Texas 2013 - 83rd Regular

Texas House Bill HB1928 Compare Versions

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1	1	83R12222 CLG-F
2	2	By: Oliveira H.B. No. 1928
3	3	Substitute the following for H.B. No. 1928:
4	4	By: Orr C.S.H.B. No. 1928
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to social purposes of a for-profit corporation and the
10	10	consideration of social purposes and other interests by officers
11	11	and directors of a for-profit corporation.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Section 1.002, Business Organizations Code, is
14	14	amended by adding Subdivision (82-a) to read as follows:
15	15	(82-a) "Social purposes" means one or more purposes of
16	16	a for-profit corporation that are specified in the corporation's
17	17	certificate of formation and consist of promoting one or more
18	18	positive impacts on society or the environment or of minimizing one
19	19	or more adverse impacts of the corporation's activities on society
20	20	or the environment. Those impacts may include:
21	21	(A) providing low-income or underserved
22	22	individuals or communities with beneficial products or services;
23	23	(B) promoting economic opportunity for
24	24	individuals or communities beyond the creation of jobs in the
25	25	normal course of business;
26	26	(C) preserving the environment;
27	27	(D) improving human health;
28	28	(E) promoting the arts, sciences, or advancement
29	29	of knowledge;
30	30	(F) increasing the flow of capital to entities
31	31	with a social purpose; and
32	32	(G) conferring any particular benefit on society
33	33	or the environment.
34	34	SECTION 2. Section 3.007, Business Organizations Code, is
35	35	amended by adding Subsection (d) to read as follows:
36	36	(d) Notwithstanding Section 2.008, a for-profit corporation
37	37	may include one or more social purposes in addition to the purpose
38	38	or purposes required to be stated in the corporation's certificate
39	39	of formation by Section 3.005(a)(3). The corporation may also
40	40	include in the certificate of formation a provision that the board
41	41	of directors and officers of the corporation shall consider any
42	42	social purpose specified in the certificate of formation in
43	43	discharging the duties of directors or officers under this code or
44	44	otherwise.
45	45	SECTION 3. Section 21.101(a), Business Organizations Code,
46	46	is amended to read as follows:
47	47	(a) The shareholders of a corporation may enter into an
48	48	agreement that:
49	49	(1) restricts the discretion or powers of the board of
50	50	directors;
51	51	(2) eliminates the board of directors and authorizes
52	52	the business and affairs of the corporation to be managed, wholly or
53	53	partly, by one or more of its shareholders or other persons;
54	54	(3) establishes the individuals who shall serve as
55	55	directors or officers of the corporation;
56	56	(4) determines the term of office, manner of selection
57	57	or removal, or terms or conditions of employment of a director,
58	58	officer, or other employee of the corporation, regardless of the
59	59	length of employment;
60	60	(5) governs the authorization or making of
61	61	distributions whether in proportion to ownership of shares, subject
62	62	to Section 21.303;
63	63	(6) determines the manner in which profits and losses
64	64	will be apportioned;
65	65	(7) governs, in general or with regard to specific
66	66	matters, the exercise or division of voting power by and between the
67	67	shareholders, directors, or other persons, including use of
68	68	disproportionate voting rights or director proxies;
69	69	(8) establishes the terms of an agreement for the
70	70	transfer or use of property or for the provision of services between
71	71	the corporation and another person, including a shareholder,
72	72	director, officer, or employee of the corporation;
73	73	(9) authorizes arbitration or grants authority to a
74	74	shareholder or other person to resolve any issue about which there
75	75	is a deadlock among the directors, shareholders, or other persons
76	76	authorized to manage the corporation;
77	77	(10) requires winding up and termination of the
78	78	corporation at the request of one or more shareholders or on the
79	79	occurrence of a specified event or contingency, in which case the
80	80	winding up and termination of the corporation will proceed as if all
81	81	of the shareholders had consented in writing to the winding up and
82	82	termination as provided by Subchapter K; [or]
83	83	(11) with regard to one or more social purposes
84	84	specified in the corporation's certificate of formation, governs
85	85	the exercise of corporate powers, the management of the operations
86	86	and affairs of the corporation, the approval by shareholders or
87	87	other persons of corporate actions, or the relationship among the
88	88	shareholders, the directors, and the corporation; or
89	89	(12) otherwise governs the exercise of corporate
90	90	powers, the management of the business and affairs of the
91	91	corporation, or the relationship among the shareholders, the
92	92	directors, and the corporation as if the corporation were a
93	93	partnership or in a manner that would otherwise be appropriate only
94	94	among partners and not contrary to public policy.
95	95	SECTION 4. Section 21.401, Business Organizations Code, is
96	96	amended by amending Subsection (b) and adding Subsections (c), (d),
97	97	and (e) to read as follows:
98	98	(b) In discharging the duties of director under this code or
99	99	otherwise and in considering the best interests of the corporation,
100	100	a director is entitled to [may] consider the long-term and
101	101	short-term interests of the corporation and the shareholders of the
102	102	corporation, including the possibility that those interests may be
103	103	best served by the continued independence of the corporation.
104	104	(c) In discharging the duties of a director under this code
105	105	or otherwise, a director is entitled to consider any social
106	106	purposes specified in the corporation's certificate of formation.
107	107	(d) Subject to direction by the board of directors of the
108	108	corporation, in discharging the duties of an officer under this
109	109	code or otherwise, an officer is entitled to consider:
110	110	(1) the long-term and short-term interests of the
111	111	corporation and of the corporation's shareholders, including the
112	112	possibility that those interests may be best served by the
113	113	continued independence of the corporation; and
114	114	(2) any social purposes specified in the corporation's
115	115	certificate of formation.
116	116	(e) Nothing in this section prohibits or limits a director
117	117	or officer of a corporation that does not have a social purpose
118	118	specified as a purpose in the corporation's certificate of
119	119	formation from considering, approving, or taking an action that
120	120	promotes or has the effect of promoting a social, charitable, or
121	121	environmental purpose.
122	122	SECTION 5. This Act takes effect September 1, 2013.