Texas 2011 - 82nd Regular

Texas Senate Bill SB748 Compare Versions

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1	1	By: Carona S.B. No. 748
2	2	(Giddings)
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to business entities and associations.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 1.002, Business Organizations Code, is
10	10	amended by adding Subdivisions (55-a), (69-c), (69-d), and (69-e)
11	11	and amending Subdivision (69-b) to read as follows:
12	12	(55-a) "National securities exchange" means an
13	13	exchange registered as a national securities exchange under Section
14	14	6, Securities Exchange Act of 1934 (15 U.S.C. Section 78f).
15	15	(69-b) "Person" means an individual or a corporation,
16	16	partnership, limited liability company, business trust, trust,
17	17	association, or other organization, estate, government or
18	18	governmental subdivision or agency, or other legal entity [has the
19	19	meaning assigned by Section 311.005, Government Code].
20	20	(69-c) "Plan of conversion" means a document that
21	21	conforms with the requirements of Section 10.103.
22	22	(69-d) "Plan of exchange" means a document that
23	23	conforms with the requirements of Section 10.052.
24	24	(69-e) "Plan of merger" means a document that conforms
25	25	with the requirements of Sections 10.002 and 10.003.
26	26	SECTION 2. Subsection (b), Section 6.101, Business
27	27	Organizations Code, is amended to read as follows:
28	28	(b) Subject to this code and the governing documents of a
29	29	domestic entity, the governing authority of the entity, in advance,
30	30	may provide a record date for determining the owners or members of
31	31	the entity, except that the date may not be earlier than the 60th
32	32	day before the date the action requiring the determination of
33	33	owners or members is originally to be taken.
34	34	SECTION 3. Subsection (a), Section 6.205, Business
35	35	Organizations Code, is amended to read as follows:
36	36	(a) Any photographic, photostatic, facsimile, or similarly
37	37	reliable reproduction of a consent in writing signed by an owner,
38	38	member, or governing person of a filing entity may be substituted or
39	39	used instead of the original writing for any purpose for which the
40	40	original writing could be used[, if the reproduction is a complete
41	41	reproduction of the entire original writing].
42	42	SECTION 4. Subdivision (1) and (2), Section 8.001, Business
43	43	Organizations Code, are amended to read as follows:
44	44	(1) "Delegate" means a person who, while serving as a
45	45	governing person of an enterprise, is or was serving [as a
46	46	representative of the enterprise] at the request of that enterprise
47	47	as a representative of [at] another enterprise, [or] another
48	48	organization, or [to] an employee benefit plan. A person is a
49	49	delegate to an employee benefit plan if the performance of the
50	50	person's official duties to the enterprise also imposes duties on
51	51	or otherwise involves service by the person to the plan or
52	52	participants in or beneficiaries of the plan.
53	53	(2) "Enterprise" means a domestic entity or an
54	54	organization subject to this chapter. The term includes[,
55	55	including] a predecessor enterprise [domestic entity or
56	56	organization].
57	57	SECTION 5. Subsection (d), Section 8.103, Business
58	58	Organizations Code, is amended to read as follows:
59	59	(d) With respect to a limited partnership, a vote of a
60	60	majority-in-interest of the limited partners in a vote that
61	61	excludes the interest held by each general partner who is not
62	62	disinterested and independent constitutes a determination under
63	63	Subsection (a)(4). For purposes of this subsection,
64	64	"majority-in-interest" means, with respect to limited partners,
65	65	limited partners who own more than 50 percent of the current
66	66	percentage or other interest in the profits of the partnership that
67	67	is owned by all of the limited partners.
68	68	SECTION 6. Subsection (d), Section 8.104, Business
69	69	Organizations Code, is amended to read as follows:
70	70	(d) With respect to a limited partnership, a vote of a
71	71	majority-in-interest of the limited partners in a vote that
72	72	excludes the interest held by each general partner who is not
73	73	disinterested and independent constitutes an authorization under
74	74	Subsection (b). For purposes of this subsection,
75	75	"majority-in-interest" means, with respect to limited partners,
76	76	limited partners who own more than 50 percent of the current
77	77	percentage or other interest in the profits of the partnership that
78	78	is owned by all of the limited partners.
79	79	SECTION 7. Subsection (d), Section 8.105, Business
80	80	Organizations Code, is amended to read as follows:
81	81	(d) Notwithstanding any authorization or determination
82	82	specified in this chapter, an enterprise may pay or reimburse, in
83	83	advance of the final disposition of a proceeding and on terms the
84	84	enterprise considers appropriate, reasonable expenses incurred by:
85	85	(1) a former governing person [managerial official] or
86	86	delegate who was, is, or is threatened to be made a respondent in
87	87	the proceeding;[,] or
88	88	(2) a present or former employee, [or] agent, or
89	89	officer who is not a governing person of the enterprise and who was,
90	90	is, or is threatened to be made a respondent in the proceeding.
91	91	SECTION 8. Section 8.151, Business Organizations Code, is
92	92	amended by adding Subsection (c-1) to read as follows:
93	93	(c-1) With respect to a limited partnership, a vote of a
94	94	majority-in-interest of the limited partners constitutes approval
95	95	of the owners for purposes of Subsection (c).
96	96	SECTION 9. Subsection (b), Section 9.007, Business
97	97	Organizations Code, is amended to read as follows:
98	98	(b) The application for registration must state:
99	99	(1) the partnership's name;
100	100	(2) the federal taxpayer [tax] identification number
101	101	of the partnership;
102	102	(3) the partnership's jurisdiction of formation;
103	103	(4) the date of initial registration as a limited
104	104	liability partnership under the laws of the jurisdiction [state] of
105	105	formation;
106	106	(5) the date the foreign entity began or will begin to
107	107	transact business in this state;
108	108	(6) that the partnership exists as a valid limited
109	109	liability partnership under the laws of the jurisdiction [state] of
110	110	its formation;
111	111	(7) the number of partners at the date of the
112	112	statement;
113	113	(8) each business or activity that the partnership
114	114	proposes to pursue in this state, which may be stated to be any
115	115	lawful business or activity under the laws of this state;
116	116	(9) the address of the principal office of the
117	117	partnership;
118	118	(10) the address of the initial registered office and
119	119	the name and address of the initial registered agent for service of
120	120	process required to be maintained under Section 152.904; and
121	121	(11) that the secretary of state is appointed the
122	122	agent of the partnership for service of process under the same
123	123	circumstances as set forth by Section 5.251 for a foreign filing
124	124	entity.
125	125	SECTION 10. Section 10.002, Business Organizations Code, is
126	126	amended to read as follows:
127	127	Sec. 10.002. PLAN OF MERGER: REQUIRED PROVISIONS. (a) A
128	128	plan of merger must be in writing and must include:
129	129	(1) the name of each organization that is a party to
130	130	the merger;
131	131	(2) the name of each organization that will survive
132	132	the merger;
133	133	(3) the name of each new organization that is to be
134	134	created by the plan of merger;
135	135	(4) a description of the organizational form of each
136	136	organization that is a party to the merger or that is to be created
137	137	by the plan of merger and its jurisdiction of formation;
138	138	(5) the manner and basis of converting or exchanging
139	139	any of the ownership or membership interests of each organization
140	140	that is a party to the merger into:
141	141	(A) ownership interests, membership interests,
142	142	obligations, rights to purchase securities, or other securities of
143	143	one or more of the surviving or new organizations;
144	144	(B) cash;
145	145	(C) other property, including ownership
146	146	interests, membership interests, obligations, rights to purchase
147	147	securities, or other securities of any other person or entity; or
148	148	(D) any combination of the items described by
149	149	Paragraphs (A)-(C);
150	150	(6) the identification of any of the ownership or
151	151	membership interests of an organization that is a party to the
152	152	merger that are to be canceled rather than converted or exchanged;
153	153	(7) the certificate of formation of each new domestic
154	154	filing entity to be created by the plan of merger;
155	155	(8) [(7)] the governing documents of each new domestic
156	156	nonfiling entity to be created by the plan of merger; and
157	157	(9) [(8)] the governing documents of each non-code
158	158	organization that:
159	159	(A) is to survive the merger or to be created by
160	160	the plan of merger; and
161	161	(B) is an entity that is not:
162	162	(i) organized under the laws of any state or
163	163	the United States; or
164	164	(ii) required to file its certificate of
165	165	formation or similar document under which the entity is organized
166	166	with the appropriate governmental authority.
167	167	(b) An item required by Subsections (a)(7)-(9) [(a)(6)-(8)]
168	168	may be included in the plan of merger by an attachment or exhibit to
169	169	the plan.
170	170	(c) If the plan of merger provides for a manner and basis of
171	171	converting or exchanging an ownership or membership interest that
172	172	may be converted or exchanged in a manner or basis different than
173	173	any other ownership or membership interest of the same class or
174	174	series of the ownership or membership interest, the manner and
175	175	basis of conversion or exchange must be included in the plan of
176	176	merger in the same manner as provided by Subsection (a)(5). A plan
177	177	of merger may provide for cancellation of an ownership or
178	178	membership interest while providing for the conversion or exchange
179	179	of other ownership or membership interests of the same class or
180	180	series as the ownership or membership interest to be canceled.
181	181	SECTION 11. Subsection (a), Section 10.008, Business
182	182	Organizations Code, is amended to read as follows:
183	183	(a) When a merger takes effect:
184	184	(1) the separate existence of each domestic entity
185	185	that is a party to the merger, other than a surviving or new
186	186	domestic entity, ceases;
187	187	(2) all rights, title, and interests to all real
188	188	estate and other property owned by each organization that is a party
189	189	to the merger is allocated to and vested, subject to any existing
190	190	liens or other encumbrances on the property, in one or more of the
191	191	surviving or new organizations as provided in the plan of merger
192	192	without:
193	193	(A) reversion or impairment;
194	194	(B) any further act or deed; or
195	195	(C) any transfer or assignment having occurred;
196	196	(3) all liabilities and obligations of each
197	197	organization that is a party to the merger are allocated to one or
198	198	more of the surviving or new organizations in the manner provided by
199	199	the plan of merger;
200	200	(4) each surviving or new domestic organization to
201	201	which a liability or obligation is allocated under the plan of
202	202	merger is the primary obligor for the liability or obligation, and,
203	203	except as otherwise provided by the plan of merger or by law or
204	204	contract, no other party to the merger, other than a surviving
205	205	domestic entity or non-code organization liable or otherwise
206	206	obligated at the time of the merger, and no other new domestic
207	207	entity or non-code organization created under the plan of merger is
208	208	liable for the debt or other obligation;
209	209	(5) any proceeding pending by or against any domestic
210	210	entity or by or against any non-code organization that is a party to
211	211	the merger may be continued as if the merger did not occur, or the
212	212	surviving or new domestic entity or entities or the surviving or new
213	213	non-code organization or non-code organizations to which the
214	214	liability, obligation, asset, or right associated with that
215	215	proceeding is allocated to and vested in under the plan of merger
216	216	may be substituted in the proceeding;
217	217	(6) the governing documents of each surviving domestic
218	218	entity are amended to the extent provided by the plan of merger;
219	219	(7) each new filing entity whose certificate of
220	220	formation is included in the plan of merger under this chapter, on
221	221	meeting any additional requirements, if any, of this code for its
222	222	formation, is formed as a domestic entity under this code as
223	223	provided by the plan of merger;
224	224	(8) the ownership or membership interests of each
225	225	organization that is a party to the merger and that are to be
226	226	converted or exchanged, in whole or part, into ownership or
227	227	membership interests, obligations, rights to purchase securities,
228	228	or other securities of one or more of the surviving or new
229	229	organizations, into cash or other property, including ownership or
230	230	membership interests, obligations, rights to purchase securities,
231	231	or other securities of any organization, or into any combination of
232	232	these, or that are to be canceled, are converted, [and] exchanged,
233	233	or canceled as provided in the plan of merger, and the former owners
234	234	or members who held ownership or membership interests of each
235	235	domestic entity that is a party to the merger are entitled only to
236	236	the rights provided by the plan of merger or, if applicable, any
237	237	rights to receive the fair value for the ownership interests
238	238	provided under Subchapter H; and
239	239	(9) notwithstanding Subdivision (4), the surviving or
240	240	new organization named in the plan of merger as primarily obligated
241	241	to pay the fair value of an ownership or membership interest under
242	242	Section 10.003(2) is the primary obligor for that payment and all
243	243	other surviving or new organizations are secondarily liable for
244	244	that payment.
245	245	SECTION 12. Subsection (a), Section 10.052, Business
246	246	Organizations Code, is amended to read as follows:
247	247	(a) A plan of exchange must be in writing and must include:
248	248	(1) the name of each domestic entity the ownership or
249	249	membership interests of which are to be acquired;
250	250	(2) the name of each acquiring organization;
251	251	(3) if there is more than one acquiring organization,
252	252	the ownership or membership interests to be acquired by each
253	253	organization;
254	254	(4) the terms and conditions of the exchange; and
255	255	(5) the manner and basis of exchanging the ownership
256	256	or membership interests to be acquired for:
257	257	(A) ownership or membership interests,
258	258	obligations, rights to purchase securities, or other securities of
259	259	one or more of the acquiring organizations that is a party to the
260	260	plan of exchange;
261	261	(B) cash;
262	262	(C) other property, including ownership or
263	263	membership interests, obligations, rights to purchase securities,
264	264	or other securities of any other person or entity; or
265	265	(D) any combination of those items.
266	266	SECTION 13. Subsection (a), Section 10.103, Business
267	267	Organizations Code, is amended to read as follows:
268	268	(a) A plan of conversion must be in writing and must
269	269	include:
270	270	(1) the name of the converting entity;
271	271	(2) the name of the converted entity;
272	272	(3) a statement that the converting entity is
273	273	continuing its existence in the organizational form of the
274	274	converted entity;
275	275	(4) a statement of the type of entity that the
276	276	converted entity is to be and the converted entity's jurisdiction
277	277	of formation;
278	278	(5) if Sections 10.1025 and 10.109 do not apply, the
279	279	manner and basis of converting the ownership or membership
280	280	interests of the converting entity into ownership or membership
281	281	interests of the converted entity;
282	282	(6) any certificate of formation required to be filed
283	283	under this code if the converted entity is a filing entity;
284	284	(7) the certificate of formation or similar
285	285	organizational document of the converted entity if the converted
286	286	entity is not a filing entity; and
287	287	(8) if Sections 10.1025 and 10.109 apply, a statement
288	288	that the converting entity is electing to continue its existence in
289	289	its current organizational form and jurisdiction of formation after
290	290	the conversion takes effect.
291	291	SECTION 14. Subsection (b), Section 10.354, Business
292	292	Organizations Code, is amended to read as follows:
293	293	(b) Notwithstanding Subsection (a), subject to Subsection
294	294	(c), an owner may not dissent from a plan of merger or conversion in
295	295	which there is a single surviving or new domestic entity or non-code
296	296	organization, or from a plan of exchange, if:
297	297	(1) the ownership interest, or a depository receipt in
298	298	respect of the ownership interest, held by the owner is part of a
299	299	class or series of ownership interests, or depository receipts in
300	300	respect of ownership interests, that are, on the record date set for
301	301	purposes of determining which owners are entitled to vote on the
302	302	plan of merger, conversion, or exchange, as appropriate:
303	303	(A) listed on a national securities exchange [or
304	304	a similar system]; or
305	305	(B) [listed on the Nasdaq Stock Market or a
306	306	successor quotation system;
307	307	[(C) designated as a national market security on
308	308	an interdealer quotation system by the National Association of
309	309	Securities Dealers, Inc., or a successor system; or
310	310	[(D)] held of record by at least 2,000 owners;
311	311	(2) the owner is not required by the terms of the plan
312	312	of merger, conversion, or exchange, as appropriate, to accept for
313	313	the owner's ownership interest any consideration that is different
314	314	from the consideration to be provided to any other holder of an
315	315	ownership interest of the same class or series as the ownership
316	316	interest held by the owner, other than cash instead of fractional
317	317	shares or interests the owner would otherwise be entitled to
318	318	receive; and
319	319	(3) the owner is not required by the terms of the plan
320	320	of merger, conversion, or exchange, as appropriate, to accept for
321	321	the owner's ownership interest any consideration other than:
322	322	(A) ownership interests, or depository receipts
323	323	in respect of ownership interests, of a domestic entity or non-code
324	324	organization of the same general organizational type that,
325	325	immediately after the effective date of the merger, conversion, or
326	326	exchange, as appropriate, will be part of a class or series of
327	327	ownership interests, or depository receipts in respect of ownership
328	328	interests, that are:
329	329	(i) listed on a national securities
330	330	exchange or authorized for listing on the exchange on official
331	331	notice of issuance; or
332	332	(ii) [approved for quotation as a national
333	333	market security on an interdealer quotation system by the National
334	334	Association of Securities Dealers, Inc., or a successor entity; or
335	335	[(iii)] held of record by at least 2,000
336	336	owners;
337	337	(B) cash instead of fractional ownership
338	338	interests the owner would otherwise be entitled to receive; or
339	339	(C) any combination of the ownership interests
340	340	and cash described by Paragraphs (A) and (B).
341	341	SECTION 15. Subsections (c) and (e), Section 10.355,
342	342	Business Organizations Code, are amended to read as follows:
343	343	(c) A notice required to be provided under Subsection (a) or
344	344	(b) must:
345	345	(1) be accompanied by a copy of this subchapter; and
346	346	(2) advise the owner of the location of the
347	347	responsible organization's principal executive offices to which a
348	348	notice required under Section 10.356(b)(1) or (3) [10.356(b)(2)]
349	349	may be provided.
350	350	(e) Not later than the 10th day after the date an action
351	351	described by Subsection (a)(1) takes effect, the responsible
352	352	organization shall give notice that the action has been effected to
353	353	each owner who voted against the action and sent notice under
354	354	Section 10.356(b)(1) [10.356(b)(2)].
355	355	SECTION 16. Subsections (b), (c), and (d), Section 10.356,
356	356	Business Organizations Code, are amended to read as follows:
357	357	(b) To perfect the owner's rights of dissent and appraisal
358	358	under Section 10.354, an owner:
359	359	(1) if the proposed action is to be submitted to a vote
360	360	of the owners at a meeting, must give to the domestic entity a
361	361	written notice of objection to the action that:
362	362	(A) is addressed to the entity's president and
363	363	secretary;
364	364	(B) states that the owner's right to dissent will
365	365	be exercised if the action takes effect;
366	366	(C) provides an address to which notice of
367	367	effectiveness of the action should be delivered or mailed; and
368	368	(D) is delivered to the entity's principal
369	369	executive offices before the meeting;
370	370	(2) with respect to the ownership interest for which
371	371	the rights of dissent and appraisal are sought:
372	372	(A) must vote against the action if the owner is
373	373	entitled to vote on the action and the action is approved at a
374	374	meeting of the owners; and
375	375	(B) may not consent to the action if the action is
376	376	approved by written consent; and
377	377	(3) [(2)] must give to the responsible organization a
378	378	demand in writing [notice dissenting to the action] that:
379	379	(A) is addressed to the president and secretary
380	380	of the responsible organization;
381	381	(B) demands payment of the fair value of the
382	382	ownership interests for which the rights of dissent and appraisal
383	383	are sought;
384	384	(C) provides to the responsible organization an
385	385	address to which a notice relating to the dissent and appraisal
386	386	procedures under this subchapter may be sent;
387	387	(D) states the number and class of the ownership
388	388	interests of the domestic entity owned by the owner and the fair
389	389	value of the ownership interests as estimated by the owner; and
390	390	(E) is delivered to the responsible organization
391	391	at its principal executive offices at the following time:
392	392	(i) not later than the 20th day after the
393	393	date the responsible organization sends to the owner the notice
394	394	required by Section 10.355(e) that the action has taken effect
395	395	[before the action is considered for approval], if the action was
396	396	approved by [is to be submitted to] a vote of the owners at a
397	397	meeting;
398	398	(ii) not later than the 20th day after the
399	399	date the responsible organization sends to the owner the [a] notice
400	400	required by Section 10.355(d)(2) that the action has taken effect
401	401	[was approved by the requisite vote of the owners], if the action
402	402	was approved by [is to be undertaken on] the written consent of the
403	403	owners; or
404	404	(iii) not later than the 20th day after the
405	405	date the responsible organization sends to the owner a notice that
406	406	the merger was effected, if the action is a merger effected under
407	407	Section 10.006.
408	408	(c) An owner who does not make a demand within the period
409	409	required by Subsection (b)(3)(E) or, if Subsection (b)(1) is
410	410	applicable, does not give the notice of objection before the
411	411	meeting of the owners [(b)(2)(E)] is bound by the action and is not
412	412	entitled to exercise the rights of dissent and appraisal under
413	413	Section 10.354.
414	414	(d) Not later than the 20th day after the date an owner makes
415	415	a demand under Subsection (b)(3) [this section], the owner must
416	416	submit to the responsible organization any certificates
417	417	representing the ownership interest to which the demand relates for
418	418	purposes of making a notation on the certificates that a demand for
419	419	the payment of the fair value of an ownership interest has been made
420	420	under this section. An owner's failure to submit the certificates
421	421	within the required period has the effect of terminating, at the
422	422	option of the responsible organization, the owner's rights to
423	423	dissent and appraisal under Section 10.354 unless a court, for good
424	424	cause shown, directs otherwise.
425	425	SECTION 17. Subsections (a), (d), and (e), Section 10.358,
426	426	Business Organizations Code, are amended to read as follows:
427	427	(a) Not later than the 20th day after the date a responsible
428	428	organization receives a demand for payment made by a dissenting
429	429	owner in accordance with Section 10.356(b)(3) [10.356], the
430	430	responsible organization shall respond to the dissenting owner in
431	431	writing by:
432	432	(1) accepting the amount claimed in the demand as the
433	433	fair value of the ownership interests specified in the notice; or
434	434	(2) rejecting the demand and including in the response
435	435	the requirements prescribed by Subsection (c).
436	436	(d) If the dissenting owner decides to accept the offer made
437	437	by the responsible organization under Subsection (c)(2), the owner
438	438	must provide to the responsible organization notice of the
439	439	acceptance of the offer not later than the 90th day after the date
440	440	the action that is the subject of the demand took effect [An offer
441	441	made under Subsection (c)(2) must remain open for a period of at
442	442	least 60 days from the date the offer is first delivered to the
443	443	dissenting owner].
444	444	(e) If, not later than the 90th day after the date the action
445	445	that is the subject of the demand took effect, a dissenting owner
446	446	accepts an offer made by a responsible organization under
447	447	Subsection (c)(2) or [if] a dissenting owner and a responsible
448	448	organization reach an agreement on the fair value of the ownership
449	449	interests, the responsible organization shall pay the agreed amount
450	450	not later than the 120th [60th] day after the date the action that
451	451	is the subject of the demand took effect [the offer is accepted or
452	452	the agreement is reached, as appropriate], if the dissenting owner
453	453	delivers to the responsible organization:
454	454	(1) endorsed certificates representing the ownership
455	455	interests if the ownership interests are certificated; or
456	456	(2) signed assignments of the ownership interests if
457	457	the ownership interests are uncertificated.
458	458	SECTION 18. Section 11.057, Business Organizations Code, is
459	459	amended by adding Subsection (f) to read as follows:
460	460	(f) "Majority-in-interest" means, with respect to all or a
461	461	specified group of partners, partners who own more than 50 percent
462	462	of the current percentage or other interest in the profits of the
463	463	partnership that is owned by all of the partners or by the partners
464	464	in the specified group, as appropriate.
465	465	SECTION 19. Section 11.402, Business Organizations Code, is
466	466	amended to read as follows:
467	467	Sec. 11.402. JURISDICTION TO APPOINT RECEIVER. (a) A
468	468	court that has subject matter jurisdiction over specific property
469	469	of a domestic or foreign entity that is located in this state and is
470	470	involved in litigation has jurisdiction to appoint a receiver for
471	471	that property as provided by Section 11.403.
472	472	(b) A district court in the county in which the registered
473	473	office or principal place of business of a domestic entity is
474	474	located has jurisdiction to:
475	475	(1) appoint a receiver for the property and business
476	476	of a domestic entity for the purpose of rehabilitating the entity as
477	477	provided by Section 11.404; or
478	478	(2) order the liquidation of the property and business
479	479	of a domestic entity and appoint a receiver to effect that
480	480	liquidation as provided by Section 11.405.
481	481	SECTION 20. Subsection (b), Section 11.404, Business
482	482	Organizations Code, is amended to read as follows:
483	483	(b) A court may appoint a receiver under Subsection (a) only
484	484	if:
485	485	(1) circumstances exist that are considered by the
486	486	court to necessitate the appointment of a receiver to conserve the
487	487	property and business of the domestic entity and avoid damage to
488	488	interested parties;
489	489	(2) all other requirements of law are complied with;
490	490	and
491	491	(3) the court determines that all other available
492	492	legal and equitable remedies, including the appointment of a
493	493	receiver for specific property of the domestic entity under Section
494	494	11.402(a) [11.402], are inadequate.
495	495	SECTION 21. Subsection (a), Section 21.109, Business
496	496	Organizations Code, is amended to read as follows:
497	497	(a) A shareholders' agreement authorized by this subchapter
498	498	ceases to be effective when shares of the corporation are:
499	499	(1) listed on a national securities exchange [or
500	500	similar system]; or
501	501	(2) [quoted on an interdealer quotation system of a
502	502	national securities association or successor system; or
503	503	[(3)] regularly traded in a market maintained by one
504	504	or more members of a national or affiliated securities association.
505	505	SECTION 22. Subchapter C, Chapter 21, Business
506	506	Organizations Code, is amended by adding Section 21.110 to read as
507	507	follows:
508	508	Sec. 21.110. OTHER SHAREHOLDER AGREEMENTS PERMITTED. This
509	509	subchapter does not prohibit or impair any agreement between two or
510	510	more shareholders, or between the corporation and one or more of the
511	511	corporation's shareholders, permitted by Title 1, this chapter, or
512	512	other law.
513	513	SECTION 23. Section 21.203, Business Organizations Code, is
514	514	amended by adding Subsection (c) to read as follows:
515	515	(c) This section and Sections 21.204 through 21.208 do not
516	516	invalidate or impair a corporation's right or power to grant an
517	517	enforceable nonstatutory preemptive right in:
518	518	(1) a contract between the corporation and a
519	519	shareholder or other person; or
520	520	(2) the governing documents of the corporation.
521	521	SECTION 24. Subsection (a), Section 21.206, Business
522	522	Organizations Code, is amended to read as follows:
523	523	(a) An action brought against a corporation, the board of
524	524	directors or an officer, shareholder, or agent of the corporation,
525	525	or an owner of a beneficial interest in shares of the corporation
526	526	for the violation of a preemptive right of a shareholder under
527	527	Sections 21.203 and 21.204 must be brought not later than the
528	528	earlier of:
529	529	(1) the first anniversary of the date written notice
530	530	is given to each shareholder whose preemptive right was violated;
531	531	or
532	532	(2) the fourth anniversary of the latest of:
533	533	(A) the date the corporation issued the shares,
534	534	securities, or rights;
535	535	(B) the date the corporation sold the shares,
536	536	securities, or rights; or
537	537	(C) the date the corporation otherwise
538	538	distributed the shares, securities, or rights.
539	539	SECTION 25. Subsection (b), Section 21.222, Business
540	540	Organizations Code, is amended to read as follows:
541	541	(b) It is a defense to an action brought under this section
542	542	that the person suing:
543	543	(1) has, within the two years preceding the date the
544	544	action is brought, sold or offered for sale a list of shareholders
545	545	or of holders of voting trust certificates [in consideration] for
546	546	shares of the corporation or any other corporation;
547	547	(2) has aided or abetted a person in procuring a list
548	548	of shareholders or of holders of voting trust certificates for the
549	549	purpose described by Subdivision (1);
550	550	(3) has improperly used information obtained through a
551	551	prior examination of the books and account records, minutes, or
552	552	share transfer records of the corporation or any other corporation;
553	553	or
554	554	(4) was not acting in good faith or for a proper
555	555	purpose in making the person's request for examination.
556	556	SECTION 26. Section 21.357, Business Organizations Code, is
557	557	amended to read as follows:
558	558	Sec. 21.357. RECORD DATE FOR PURPOSE OF SHAREHOLDERS'
559	559	MEETING [OTHER THAN WRITTEN CONSENT TO ACTION]. The record date for
560	560	the purpose of determining shareholders entitled to notice of or to
561	561	vote at a shareholders' meeting or any adjournment of the meeting,
562	562	as provided by the directors in accordance with Section 6.101, must
563	563	be at least 10 days before the date of the shareholders' meeting [on
564	564	which the particular action requiring the determination of
565	565	shareholders is to be taken].
566	566	SECTION 27. Subsection (a), Section 21.415, Business
567	567	Organizations Code, is amended to read as follows:
568	568	(a) The act of a majority of the directors present at a
569	569	meeting at which a quorum is present at the time of the act is the
570	570	act of the board of directors of a corporation, unless the act of a
571	571	greater number is required by the certificate of formation or
572	572	bylaws of the corporation or by this code.
573	573	SECTION 28. Section 21.418, Business Organizations Code, is
574	574	amended by amending Subsections (a) and (b) and adding Subsections
575	575	(d) and (e) to read as follows:
576	576	(a) This section applies [only] to a contract or transaction
577	577	between a corporation and:
578	578	(1) one or more [of the corporation's] directors or
579	579	officers, or one or more affiliates or associates of one or more
580	580	directors or officers, of the corporation; or
581	581	(2) an entity or other organization in which one or
582	582	more [of the corporation's] directors or officers, or one or more
583	583	affiliates or associates of one or more directors or officers, of
584	584	the corporation:
585	585	(A) is a managerial official; or
586	586	(B) has a financial interest.
587	587	(b) An otherwise valid and enforceable contract or
588	588	transaction described by Subsection (a) is valid and enforceable,
589	589	and is not void or voidable, notwithstanding any relationship or
590	590	interest described by Subsection (a), if any one of the following
591	591	conditions is satisfied [notwithstanding that the director or
592	592	officer having the relationship or interest described by Subsection
593	593	(a) is present at or participates in the meeting of the board of
594	594	directors, or of a committee of the board that authorizes the
595	595	contract or transaction, or votes or signs, in the person's
596	596	capacity as a director or committee member, a unanimous written
597	597	consent of directors or committee members to authorize the contract
598	598	or transaction, if]:
599	599	(1) the material facts as to the relationship or
600	600	interest described by Subsection (a) and as to the contract or
601	601	transaction are disclosed to or known by:
602	602	(A) the corporation's board of directors or a
603	603	committee of the board of directors, and the board of directors or
604	604	committee in good faith authorizes the contract or transaction by
605	605	the approval of the majority of the disinterested directors or
606	606	committee members, regardless of whether the disinterested
607	607	directors or committee members constitute a quorum; or
608	608	(B) the shareholders entitled to vote on the
609	609	authorization of the contract or transaction, and the contract or
610	610	transaction is specifically approved in good faith by a vote of the
611	611	shareholders; or
612	612	(2) the contract or transaction is fair to the
613	613	corporation when the contract or transaction is authorized,
614	614	approved, or ratified by the board of directors, a committee of the
615	615	board of directors, or the shareholders.
616	616	(d) A person who has the relationship or interest described
617	617	by Subsection (a) may:
618	618	(1) be present at or participate in and, if the person
619	619	is a director or committee member, may vote at a meeting of the
620	620	board of directors or of a committee of the board that authorizes
621	621	the contract or transaction; or
622	622	(2) sign, in the person's capacity as a director or
623	623	committee member, a unanimous written consent of the directors or
624	624	committee members to authorize the contract or transaction.
625	625	(e) If at least one of the conditions of Subsection (b) is
626	626	satisfied, neither the corporation nor any of the corporation's
627	627	shareholders will have a cause of action against any of the persons
628	628	described by Subsection (a) for breach of duty with respect to the
629	629	making, authorization, or performance of the contract or
630	630	transaction because the person had the relationship or interest
631	631	described by Subsection (a) or took any of the actions authorized by
632	632	Subsection (d).
633	633	SECTION 29. Section 21.453, Business Organizations Code, is
634	634	amended by adding Subsections (f) and (g) to read as follows:
635	635	(f) If after the adoption of a resolution under Subsection
636	636	(b) the board of directors of the corporation determines that the
637	637	plan of conversion is not advisable, the plan of conversion may be
638	638	submitted to the shareholders of the corporation with a
639	639	recommendation that the shareholders not approve the plan of
640	640	conversion.
641	641	(g) A plan of conversion for a corporation may include a
642	642	provision requiring that the plan of conversion be submitted to the
643	643	shareholders of the corporation, regardless of whether the board of
644	644	directors determines, after adopting a resolution or making a
645	645	determination under this section, that the plan of conversion is
646	646	not advisable and recommends that the shareholders not approve the
647	647	plan of conversion.
648	648	SECTION 30. Subdivision (1), Section 21.601, Business
649	649	Organizations Code, is amended to read as follows:
650	650	(1) "Issuing public corporation" means a domestic
651	651	corporation that has:
652	652	(A) 100 or more shareholders of record as shown
653	653	by the share transfer records of the corporation;
654	654	(B) a class or series of the corporation's voting
655	655	shares registered under the Securities Exchange Act of 1934 (15
656	656	U.S.C. Section 77b et seq.), as amended; or
657	657	(C) a class or series of the corporation's voting
658	658	shares qualified for trading on [in] a national securities exchange
659	659	[market system].
660	660	SECTION 31. Section 21.603, Business Organizations Code, is
661	661	amended to read as follows:
662	662	Sec. 21.603. BENEFICIAL OWNER OF SHARES OR OTHER [SIMILAR]
663	663	SECURITIES. (a) For purposes of this subchapter [chapter], a
664	664	person is a beneficial owner of shares or other [similar]
665	665	securities if the person individually, or through an affiliate or
666	666	associate, [beneficially owns,] directly or indirectly
667	667	beneficially owns the shares or other securities or has the right[,
668	668	shares or similar securities.
669	669	[(b) A beneficial owner of shares or similar securities is
670	670	entitled, individually or through an affiliate or associate,] to:
671	671	(1) acquire the shares or other [similar] securities
672	672	[that may be exercised] immediately or after the passage [of a
673	673	certain amount] of time according to an oral or written agreement,
674	674	arrangement, or understanding, or on the exercise of conversion
675	675	rights, exchange rights, warrants, or options;
676	676	(2) vote the shares or other [similar] securities
677	677	according to an oral or written agreement, arrangement, or
678	678	understanding; or
679	679	(3) [subject to Subsection (c),] acquire, hold or
680	680	dispose of, or vote the shares or other [similar] securities with
681	681	another person who individually, or through an affiliate or
682	682	associate, beneficially owns, directly or indirectly, the shares or
683	683	other [similar] securities.
684	684	(b) [(c)] A person, however, is not considered a beneficial
685	685	owner of shares or other [similar] securities for purposes of this
686	686	subchapter if:
687	687	(1) the shares or other [similar] securities are:
688	688	(A) tendered under a tender or exchange offer
689	689	made by the person or an affiliate or associate of the person before
690	690	the tendered shares or securities are accepted for purchase or
691	691	exchange; or
692	692	(B) subject to an agreement, arrangement, or
693	693	understanding that expressly conditions the acquisition or
694	694	purchase of shares or securities on the approval of the acquisition
695	695	or purchase under Section 21.606 if the person has no direct or
696	696	indirect rights of ownership or voting with respect to the shares or
697	697	other securities until the time the approval is obtained; or
698	698	(2) the agreement, arrangement, or understanding to
699	699	vote the shares:
700	700	(A) arises solely from an immediately revocable
701	701	proxy that authorizes the person named in the proxy to vote at a
702	702	meeting of the shareholders that has been called when the proxy is
703	703	delivered or at an adjournment of the meeting; and
704	704	(B) would [is] not be reportable on a Schedule
705	705	13D under the Securities Exchange Act of 1934 (15 U.S.C. Section 77b
706	706	et seq.), as amended, or a comparable or successor report.
707	707	SECTION 32. Subdivision (1), Section 21.701, Business
708	708	Organizations Code, is amended to read as follows:
709	709	(1) "Close corporation" means a domestic corporation
710	710	formed under this subchapter or governed by this subchapter because
711	711	of Section 21.705, 21.706, or 21.707.
712	712	SECTION 33. Subsection (a), Section 22.153, Business
713	713	Organizations Code, is amended to read as follows:
714	714	(a) Except as provided by Subsection (b) or by the
715	715	corporation's certificate of formation, a corporation with members
716	716	who have voting rights shall hold an annual meeting of the members
717	717	at a time that is stated in or determined in accordance with the
718	718	corporation's bylaws.
719	719	SECTION 34. Section 22.230, Business Organizations Code, is
720	720	amended by amending Subsections (a) and (b) and adding Subsections
721	721	(d) and (e) to read as follows:
722	722	(a) This section applies [only] to a contract or transaction
723	723	between a corporation and:
724	724	(1) one or more [of the corporation's] directors,
725	725	officers, or members, or one or more affiliates or associates of one
726	726	or more directors, officers, or members, of the corporation; or
727	727	(2) an entity or other organization in which one or
728	728	more [of the corporation's] directors, officers, or members, or one
729	729	or more affiliates or associates of one or more directors,
730	730	officers, or members, of the corporation:
731	731	(A) is a managerial official or a member; or
732	732	(B) has a financial interest.
733	733	(b) An otherwise valid and enforceable contract or
734	734	transaction is valid and enforceable, and is not void or voidable,
735	735	notwithstanding any relationship or interest described by
736	736	Subsection (a), if any one of the following conditions is satisfied
737	737	[notwithstanding that a director, officer, or member of the
738	738	corporation is present at or participates in the meeting of the
739	739	board of directors, of a committee of the board, or of the members
740	740	that authorizes the contract or transaction, or votes to authorize
741	741	the contract or transaction, if]:
742	742	(1) the material facts as to the relationship or
743	743	interest and as to the contract or transaction are disclosed to or
744	744	known by:
745	745	(A) the corporation's board of directors, a
746	746	committee of the board of directors, or the members, and the board,
747	747	the committee, or the members in good faith and with ordinary care
748	748	authorize the contract or transaction by the affirmative vote of
749	749	the majority of the disinterested directors, committee members or
750	750	members, regardless of whether the disinterested directors,
751	751	committee members or members constitute a quorum; or
752	752	(B) the members entitled to vote on the
753	753	authorization of the contract or transaction, and the contract or
754	754	transaction is specifically approved in good faith and with
755	755	ordinary care by a vote of the members; or
756	756	(2) the contract or transaction is fair to the
757	757	corporation when the contract or transaction is authorized,
758	758	approved, or ratified by the board of directors, a committee of the
759	759	board of directors, or the members.
760	760	(d) A person who has the relationship or interest described
761	761	by Subsection (a) may:
762	762	(1) be present at or participate in and, if the person
763	763	is a director, member, or committee member, may vote at a meeting of
764	764	the board of directors, of the members, or of a committee of the
765	765	board that authorizes the contract or transaction; or
766	766	(2) sign, in the person's capacity as a director,
767	767	member, or committee member, a written consent of the directors,
768	768	members, or committee members to authorize the contract or
769	769	transaction.
770	770	(e) If at least one of the conditions of Subsection (b) is
771	771	satisfied, neither the corporation nor any of the corporation's
772	772	shareholders will have a cause of action against any of the persons
773	773	described by Subsection (a) for breach of duty with respect to the
774	774	making, authorization, or performance of the contract or
775	775	transaction because the person had the relationship or interest
776	776	described by Subsection (a) or took any of the actions authorized by
777	777	Subsection (d).
778	778	SECTION 35. Section 101.054, Business Organizations Code,
779	779	is amended by amending Subsection (a) and adding Subsection (e) to
780	780	read as follows:
781	781	(a) Except as provided by this section, the following
782	782	provisions may not be waived or modified in the company agreement of
783	783	a limited liability company:
784	784	(1) this section;
785	785	(2) Section 101.101, 101.151, 101.206, 101.501,
786	786	101.602(b), or 101.613 [101.502];
787	787	(3) Chapter 1, if the provision is used to interpret a
788	788	provision or define a word or phrase contained in a section listed
789	789	in this subsection;
790	790	(4) Chapter 2, except that Section 2.104(c)(2),
791	791	2.104(c)(3), or 2.113 may be waived or modified in the company
792	792	agreement;
793	793	(5) Chapter 3, except that Subchapters C and E may be
794	794	waived or modified in the company agreement; or
795	795	(6) Chapter 4, 5, 7, 10, 11, or 12, other than Section
796	796	11.056.
797	797	(e) The company agreement may not unreasonably restrict a
798	798	person's right of access to records and information under Section
799	799	101.502.
800	800	SECTION 36. Section 101.106, Business Organizations Code,
801	801	is amended by adding Subsections (a-1) and (a-2) to read as follows:
802	802	(a-1) A membership interest may be community property under
803	803	applicable law.
804	804	(a-2) A member's right to participate in the management and
805	805	conduct of the business of the limited liability company is not
806	806	community property.
807	807	SECTION 37. Subchapter C, Chapter 101, Business
808	808	Organizations Code, is amended by adding Section 101.1115 to read
809	809	as follows:
810	810	Sec. 101.1115. EFFECT OF DEATH OR DIVORCE ON MEMBERSHIP
811	811	INTEREST. (a) For purposes of this code:
812	812	(1) on the divorce of a member, the member's spouse, to
813	813	the extent of the spouse's membership interest, if any, is an
814	814	assignee of the membership interest;
815	815	(2) on the death of a member, the member's surviving
816	816	spouse, if any, and an heir, devisee, personal representative, or
817	817	other successor of the member, to the extent of their respective
818	818	membership interest, are assignees of the membership interest; and
819	819	(3) on the death of a member's spouse, an heir,
820	820	devisee, personal representative, or other successor of the spouse,
821	821	other than the member, to the extent of their respective membership
822	822	interest, if any, is an assignee of the membership interest.
823	823	(b) This chapter does not impair an agreement for the
824	824	purchase or sale of a membership interest at any time, including on
825	825	the death or divorce of an owner of the membership interest.
826	826	SECTION 38. Subsection (a), Section 101.254, Business
827	827	Organizations Code, is amended to read as follows:
828	828	(a) Except as provided by this title and Title 1, each
829	829	governing person of a limited liability company and each officer
830	830	[or agent] of a limited liability company vested with actual or
831	831	apparent authority by the governing authority of the company is an
832	832	agent of the company for purposes of carrying out the company's
833	833	business.
834	834	SECTION 39. Section 101.255, Business Organizations Code,
835	835	is amended by amending Subsections (a) and (b) and adding
836	836	Subsections (d) and (e) to read as follows:
837	837	(a) This section applies [only] to a contract or transaction
838	838	between a limited liability company and:
839	839	(1) one or more [of the company's] governing persons or
840	840	officers, or one or more affiliates or associates of one or more
841	841	governing persons or officers, of the company; or
842	842	(2) an entity or other organization in which one or
843	843	more [of the company's] governing persons or officers, or one or
844	844	more affiliates or associates of one or more governing persons or
845	845	officers, of the company:
846	846	(A) is a managerial official; or
847	847	(B) has a financial interest.
848	848	(b) An otherwise valid and enforceable contract or
849	849	transaction described by Subsection (a) is valid and enforceable,
850	850	and is not void or voidable, notwithstanding any relationship or
851	851	interest described by Subsection (a), if any one of the following
852	852	conditions is satisfied [notwithstanding that the governing person
853	853	or officer having the relationship or interest described by
854	854	Subsection (a) is present at or participates in the meeting of the
855	855	governing authority, or of a committee of the governing authority,
856	856	that authorizes the contract or transaction or votes or signs, in
857	857	the person's capacity as a governing person or committee member, a
858	858	written consent of governing persons or committee members to
859	859	authorize the contract or transaction, if]:
860	860	(1) the material facts as to the relationship or
861	861	interest described by Subsection (a) and as to the contract or
862	862	transaction are disclosed to or known by:
863	863	(A) the company's governing authority or a
864	864	committee of the governing authority and the governing authority or
865	865	committee in good faith authorizes the contract or transaction by
866	866	the approval of the majority of the disinterested governing persons
867	867	or committee members, regardless of whether the disinterested
868	868	governing persons or committee members constitute a quorum; or
869	869	(B) the members of the company, and the members
870	870	in good faith approve the contract or transaction by vote of the
871	871	members; or
872	872	(2) the contract or transaction is fair to the company
873	873	when the contract or transaction is authorized, approved, or
874	874	ratified by the governing authority, a committee of the governing
875	875	authority, or the members of the company.
876	876	(d) A person who has the relationship or interest described
877	877	by Subsection (a) may:
878	878	(1) be present at or participate in and, if the person
879	879	is a governing person or committee member, may vote at a meeting of
880	880	the governing authority or of a committee of the governing
881	881	authority that authorizes the contract or transaction; or
882	882	(2) sign, in the person's capacity as a governing
883	883	person or committee member, a written consent of the governing
884	884	persons or committee members to authorize the contract or
885	885	transaction.
886	886	(e) If at least one of the conditions of Subsection (b) is
887	887	satisfied, neither the company nor any of the company's members
888	888	will have a cause of action against any of the persons described by
889	889	Subsection (a) for breach of duty with respect to the making,
890	890	authorization, or performance of the contract or transaction
891	891	because the person had the relationship or interest described by
892	892	Subsection (a) or took any of the actions authorized by Subsection
893	893	(d).
894	894	SECTION 40. Subsection (b), Section 101.357, Business
895	895	Organizations Code, is amended to read as follows:
896	896	(b) A manager or committee member of a limited liability
897	897	company[, if authorized by the company agreement,] may vote:
898	898	(1) in person; or
899	899	(2) if authorized by the company agreement, by a proxy
900	900	executed in writing by the manager or committee member, as
901	901	appropriate.
902	902	SECTION 41. Subsection (b), Section 101.611, Business
903	903	Organizations Code, is amended to read as follows:
904	904	(b) Section 101.206 [101.207] does not apply to a
905	905	distribution with respect to the series.
906	906	SECTION 42. Subsection (d), Section 151.003, Business
907	907	Organizations Code, is amended to read as follows:
908	908	(d) Receipt of notice by a general partner of a fact
909	909	relating to the partnership is effective immediately as notice to
910	910	the partnership unless fraud against the partnership is committed
911	911	by or with the consent of the partner receiving the notice.
912	912	SECTION 43. Subsection (a), Section 152.304, Business
913	913	Organizations Code, is amended to read as follows:
914	914	(a) Except as provided by Subsection (b) or Section
915	915	152.801(a), all partners are [liable] jointly and severally liable
916	916	for all obligations [a debt or obligation] of the partnership
917	917	unless otherwise:
918	918	(1) agreed by the claimant; or
919	919	(2) provided by law.
920	920	SECTION 44. Subchapter E, Chapter 152, Business
921	921	Organizations Code, is amended by adding Section 152.308 to read as
922	922	follows:
923	923	Sec. 152.308. PARTNER'S PARTNERSHIP INTEREST SUBJECT TO
924	924	CHARGING ORDER. (a) On application by a judgment creditor of a
925	925	partner or of any other owner of a partnership interest, a court
926	926	having jurisdiction may charge the partnership interest of the
927	927	judgment debtor to satisfy the judgment.
928	928	(b) To the extent that the partnership interest is charged
929	929	in the manner provided by Subsection (a), the judgment creditor has
930	930	only the right to receive any distribution to which the judgment
931	931	debtor would otherwise be entitled in respect of the partnership
932	932	interest.
933	933	(c) A charging order constitutes a lien on the judgment
934	934	debtor's partnership interest. The charging order lien may not be
935	935	foreclosed on under this code or any other law.
936	936	(d) The entry of a charging order is the exclusive remedy by
937	937	which a judgment creditor of a partner or of any other owner of a
938	938	partnership interest may satisfy a judgment out of the judgment
939	939	debtor's partnership interest.
940	940	(e) This section does not deprive a partner or other owner
941	941	of a partnership interest of a right under exemption laws with
942	942	respect to the judgment debtor's partnership interest.
943	943	(f) A creditor of a partner or of any other owner of a
944	944	partnership interest does not have the right to obtain possession
945	945	of, or otherwise exercise legal or equitable remedies with respect
946	946	to, the property of the limited partnership.
947	947	SECTION 45. Subsections (a) and (c), Section 152.406,
948	948	Business Organizations Code, are amended to read as follows:
949	949	(a) For purposes of this code:
950	950	(1) on the divorce of a partner, the partner's spouse,
951	951	to the extent of the spouse's partnership interest, if any, is a
952	952	transferee of the partnership interest [from the partner];
953	953	(2) on the death of a partner:
954	954	(A) if the partnership interest of the deceased
955	955	partner is subject to redemption under Subchapter H, the partner's
956	956	surviving spouse, if any, and an heir, devisee, personal
957	957	representative, or other successor of the partner, to the extent of
958	958	their respective right to the redemption price, are creditors of
959	959	the partnership until the redemption price is paid; or
960	960	(B) if the partnership interest of the deceased
961	961	partner is not subject to redemption under Subchapter H, the
962	962	partner's surviving spouse, if any, and an heir, devisee, personal
963	963	representative, or other successor of the partner, to the extent of
964	964	their respective partnership interest, are transferees of the
965	965	partnership interest[, the partner's surviving spouse, if any, and
966	966	an heir, legatee, or personal representative of the partner, to the
967	967	extent of their respective partnership interest, is a transferee of
968	968	the partnership interest from the partner]; and
969	969	(3) on the death of a partner's spouse, an heir,
970	970	devisee [legatee], [or] personal representative, or other
971	971	successor of the spouse, other than the partner, to the extent of
972	972	their respective partnership interest, if any, is a transferee of
973	973	the partnership interest [from the partner].
974	974	(c) This chapter does not impair an agreement for the
975	975	purchase or sale of a partnership interest at any time, including on
976	976	the death or divorce of an owner of the partnership interest.
977	977	SECTION 46. Subsection (b), Section 152.707, Business
978	978	Organizations Code, is amended to read as follows:
979	979	(b) In settling accounts among the partners, the
980	980	partnership interest of a withdrawn partner that is [not] redeemed
981	981	under Section 152.610 [Subchapter H] is credited with a share of any
982	982	profits for the period after the partner's withdrawal but is
983	983	charged with a share of losses for that period only to the extent of
984	984	profits credited for that period.
985	985	SECTION 47. Section 152.801, Business Organizations Code,
986	986	is amended to read as follows:
987	987	Sec. 152.801. LIABILITY OF PARTNER. (a) Except as
988	988	provided by [Subsection (b) or] the partnership agreement, a
989	989	partner [in a limited liability partnership] is not personally
990	990	liable to any person, including a partner, directly or indirectly,
991	991	by contribution, indemnity, or otherwise, for any [a debt or]
992	992	obligation of the partnership incurred while the partnership is a
993	993	limited liability partnership.
994	994	(b) [A partner in a limited liability partnership is not
995	995	personally liable for a debt or obligation of the partnership
996	996	arising from an error, omission, negligence, incompetence, or
997	997	malfeasance committed by another partner or representative of the
998	998	partnership while the partnership is a limited liability
999	999	partnership and in the course of the partnership business unless
1000	1000	the first partner:
1001	1001	[(1) was supervising or directing the other partner or
1002	1002	representative when the error, omission, negligence, incompetence,
1003	1003	or malfeasance was committed by the other partner or
1004	1004	representative;
1005	1005	[(2) was directly involved in the specific activity in
1006	1006	which the error, omission, negligence, incompetence, or
1007	1007	malfeasance was committed by the other partner or representative;
1008	1008	or
1009	1009	[(3) had notice or knowledge of the error, omission,
1010	1010	negligence, incompetence, or malfeasance by the other partner or
1011	1011	representative at the time of the occurrence and then failed to take
1012	1012	reasonable action to prevent or cure the error, omission,
1013	1013	negligence, incompetence, or malfeasance.
1014	1014	[(c)] Sections 2.101(1), 152.305, and 152.306 do not limit
1015	1015	the effect of Subsection (a) in a limited liability partnership.
1016	1016	(c) For purposes of this section, [(d) In this section,
1017	1017	"representative" includes] an obligation is incurred while a
1018	1018	partnership is [agent, servant, or employee of] a limited liability
1019	1019	partnership if:
1020	1020	(1) the obligation relates to an action or omission
1021	1021	occurring while the partnership is a limited liability partnership;
1022	1022	or
1023	1023	(2) the obligation arises under a contract or
1024	1024	commitment entered into while the partnership is a limited
1025	1025	liability partnership.
1026	1026	(d) Subsection [(e) Subsections] (a) does [and (b) do] not
1027	1027	affect:
1028	1028	(1) the liability of a partnership to pay its [debts
1029	1029	and] obligations from partnership property;
1030	1030	(2) the liability of a partner, if any, imposed by law
1031	1031	or contract independently of the partner's status as a partner; or
1032	1032	(3) the manner in which service of citation or other
1033	1033	civil process may be served in an action against a partnership.
1034	1034	(e) [(f)] This section controls over the other parts of this
1035	1035	chapter and the other partnership provisions regarding the
1036	1036	liability of partners of a limited liability partnership, the
1037	1037	chargeability of the partners for the [debts and] obligations of
1038	1038	the partnership, and the obligations of the partners regarding
1039	1039	contributions and indemnity.
1040	1040	SECTION 48. Subsections (a), (f), and (j), Section 152.802,
1041	1041	Business Organizations Code, are amended to read as follows:
1042	1042	(a) In addition to complying with Section [Sections]
1043	1043	152.803 [and 152.804], a partnership, to become a limited liability
1044	1044	partnership, must file an application with the secretary of state
1045	1045	in accordance with Chapter 4 and this section. The application
1046	1046	must:
1047	1047	(1) set out:
1048	1048	(A) the name of the partnership;
1049	1049	(B) the federal taxpayer [tax] identification
1050	1050	number of the partnership;
1051	1051	(C) the street address of the partnership's
1052	1052	principal office in this state or outside of this state, as
1053	1053	applicable; and
1054	1054	(D) the number of partners at the date of
1055	1055	application; and
1056	1056	(2) contain a brief statement of the partnership's
1057	1057	business.
1058	1058	(f) A registration may be withdrawn by filing a withdrawal
1059	1059	notice with the secretary of state in accordance with Chapter 4. A
1060	1060	certificate from the comptroller stating that all taxes
1061	1061	administered by the comptroller under Title 2, Tax Code, have been
1062	1062	paid must be filed with the notice of withdrawal. A withdrawal
1063	1063	notice terminates the status of the partnership as a limited
1064	1064	liability partnership from the date on which the notice is filed or
1065	1065	a later date specified in the notice, but not later than the
1066	1066	expiration date under Subsection (e). A withdrawal notice must:
1067	1067	(1) contain:
1068	1068	(A) the name of the partnership;
1069	1069	(B) the federal taxpayer [tax] identification
1070	1070	number of the partnership;
1071	1071	(C) the date of registration of the partnership's
1072	1072	last application under this subchapter; and
1073	1073	(D) the current street address of the
1074	1074	partnership's principal office in this state and outside this
1075	1075	state, if applicable; and
1076	1076	(2) be signed by:
1077	1077	(A) a majority-in-interest of the partners; or
1078	1078	(B) one or more partners authorized by a
1079	1079	majority-in-interest of the partners.
1080	1080	(j) A document filed under this subchapter may be amended by
1081	1081	filing an application for amendment of registration with the
1082	1082	secretary of state in accordance with Chapter 4 and this
1083	1083	subsection. The application for amendment must:
1084	1084	(1) contain:
1085	1085	(A) the name of the partnership;
1086	1086	(B) the taxpayer [tax] identification number of
1087	1087	the partnership;
1088	1088	(C) the identity of the document being amended;
1089	1089	(D) the date on which the document being amended
1090	1090	was filed;
1091	1091	(E) a reference to the part of the document being
1092	1092	amended; and
1093	1093	(F) the amendment or correction; and
1094	1094	(2) be signed by:
1095	1095	(A) a majority-in-interest of the partners; or
1096	1096	(B) one or more partners authorized by a
1097	1097	majority-in-interest of the partners.
1098	1098	SECTION 49. Subsection (b), Section 152.906, Business
1099	1099	Organizations Code, is amended to read as follows:
1100	1100	(b) In addition to the information required by Section
1101	1101	9.011, the certificate of withdrawal must:
1102	1102	(1) contain:
1103	1103	(A) the federal taxpayer [tax] identification
1104	1104	number of the partnership; and
1105	1105	(B) the date of effectiveness of the
1106	1106	partnership's last application for registration under this
1107	1107	subchapter; and
1108	1108	(2) be signed by:
1109	1109	(A) a majority-in-interest of the partners; or
1110	1110	(B) one or more partners authorized by a
1111	1111	majority-in-interest of the partners.
1112	1112	SECTION 50. Subsection (b), Section 152.910, Business
1113	1113	Organizations Code, is amended to read as follows:
1114	1114	(b) A partner of a foreign limited liability partnership is
1115	1115	not liable for an [a debt or] obligation of the partnership solely
1116	1116	because the partnership transacted business in this state without
1117	1117	being registered.
1118	1118	SECTION 51. Subsection (b), Section 152.911, Business
1119	1119	Organizations Code, is amended to read as follows:
1120	1120	(b) The application for amendment must contain:
1121	1121	(1) the name of the partnership;
1122	1122	(2) the taxpayer [tax] identification number of the
1123	1123	partnership;
1124	1124	(3) the identity of the document being amended;
1125	1125	(4) a reference to the date on which the document being
1126	1126	amended was filed;
1127	1127	(5) the part of the document being amended; and
1128	1128	(6) the amendment or correction.
1129	1129	SECTION 52. Subsection (a), Section 153.004, Business
1130	1130	Organizations Code, is amended to read as follows:
1131	1131	(a) Except as provided by this section, the following
1132	1132	provisions of Title 1 may not be waived or modified in the
1133	1133	partnership agreement of a limited partnership:
1134	1134	(1) Chapter 1, if the provision is used to interpret a
1135	1135	provision or define a word or phrase contained in a section listed
1136	1136	in this subsection;
1137	1137	(2) Chapter 2, other than Section 2.104(c)(2),
1138	1138	2.104(c)(3), or 2.113;
1139	1139	(3) Chapter 3, other than Subchapters C and E of that
1140	1140	chapter and Section 3.151 (provided, that in all events a
1141	1141	partnership agreement may not validly waive or modify Section
1142	1142	[Sections] 153.551 or unreasonably restrict a partner's right of
1143	1143	access to books and records under Section [and] 153.552); or
1144	1144	(4) Chapter 4, 5, 10, 11, or 12, other than Section
1145	1145	11.058.
1146	1146	SECTION 53. Section 153.103, Business Organizations Code,
1147	1147	is amended to read as follows:
1148	1148	Sec. 153.103. ACTIONS NOT CONSTITUTING PARTICIPATION IN
1149	1149	BUSINESS FOR LIABILITY PURPOSES. For purposes of this section and
1150	1150	Sections 153.102, 153.104, and 153.105, a limited partner does not
1151	1151	participate in the control of the business because the limited
1152	1152	partner has or has acted in one or more of the following capacities
1153	1153	or possesses or exercises one or more of the following powers:
1154	1154	(1) acting as:
1155	1155	(A) a contractor for or an officer or other agent
1156	1156	or employee of the limited partnership;
1157	1157	(B) a contractor for or an agent or employee of a
1158	1158	general partner;
1159	1159	(C) an officer, director, or stockholder of a
1160	1160	corporate general partner;
1161	1161	(D) a partner of a partnership that is a general
1162	1162	partner of the limited partnership; or
1163	1163	(E) a member or manager of a limited liability
1164	1164	company that is a general partner of the limited partnership;
1165	1165	(2) acting in a capacity similar to that described in
1166	1166	Subdivision (1) with any other person that is a general partner of
1167	1167	the limited partnership;
1168	1168	(3) consulting with or advising a general partner on
1169	1169	any matter, including the business of the limited partnership;
1170	1170	(4) acting as surety, guarantor, or endorser for the
1171	1171	limited partnership, guaranteeing or assuming one or more specific
1172	1172	obligations of the limited partnership, or providing collateral for
1173	1173	borrowings of the limited partnership;
1174	1174	(5) calling, requesting, attending, or participating
1175	1175	in a meeting of the partners or the limited partners;
1176	1176	(6) winding up the business of a limited partnership
1177	1177	under Chapter 11 and Subchapter K of this chapter;
1178	1178	(7) taking an action required or permitted by law to
1179	1179	bring, pursue, settle, or otherwise terminate a derivative action
1180	1180	in the right of the limited partnership;
1181	1181	(8) serving on a committee of the limited partnership
1182	1182	or the limited partners; or
1183	1183	(9) proposing, approving, or disapproving, by vote or
1184	1184	otherwise, one or more of the following matters:
1185	1185	(A) the winding up or termination of the limited
1186	1186	partnership;
1187	1187	(B) an election to reconstitute the limited
1188	1188	partnership or continue the business of the limited partnership;
1189	1189	(C) the sale, exchange, lease, mortgage,
1190	1190	assignment, pledge, or other transfer of, or granting of a security
1191	1191	interest in, an asset of the limited partnership;
1192	1192	(D) the incurring, renewal, refinancing, or
1193	1193	payment or other discharge of indebtedness by the limited
1194	1194	partnership;
1195	1195	(E) a change in the nature of the business of the
1196	1196	limited partnership;
1197	1197	(F) the admission, removal, or retention of a
1198	1198	general partner;
1199	1199	(G) the admission, removal, or retention of a
1200	1200	limited partner;
1201	1201	(H) a transaction or other matter involving an
1202	1202	actual or potential conflict of interest;
1203	1203	(I) an amendment to the partnership agreement or
1204	1204	certificate of formation;
1205	1205	(J) if the limited partnership is qualified as an
1206	1206	investment company under the federal Investment Company Act of 1940
1207	1207	(15 U.S.C. Section 80a-1 et seq.), as amended, any matter required
1208	1208	by that Act or the rules and regulations of the Securities and
1209	1209	Exchange Commission under that Act, to be approved by the holders of
1210	1210	beneficial interests in an investment company, including:
1211	1211	(i) electing directors or trustees of the
1212	1212	investment company;
1213	1213	(ii) approving or terminating an investment
1214	1214	advisory or underwriting contract;
1215	1215	(iii) approving an auditor; and
1216	1216	(iv) acting on another matter that that Act
1217	1217	requires to be approved by the holders of beneficial interests in
1218	1218	the investment company;
1219	1219	(K) indemnification of a general partner under
1220	1220	Chapter 8 or otherwise;
1221	1221	(L) any other matter stated in the partnership
1222	1222	agreement;
1223	1223	(M) the exercising of a right or power granted or
1224	1224	permitted to limited partners under this code and not specifically
1225	1225	enumerated in this section; or
1226	1226	(N) the merger, [or] conversion, or interest
1227	1227	exchange with respect to [of] a limited partnership.
1228	1228	SECTION 54. Subsection (b), Section 153.158, Business
1229	1229	Organizations Code, is amended to read as follows:
1230	1230	(b) Until an action described by Subsection (a) is taken,
1231	1231	the owner of the partnership interest of the withdrawn general
1232	1232	partner has the status of an assignee under Subchapter F[, Section
1233	1233	153.113, and Section 153.555].
1234	1234	SECTION 55. Subsection (b), Section 153.501, Business
1235	1235	Organizations Code, is amended to read as follows:
1236	1236	(b) The limited partnership may cancel under Section 11.152
1237	1237	an event requiring winding up arising from an event of withdrawal of
1238	1238	a general partner as specified in Section 11.058(b) if:
1239	1239	(1) there remains at least one general partner and the
1240	1240	partnership agreement permits the business of the limited
1241	1241	partnership to be carried on by the remaining general partners and
1242	1242	those remaining general partners carry on the business; or
1243	1243	(2) not later than one year after the event, all
1244	1244	remaining partners, or another group or percentage of partners
1245	1245	specified in the partnership agreement:
1246	1246	(A) agree in writing to continue the business of
1247	1247	the limited partnership [in writing]; and
1248	1248	(B) to the extent that they desire or if there are
1249	1249	no remaining general partners, agree to the appointment of one or
1250	1250	more new general partners.
1251	1251	SECTION 56. Section 153.504, Business Organizations Code,
1252	1252	is amended to read as follows:
1253	1253	Sec. 153.504. DISPOSITION OF ASSETS. On the winding up of a
1254	1254	limited partnership, its assets shall be paid or transferred as
1255	1255	follows:
1256	1256	(1) to the extent otherwise permitted by law, to
1257	1257	creditors, including partners who are creditors other than solely
1258	1258	because of the application of Section 153.207, for the payment or
1259	1259	the making of reasonable provision for payment to satisfy the
1260	1260	liabilities of the limited partnership;
1261	1261	(2) unless otherwise provided by the partnership
1262	1262	agreement, to partners and former partners to satisfy the
1263	1263	partnership's liability for distributions under Section 153.111 or
1264	1264	153.209; and
1265	1265	(3) unless otherwise provided by the partnership
1266	1266	agreement, to partners first for the return of their capital and
1267	1267	second with respect to their partnership interests, in the
1268	1268	proportions provided by Sections 153.208(a) and (b).
1269	1269	SECTION 57. Subsection (a), Section 153.551, Business
1270	1270	Organizations Code, is amended to read as follows:
1271	1271	(a) A domestic limited partnership shall maintain the
1272	1272	following records in its principal office in the United States or
1273	1273	make the records available in that office not later than the fifth
1274	1274	day after the date on which a written request under Section
1275	1275	153.552(a) is received:
1276	1276	(1) a current list that states:
1277	1277	(A) the name and mailing address of each partner,
1278	1278	separately identifying in alphabetical order the general partners
1279	1279	and the limited partners;
1280	1280	(B) the last known street address of the business
1281	1281	or residence of each general partner;
1282	1282	(C) the percentage or other interest in the
1283	1283	partnership owned by each partner; and
1284	1284	(D) if one or more classes or groups are
1285	1285	established under the partnership agreement, the names of the
1286	1286	partners who are members of each specified class or group;
1287	1287	(2) a copy of:
1288	1288	(A) the limited partnership's federal, state,
1289	1289	and local information or income tax returns for each of the
1290	1290	partnership's six most recent tax years;
1291	1291	(B) the partnership agreement and certificate of
1292	1292	formation; and
1293	1293	(C) all amendments or restatements;
1294	1294	(3) copies of any document that creates, in the manner
1295	1295	provided by the partnership agreement, classes or groups of
1296	1296	partners;
1297	1297	(4) an executed copy of any powers of attorney under
1298	1298	which the partnership agreement, certificate of formation, and all
1299	1299	amendments or restatements to the agreement and certificate have
1300	1300	been executed;
1301	1301	(5) unless contained in the written partnership
1302	1302	agreement, a written statement of:
1303	1303	(A) the amount of the cash contribution and a
1304	1304	description and statement of the agreed value of any other
1305	1305	contribution made by each partner;
1306	1306	(B) the amount of the cash contribution and a
1307	1307	description and statement of the agreed value of any other
1308	1308	contribution that the partner has agreed to make in the future as an
1309	1309	additional contribution;
1310	1310	(C) [the date on which additional contributions
1311	1311	are to be made or] the [date of] events requiring additional
1312	1312	contributions to be made or the date on which additional
1313	1313	contributions are to be made;
1314	1314	(D) the events requiring the winding up of the
1315	1315	limited partnership; and
1316	1316	(E) the date on which each partner in the limited
1317	1317	partnership became a partner; and
1318	1318	(6) books and records of the accounts of the limited
1319	1319	partnership.
1320	1320	SECTION 58. Section 200.317, Business Organizations Code,
1321	1321	is amended by amending Subsections (a) and (b) and adding
1322	1322	Subsections (d) and (e) to read as follows:
1323	1323	(a) This section applies [only] to a contract or transaction
1324	1324	between a real estate investment trust and:
1325	1325	(1) one or more [of the trust's] trust managers or
1326	1326	officers, or one or more affiliates or associates of one or more
1327	1327	directors or officers, of the trust; or
1328	1328	(2) an entity or other organization in which one or
1329	1329	more [of the trust's] trust managers or officers, or one or more
1330	1330	affiliates or associates of one or more directors or officers, of
1331	1331	the trust:
1332	1332	(A) is a managerial official; or
1333	1333	(B) has a financial interest.
1334	1334	(b) An otherwise valid and enforceable contract or
1335	1335	transaction described by Subsection (a) is valid and enforceable,
1336	1336	and is not void or voidable, notwithstanding any relationship or
1337	1337	interest described by Subsection (a), if any one of the following
1338	1338	conditions is satisfied [notwithstanding that the trust manager or
1339	1339	officer having the relationship or interest described by Subsection
1340	1340	(a) is present at or participates in the meeting of the trust
1341	1341	managers or of a committee of the trust managers that authorizes the
1342	1342	contract or transaction, or votes or signs, in the person's
1343	1343	capacity as a trust manager or committee member, a unanimous
1344	1344	written consent of trust managers or committee members to authorize
1345	1345	the contract or transaction, if]:
1346	1346	(1) the material facts as to the relationship or
1347	1347	interest described by Subsection (a) and as to the contract or
1348	1348	transaction are disclosed to or known by:
1349	1349	(A) the trust managers or a committee of the
1350	1350	trust managers, and the trust managers or committee of the trust
1351	1351	managers in good faith authorize the contract or transaction by the
1352	1352	approval of the majority of disinterested trust managers or
1353	1353	committee members, regardless of whether the disinterested trust
1354	1354	managers or committee members constitute a quorum; or
1355	1355	(B) the shareholders entitled to vote on the
1356	1356	authorization of the contract or transaction, and the contract or
1357	1357	transaction is specifically approved in good faith by a vote of the
1358	1358	shareholders; or
1359	1359	(2) the contract or transaction is fair to the real
1360	1360	estate investment trust when the contract or transaction is
1361	1361	authorized, approved, or ratified by the trust managers, a
1362	1362	committee of the trust managers, or the shareholders.
1363	1363	(d) A person who has the relationship or interest described
1364	1364	by Subsection (a) may:
1365	1365	(1) be present at or participate in and, if the person
1366	1366	is a trust manager or committee member, may vote at a meeting of the
1367	1367	trust managers, or of a committee of the trust managers, that
1368	1368	authorizes the contract or transaction; or
1369	1369	(2) sign, in the person's capacity as a trust manager
1370	1370	or committee member, a unanimous written consent of the trust
1371	1371	managers or committee members to authorize the contract or
1372	1372	transaction.
1373	1373	(e) If at least one of the conditions of Subsection (b) is
1374	1374	satisfied, neither the trust nor any of the trust's shareholders
1375	1375	will have a cause of action against any of the persons described by
1376	1376	Subsection (a) for breach of duty with respect to the making,
1377	1377	authorization, or performance of the contract or transaction
1378	1378	because the person had the relationship or interest described by
1379	1379	Subsection (a) or took any of the actions authorized by Subsection
1380	1380	(d).
1381	1381	SECTION 59. Subsections (b) and (f), Section 252.011,
1382	1382	Business Organizations Code, are amended to read as follows:
1383	1383	(b) A statement appointing an agent must contain:
1384	1384	(1) the name of the nonprofit association;
1385	1385	(2) the federal taxpayer [tax] identification number
1386	1386	of the nonprofit association, if applicable;
1387	1387	(3) the address in this state, including the street
1388	1388	address, if any, of the nonprofit association or, if the nonprofit
1389	1389	association does not have an address in this state, its address out
1390	1390	of state; and
1391	1391	(4) the name of the person in this state authorized to
1392	1392	receive service of process and the person's address, including the
1393	1393	street address, in this state.
1394	1394	(f) A statement appointing an agent may be canceled by
1395	1395	filing with the secretary of state a written notice of cancellation
1396	1396	executed by a person authorized to manage the affairs of the
1397	1397	nonprofit association. A notice of cancellation must contain:
1398	1398	(1) the name of the nonprofit association;
1399	1399	(2) the federal taxpayer [tax] identification number
1400	1400	of the nonprofit association, if applicable;
1401	1401	(3) the date of filing of the nonprofit association's
1402	1402	statement appointing the agent; and
1403	1403	(4) a current street address, if any, of the nonprofit
1404	1404	association in this state or, if the nonprofit association does not
1405	1405	have an address in this state, its address out of state.
1406	1406	SECTION 60. Section 402.003, Business Organizations Code,
1407	1407	is amended to read as follows:
1408	1408	Sec. 402.003. EARLY ADOPTION OF CODE BY EXISTING DOMESTIC
1409	1409	ENTITY. (a) A domestic entity formed before the effective date of
1410	1410	this code may voluntarily elect to adopt and become subject to this
1411	1411	code by:
1412	1412	(1) adopting the code by complying with the procedures
1413	1413	for approval, under prior law and its governing documents, of an
1414	1414	amendment to:
1415	1415	(A) its articles of incorporation, with respect
1416	1416	to a corporation or cooperative association;
1417	1417	(B) its regulations, with respect to a limited
1418	1418	liability company;
1419	1419	(C) its articles of association, with respect to
1420	1420	a professional association;
1421	1421	(D) its declaration of trust, with respect to a
1422	1422	real estate investment trust;
1423	1423	(E) its partnership agreement, with respect to a
1424	1424	partnership; or
1425	1425	(F) its primary governing document, with respect
1426	1426	to another type of domestic entity;
1427	1427	(2) if any of its governing documents, including its
1428	1428	certificate of formation, do not comply with this code, complying
1429	1429	with the procedures, under prior law and its governing documents,
1430	1430	to amend the noncomplying governing documents to comply with this
1431	1431	code, including filing with the filing officer in accordance with
1432	1432	Chapter 4 a certificate of amendment to cause its certificate of
1433	1433	formation to comply with this code; and
1434	1434	(3) if the domestic entity is a filing entity, filing
1435	1435	with the filing officer in accordance with Chapter 4 a statement
1436	1436	that the filing entity is electing to adopt this code.
1437	1437	(b) A domestic entity that elected to adopt and become
1438	1438	subject to this code as provided by Subsection (a) is not considered
1439	1439	to have failed to comply with Subsection (a)(2) because:
1440	1440	(1) the entity's governing documents do not state the
1441	1441	type of entity formed; or
1442	1442	(2) a circumstance described by Section 402.0051
1443	1443	applies.
1444	1444	SECTION 61. Section 402.004, Business Organizations Code,
1445	1445	is amended to read as follows:
1446	1446	Sec. 402.004. EARLY ADOPTION OF CODE BY REGISTERED FOREIGN
1447	1447	FILING ENTITY. (a) A foreign filing entity registered with the
1448	1448	secretary of state to transact business in this state before the
1449	1449	effective date of this code may voluntarily elect to adopt and
1450	1450	become subject to this code by filing with the secretary of state in
1451	1451	accordance with Chapter 4:
1452	1452	(1) a statement that the foreign filing entity is
1453	1453	electing to adopt this code; and
1454	1454	(2) an amendment to its application for registration
1455	1455	that would cause its application for registration to comply with
1456	1456	this code.
1457	1457	(b) A foreign filing entity that elected to adopt and become
1458	1458	subject to this code as provided by Subsection (a) is not considered
1459	1459	to have failed to comply with Subsection (a)(2) because:
1460	1460	(1) the application for registration or any amendment
1461	1461	to the registration:
1462	1462	(A) does not state the entity's type; or
1463	1463	(B) does not include the appointment of the
1464	1464	secretary of state as agent for service of process under the
1465	1465	circumstances provided by Section 5.251; or
1466	1466	(2) a circumstance described by Section 402.0051
1467	1467	applies.
1468	1468	SECTION 62. Section 402.005, Business Organizations Code,
1469	1469	is amended by adding Subsection (c) to read as follows:
1470	1470	(c) A domestic or foreign filing entity is not considered to
1471	1471	have failed to comply with Subsection (a)(3) or (4) because:
1472	1472	(1) the certificate of formation does not state the
1473	1473	type of entity formed;
1474	1474	(2) the application for registration or any amendment
1475	1475	to the registration:
1476	1476	(A) does not state the entity's type; or
1477	1477	(B) does not include the appointment of the
1478	1478	secretary of state as agent for service of process, notice, or
1479	1479	demand under the circumstances provided by Section 5.251; or
1480	1480	(3) a circumstance described by Section 402.0051
1481	1481	applies.
1482	1482	SECTION 63. Chapter 402, Business Organizations Code, is
1483	1483	amended by adding Section 402.0051 to read as follows:
1484	1484	Sec. 402.0051. EFFECT OF REFERENCES TO PRIOR LAW AND USE OF
1485	1485	SYNONYMOUS TERMS. (a) A governing document or a filing
1486	1486	instrument, including a certificate of formation or application for
1487	1487	registration, is not considered to have failed to conform to this
1488	1488	code if the governing document or filing instrument:
1489	1489	(1) contains a reference to prior law that was
1490	1490	applicable at the time of its filing or adoption;
1491	1491	(2) contains a provision that was authorized by prior
1492	1492	law at the time of its filing or adoption;
1493	1493	(3) includes a term or phrase described by Section
1494	1494	1.006; or
1495	1495	(4) includes a term or phrase from prior law that is
1496	1496	different from the corresponding term or phrase used in this code.
1497	1497	(b) A reference in a governing document or filing instrument
1498	1498	to a statute or provision of a statute in effect before January 1,
1499	1499	2010, that was repealed by this code is considered to be a reference
1500	1500	to the provision or provisions of this code that correspond to the
1501	1501	repealed statute or provision unless the governing document or
1502	1502	filing instrument expressly provides otherwise.
1503	1503	(c) An entity is not considered to have failed to comply
1504	1504	with this code if a governing document or filing instrument makes a
1505	1505	reference to prior law rather than to the corresponding provisions
1506	1506	of the prior law in this code.
1507	1507	(d) For purposes of this section, prior law includes a
1508	1508	predecessor statute to the prior law.
1509	1509	SECTION 64. The heading to Section 402.013, Business
1510	1510	Organizations Code, is amended to read as follows:
1511	1511	Sec. 402.013. REINSTATEMENT OF ENTITIES CANCELED, REVOKED,
1512	1512	DISSOLVED, INVOLUNTARILY DISSOLVED, SUSPENDED, OR FORFEITED UNDER
1513	1513	PRIOR LAW.
1514	1514	SECTION 65. Section 402.013, Business Organizations Code,
1515	1515	is amended by adding Subsections (b-1) and (b-2) to read as follows:
1516	1516	(b-1) On or after January 1, 2010, a domestic filing entity
1517	1517	whose existence has been voluntarily dissolved or involuntarily
1518	1518	dissolved under prior law or whose certificate of formation or
1519	1519	equivalent governing document has been canceled, revoked,
1520	1520	suspended, or forfeited under prior law may reinstate the entity in
1521	1521	accordance with this code.
1522	1522	(b-2) On or after January 1, 2010, a foreign filing entity
1523	1523	whose registration to do business has been canceled, revoked,
1524	1524	suspended, or forfeited under prior law may reinstate its
1525	1525	registration in accordance with this code.
1526	1526	SECTION 66. (a) In this section:
1527	1527	(1) "Governing document" has the meaning assigned by
1528	1528	Subdivision (36), Section 1.002, Business Organizations Code.
1529	1529	(2) "Prior law" has the meaning assigned by Section
1530	1530	401.001, Business Organizations Code.
1531	1531	(b) This section applies only to a domestic entity whose
1532	1532	existence has been voluntarily dissolved under prior law or whose
1533	1533	certificate of formation or equivalent governing document has been
1534	1534	canceled under prior law.
1535	1535	(c) The reinstatement of a domestic filing entity that was
1536	1536	filed in accordance with Chapter 11 and Section 402.003, Business
1537	1537	Organizations Code, after December 31, 2005, and before January 1,
1538	1538	2010, is validated in all respects as of the date on which the
1539	1539	reinstatement occurred.
1540	1540	SECTION 67. The following provisions of the Business
1541	1541	Organizations Code are repealed:
1542	1542	(1) Section 21.001;
1543	1543	(2) Subsection (i), Section 152.802; and
1544	1544	(3) Section 152.804.
1545	1545	SECTION 68. This Act takes effect September 1, 2011.
1546	1546	COMMITTEE AMENDMENT NO. 1
1547	1547	Amend S.B. No. 748 (senate engrossment) in Section 44 of the
1548	1548	bill, in added Section 152.308(f), Business Organizations Code
1549	1549	(page 35, line 26), by striking "limited".
1550	1550	82R22868 CLG-FOrr
1551	1551	COMMITTEE AMENDMENT NO. 2
1552	1552	Amend S.B. No. 748 (senate engrossment) by striking SECTION
1553	1553	33 of the bill, amending Section 22.153(a), Business Organizations
1554	1554	Code (page 27, lines 8-14), and renumbering subsequent SECTIONS of
1555	1555	the bill accordingly.
1556	1556	82R23469 CLG-FOrr