice of cancellation
1391	1391	executed by a person authorized to manage the affairs of the
1392	1392	nonprofit association. A notice of cancellation must contain:
1393	1393	(1) the name of the nonprofit association;
1394	1394	(2) the federal taxpayer [tax] identification number
1395	1395	of the nonprofit association, if applicable;
1396	1396	(3) the date of filing of the nonprofit association's
1397	1397	statement appointing the agent; and
1398	1398	(4) a current street address, if any, of the nonprofit
1399	1399	association in this state or, if the nonprofit association does not
1400	1400	have an address in this state, its address out of state.
1401	1401	SECTION 59. Section 402.003, Business Organizations Code,
1402	1402	is amended to read as follows:
1403	1403	Sec. 402.003. EARLY ADOPTION OF CODE BY EXISTING DOMESTIC
1404	1404	ENTITY. (a) A domestic entity formed before the effective date of
1405	1405	this code may voluntarily elect to adopt and become subject to this
1406	1406	code by:
1407	1407	(1) adopting the code by complying with the procedures
1408	1408	for approval, under prior law and its governing documents, of an
1409	1409	amendment to:
1410	1410	(A) its articles of incorporation, with respect
1411	1411	to a corporation or cooperative association;
1412	1412	(B) its regulations, with respect to a limited
1413	1413	liability company;
1414	1414	(C) its articles of association, with respect to
1415	1415	a professional association;
1416	1416	(D) its declaration of trust, with respect to a
1417	1417	real estate investment trust;
1418	1418	(E) its partnership agreement, with respect to a
1419	1419	partnership; or
1420	1420	(F) its primary governing document, with respect
1421	1421	to another type of domestic entity;
1422	1422	(2) if any of its governing documents, including its
1423	1423	certificate of formation, do not comply with this code, complying
1424	1424	with the procedures, under prior law and its governing documents,
1425	1425	to amend the noncomplying governing documents to comply with this
1426	1426	code, including filing with the filing officer in accordance with
1427	1427	Chapter 4 a certificate of amendment to cause its certificate of
1428	1428	formation to comply with this code; and
1429	1429	(3) if the domestic entity is a filing entity, filing
1430	1430	with the filing officer in accordance with Chapter 4 a statement
1431	1431	that the filing entity is electing to adopt this code.
1432	1432	(b) A domestic entity that elected to adopt and become
1433	1433	subject to this code as provided by Subsection (a) is not considered
1434	1434	to have failed to comply with Subsection (a)(2) because:
1435	1435	(1) the entity's governing documents do not state the
1436	1436	type of entity formed; or
1437	1437	(2) a circumstance described by Section 402.0051
1438	1438	applies.
1439	1439	SECTION 60. Section 402.004, Business Organizations Code,
1440	1440	is amended to read as follows:
1441	1441	Sec. 402.004. EARLY ADOPTION OF CODE BY REGISTERED FOREIGN
1442	1442	FILING ENTITY. (a) A foreign filing entity registered with the
1443	1443	secretary of state to transact business in this state before the
1444	1444	effective date of this code may voluntarily elect to adopt and
1445	1445	become subject to this code by filing with the secretary of state in
1446	1446	accordance with Chapter 4:
1447	1447	(1) a statement that the foreign filing entity is
1448	1448	electing to adopt this code; and
1449	1449	(2) an amendment to its application for registration
1450	1450	that would cause its application for registration to comply with
1451	1451	this code.
1452	1452	(b) A foreign filing entity that elected to adopt and become
1453	1453	subject to this code as provided by Subsection (a) is not considered
1454	1454	to have failed to comply with Subsection (a)(2) because:
1455	1455	(1) the application for registration or any amendment
1456	1456	to the registration:
1457	1457	(A) does not state the entity's type; or
1458	1458	(B) does not include the appointment of the
1459	1459	secretary of state as agent for service of process under the
1460	1460	circumstances provided by Section 5.251; or
1461	1461	(2) a circumstance described by Section 402.0051
1462	1462	applies.
1463	1463	SECTION 61. Section 402.005, Business Organizations Code,
1464	1464	is amended by adding Subsection (c) to read as follows:
1465	1465	(c) A domestic or foreign filing entity is not considered to
1466	1466	have failed to comply with Subsection (a)(3) or (4) because:
1467	1467	(1) the certificate of formation does not state the
1468	1468	type of entity formed;
1469	1469	(2) the application for registration or any amendment
1470	1470	to the registration:
1471	1471	(A) does not state the entity's type; or
1472	1472	(B) does not include the appointment of the
1473	1473	secretary of state as agent for service of process, notice, or
1474	1474	demand under the circumstances provided by Section 5.251; or
1475	1475	(3) a circumstance described by Section 402.0051
1476	1476	applies.
1477	1477	SECTION 62. Chapter 402, Business Organizations Code, is
1478	1478	amended by adding Section 402.0051 to read as follows:
1479	1479	Sec. 402.0051. EFFECT OF REFERENCES TO PRIOR LAW AND USE OF
1480	1480	SYNONYMOUS TERMS. (a) A governing document or a filing
1481	1481	instrument, including a certificate of formation or application for
1482	1482	registration, is not considered to have failed to conform to this
1483	1483	code if the governing document or filing instrument:
1484	1484	(1) contains a reference to prior law that was
1485	1485	applicable at the time of its filing or adoption;
1486	1486	(2) contains a provision that was authorized by prior
1487	1487	law at the time of its filing or adoption;
1488	1488	(3) includes a term or phrase described by Section
1489	1489	1.006; or
1490	1490	(4) includes a term or phrase from prior law that is
1491	1491	different from the corresponding term or phrase used in this code.
1492	1492	(b) A reference in a governing document or filing instrument
1493	1493	to a statute or provision of a statute in effect before January 1,
1494	1494	2010, that was repealed by this code is considered to be a reference
1495	1495	to the provision or provisions of this code that correspond to the
1496	1496	repealed statute or provision unless the governing document or
1497	1497	filing instrument expressly provides otherwise.
1498	1498	(c) An entity is not considered to have failed to comply
1499	1499	with this code if a governing document or filing instrument makes a
1500	1500	reference to prior law rather than to the corresponding provisions
1501	1501	of the prior law in this code.
1502	1502	(d) For purposes of this section, prior law includes a
1503	1503	predecessor statute to the prior law.
1504	1504	SECTION 63. The heading to Section 402.013, Business
1505	1505	Organizations Code, is amended to read as follows:
1506	1506	Sec. 402.013. REINSTATEMENT OF ENTITIES CANCELED, REVOKED,
1507	1507	DISSOLVED, INVOLUNTARILY DISSOLVED, SUSPENDED, OR FORFEITED UNDER
1508	1508	PRIOR LAW.
1509	1509	SECTION 64. Section 402.013, Business Organizations Code,
1510	1510	is amended by adding Subsections (b-1) and (b-2) to read as follows:
1511	1511	(b-1) On or after January 1, 2010, a domestic filing entity
1512	1512	whose existence has been voluntarily dissolved or involuntarily
1513	1513	dissolved under prior law or whose certificate of formation or
1514	1514	equivalent governing document has been canceled, revoked,
1515	1515	suspended, or forfeited under prior law may reinstate the entity in
1516	1516	accordance with this code.
1517	1517	(b-2) On or after January 1, 2010, a foreign filing entity
1518	1518	whose registration to do business has been canceled, revoked,
1519	1519	suspended, or forfeited under prior law may reinstate its
1520	1520	registration in accordance with this code.
1521	1521	SECTION 65. (a) In this section:
1522	1522	(1) "Governing document" has the meaning assigned by
1523	1523	Subdivision (36), Section 1.002, Business Organizations Code.
1524	1524	(2) "Prior law" has the meaning assigned by Section
1525	1525	401.001, Business Organizations Code.
1526	1526	(b) This section applies only to a domestic entity whose
1527	1527	existence has been voluntarily dissolved under prior law or whose
1528	1528	certificate of formation or equivalent governing document has been
1529	1529	canceled under prior law.
1530	1530	(c) The reinstatement of a domestic filing entity that was
1531	1531	filed in accordance with Chapter 11 and Section 402.003, Business
1532	1532	Organizations Code, after December 31, 2005, and before January 1,
1533	1533	2010, is validated in all respects as of the date on which the
1534	1534	reinstatement occurred.
1535	1535	SECTION 66. The following provisions of the Business
1536	1536	Organizations Code are repealed:
1537	1537	(1) Section 21.001;
1538	1538	(2) Subsection (i), Section 152.802; and
1539	1539	(3) Section 152.804.
1540	1540	SECTION 67. This Act takes effect September 1, 2011.