Texas Senate Bill SB323

Texas 2011 - 82nd Regular

• Introduced: 1/7/11
• Out of Senate Committee: 3/2/11
• Voted on by Senate: 3/17/11
• Refer: 2/2/11
• Out of House Committee: 4/18/11
• Report Pass: 3/2/11
• Voted on by House: 4/20/11
• Engrossed: 3/17/11
• Governor Action: 5/9/11
• Refer: 3/30/11
• Report Pass: 4/13/11
• Enrolled: 4/26/11
• Passed: 5/9/11

Caption

Relating to the applicability of certain laws governing corporations to limited liability companies.

Impact

The changes introduced by SB323 are expected to simplify the legal landscape for businesses operating as limited liability companies. By aligning the governance provisions of LLCs with those of corporations, the bill enhances legal certainty for business owners and stakeholders. The act emphasizes that terms traditionally associated with corporations now equally apply to LLCs, which could aid in standardizing practices across different business entities in Texas, potentially improving growth opportunities for companies choosing to form as LLCs.

Summary

SB323 proposes amendments to the Business Organizations Code in Texas, specifically addressing the applicability of certain corporate laws to limited liability companies (LLCs). The bill aims to harmonize regulations between corporations and LLCs by extending specific provisions that traditionally governed corporations to include LLCs as well. This includes clarifying terms such as 'shares' and 'directors' to also encompass 'membership interests' and 'managers' within the context of LLCs, thereby ensuring a consistent regulatory framework.

Contention

Notable points of contention may arise from the perspectives of various stakeholders. Proponents argue that the bill promotes efficiency and reduces complexity in business governance, addressing gaps that have previously existed due to the dichotomy between corporate and LLC regulations. In contrast, opponents might contend that the unique ownership structure of LLCs requires distinct treatment under the law, arguing that the blending of corporate regulations could obscure essential differences between these two types of business entities, thus impacting decision-making processes and accountability.