Texas 2015 - 84th Regular

Texas House Bill HB2142 Compare Versions

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Version 2 (New)

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1	1	84R14900 CLG-F
2	2	By: Oliveira, Villalba H.B. No. 2142
3	3	Substitute the following for H.B. No. 2142:
4	4	By: Simmons C.S.H.B. No. 2142
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to corporations and fundamental business transactions.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 1.002, Business Organizations Code, is
12	12	amended by adding Subdivision (63-a) to read as follows:
13	13	(63-a) "Owner liability" means personal liability for a
14	14	liability or other obligation of an organization that is imposed on
15	15	a person:
16	16	(A) by statute solely because of the person's
17	17	status as an owner or member of the organization; or
18	18	(B) by a governing document of an organization
19	19	under a provision of this code or the law of the organization's
20	20	jurisdiction of formation that authorizes the governing document to
21	21	make one or more specified owners or members of the organization
22	22	liable in their capacity as owners or members for all or specified
23	23	liabilities or other obligations of the organization.
24	24	SECTION 2. Section 3.054, Business Organizations Code, is
25	25	amended to read as follows:
26	26	Sec. 3.054. EXECUTION OF CERTIFICATE OF AMENDMENT OF
27	27	FOR-PROFIT CORPORATION. Except as provided by Title 2 or this
28	28	section, an [An] officer shall sign the certificate of amendment on
29	29	behalf of the for-profit corporation. If shares of the for-profit
30	30	corporation have not been issued and the certificate of amendment
31	31	is adopted by the board of directors, one or more [a majority] of
32	32	the directors may sign the certificate of amendment on behalf of the
33	33	for-profit corporation.
34	34	SECTION 3. Section 3.060(b), Business Organizations Code,
35	35	is amended to read as follows:
36	36	(b) Except as provided by Title 2 or this subsection, an
37	37	[An] officer shall sign the restated certificate of formation on
38	38	behalf of the corporation. If shares of the corporation have not
39	39	been issued and the restated certificate of formation is adopted by
40	40	the board of directors, one or more [the majority] of the directors
41	41	may sign the restated certificate of formation on behalf of the
42	42	corporation.
43	43	SECTION 4. Section 3.201(b), Business Organizations Code,
44	44	is amended to read as follows:
45	45	(b) The ownership interests in a for-profit corporation,
46	46	real estate investment trust, or professional corporation must be
47	47	certificated, except to the extent a [unless the] governing
48	48	document [documents] of the entity or a resolution adopted by the
49	49	governing authority of the entity provides that some or all of the
50	50	classes or series of [states that] the ownership interests are
51	51	uncertificated or that some or all of the ownership interests in any
52	52	class or series of the ownership interests are uncertificated. The
53	53	entity may have outstanding both certificated and uncertificated
54	54	ownership interests of the same class or series. If a domestic
55	55	entity changes the form of its ownership interests from
56	56	certificated to uncertificated, a certificated ownership interest
57	57	subject to the change becomes an uncertificated ownership interest
58	58	only after the certificate is surrendered to the domestic entity.
59	59	SECTION 5. Section 10.001(e), Business Organizations Code,
60	60	is amended to read as follows:
61	61	(e) A domestic entity may not merge under this subchapter if
62	62	an owner or member of that entity that is a party to the merger will,
63	63	as a result of the merger, become subject to owner liability
64	64	[personally liable], without that owner's or member's consent, for
65	65	a liability or other obligation of any other person.
66	66	SECTION 6. Section 10.002, Business Organizations Code, is
67	67	amended by amending Subsection (a) and adding Subsection (d) to
68	68	read as follows:
69	69	(a) A plan of merger must be in writing and must include:
70	70	(1) the name of each organization that is a party to
71	71	the merger;
72	72	(2) the name of each organization that will survive
73	73	the merger;
74	74	(3) the name of each new organization that is to be
75	75	created by the plan of merger;
76	76	(4) a description of the organizational form of each
77	77	organization that is a party to the merger or that is to be created
78	78	by the plan of merger and its jurisdiction of formation;
79	79	(5) the manner and basis, including use of a formula,
80	80	of converting or exchanging any of the ownership or membership
81	81	interests of each organization that is a party to the merger into:
82	82	(A) ownership interests, membership interests,
83	83	obligations, rights to purchase securities, or other securities of
84	84	one or more of the surviving or new organizations;
85	85	(B) cash;
86	86	(C) other property, including ownership
87	87	interests, membership interests, obligations, rights to purchase
88	88	securities, or other securities of any other person or entity; or
89	89	(D) any combination of the items described by
90	90	Paragraphs (A)-(C);
91	91	(6) the identification of any of the ownership or
92	92	membership interests of an organization that is a party to the
93	93	merger that are:
94	94	(A) to be canceled rather than converted or
95	95	exchanged; or
96	96	(B) to remain outstanding rather than converted
97	97	or exchanged if the organization survives the merger;
98	98	(7) the certificate of formation of each new domestic
99	99	filing entity to be created by the plan of merger;
100	100	(8) the governing documents of each new domestic
101	101	nonfiling entity to be created by the plan of merger; and
102	102	(9) the governing documents of each non-code
103	103	organization that:
104	104	(A) is to survive the merger or to be created by
105	105	the plan of merger; and
106	106	(B) is an entity that is not:
107	107	(i) organized under the laws of any state or
108	108	the United States; or
109	109	(ii) required to file its certificate of
110	110	formation or similar document under which the entity is organized
111	111	with the appropriate governmental authority.
112	112	(d) Any of the terms of the plan of merger may be made
113	113	dependent on facts ascertainable outside of the plan if the manner
114	114	in which those facts will operate on the terms of the merger is
115	115	clearly and expressly stated in the plan. In this subsection,
116	116	"facts" includes the occurrence of any event, including a
117	117	determination or action by any person.
118	118	SECTION 7. Section 10.004, Business Organizations Code, is
119	119	amended to read as follows:
120	120	Sec. 10.004. PLAN OF MERGER: PERMISSIVE PROVISIONS. A plan
121	121	of merger may include:
122	122	(1) amendments to, restatements of, or amendments and
123	123	restatements of the governing documents of any surviving
124	124	organization, including a certificate of amendment, a restated
125	125	certificate of formation without amendment, or a restated
126	126	certificate of formation containing amendments;
127	127	(2) provisions relating to an interest exchange,
128	128	including a plan of exchange; and
129	129	(3) any other provisions relating to the merger that
130	130	are not required by this chapter.
131	131	SECTION 8. Section 10.008(a), Business Organizations Code,
132	132	is amended to read as follows:
133	133	(a) When a merger takes effect:
134	134	(1) the separate existence of each domestic entity
135	135	that is a party to the merger, other than a surviving or new
136	136	domestic entity, ceases;
137	137	(2) all rights, title, and interests to all real
138	138	estate and other property owned by each organization that is a party
139	139	to the merger is allocated to and vested, subject to any existing
140	140	liens or other encumbrances on the property, in one or more of the
141	141	surviving or new organizations as provided in the plan of merger
142	142	without:
143	143	(A) reversion or impairment;
144	144	(B) any further act or deed; or
145	145	(C) any transfer or assignment having occurred;
146	146	(3) all liabilities and obligations of each
147	147	organization that is a party to the merger are allocated to one or
148	148	more of the surviving or new organizations in the manner provided by
149	149	the plan of merger;
150	150	(4) each surviving or new domestic organization to
151	151	which a liability or obligation is allocated under the plan of
152	152	merger is the primary obligor for the liability or obligation, and,
153	153	except as otherwise provided by the plan of merger or by law or
154	154	contract, no other party to the merger, other than a surviving
155	155	domestic entity or non-code organization liable or otherwise
156	156	obligated at the time of the merger, and no other new domestic
157	157	entity or non-code organization created under the plan of merger is
158	158	liable for the debt or other obligation;
159	159	(5) any proceeding pending by or against any domestic
160	160	entity or by or against any non-code organization that is a party to
161	161	the merger may be continued as if the merger did not occur, or the
162	162	surviving or new domestic entity or entities or the surviving or new
163	163	non-code organization or non-code organizations to which the
164	164	liability, obligation, asset, or right associated with that
165	165	proceeding is allocated to and vested in under the plan of merger
166	166	may be substituted in the proceeding;
167	167	(6) the governing documents of each surviving domestic
168	168	entity are amended, restated, or amended and restated to the extent
169	169	provided by the plan of merger, and a certificate of amendment, a
170	170	restated certificate of formation without amendment, or a restated
171	171	certificate of formation containing amendments of a surviving
172	172	filing entity shall have the effect stated in Section 3.063;
173	173	(7) each new filing entity whose certificate of
174	174	formation is included in the plan of merger under this chapter, on
175	175	meeting any additional requirements, if any, of this code for its
176	176	formation, is formed as a domestic entity under this code as
177	177	provided by the plan of merger;
178	178	(8) the ownership or membership interests of each
179	179	organization that is a party to the merger and that are to be
180	180	converted or exchanged, in whole or part, into ownership or
181	181	membership interests, obligations, rights to purchase securities,
182	182	or other securities of one or more of the surviving or new
183	183	organizations, into cash or other property, including ownership or
184	184	membership interests, obligations, rights to purchase securities,
185	185	or other securities of any organization, or into any combination of
186	186	these, or that are to be canceled or remain outstanding, are
187	187	converted, exchanged, [or] canceled, or remain outstanding as
188	188	provided in the plan of merger, and the former owners or members who
189	189	held ownership or membership interests of each domestic entity that
190	190	is a party to the merger are entitled only to the rights provided by
191	191	the plan of merger or, if applicable, any rights to receive the fair
192	192	value for the ownership interests provided under Subchapter H; and
193	193	(9) notwithstanding Subdivision (4), the surviving or
194	194	new organization named in the plan of merger as primarily obligated
195	195	to pay the fair value of an ownership or membership interest under
196	196	Section 10.003(2) is the primary obligor for that payment and all
197	197	other surviving or new organizations are secondarily liable for
198	198	that payment.
199	199	SECTION 9. Section 10.051(f), Business Organizations Code,
200	200	is amended to read as follows:
201	201	(f) A plan of exchange may not be effected if any owner or
202	202	member of a domestic entity that is a party to the interest exchange
203	203	will, as a result of the interest exchange, become subject to owner
204	204	liability [personally liable], without the consent of the owner or
205	205	member, for the liabilities or obligations of any other person or
206	206	organization.
207	207	SECTION 10. Section 10.052, Business Organizations Code, is
208	208	amended by amending Subsection (a) and adding Subsection (c) to
209	209	read as follows:
210	210	(a) A plan of exchange must be in writing and must include:
211	211	(1) the name of each domestic entity the ownership or
212	212	membership interests of which are to be acquired;
213	213	(2) the name of each acquiring organization;
214	214	(3) if there is more than one acquiring organization,
215	215	the ownership or membership interests to be acquired by each
216	216	organization;
217	217	(4) the terms and conditions of the exchange; and
218	218	(5) the manner and basis, including use of a formula,
219	219	of exchanging the ownership or membership interests to be acquired
220	220	for:
221	221	(A) ownership or membership interests,
222	222	obligations, rights to purchase securities, or other securities of
223	223	one or more of the acquiring organizations that is a party to the
224	224	plan of exchange;
225	225	(B) cash;
226	226	(C) other property, including ownership or
227	227	membership interests, obligations, rights to purchase securities,
228	228	or other securities of any other person or entity; or
229	229	(D) any combination of those items.
230	230	(c) Any of the terms of the plan of exchange may be made
231	231	dependent on facts ascertainable outside of the plan if the manner
232	232	in which those facts will operate on the terms of the interest
233	233	exchange is clearly and expressly stated in the plan. In this
234	234	subsection, "facts" includes the occurrence of any event, including
235	235	a determination or action by any person.
236	236	SECTION 11. Section 10.101(f), Business Organizations
237	237	Code, is amended to read as follows:
238	238	(f) A domestic entity may not convert under this section if
239	239	an owner or member of the domestic entity, as a result of the
240	240	conversion, becomes subject to owner liability [personally
241	241	liable], without the consent of the owner or member, for a liability
242	242	or other obligation of the converted entity.
243	243	SECTION 12. Section 10.103, Business Organizations Code, is
244	244	amended by amending Subsection (a) and adding Subsection (c) to
245	245	read as follows:
246	246	(a) A plan of conversion must be in writing and must
247	247	include:
248	248	(1) the name of the converting entity;
249	249	(2) the name of the converted entity;
250	250	(3) a statement that the converting entity is
251	251	continuing its existence in the organizational form of the
252	252	converted entity;
253	253	(4) a statement of the type of entity that the
254	254	converted entity is to be and the converted entity's jurisdiction
255	255	of formation;
256	256	(5) if Sections 10.1025 and 10.109 do not apply, the
257	257	manner and basis, including use of a formula, of converting the
258	258	ownership or membership interests of the converting entity into
259	259	ownership or membership interests of the converted entity;
260	260	(6) any certificate of formation required to be filed
261	261	under this code if the converted entity is a filing entity;
262	262	(7) the certificate of formation or similar
263	263	organizational document of the converted entity if the converted
264	264	entity is not a filing entity; and
265	265	(8) if Sections 10.1025 and 10.109 apply, a statement
266	266	that the converting entity is electing to continue its existence in
267	267	its current organizational form and jurisdiction of formation after
268	268	the conversion takes effect.
269	269	(c) Any of the terms of the plan of conversion may be made
270	270	dependent on facts ascertainable outside of the plan if the manner
271	271	in which those facts will operate on the terms of the conversion is
272	272	clearly and expressly stated in the plan. In this subsection,
273	273	"facts" includes the occurrence of any event, including a
274	274	determination or action by any person.
275	275	SECTION 13. Section 10.151, Business Organizations Code, is
276	276	amended by amending Subsection (b) and adding Subsection (d) to
277	277	read as follows:
278	278	(b) If a certificate of merger or exchange is required to be
279	279	filed in connection with an interest exchange or a merger, other
280	280	than a merger under Section 10.006, the certificate must be signed
281	281	on behalf of each domestic entity and non-code organization that is
282	282	a party to the merger or exchange by an officer or other authorized
283	283	representative and must include:
284	284	(1) the plan of merger or exchange or a statement
285	285	certifying:
286	286	(A) the name and organizational form of each
287	287	domestic entity or non-code organization that is a party to the
288	288	merger or exchange;
289	289	(B) for a merger, the name and organizational
290	290	form of each domestic entity or non-code organization that is to be
291	291	created by the plan of merger;
292	292	(C) the name of the jurisdiction in which each
293	293	domestic entity or non-code organization named under Paragraph (A)
294	294	or (B) is incorporated or organized;
295	295	(D) for a merger, the amendments or changes to
296	296	the certificate of formation of any [each] filing entity that is a
297	297	party to the merger, or a statement that amendments or changes are
298	298	being made to the certificate of formation of any filing entity that
299	299	is a party to the merger as set forth in a restated certificate of
300	300	formation containing amendments or a certificate of amendment
301	301	attached to the certificate of merger under Subsection (d) [if no
302	302	amendments are desired to be effected by the merger, a statement to
303	303	that effect];
304	304	(E) for a merger, if no amendments or changes to
305	305	the certificate of formation of a filing entity are made under
306	306	Paragraph (D), a statement to that effect, which may also refer to a
307	307	restated certificate of formation attached to the certificate of
308	308	merger under Subsection (d);
309	309	(F) for a merger, that the certificate of
310	310	formation of each new filing entity to be created under the plan of
311	311	merger is being filed with the certificate of merger;
312	312	(G) [(F)] that a [signed] plan of merger or
313	313	exchange is on file at the principal place of business of each
314	314	surviving, acquiring, or new domestic entity or non-code
315	315	organization, and the address of each principal place of business;
316	316	and
317	317	(H) [(G)] that a copy of the plan of merger or
318	318	exchange will be on written request furnished without cost by each
319	319	surviving, acquiring, or new domestic entity or non-code
320	320	organization to any owner or member of any domestic entity that is a
321	321	party to or created by the plan of merger or exchange and, for a
322	322	merger with multiple surviving domestic entities or non-code
323	323	organizations, to any creditor or obligee of the parties to the
324	324	merger at the time of the merger if a liability or obligation is
325	325	then outstanding;
326	326	(2) if approval of the owners or members of any
327	327	domestic entity that was a party to the plan of merger or exchange
328	328	is not required by this code, a statement to that effect; and
329	329	(3) a statement that the plan of merger or exchange has
330	330	been approved as required by the laws of the jurisdiction of
331	331	formation of each organization that is a party to the merger or
332	332	exchange and by the governing documents of those organizations.
333	333	(d) As provided by Subsections (b)(1)(D) and (E), a
334	334	certificate of merger filed under this section may include as an
335	335	attachment a certificate of amendment, a restated certificate of
336	336	formation without amendment, or a restated certificate of formation
337	337	containing amendments for any filing entity that is a party to the
338	338	merger.
339	339	SECTION 14. Section 10.154(b), Business Organizations
340	340	Code, is amended to read as follows:
341	341	(b) If a certificate of conversion is required to be filed
342	342	in connection with a conversion, the certificate must be signed on
343	343	behalf of the converting entity and must include:
344	344	(1) the plan of conversion or a statement certifying
345	345	the following:
346	346	(A) the name, organizational form, and
347	347	jurisdiction of formation of the converting entity;
348	348	(B) the name, organizational form, and
349	349	jurisdiction of formation of the converted entity;
350	350	(C) that a [signed] plan of conversion is on file
351	351	at the principal place of business of the converting entity, and the
352	352	address of the principal place of business;
353	353	(D) that a [signed] plan of conversion will be on
354	354	file after the conversion at the principal place of business of the
355	355	converted entity, and the address of the principal place of
356	356	business; and
357	357	(E) that a copy of the plan of conversion will be
358	358	on written request furnished without cost by the converting entity
359	359	before the conversion or by the converted entity after the
360	360	conversion to any owner or member of the converting entity or the
361	361	converted entity; and
362	362	(2) a statement that the plan of conversion has been
363	363	approved as required by the laws of the jurisdiction of formation
364	364	and the governing documents of the converting entity.
365	365	SECTION 15. Sections 10.354(a) and (c), Business
366	366	Organizations Code, are amended to read as follows:
367	367	(a) Subject to Subsection (b), an owner of an ownership
368	368	interest in a domestic entity subject to dissenters' rights is
369	369	entitled to:
370	370	(1) dissent from:
371	371	(A) a plan of merger to which the domestic entity
372	372	is a party if owner approval is required by this code and the owner
373	373	owns in the domestic entity an ownership interest that was entitled
374	374	to vote on the plan of merger;
375	375	(B) a sale of all or substantially all of the
376	376	assets of the domestic entity if owner approval is required by this
377	377	code and the owner owns in the domestic entity an ownership interest
378	378	that was entitled to vote on the sale;
379	379	(C) a plan of exchange in which the ownership
380	380	interest of the owner is to be acquired;
381	381	(D) a plan of conversion in which the domestic
382	382	entity is the converting entity if owner approval is required by
383	383	this code and the owner owns in the domestic entity an ownership
384	384	interest that was entitled to vote on the plan of conversion; [or]
385	385	(E) a merger effected under Section 10.006 in
386	386	which:
387	387	(i) the owner is entitled to vote on the
388	388	merger; or
389	389	(ii) the ownership interest of the owner is
390	390	converted or exchanged; or
391	391	(F) a merger effected under Section 21.459(c) in
392	392	which the shares of the shareholders are converted or exchanged;
393	393	and
394	394	(2) subject to compliance with the procedures set
395	395	forth in this subchapter, obtain the fair value of that ownership
396	396	interest through an appraisal.
397	397	(c) Subsection (b) shall not apply either to a domestic
398	398	entity that is a subsidiary with respect to a merger under Section
399	399	10.006 or to a corporation with respect to a merger under Section
400	400	21.459(c).
401	401	SECTION 16. Section 10.355, Business Organizations Code, is
402	402	amended by adding Subsections (b-1) and (f) and amending
403	403	Subsections (c) and (d) to read as follows:
404	404	(b-1) If a corporation effects a merger under Section
405	405	21.459(c), the responsible organization shall notify the
406	406	shareholders of that corporation who have a right to dissent to the
407	407	plan of merger under Section 10.354 of their rights under this
408	408	subchapter not later than the 10th day after the effective date of
409	409	the merger. Notice required under this subsection that is given to
410	410	shareholders before the effective date of the merger may, but is not
411	411	required to, contain a statement of the merger's effective date. If
412	412	the notice is not given to the shareholders until on or after the
413	413	effective date of the merger, the notice must contain a statement of
414	414	the merger's effective date.
415	415	(c) A notice required to be provided under Subsection (a),
416	416	[or] (b), or (b-1) must:
417	417	(1) be accompanied by a copy of this subchapter; and
418	418	(2) advise the owner of the location of the
419	419	responsible organization's principal executive offices to which a
420	420	notice required under Section 10.356(b)(1) or a demand under
421	421	Section 10.356(b)(3), or both, [(3)] may be provided.
422	422	(d) In addition to the requirements prescribed by
423	423	Subsection (c), a notice required to be provided:
424	424	(1) under Subsection (a)(1) must accompany the notice
425	425	of the meeting to consider the action;
426	426	(2) [, and a notice required] under Subsection (a)(2)
427	427	must be provided to:
428	428	(A) [(1)] each owner who consents in writing to
429	429	the action before the owner delivers the written consent; and
430	430	(B) [(2)] each owner who is entitled to vote on
431	431	the action and does not consent in writing to the action before the
432	432	11th day after the date the action takes effect; and
433	433	(3) under Subsection (b-1) must be provided:
434	434	(A) if given before the consummation of the
435	435	tender or exchange offer described by Section 21.459(c)(2), to each
436	436	shareholder to whom that offer is made; or
437	437	(B) if given after the consummation of the tender
438	438	or exchange offer described by Section 21.459(c)(2), to each
439	439	shareholder who did not tender the shareholder's shares in that
440	440	offer.
441	441	(f) If the notice given under Subsection (b-1) did not
442	442	include a statement of the effective date of the merger, the
443	443	responsible organization shall, not later than the 10th day after
444	444	the effective date, give a second notice to the shareholders
445	445	notifying them of the merger's effective date. If the second notice
446	446	is given after the later of the date on which the tender or exchange
447	447	offer described by Section 21.459(c)(2) is consummated or the 20th
448	448	day after the date notice under Subsection (b-1) is given, then the
449	449	second notice is required to be given to only those shareholders who
450	450	have made a demand under Section 10.356(b)(3).
451	451	SECTION 17. Section 10.356(b), Business Organizations
452	452	Code, is amended to read as follows:
453	453	(b) To perfect the owner's rights of dissent and appraisal
454	454	under Section 10.354, an owner:
455	455	(1) if the proposed action is to be submitted to a vote
456	456	of the owners at a meeting, must give to the domestic entity a
457	457	written notice of objection to the action that:
458	458	(A) is addressed to the entity's president and
459	459	secretary;
460	460	(B) states that the owner's right to dissent will
461	461	be exercised if the action takes effect;
462	462	(C) provides an address to which notice of
463	463	effectiveness of the action should be delivered or mailed; and
464	464	(D) is delivered to the entity's principal
465	465	executive offices before the meeting;
466	466	(2) with respect to the ownership interest for which
467	467	the rights of dissent and appraisal are sought:
468	468	(A) must vote against the action if the owner is
469	469	entitled to vote on the action and the action is approved at a
470	470	meeting of the owners; and
471	471	(B) may not consent to the action if the action is
472	472	approved by written consent; and
473	473	(3) must give to the responsible organization a demand
474	474	in writing that:
475	475	(A) is addressed to the president and secretary
476	476	of the responsible organization;
477	477	(B) demands payment of the fair value of the
478	478	ownership interests for which the rights of dissent and appraisal
479	479	are sought;
480	480	(C) provides to the responsible organization an
481	481	address to which a notice relating to the dissent and appraisal
482	482	procedures under this subchapter may be sent;
483	483	(D) states the number and class of the ownership
484	484	interests of the domestic entity owned by the owner and the fair
485	485	value of the ownership interests as estimated by the owner; and
486	486	(E) is delivered to the responsible organization
487	487	at its principal executive offices at the following time:
488	488	(i) not later than the 20th day after the
489	489	date the responsible organization sends to the owner the notice
490	490	required by Section 10.355(e) that the action has taken effect, if
491	491	the action was approved by a vote of the owners at a meeting;
492	492	(ii) not later than the 20th day after the
493	493	date the responsible organization sends to the owner the notice
494	494	required by Section 10.355(d)(2) that the action has taken effect,
495	495	if the action was approved by the written consent of the owners;
496	496	[or]
497	497	(iii) not later than the 20th day after the
498	498	date the responsible organization sends to the owner a notice that
499	499	the merger was effected, if the action is a merger effected under
500	500	Section 10.006; or
501	501	(iv) not later than the 20th day after the
502	502	date the responsible organization gives to the shareholder the
503	503	notice required by Section 10.355(b-1) or the date of the
504	504	consummation of the tender or exchange offer described by Section
505	505	21.459(c)(2), whichever is later, if the action is a merger
506	506	effected under Section 21.459(c).
507	507	SECTION 18. Section 11.001(3), Business Organizations
508	508	Code, is amended to read as follows:
509	509	(3) "Existing claim" with respect to an entity means:
510	510	(A) a claim [against the entity] that existed
511	511	before the entity's termination and is not barred by limitations;
512	512	or
513	513	(B) a contractual obligation incurred after
514	514	termination.
515	515	SECTION 19. Section 20.001, Business Organizations Code, is
516	516	amended to read as follows:
517	517	Sec. 20.001. SIGNATURE REQUIREMENTS FOR FILING INSTRUMENTS
518	518	[REQUIREMENT THAT FILING INSTRUMENT BE SIGNED BY OFFICER]. (a)
519	519	Unless otherwise provided by Section 3.054 or 3.060(b) or this
520	520	title, a filing instrument of a corporation must be signed by an
521	521	officer of the corporation.
522	522	(b) A certificate of termination, a certificate of
523	523	reinstatement, a certificate of amendment to cancel an event
524	524	requiring winding up, or a restated certificate of formation that
525	525	contains an amendment to cancel an event requiring winding up may be
526	526	signed by:
527	527	(1) one of the organizers if the winding up, the
528	528	reinstatement, or the cancellation of an event requiring winding up
529	529	was authorized by the organizers under Section 21.502(2) or
530	530	22.302(1)(B); or
531	531	(2) one of the directors if the winding up, the
532	532	reinstatement, or the cancellation of an event requiring winding up
533	533	was authorized by the board of directors under Section 21.502(2) or
534	534	22.302(1)(B).
535	535	SECTION 20. Section 21.052, Business Organizations Code, is
536	536	amended by adding Subsection (d) to read as follows:
537	537	(d) This section does not affect:
538	538	(1) the authority of the shareholders of a corporation
539	539	to consent in writing to the cancellation of an event requiring
540	540	winding up in accordance with Section 21.502(1); or
541	541	(2) the authority of the organizers of a corporation
542	542	to adopt a resolution to cancel an event requiring winding up in
543	543	accordance with Section 21.502(2).
544	544	SECTION 21. Section 21.053, Business Organizations Code, is
545	545	amended by amending Subsection (a) and adding Subsection (c) to
546	546	read as follows:
547	547	(a) If a corporation does not have any issued and
548	548	outstanding shares, or in the case of an amendment under Subsection
549	549	(b) or (c), the board of directors may adopt a proposed amendment to
550	550	the corporation's certificate of formation by resolution without
551	551	shareholder approval.
552	552	(c) Notwithstanding Section 21.054 and except as otherwise
553	553	provided by the certificate of formation, the board of directors of
554	554	a corporation that has outstanding shares may, without shareholder
555	555	approval, adopt an amendment to the corporation's certificate of
556	556	formation to change the word or abbreviation in its corporate name
557	557	as required by Section 5.054(a) to be a different word or
558	558	abbreviation required by that section.
559	559	SECTION 22. Section 21.056(a), Business Organizations
560	560	Code, is amended to read as follows:
561	561	(a) A corporation may adopt a restated certificate of
562	562	formation as provided by Subchapter B, Chapter 3, by following the
563	563	same procedures to amend its certificate of formation under
564	564	Sections 21.052-21.055, except that:
565	565	(1) shareholder approval is not required if an
566	566	amendment is not adopted; and
567	567	(2) the shareholders of a corporation may consent in
568	568	writing, or the organizers of a corporation may adopt a resolution,
569	569	to authorize a restated certificate of formation that contains an
570	570	amendment to cancel an event requiring winding up in accordance
571	571	with Section 21.502(1) or (2).
572	572	SECTION 23. Section 21.102, Business Organizations Code, is
573	573	amended to read as follows:
574	574	Sec. 21.102. TERM OF AGREEMENT. Any limit on the term or
575	575	duration of a shareholders' agreement under this subchapter must be
576	576	set forth in the agreement. A shareholders' agreement under this
577	577	subchapter that was in effect before September 1, 2015, remains in
578	578	effect for 10 years, unless the agreement provides otherwise. [A
579	579	shareholders' agreement under this subchapter is valid for 10
580	580	years, unless the agreement provides otherwise.]
581	581	SECTION 24. Section 21.160, Business Organizations Code, is
582	582	amended by adding Subsection (d) to read as follows:
583	583	(d) The amount of the consideration to be received for
584	584	shares may be determined in accordance with Subsection (a) by the
585	585	approval of a formula to determine that amount.
586	586	SECTION 25. Section 21.371, Business Organizations Code, is
587	587	amended to read as follows:
588	588	Sec. 21.371. PROCEDURES IN BYLAWS RELATING TO PROXIES. (a)
589	589	A corporation may establish in the corporation's bylaws procedures
590	590	consistent with this code for determining the validity of proxies
591	591	and determining whether shares that are held of record by a bank,
592	592	broker, or other nominee are represented at a meeting of
593	593	shareholders. The procedures may incorporate rules of and
594	594	determinations made by a stock exchange or self-regulatory
595	595	organization regulating the corporation or that bank, broker, or
596	596	other nominee.
597	597	(b) The bylaws may contain one or both of the following:
598	598	(1) a provision requiring that, when soliciting
599	599	proxies or consents with respect to an election of directors, the
600	600	corporation include in both its proxy statement and any form of its
601	601	proxy or consent, in addition to individuals nominated by the board
602	602	of directors, one or more individuals nominated by a shareholder,
603	603	subject to any procedures or conditions as may be provided in the
604	604	bylaws; and
605	605	(2) a provision requiring that the corporation
606	606	reimburse expenses incurred by a shareholder in soliciting proxies
607	607	or consents with respect to an election of directors so long as the
608	608	provision does not apply to any election for which the record date
609	609	precedes the adoption of the bylaw provision, but subject to any
610	610	procedures or conditions as may be provided in the bylaws.
611	611	SECTION 26. Section 21.459, Business Organizations Code, is
612	612	amended by adding Subsections (c), (d), and (e) to read as follows:
613	613	(c) This subsection applies only to a corporation that is a
614	614	party to the merger and whose shares are, immediately before the
615	615	date its board of directors approves the plan of merger, either
616	616	listed on a national securities exchange or held of record by at
617	617	least 2,000 shareholders. Unless required by the corporation's
618	618	certificate of formation, a plan of merger is not required to be
619	619	approved by the shareholders of the corporation if:
620	620	(1) the plan of merger expressly:
621	621	(A) permits or requires the merger to be effected
622	622	under this subsection; and
623	623	(B) provides that any merger effected under this
624	624	subsection shall be effected as soon as practicable following the
625	625	consummation of the offer described by Subdivision (2);
626	626	(2) an organization consummates a tender or exchange
627	627	offer for all of the outstanding shares of the corporation on the
628	628	terms provided in the plan of merger that, absent this subsection,
629	629	would be entitled to vote on the approval of the plan of merger,
630	630	except that the offer may exclude shares of the corporation owned at
631	631	the time of the commencement of the offer by:
632	632	(A) the corporation;
633	633	(B) the organization making the offer;
634	634	(C) any person who owns, directly or indirectly,
635	635	all of the ownership interests in the organization making the
636	636	offer; or
637	637	(D) any direct or indirect wholly owned
638	638	subsidiary of a person described by Paragraph (A), (B), or (C);
639	639	(3) shares that are irrevocably accepted for purchase
640	640	or exchange pursuant to the consummation of the offer described by
641	641	Subdivision (2) and that are received by the depository before the
642	642	expiration of the offer in addition to the shares that are otherwise
643	643	owned by the consummating organization equal at least the
644	644	percentage of the shares, and of each class or series of those
645	645	shares, of the corporation that, absent this subsection, would be
646	646	required to approve the plan of merger by:
647	647	(A) Section 21.457 and, if applicable, Section
648	648	21.458; and
649	649	(B) the certificate of formation of the
650	650	corporation;
651	651	(4) the organization consummating the offer described
652	652	by Subdivision (2) merges with or into the corporation pursuant to
653	653	the plan of merger; and
654	654	(5) each outstanding share of each class or series of
655	655	the corporation that is the subject of and not irrevocably accepted
656	656	for purchase or exchange in the offer described by Subdivision (2)
657	657	is to be converted or exchanged in the merger into, or into the
658	658	right to receive, the same amount and kind of consideration, as
659	659	described by Section 10.002(a)(5), as to be paid or delivered for
660	660	shares of such class or series of the corporation irrevocably
661	661	accepted for purchase or exchange in the offer.
662	662	(d) In Subsection (c) and this subsection and, as
663	663	applicable, in Sections 10.355(d)(3)(B), 10.355(f), and
664	664	10.356(b)(3)(E)(iv):
665	665	(1) "Consummates," "consummation," or "consummating"
666	666	means irrevocably accepts for purchase or exchange shares tendered
667	667	pursuant to a tender or exchange offer.
668	668	(2) "Depository" means an agent appointed to
669	669	facilitate consummation of the offer described by Subsection
670	670	(c)(2).
671	671	(e) For purposes of Subsection (c)(3), "received," with
672	672	respect to shares, means:
673	673	(1) physical receipt of a certificate representing
674	674	shares, in the case of certificated shares; and
675	675	(2) transfer into the depository's account or an
676	676	agent's message being received by the depository, in the case of
677	677	uncertificated shares.
678	678	SECTION 27. Section 22.109(a), Business Organizations
679	679	Code, is amended to read as follows:
680	680	(a) A [The board of directors of a] corporation may adopt a
681	681	restated certificate of formation as provided by Subchapter B,
682	682	Chapter 3, by following the same procedure to amend its [the
683	683	corporation's] certificate of formation provided by Sections
684	684	22.104-22.107, except that:
685	685	(1) member approval is required only if the restated
686	686	certificate of formation contains an amendment; and
687	687	(2) the members may consent in writing, or the
688	688	organizers of a corporation may adopt a resolution, to authorize a
689	689	restated certificate of formation that contains an amendment to
690	690	cancel an event requiring winding up in accordance with Section
691	691	22.302(1)(B) or 22.302(2), as applicable.
692	692	SECTION 28. Section 22.164, Business Organizations Code, is
693	693	amended by amending Subsection (b) and adding Subsection (d) to
694	694	read as follows:
695	695	(b) Except as otherwise provided by Subsection (c) or (d) or
696	696	the certificate of formation in accordance with Section 22.162, the
697	697	vote required for approval of a fundamental action is:
698	698	(1) at least two-thirds of the votes that members
699	699	present in person or by proxy are entitled to cast at the meeting at
700	700	which the action is submitted for a vote, if the corporation has
701	701	members with voting rights;
702	702	(2) at least two-thirds of the votes of members
703	703	present at the meeting at which the action is submitted for a vote,
704	704	if the management of the affairs of the corporation is vested in the
705	705	corporation's members under Section 22.202; or
706	706	(3) the affirmative vote of the majority of the
707	707	directors in office, if the corporation has no members or has no
708	708	members with voting rights.
709	709	(d) If the corporation has no members or has no members with
710	710	voting rights and the corporation does not hold any assets and has
711	711	not solicited any assets or otherwise engaged in activities, the
712	712	vote required for approval of a fundamental action consisting of an
713	713	amendment to the certificate of formation to cancel an event
714	714	requiring winding up or any of the actions described by Subsections
715	715	(a)(2) through (a)(6) is the affirmative vote of a majority of the
716	716	organizers or a majority of the directors in office.
717	717	SECTION 29. Section 22.302, Business Organizations Code, is
718	718	amended to read as follows:
719	719	Sec. 22.302. CERTAIN PROCEDURES FOR APPROVAL. To approve a
720	720	voluntary winding up, a reinstatement, a cancellation of an event
721	721	requiring winding up, a revocation of a voluntary decision to wind
722	722	up, or a distribution plan, a corporation must follow the following
723	723	procedures:
724	724	(1) if the corporation has no members or has no members
725	725	with voting rights and the corporation:
726	726	(A) holds any assets or has solicited any assets
727	727	or otherwise engaged in activities, the corporation's board of
728	728	directors must adopt a resolution to wind up, to reinstate, to
729	729	cancel the event requiring winding up, to revoke a voluntary
730	730	decision to wind up, or to effect the distribution plan by the vote
731	731	of directors required by Section 22.164(b)(3) [22.164]; or
732	732	(B) does not hold any assets and has not
733	733	solicited any assets or otherwise engaged in activities, a majority
734	734	of the organizers or the board of directors of the corporation must
735	735	adopt a resolution to wind up, to reinstate, to cancel an event
736	736	requiring winding up, to revoke a voluntary decision to wind up, or
737	737	to effect the distribution plan by the vote required by Section
738	738	22.164(d);
739	739	(2) if the management of the affairs of the
740	740	corporation is vested in the corporation's members under Section
741	741	22.202, the winding up, reinstatement, cancellation of event
742	742	requiring winding up, revocation of voluntary decision to wind up,
743	743	or distribution plan:
744	744	(A) must be submitted to a vote at an annual,
745	745	regular, or special meeting of members; and
746	746	(B) must be approved by the members by the vote
747	747	required by Section 22.164(b)(2) [22.164]; or
748	748	(3) if the corporation has members with voting rights:
749	749	(A) the corporation's board of directors must
750	750	approve a resolution:
751	751	(i) recommending the winding up,
752	752	reinstatement, cancellation of event requiring winding up,
753	753	revocation of a voluntary decision to wind up, or distribution
754	754	plan; and
755	755	(ii) directing that the winding up,
756	756	reinstatement, cancellation of event requiring winding up,
757	757	revocation of a voluntary decision to wind up, or distribution plan
758	758	of the corporation be submitted to a vote at an annual or special
759	759	meeting of members; and
760	760	(B) the members must approve the action described
761	761	by Paragraph (A) in accordance with Section 22.303.
762	762	SECTION 30. Chapter 21, Business Organizations Code, is
763	763	amended by adding Subchapter R to read as follows:
764	764	SUBCHAPTER R. RATIFICATION OF DEFECTIVE CORPORATE ACTS OR SHARES;
765	765	PROCEEDINGS
766	766	Sec. 21.901. DEFINITIONS. In this subchapter:
767	767	(1) "Corporate statute," with respect to an action or
768	768	filing, means this code, the former Texas Business Corporation Act,
769	769	or any predecessor statute of this state that governed the action or
770	770	the filing.
771	771	(2) "Defective corporate act" means:
772	772	(A) an overissue;
773	773	(B) an election or appointment of directors that
774	774	is void or voidable due to a failure of authorization; or
775	775	(C) any act or transaction purportedly taken by
776	776	or on behalf of the corporation that is, and at the time the act or
777	777	transaction was purportedly taken would have been, within the power
778	778	of a corporation to take under the corporate statute, but is void or
779	779	voidable due to a failure of authorization.
780	780	(3) "District court" means a district court in:
781	781	(A) the county in which the corporation's
782	782	principal office in this state is located; or
783	783	(B) the county in which the corporation's
784	784	registered office in this state is located, if the corporation does
785	785	not have a principal office in this state.
786	786	(4) "Failure of authorization" means the failure to
787	787	authorize or effect an act or transaction in compliance with the
788	788	provisions of the corporate statute, the governing documents of the
789	789	corporation, or any plan or agreement to which the corporation is a
790	790	party, if and to the extent the failure would render the act or
791	791	transaction void or voidable.
792	792	(5) "Overissue" means the purported issuance of:
793	793	(A) shares of a class or series in excess of the
794	794	number of shares of that class or series that the corporation has
795	795	the power to issue under the corporate statute at the time of
796	796	issuance; or
797	797	(B) shares of any class or series that are not at
798	798	the time authorized for issuance by the governing documents of the
799	799	corporation.
800	800	(6) "Putative shares" means the shares of any class or
801	801	series of the corporation, including shares issued on exercise of
802	802	options, rights, warrants, or other securities convertible into
803	803	shares of the corporation, or interests with respect to the shares
804	804	that were created or issued pursuant to a defective corporate act,
805	805	that:
806	806	(A) would constitute valid shares, if not for a
807	807	failure of authorization; or
808	808	(B) cannot be determined by the board of
809	809	directors to be valid shares.
810	810	(7) "Time of the defective corporate act" means the
811	811	date and time the defective corporate act was purported to have been
812	812	taken.
813	813	(8) "Validation effective time" or "effective time of
814	814	the validation," with respect to any defective corporate act
815	815	ratified under this subchapter, means the later of:
816	816	(A) the time at which the resolution submitted to
817	817	the shareholders for adoption under Section 21.905 is adopted by
818	818	the shareholders or, if no shareholder approval is required for
819	819	adoption, the time at which the notice required by Section 21.911 is
820	820	given; or
821	821	(B) the time at which any certificate of
822	822	validation filed under Section 21.908 takes effect in accordance
823	823	with Chapter 4.
824	824	(9) "Valid shares" means the shares of any class or
825	825	series of the corporation that have been authorized and validly
826	826	issued in accordance with the corporate statute.
827	827	Sec. 21.902. RATIFICATION OF DEFECTIVE CORPORATE ACT AND
828	828	PUTATIVE SHARES. Subject to Section 21.909 or 21.910, a defective
829	829	corporate act or putative shares are not void or voidable solely as
830	830	a result of a failure of authorization if the act or shares are:
831	831	(1) ratified in accordance with this subchapter; or
832	832	(2) validated by the district court in a proceeding
833	833	brought under Section 21.914.
834	834	Sec. 21.903. RATIFICATION OF DEFECTIVE CORPORATE ACT;
835	835	ADOPTION OF RESOLUTION. (a) To ratify a defective corporate act,
836	836	the board of directors of the corporation shall adopt a resolution
837	837	stating:
838	838	(1) the defective corporate act to be ratified;
839	839	(2) the time of the defective corporate act;
840	840	(3) if the defective corporate act involved the
841	841	issuance of putative shares, the number and type of putative shares
842	842	issued and the date or dates on which the putative shares were
843	843	purportedly issued;
844	844	(4) the nature of the failure of authorization with
845	845	respect to the defective corporate act to be ratified; and
846	846	(5) that the board of directors approves the
847	847	ratification of the defective corporate act.
848	848	(b) The resolution may also state that, notwithstanding the
849	849	adoption of the resolution by the shareholders, the board of
850	850	directors may, at any time before the validation effective time,
851	851	abandon the resolution without further shareholder action.
852	852	Sec. 21.904. QUORUM AND VOTING REQUIREMENTS FOR ADOPTION OF
853	853	RESOLUTION. (a) The quorum and voting requirements applicable to
854	854	the adoption of a resolution under Section 21.903 are the same as
855	855	the quorum and voting requirements applicable at the time of the
856	856	adoption of a resolution for the type of defective corporate act
857	857	proposed to be ratified.
858	858	(b) Notwithstanding Subsection (a) and except as provided
859	859	by Subsection (c), if in order for a quorum to be present or to
860	860	approve the defective corporate act, the presence or approval of a
861	861	larger number or portion of directors or of specified directors
862	862	would have been required by the governing documents of the
863	863	corporation, any plan or agreement to which the corporation was a
864	864	party, or any provision of the corporate statute, each as in effect
865	865	at the time of the defective corporate act, then the presence or
866	866	approval of the larger number or portion of such directors or of
867	867	such specified directors must be required for a quorum to be present
868	868	or to adopt the resolution, as applicable.
869	869	(c) The presence or approval of any director elected,
870	870	appointed, or nominated by holders of any class or series of which
871	871	no shares are then outstanding, or by any person that is no longer a
872	872	shareholder, shall not be required for a quorum to be present or to
873	873	adopt the resolution.
874	874	Sec. 21.905. SHAREHOLDER ADOPTION OF RESOLUTION REQUIRED.
875	875	The resolution adopted under Section 21.903 must be submitted to
876	876	shareholders for adoption as provided by Sections 21.906 and
877	877	21.907, unless:
878	878	(1) no other provision of the corporate statute, no
879	879	provision of the corporation's governing documents, and no
880	880	provision of any plan or agreement to which the corporation is a
881	881	party would have required shareholder approval of the defective
882	882	corporate act to be ratified, either at the time of the act or at the
883	883	time when the resolution required by Section 21.903 is adopted; and
884	884	(2) the defective corporate act to be ratified did not
885	885	result from a failure to comply with Subchapter M.
886	886	Sec. 21.906. NOTICE REQUIREMENTS FOR RESOLUTION SUBMITTED
887	887	FOR SHAREHOLDER APPROVAL. (a) If Section 21.905 requires that the
888	888	resolution be submitted to the shareholders for approval, notice of
889	889	the time, place, if any, and purpose of the meeting shall be given
890	890	at least 20 days before the date of the meeting to each holder of
891	891	valid shares and putative shares, whether voting or nonvoting, at
892	892	the address of the holder as it appears or most recently appeared,
893	893	as appropriate, on the corporation's records.
894	894	(b) Notice under this section shall be given to each holder
895	895	of record of valid shares and putative shares, regardless of
896	896	whether the shares are voting or nonvoting, as of the time of the
897	897	defective corporate act, except that notice is not required to be
898	898	given to a holder whose identity or address cannot be ascertained
899	899	from the corporation's records.
900	900	(c) The notice must contain:
901	901	(1) a copy of the resolution; and
902	902	(2) a statement that the following must be brought not
903	903	later than the 120th day of the validation effective time:
904	904	(A) any claim that the defective corporate act or
905	905	putative shares ratified under this subchapter are void or voidable
906	906	due to the identified failure of authorization; or
907	907	(B) any claim that the district court, in its
908	908	discretion, should declare that a ratification made in accordance
909	909	with this subchapter not take effect or that it take effect only on
910	910	certain conditions.
911	911	Sec. 21.907. SHAREHOLDER MEETING; QUORUM AND VOTING. (a)
912	912	At the shareholder meeting, the quorum and voting requirements
913	913	applicable to the adoption of the resolution under Section 21.905
914	914	shall be the same as the quorum and voting requirements applicable
915	915	at the time of such adoption by the shareholders for the type of
916	916	defective corporate act to be ratified, except as provided by this
917	917	section.
918	918	(b) If the presence or approval of a larger number or
919	919	portion of shares or of any class or series of shares or of
920	920	specified shareholders would have been required for a quorum to be
921	921	present or to approve the defective corporate act, as applicable,
922	922	by the corporation's governing documents, any plan or agreement to
923	923	which the corporation was a party, or any provision of the corporate
924	924	statute, each as in effect at the time of the defective corporate
925	925	act, then the presence or approval of the larger number or portion
926	926	of shares or of the class or series of shares or of such specified
927	927	shareholders shall be required for a quorum to be present or to
928	928	adopt the resolution, as applicable, except that the presence or
929	929	approval of shares of any class or series of which no shares are
930	930	then outstanding, or of any person that is no longer a shareholder,
931	931	shall not be required.
932	932	(c) The adoption of a resolution to ratify the election of a
933	933	director requires the affirmative vote of the majority of shares
934	934	present at the meeting and entitled to vote on the election of the
935	935	director, unless the governing documents of the corporation then in
936	936	effect or in effect at the time of the defective election require or
937	937	required a larger number or portion of shares to elect the director,
938	938	in which case the affirmative vote of the larger number or portion
939	939	of shares is required to ratify the election of the director.
940	940	(d) If a failure of authorization results from the failure
941	941	to comply with Subchapter M, the ratification of the defective
942	942	corporate act requires the vote set forth by Section 21.606(2),
943	943	regardless of whether that vote would have otherwise been required.
944	944	Sec. 21.908. CERTIFICATE OF VALIDATION. (a) If the
945	945	defective corporate act ratified under this subchapter would have
946	946	required under any other provision of the corporate statute the
947	947	filing of a filing instrument or other document with the filing
948	948	officer, the corporation, instead of filing the filing instrument
949	949	or other document otherwise required by this code, shall file a
950	950	certificate of validation in accordance with Chapter 4, regardless
951	951	of whether a filing instrument or other document was previously
952	952	filed with respect to the defective corporate act.
953	953	(b) The certificate of validation must set forth:
954	954	(1) a copy of the resolution adopted in accordance
955	955	with Sections 21.903 and 21.904, the date of adoption of the
956	956	resolution by the board of directors and, if applicable, the date of
957	957	adoption by the shareholders, and a statement that the resolution
958	958	was adopted in accordance with this subchapter;
959	959	(2) if a filing instrument or document was previously
960	960	filed with a filing officer under the corporate statute in respect
961	961	of the defective corporate act, the title and date of filing of the
962	962	prior filing instrument or document and any articles or certificate
963	963	of correction to the filing instrument; and
964	964	(3) the provisions that would be required under any
965	965	other section of this code to be included in the filing instrument
966	966	that otherwise would have been required to be filed with respect to
967	967	the defective corporate act under this code.
968	968	Sec. 21.909. ADOPTION OF RESOLUTION; EFFECT ON DEFECTIVE
969	969	CORPORATE ACT. On or after the validation effective time, unless
970	970	determined otherwise in an action brought under Section 21.914,
971	971	each defective corporate act set forth in the resolution adopted
972	972	under Sections 21.903 and 21.904 may not be considered void or
973	973	voidable as a result of a failure of authorization identified in the
974	974	resolution, and the effect shall be retroactive to the time of the
975	975	defective corporate act.
976	976	Sec. 21.910. ADOPTION OF RESOLUTION; EFFECT ON PUTATIVE
977	977	SHARES. On or after the validation effective time, unless
978	978	determined otherwise in an action brought under Section 21.914,
979	979	each putative share or fraction of a putative share issued or
980	980	purportedly issued pursuant to the defective corporate act and
981	981	identified in the resolution adopted under Sections 21.903 and
982	982	21.904 may not be considered void or voidable as a result of a
983	983	failure of authorization identified in the resolution and, in the
984	984	absence of any failure of authorization not ratified, is considered
985	985	to be an identical share or fraction of a share outstanding as of
986	986	the time it was purportedly issued.
987	987	Sec. 21.911. NOTICE TO SHAREHOLDERS FOLLOWING ADOPTION OF
988	988	RESOLUTION. (a) Notice of the adoption of a resolution under this
989	989	subchapter shall be given promptly to:
990	990	(1) each holder of valid shares and putative shares,
991	991	regardless of whether the shares are voting or nonvoting, as of the
992	992	date the board of directors adopted the resolution; or
993	993	(2) each holder of valid shares and putative shares,
994	994	regardless of whether the shares are voting or nonvoting, as of a
995	995	date not later than the 60th day after the date on which the
996	996	resolution is adopted, as established by the board of directors.
997	997	(b) Notice under this section shall be sent to the address
998	998	of a holder of shares described by Subsection (a)(1) or (a)(2) as
999	999	the address appears or most recently appeared, as appropriate, on
1000	1000	the records of the corporation.
1001	1001	(c) Notice under this section shall also be given to each
1002	1002	holder of record of valid shares and putative shares, regardless of
1003	1003	whether the shares are voting or nonvoting, as of the time of the
1004	1004	defective corporate act, except that notice is not required to be
1005	1005	given to a holder whose identity or address cannot be ascertained
1006	1006	from the corporation's records.
1007	1007	(d) The notice must contain:
1008	1008	(1) a copy of the resolution; and
1009	1009	(2) a statement that the following must be brought not
1010	1010	later than the 120th day of the validation effective time:
1011	1011	(A) any claim that the defective corporate act or
1012	1012	putative shares ratified under this subchapter are void or voidable
1013	1013	due to the identified failure of authorization; or
1014	1014	(B) any claim that the district court, in its
1015	1015	discretion, should declare that a ratification made in accordance
1016	1016	with this subchapter not take effect or that it take effect only on
1017	1017	certain conditions.
1018	1018	(e) Notwithstanding Subsections (a)-(d), notice is not
1019	1019	required to be given under this section if notice of the resolution
1020	1020	is given in accordance with Section 21.906.
1021	1021	(f) For purposes of Section 21.906 and this section, notice
1022	1022	to holders of putative shares and notice to holders of valid shares
1023	1023	and putative shares as of the time of the defective corporate act
1024	1024	shall be treated as notice to holders of valid shares for purposes
1025	1025	of Sections 6.051, 6.052, 6.053, 21.353, and 21.3531.
1026	1026	Sec. 21.912. VALID SHARES OR PUTATIVE SHARES. In the
1027	1027	absence of actual fraud in the transaction, the judgment of the
1028	1028	board of directors of a corporation that shares of the corporation
1029	1029	are valid shares or putative shares is conclusive, unless otherwise
1030	1030	determined by the district court in a proceeding brought under
1031	1031	Section 21.914.
1032	1032	Sec. 21.913. RATIFICATION PROCEDURES OR COURT PROCEEDINGS
1033	1033	CONCERNING VALIDATION NOT EXCLUSIVE. (a) Ratification of an act or
1034	1034	transaction under this subchapter or validation of an act or
1035	1035	transaction as provided by Sections 21.914 through 21.917 is not
1036	1036	the exclusive means of ratifying or validating any act or
1037	1037	transaction taken by or on behalf of the corporation, including any
1038	1038	defective corporate act or any issuance of putative shares or other
1039	1039	shares.
1040	1040	(b) The absence or failure of ratification of an act or
1041	1041	transaction in accordance with this subchapter or of validation of
1042	1042	an act or transaction as provided by Sections 21.914 through 21.917
1043	1043	does not, of itself, affect the validity or effectiveness of any act
1044	1044	or transaction or the issuance of any shares properly ratified
1045	1045	under common law or otherwise, nor does it create a presumption that
1046	1046	any such act or transaction is or was a defective corporate act or
1047	1047	that those shares are void or voidable.
1048	1048	Sec. 21.914. PROCEEDING REGARDING VALIDITY OF DEFECTIVE
1049	1049	CORPORATE ACTS AND SHARES. (a) The following may bring an action
1050	1050	under this section:
1051	1051	(1) the corporation;
1052	1052	(2) any successor entity to the corporation;
1053	1053	(3) any member of the corporation's board of
1054	1054	directors;
1055	1055	(4) any record or beneficial holder of valid shares or
1056	1056	putative shares of the corporation;
1057	1057	(5) any record or beneficial holder of valid shares or
1058	1058	putative shares as of the time a defective corporate act was
1059	1059	ratified in accordance with this subchapter; or
1060	1060	(6) any other person claiming to be substantially and
1061	1061	adversely affected by a ratification under this subchapter.
1062	1062	(b) Subject to Section 21.917, the district court, on
1063	1063	application by a person described by Subsection (a), may:
1064	1064	(1) determine the validity and effectiveness of any
1065	1065	defective corporate act ratified in accordance with this
1066	1066	subchapter;
1067	1067	(2) determine the validity and effectiveness of the
1068	1068	ratification of any defective corporate act in accordance with this
1069	1069	subchapter;
1070	1070	(3) determine the validity and effectiveness of:
1071	1071	(A) any defective corporate act not ratified
1072	1072	under this subchapter; or
1073	1073	(B) any defective corporate act not ratified
1074	1074	effectively under this subchapter;
1075	1075	(4) determine the validity of any corporate act or
1076	1076	transaction and of any shares, rights, or options to acquire
1077	1077	shares; and
1078	1078	(5) modify or waive any of the procedures set forth in
1079	1079	Sections 21.901 through 21.913 to ratify a defective corporate act.
1080	1080	(c) In connection with an action brought under this section,
1081	1081	the district court may:
1082	1082	(1) declare that a ratification in accordance with and
1083	1083	pursuant to this subchapter is not effective or that the
1084	1084	ratification is effective only at a time or on conditions as
1085	1085	specified by the district court;
1086	1086	(2) validate and declare effective any defective
1087	1087	corporate act or putative shares and impose conditions on such a
1088	1088	validation;
1089	1089	(3) require measures to remedy or avoid harm to any
1090	1090	person substantially and adversely affected by a ratification under
1091	1091	this subchapter or from any order of the district court pursuant to
1092	1092	this section, excluding any harm that would have resulted had the
1093	1093	defective corporate act been valid when approved or effectuated;
1094	1094	(4) order the filing officer to accept for filing an
1095	1095	instrument with an effective date and time as specified by the
1096	1096	court, which may be before or subsequent to the time of the order;
1097	1097	(5) approve share records for the corporation that
1098	1098	include any shares ratified in accordance with this subchapter or
1099	1099	validated in accordance with this section and Sections 21.915
1100	1100	through 21.917;
1101	1101	(6) declare that putative shares are valid shares or
1102	1102	require a corporation to issue and deliver valid shares in place of
1103	1103	any putative shares;
1104	1104	(7) order that a meeting of holders of valid shares or
1105	1105	putative shares be held and determine the right and power of persons
1106	1106	to vote at the meeting;
1107	1107	(8) declare that a defective corporate act validated
1108	1108	by the court is effective as of the time of the defective corporate
1109	1109	act or at such other time as determined by the court;
1110	1110	(9) declare that putative shares validated by the
1111	1111	district court are considered to be an identical valid share or a
1112	1112	fraction of a valid share as of the time the shares were originally
1113	1113	or purportedly issued or at such other time as determined by the
1114	1114	district court; and
1115	1115	(10) make any other order regarding such matters as
1116	1116	the court considers appropriate under the circumstances.
1117	1117	(d) In connection with the resolution of matters under
1118	1118	Subsections (b) and (c), the district court may consider:
1119	1119	(1) whether the defective corporate act was originally
1120	1120	approved or effectuated with the belief that the approval or
1121	1121	effectuation was in compliance with the provisions of the corporate
1122	1122	statute or the governing documents of the corporation;
1123	1123	(2) whether the corporation and the corporation's
1124	1124	board of directors have treated the defective corporate act as a
1125	1125	valid act or transaction and whether any person has acted in
1126	1126	reliance on the public record that the defective corporate act was
1127	1127	valid;
1128	1128	(3) whether any person will be or was harmed by the
1129	1129	ratification or validation of the defective corporate act,
1130	1130	excluding any harm that would have resulted had the defective
1131	1131	corporate act been valid when it was approved or took effect;
1132	1132	(4) whether any person will be harmed by the failure to
1133	1133	ratify or validate the defective corporate act; and
1134	1134	(5) any other factors or considerations the district
1135	1135	court considers just and equitable.
1136	1136	Sec. 21.915. EXCLUSIVE JURISDICTION. The district court
1137	1137	has exclusive jurisdiction to hear and determine any action brought
1138	1138	under Section 21.914.
1139	1139	Sec. 21.916. SERVICE. (a) Service of an application filed
1140	1140	under Section 21.914 on the registered agent of a corporation or in
1141	1141	any other manner permitted by applicable law is considered to be
1142	1142	service on the corporation, and no other party need be joined in
1143	1143	order for the district court to adjudicate the matter.
1144	1144	(b) If an action is brought by a corporation under Section
1145	1145	21.914, the district court may require that notice of the action be
1146	1146	provided to other persons identified by the court and permit those
1147	1147	other persons to intervene in the action.
1148	1148	Sec. 21.917. STATUTE OF LIMITATIONS. (a) This section does
1149	1149	not apply to:
1150	1150	(1) an action asserting that a ratification was not
1151	1151	accomplished in accordance with this subchapter; or
1152	1152	(2) any person to whom notice of the ratification was
1153	1153	not given as required by Sections 21.906 and 21.911.
1154	1154	(b) Notwithstanding any other provision of this subchapter,
1155	1155	the following may not be brought after the expiration of the 120th
1156	1156	day of the validation effective time:
1157	1157	(1) an action asserting that a defective corporate act
1158	1158	or putative shares ratified in accordance with this subchapter are
1159	1159	void or voidable due to a failure of authorization identified in the
1160	1160	resolution adopted in accordance with Section 21.903; or
1161	1161	(2) an action asserting that the district court, in
1162	1162	its discretion, should declare that a ratification in accordance
1163	1163	with this subchapter not take effect or that the ratification take
1164	1164	effect only on certain conditions.
1165	1165	SECTION 31. This Act takes effect September 1, 2015.