Texas 2017 - 85th Regular

Texas House Bill HB2827 Compare Versions

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Version 2 (New)

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1	1	85R17631 EES-F
2	2	By: Oliveira H.B. No. 2827
3	3	Substitute the following for H.B. No. 2827:
4	4	By: Shine C.S.H.B. No. 2827
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to corporations, associations, real estate investment
10	10	trusts, and related entities; authorizing fees.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 4.152, Business Organizations Code, is
13	13	amended to read as follows:
14	14	Sec. 4.152. FILING FEES: FOR-PROFIT CORPORATIONS. For a
15	15	filing by or for a for-profit corporation, the secretary of state
16	16	shall impose the following fees:
17	17	(1) for filing a certificate of formation, $300;
18	18	(2) for filing a certificate of amendment, $150;
19	19	(3) for filing an application of a foreign corporation
20	20	for registration to transact business in this state, $750;
21	21	(4) for filing an application of a foreign corporation
22	22	for an amended registration to transact business in this state,
23	23	$150;
24	24	(5) for filing a restated certificate of formation and
25	25	accompanying statement, $300;
26	26	(6) for filing a statement of change of registered
27	27	office, registered agent, or both, $15;
28	28	(7) for filing a statement of change of name or address
29	29	of a registered agent, $15, except that the maximum fee for
30	30	simultaneous filings by a registered agent for more than one
31	31	corporation may not exceed $750;
32	32	(8) for filing a statement of resolution establishing
33	33	one or more series of shares, $15;
34	34	(9) for filing a certificate of termination, $40;
35	35	(10) for filing a certificate of withdrawal of a
36	36	foreign corporation, $15;
37	37	(11) for filing a certificate from the home state of a
38	38	foreign corporation that the corporation no longer exists in that
39	39	state, $15;
40	40	(12) for filing a bylaw or agreement restricting
41	41	transfer of shares or securities other than as an amendment to the
42	42	certificate of formation, $15;
43	43	(13) for filing an application for reinstatement of a
44	44	certificate of formation or registration as a foreign corporation
45	45	following forfeiture under the Tax Code, $75;
46	46	(14) for filing an application for reinstatement of a
47	47	corporation or registration as a foreign corporation after
48	48	involuntary termination or revocation, $75; [and]
49	49	(15) for filing a certificate of validation, $15, plus
50	50	the filing fee imposed for filing each new filing instrument that is
51	51	attached as an exhibit to the certificate of validation under
52	52	Section 21.908(b)(3)(C); and
53	53	(16) for filing any instrument as provided by this
54	54	code for which this section does not expressly provide a fee, $15.
55	55	SECTION 2. Section 4.159, Business Organizations Code, is
56	56	amended to read as follows:
57	57	Sec. 4.159. FILING FEES: NONPROFIT ASSOCIATIONS. For a
58	58	filing by or for a nonprofit association, the secretary of state
59	59	shall impose the following fees:
60	60	(1) for filing a statement appointing an agent to
61	61	receive service of process, $25;
62	62	(2) for filing an amendment of a statement appointing
63	63	an agent, $5; [and]
64	64	(3) for filing a cancellation of a statement
65	65	appointing an agent, $5;
66	66	(4) for filing a certificate of merger or conversion,
67	67	regardless of whether the surviving or new nonprofit organization
68	68	is a domestic or foreign entity, $50; and
69	69	(5) for filing any instrument of a nonprofit
70	70	association as provided by this code for which this section does not
71	71	expressly provide a fee, $5.
72	72	SECTION 3. Subchapter D, Chapter 6, Business Organizations
73	73	Code, is amended by adding Section 6.157 to read as follows:
74	74	Sec. 6.157. VOTING OF JOINTLY HELD OWNERSHIP INTERESTS.
75	75	(a) In this section, "jointly held ownership interest" means:
76	76	(1) an ownership interest that is held of record in the
77	77	names of two or more persons, whether fiduciaries, joint tenants,
78	78	tenants in common, or otherwise; or
79	79	(2) an ownership interest for which two or more
80	80	persons have the right to vote the interest under Section 6.154.
81	81	(b) A jointly held ownership interest may be voted by:
82	82	(1) for a jointly held ownership interest as defined
83	83	by Subsection (a)(1), any one of the record owners; or
84	84	(2) for a jointly held ownership interest as defined
85	85	by Subsection (a)(2), any one of the persons having the right to
86	86	vote the interest, as described by Section 6.154.
87	87	(c) If a jointly held ownership interest is voted by more
88	88	than one person as described by Subsection (b), the act of a
89	89	majority of the persons voting binds all of the record owners or
90	90	persons having the right to vote the interest.
91	91	(d) If a jointly held ownership interest is voted by more
92	92	than one person as described by Subsection (b), and the votes of the
93	93	persons are evenly split on any particular matter, each faction may
94	94	vote the interest proportionately.
95	95	(e) Subsection (b), (c), or (d) does not apply if the
96	96	secretary or other person tabulating votes on the entity's behalf
97	97	has a good faith belief, based on written information the person
98	98	received regarding rights or obligations with respect to voting the
99	99	jointly held ownership interest, that reliance on Subsection (b),
100	100	(c), or (d), as applicable, is unwarranted.
101	101	SECTION 4. Section 10.010, Business Organizations Code, is
102	102	amended to read as follows:
103	103	Sec. 10.010. SPECIAL PROVISIONS APPLYING TO NONPROFIT
104	104	CORPORATION AND NONPROFIT ASSOCIATION MERGERS. (a) A domestic
105	105	nonprofit corporation or nonprofit association may not merge into
106	106	another entity if the domestic nonprofit corporation or nonprofit
107	107	association would, because of the merger, lose or impair its
108	108	charitable status.
109	109	(b) One or more domestic or foreign for-profit entities or
110	110	non-code organizations may merge into one or more domestic
111	111	nonprofit corporations or nonprofit associations that continue as
112	112	the surviving entity or entities.
113	113	(c) A domestic nonprofit corporation or nonprofit
114	114	association may not merge with a foreign for-profit entity if the
115	115	domestic nonprofit corporation or nonprofit association does not
116	116	continue as the surviving entity.
117	117	(d) One or more domestic nonprofit corporations or
118	118	nonprofit associations and non-code organizations may merge into
119	119	one or more foreign nonprofit entities that continue as the
120	120	surviving entity or entities.
121	121	SECTION 5. Section 10.108, Business Organizations Code, is
122	122	amended to read as follows:
123	123	Sec. 10.108. SPECIAL PROVISIONS APPLYING TO NONPROFIT
124	124	CORPORATION AND NONPROFIT ASSOCIATION CONVERSIONS. A domestic
125	125	nonprofit corporation or nonprofit association may not convert into
126	126	a for-profit entity.
127	127	SECTION 6. Section 21.157, Business Organizations Code, is
128	128	amended by adding Subsection (d) to read as follows:
129	129	(d) The authorization by the board of directors for the
130	130	issuance of shares may provide that any shares to be issued under
131	131	the authorization may be issued:
132	132	(1) in one or more transactions in the numbers and at
133	133	the times as stated in or determined by the authorization; or
134	134	(2) in the manner stated in the authorization, which
135	135	may include a determination or action by any person or persons,
136	136	including the corporation, if the authorization states:
137	137	(A) the maximum number of shares that may be
138	138	issued under the authorization;
139	139	(B) the period during which the shares may be
140	140	issued; and
141	141	(C) the minimum amount of consideration for which
142	142	the shares may be issued.
143	143	SECTION 7. Section 21.160(d), Business Organizations Code,
144	144	is amended to read as follows:
145	145	(d) The amount of the consideration to be received for
146	146	shares may be determined in accordance with Subsection (a) by the
147	147	approval of a minimum amount of consideration or a formula to
148	148	determine that amount. The formula may include or be made dependent
149	149	on facts ascertainable outside the formula, if the manner in which
150	150	those facts operate on the formula is clearly or expressly set forth
151	151	in the formula or in the authorization approving the formula.
152	152	SECTION 8. Section 21.168(c), Business Organizations Code,
153	153	is amended to read as follows:
154	154	(c) Subject to the certificate of formation, a right or
155	155	option described by this section must state the terms on which, the
156	156	time within which, and any consideration, including a formula by
157	157	which the consideration may be determined, for which the shares may
158	158	be purchased or received from the corporation on the exercise of the
159	159	right or option. A formula by which the consideration may be
160	160	determined may include or be made dependent on facts ascertainable
161	161	outside the formula, if the manner in which those facts operate on
162	162	the formula is clearly or expressly set forth in the formula or in
163	163	the authorization approving the formula.
164	164	SECTION 9. Section 21.218(b), Business Organizations Code,
165	165	is amended to read as follows:
166	166	(b) On [Subject to the governing documents and on] written
167	167	demand stating a proper purpose, a holder of shares of a corporation
168	168	for at least six months immediately preceding the holder's demand,
169	169	or a holder of at least five percent of all of the outstanding
170	170	shares of a corporation, is entitled to examine and copy, at a
171	171	reasonable time, the corporation's [relevant] books, records of
172	172	account, minutes, and share transfer records relating to the stated
173	173	purpose. The examination may be conducted in person or through an
174	174	agent, accountant, or attorney.
175	175	SECTION 10. Section 21.302, Business Organizations Code, is
176	176	amended to read as follows:
177	177	Sec. 21.302. AUTHORITY FOR DISTRIBUTIONS. (a) The board of
178	178	directors of a corporation may authorize a distribution and the
179	179	corporation may make a distribution, subject to Section 21.303.
180	180	(b) The board of directors may authorize a distribution by
181	181	determining the maximum amount that may be distributed and the
182	182	period during which the maximum amount may be distributed,
183	183	including by setting a formula to determine the amount to be
184	184	distributed. The authorization by the board of directors for a
185	185	distribution may provide that the distribution be paid:
186	186	(1) in the amounts and at the times as stated in the
187	187	authorization; or
188	188	(2) in the manner stated in the authorization, which
189	189	may include a determination or action by any person or persons,
190	190	including the corporation, if the authorization states the maximum
191	191	amount that may be distributed under the authorization and the
192	192	period during which the maximum amount may be distributed.
193	193	SECTION 11. Section 21.414, Business Organizations Code, is
194	194	amended to read as follows:
195	195	Sec. 21.414. DISSENT TO OR ABSTENTION FROM ACTION. (a) A
196	196	director of a corporation who is present at a meeting of the board
197	197	of directors at which action has been taken is presumed to have
198	198	assented to the action taken unless:
199	199	(1) the director's dissent or abstention has been
200	200	entered in the minutes of the meeting;
201	201	(2) the director has filed a written dissent or
202	202	abstention with respect to the action with the person acting as the
203	203	secretary of the meeting before the meeting is adjourned; or
204	204	(3) the director has sent [a written dissent by
205	205	registered mail] to the secretary of the corporation, within a
206	206	reasonable time [immediately] after the meeting has been adjourned,
207	207	a written dissent or abstention by:
208	208	(A) certified or registered mail, return receipt
209	209	requested; or
210	210	(B) other means specified in the corporation's
211	211	governing documents.
212	212	(b) A director who voted in favor of an action may not
213	213	dissent or abstain with respect to the action.
214	214	SECTION 12. Section 21.458(a), Business Organizations
215	215	Code, is amended to read as follows:
216	216	(a) Separate voting by a class or series of shares of a
217	217	corporation is required for approval of a plan of merger or
218	218	conversion if:
219	219	(1) that class or series of shares is, under the plan
220	220	of merger or conversion, to be converted into or exchanged for other
221	221	securities, interests, obligations, rights to acquire shares,
222	222	interests, or other securities, cash, property, or any combination
223	223	of the items described by this subdivision;
224	224	(2) the plan of merger or conversion contains a
225	225	provision that would require approval by that class or series of
226	226	shares under Section 21.364 if the provision was contained in a
227	227	proposed amendment to the corporation's certificate of formation;
228	228	or
229	229	(3) [(2)] that class or series of shares is entitled
230	230	under the certificate of formation to vote as a class or series on
231	231	the plan of merger or conversion.
232	232	SECTION 13. Section 21.607, Business Organizations Code, is
233	233	amended to read as follows:
234	234	Sec. 21.607. APPLICATION OF MORATORIUM. Section 21.606
235	235	does not apply to:
236	236	(1) a business combination of an issuing public
237	237	corporation if:
238	238	(A) the original articles of incorporation or
239	239	certificate of formation, as applicable, or the original bylaws of
240	240	the corporation contain a provision expressly electing not to be
241	241	governed by this subchapter;
242	242	(B) before December 31, 1997, the corporation
243	243	adopted an amendment to the articles of incorporation or bylaws of
244	244	the corporation expressly electing not to be governed by this
245	245	subchapter; or
246	246	(C) after December 31, 1997, the corporation
247	247	adopts an amendment to the articles of incorporation or certificate
248	248	of formation, as applicable, or the bylaws of the corporation,
249	249	approved by the affirmative vote of the holders, other than an
250	250	affiliated shareholder or an affiliate or associate of the
251	251	affiliated shareholder, of at least two-thirds of the outstanding
252	252	voting shares of the issuing public corporation, expressly electing
253	253	not to be governed by this subchapter, except that the amendment to
254	254	the articles of incorporation or certificate of formation, as
255	255	applicable, or the bylaws takes effect 18 months after the date of
256	256	the vote and does not apply to a business combination of the issuing
257	257	public corporation with an affiliated shareholder whose share
258	258	acquisition date is on or before the effective date of the
259	259	amendment;
260	260	(2) a business combination of an issuing public
261	261	corporation with an affiliated shareholder who became an affiliated
262	262	shareholder inadvertently, if the affiliated shareholder:
263	263	(A) as soon as practicable divests itself of a
264	264	sufficient number of the voting shares of the issuing public
265	265	corporation so that the affiliated shareholder no longer is the
266	266	beneficial owner, directly or indirectly, of 20 percent or more of
267	267	the outstanding voting shares of the issuing public corporation;
268	268	and
269	269	(B) would not at any time within the three-year
270	270	period preceding the announcement date of the business combination
271	271	have been an affiliated shareholder except for the inadvertent
272	272	acquisition;
273	273	(3) a business combination with an affiliated
274	274	shareholder who was the beneficial owner of 20 percent or more of
275	275	the outstanding voting shares of the issuing public corporation on
276	276	December 31, 1996, and continuously until the announcement date of
277	277	the business combination;
278	278	(4) a business combination with an affiliated
279	279	shareholder who became an affiliated shareholder through a transfer
280	280	of shares of the issuing public corporation by will or intestate
281	281	succession and continuously was an affiliated shareholder until the
282	282	announcement date of the business combination; or
283	283	(5) a business combination of an issuing public
284	284	corporation with a domestic wholly owned subsidiary if the domestic
285	285	subsidiary is not an affiliate or associate of the affiliated
286	286	shareholder for a reason other than the affiliated shareholder's
287	287	beneficial ownership of voting shares in the issuing public
288	288	corporation.
289	289	SECTION 14. Section 21.729(c), Business Organizations
290	290	Code, is amended to read as follows:
291	291	(c) The dissent of a shareholder may be proven by:
292	292	(1) an entry in the minutes of the meeting of
293	293	shareholders;
294	294	(2) a written dissent filed with the secretary of the
295	295	meeting before the adjournment of the meeting;
296	296	(3) a written dissent that is sent [by registered
297	297	mail] to the secretary of the close corporation:
298	298	(A) promptly after the meeting or after a written
299	299	consent was obtained from the other shareholders; and
300	300	(B) by certified or registered mail, return
301	301	receipt requested, or by other means specified in the corporation's
302	302	governing documents; or
303	303	(4) any other means reasonably evidencing the dissent.
304	304	SECTION 15. Sections 21.901(4), (5), and (8), Business
305	305	Organizations Code, are amended to read as follows:
306	306	(4) "Failure of authorization" means:
307	307	(A) the failure to authorize or effect an act or
308	308	transaction in compliance with the provisions of the corporate
309	309	statute, the governing documents of the corporation, or any plan or
310	310	agreement to which the corporation is a party, if and to the extent
311	311	the failure would render the act or transaction void or voidable; or
312	312	(B) the failure of the board of directors or an
313	313	officer of the corporation to authorize or approve an act or
314	314	transaction taken by or on behalf of the corporation that required
315	315	the prior authorization or approval of the board of directors or the
316	316	officer.
317	317	(5) "Overissue" means the purported issuance of:
318	318	(A) shares of a class or series in excess of the
319	319	number of shares of that class or series that the corporation has
320	320	the power to issue under the governing documents of the corporation
321	321	and the corporate statute at the time of issuance; or
322	322	(B) shares of any class or series that are not at
323	323	the time of issuance authorized for issuance by the governing
324	324	documents of the corporation.
325	325	(8) "Validation effective time" or "effective time of
326	326	the validation," with respect to any defective corporate act
327	327	ratified under this subchapter, means the latest [later] of:
328	328	(A) the time at which the defective corporate act
329	329	[resolution] submitted to the shareholders for approval [adoption]
330	330	under Section 21.905 is approved [adopted] by the shareholders or,
331	331	if no shareholder approval is required [for adoption], the time at
332	332	which the board of directors adopts the resolutions [notice]
333	333	required by Section 21.903 [21.911 is given]; [or]
334	334	(B) if a certificate of validation is not
335	335	required to be filed under Section 21.908, the time, if any,
336	336	specified by the board of directors in the resolutions adopted
337	337	under Section 21.903, which may not precede the time at which the
338	338	resolutions are adopted; or
339	339	(C) the time at which any certificate of
340	340	validation filed under Section 21.908 takes effect in accordance
341	341	with Chapter 4.
342	342	SECTION 16. Section 21.903, Business Organizations Code, is
343	343	amended to read as follows:
344	344	Sec. 21.903. RATIFICATION OF DEFECTIVE CORPORATE ACT;
345	345	ADOPTION OF RESOLUTIONS [RESOLUTION]. (a) To ratify one or more
346	346	[a] defective corporate acts [act], the board of directors of the
347	347	corporation shall adopt resolutions [a resolution] stating:
348	348	(1) the defective corporate act or acts to be
349	349	ratified;
350	350	(2) the date [time] of each [the] defective corporate
351	351	act;
352	352	(3) if the defective corporate act or acts involved
353	353	the issuance of putative shares, the number and type of putative
354	354	shares issued and the date or dates on which the putative shares
355	355	were purportedly issued;
356	356	(4) the nature of the failure of authorization with
357	357	respect to each [the] defective corporate act to be ratified; and
358	358	(5) that the board of directors approves the
359	359	ratification of the defective corporate act or acts.
360	360	(b) A [The] resolution may also state that, notwithstanding
361	361	shareholder approval of the ratification of a defective corporate
362	362	act that is a subject of the resolution [the adoption of the
363	363	resolution by the shareholders], the board of directors may, with
364	364	respect to the defective corporate act [at any time before the
365	365	validation effective time], abandon the ratification of the
366	366	defective corporate act at any time before the validation effective
367	367	time [resolution] without further shareholder action.
368	368	SECTION 17. Section 21.904, Business Organizations Code, is
369	369	amended to read as follows:
370	370	Sec. 21.904. QUORUM AND VOTING REQUIREMENTS FOR ADOPTION OF
371	371	RESOLUTIONS [RESOLUTION]. (a) The quorum and voting requirements
372	372	applicable to the adoption of the resolutions to ratify a defective
373	373	corporate act [a resolution] under Section 21.903 are the same as
374	374	the quorum and voting requirements applicable at the time of the
375	375	adoption of the resolutions [a resolution] for the type of
376	376	defective corporate act proposed to be ratified.
377	377	(b) Notwithstanding Subsection (a) and except as provided
378	378	by Subsection (c), if in order for a quorum to be present or to
379	379	approve the defective corporate act, the presence or approval of a
380	380	larger number or portion of directors or of specified directors
381	381	would have been required by the governing documents of the
382	382	corporation, any plan or agreement to which the corporation was a
383	383	party, or any provision of the corporate statute, each as in effect
384	384	at the time of the defective corporate act, then the presence or
385	385	approval of the larger number or portion of such directors or of
386	386	such specified directors must be required for a quorum to be present
387	387	or to adopt the resolutions to ratify the defective corporate act
388	388	[resolution], as applicable.
389	389	(c) The presence or approval of any director elected,
390	390	appointed, or nominated by holders of any class or series of which
391	391	no shares are then outstanding, or by any person that is no longer a
392	392	shareholder, shall not be required for a quorum to be present or to
393	393	adopt the resolutions [resolution].
394	394	SECTION 18. Section 21.905, Business Organizations Code, is
395	395	amended to read as follows:
396	396	Sec. 21.905. SHAREHOLDER APPROVAL [ADOPTION] OF RATIFIED
397	397	DEFECTIVE CORPORATE ACT [RESOLUTION] REQUIRED; EXCEPTION. Each
398	398	defective corporate act ratified [The resolution adopted] under
399	399	Section 21.903 must be submitted to shareholders for approval
400	400	[adoption] as provided by Sections 21.906 and 21.907, unless:
401	401	(1) no other provision of the corporate statute, no
402	402	provision of the corporation's governing documents, and no
403	403	provision of any plan or agreement to which the corporation is a
404	404	party would have required shareholder approval of:
405	405	(A) the defective corporate act to be ratified[,
406	406	either] at the time of that defective corporate [the] act; or
407	407	(B) the type of defective corporate act to be
408	408	ratified at the time the board of directors adopts the resolutions
409	409	ratifying that defective corporate act under [when the resolution
410	410	required by] Section 21.903 [is adopted]; and
411	411	(2) the defective corporate act to be ratified did not
412	412	result from a failure to comply with Subchapter M.
413	413	SECTION 19. Section 21.906, Business Organizations Code, is
414	414	amended to read as follows:
415	415	Sec. 21.906. NOTICE REQUIREMENTS FOR RATIFIED DEFECTIVE
416	416	CORPORATE ACT [RESOLUTION] SUBMITTED FOR SHAREHOLDER APPROVAL. (a)
417	417	If the ratification of a defective corporate act is required to be
418	418	submitted to the shareholders for approval under Section 21.905
419	419	[requires that the resolution be submitted to the shareholders for
420	420	approval], notice of the time, place, if any, and purpose of the
421	421	meeting shall be given at least 20 days before the date of the
422	422	meeting to:
423	423	(1) each holder of record, as of the record date of the
424	424	meeting, of valid shares and putative shares, regardless of whether
425	425	the shares are voting or nonvoting, at the address of the holder as
426	426	it appears or most recently appeared, as appropriate, on the
427	427	corporation's records; and
428	428	(2) [.
429	429	[(b) Notice under this section shall be given to] each
430	430	holder of record of valid shares and putative shares, regardless of
431	431	whether the shares are voting or nonvoting, as of the time of the
432	432	defective corporate act, except that notice is not required to be
433	433	given to a holder whose identity or address cannot be ascertained
434	434	from the corporation's records.
435	435	(b) [(c)] The notice must contain:
436	436	(1) copies [a copy] of the resolutions adopted by the
437	437	board of directors under Section 21.903 or the information required
438	438	by Sections 21.903(a)(1)-(5) [resolution]; and
439	439	(2) a statement that, on shareholder approval of the
440	440	ratification of the defective corporate act or putative shares made
441	441	in accordance with this subchapter, the holder's rights to
442	442	challenge the defective corporate act or putative shares are
443	443	limited to an action claiming [the following must be brought not
444	444	later than the 120th day of the validation effective time:
445	445	[(A) any claim that the defective corporate act
446	446	or putative shares ratified under this subchapter are void or
447	447	voidable due to the identified failure of authorization; or
448	448	[(B) any claim] that a [the district] court of
449	449	appropriate jurisdiction, in its discretion, should declare:
450	450	(A) that the [a] ratification [made in accordance
451	451	with this subchapter] not take effect or that it take effect only on
452	452	certain conditions, if that action is filed with the court not later
453	453	than the 120th day after the applicable validation effective time;
454	454	or
455	455	(B) that the ratification was not accomplished in
456	456	accordance with this subchapter.
457	457	SECTION 20. Section 21.907, Business Organizations Code, is
458	458	amended to read as follows:
459	459	Sec. 21.907. SHAREHOLDER MEETING; QUORUM AND VOTING. (a)
460	460	At the shareholder meeting, the quorum and voting requirements
461	461	applicable to the approval of the ratification [adoption] of a
462	462	defective corporate act [the resolution] under Section 21.905 are
463	463	[shall be] the same as the quorum and voting requirements
464	464	applicable at the time of the approval [such adoption] by the
465	465	shareholders of the ratification for the type of ratified defective
466	466	corporate act proposed to be approved [ratified], except as
467	467	provided by this section.
468	468	(b) If the presence or approval of a larger number or
469	469	portion of shares or of any class or series of shares or of
470	470	specified shareholders would have been required for a quorum to be
471	471	present or to approve the defective corporate act, as applicable,
472	472	by the corporation's governing documents, any plan or agreement to
473	473	which the corporation was a party, or any provision of the corporate
474	474	statute, each as in effect at the time of the defective corporate
475	475	act, then the presence or approval of the larger number or portion
476	476	of shares or of the class or series of shares or of such specified
477	477	shareholders shall be required for a quorum to be present or to
478	478	approve the ratification of the defective corporate act [adopt the
479	479	resolution], as applicable, except that the presence or approval of
480	480	shares of any class or series of which no shares are then
481	481	outstanding, or of any person that is no longer a shareholder, is
482	482	[shall] not [be] required.
483	483	(c) The approval by the shareholders of the ratification of
484	484	[adoption of a resolution to ratify] the election of a director
485	485	requires the affirmative vote of the majority of shares present at
486	486	the meeting and entitled to vote on the election of the director at
487	487	the time of the approval, unless the governing documents of the
488	488	corporation then in effect or in effect at the time of the defective
489	489	election require or required a larger number or portion of shares or
490	490	of any class or series of shares or of specified shareholders to
491	491	elect the director, in which case the affirmative vote of the larger
492	492	number or portion of shares or of the class or series of shares or of
493	493	the specified shareholders is required to ratify the election of
494	494	the director, except that the presence or approval of shares of any
495	495	class or series of which no shares are then outstanding, or of any
496	496	person that is no longer a shareholder, is not required.
497	497	(d) If a failure of authorization results from the failure
498	498	to comply with Subchapter M, the approval of the ratification of the
499	499	defective corporate act requires the vote set forth by Section
500	500	21.606(2), regardless of whether that vote would have otherwise
501	501	been required.
502	502	(e) Putative shares on the record date for determining
503	503	shareholders entitled to vote on any matter submitted to
504	504	shareholders under Section 21.905 are not entitled to be counted
505	505	for voting or quorum purposes in any vote to approve the
506	506	ratification of any defective corporate act, regardless of any
507	507	ratification that becomes effective after the record date.
508	508	SECTION 21. Section 21.908, Business Organizations Code, is
509	509	amended to read as follows:
510	510	Sec. 21.908. CERTIFICATE OF VALIDATION. (a) If a [the]
511	511	defective corporate act ratified under this subchapter would have
512	512	required under any other provision of the corporate statute the
513	513	filing of a filing instrument or other document with the filing
514	514	officer, the corporation[, instead of filing the filing instrument
515	515	or other document otherwise required by this code,] shall file a
516	516	certificate of validation with respect to the defective corporate
517	517	act in accordance with Chapter 4, regardless of whether a filing
518	518	instrument or other document was previously filed with respect to
519	519	the defective corporate act. The filing of another filing
520	520	instrument or document is not required.
521	521	(a-1) A separate certificate of validation is required for
522	522	each defective corporate act for which a certificate of validation
523	523	is required under this section, except that:
524	524	(1) two or more defective corporate acts may be
525	525	included in a single certificate of validation if the corporation
526	526	filed, or to comply with the applicable provisions of this code
527	527	could have filed, a single filing instrument or other document
528	528	under another provision of this code to effect the acts;
529	529	(2) a single certificate of validation may be filed to
530	530	amend the certificate of formation of the corporation to establish
531	531	a new class or series of shares or to increase the number of
532	532	authorized shares of any class or series of shares, in order to cure
533	533	multiple previous overissues of the shares of the class or series;
534	534	and
535	535	(3) a single certificate of validation may be filed to
536	536	amend the corporation's certificate of formation to establish two
537	537	or more new classes or series of shares, to increase the number of
538	538	authorized shares of two or more classes or series of shares, or to
539	539	establish one or more new classes or series of shares and increase
540	540	the number of authorized shares of one or more classes or series of
541	541	shares, in order to cure multiple previous overissues of the shares
542	542	of all the classes and series that are the subjects of the
543	543	certificate of validation.
544	544	(a-2) An amendment effected by a certificate of validation
545	545	described by Subsection (a-1)(2) or (3) is effective as to each
546	546	class or series that is a subject of the certificate of validation
547	547	as of the first overissue of the shares of the class or series.
548	548	(b) The certificate of validation must include [set forth]:
549	549	(1) each defective corporate act that is a subject of
550	550	the certificate of validation, including:
551	551	(A) for a defective corporate act involving the
552	552	issuance of putative shares, the number and type of putative shares
553	553	issued and the date or dates on which the putative shares were
554	554	purported to have been issued;
555	555	(B) the date of the defective corporate act; and
556	556	(C) the nature of the failure of authorization
557	557	with respect to the defective corporate act [a copy of the
558	558	resolution adopted in accordance with Sections 21.903 and 21.904,
559	559	the date of adoption of the resolution by the board of directors
560	560	and, if applicable, the date of adoption by the shareholders, and a
561	561	statement that the resolution was adopted in accordance with this
562	562	subchapter];
563	563	(2) a statement that each defective corporate act was
564	564	ratified in accordance with this subchapter, including:
565	565	(A) the date on which the board of directors
566	566	ratified each defective corporate act; and
567	567	(B) the date, if any, on which the shareholders
568	568	approved the ratification of each defective corporate act; and
569	569	(3) as appropriate:
570	570	(A) if a filing instrument [or document] was
571	571	previously filed with a filing officer under the corporate statute
572	572	with [in] respect to [of] the defective corporate act and no change
573	573	to the filing instrument is required to give effect to the defective
574	574	corporate act as ratified in accordance with this subchapter:
575	575	(i) the name, [the] title, and filing date
576	576	[of filing] of the previously filed [prior] filing instrument and
577	577	of any certificate of correction to the filing instrument; and
578	578	(ii) a statement that a copy of the
579	579	previously filed filing instrument, together with [or document and]
580	580	any [articles or] certificate of correction to the filing
581	581	instrument, is attached as an exhibit to the certificate of
582	582	validation [filing instrument]; [and]
583	583	(B) if a filing instrument was previously filed
584	584	with a filing officer under the corporate statute with respect to
585	585	the defective corporate act and the filing instrument requires any
586	586	change to give effect to the defective corporate act as ratified in
587	587	accordance with this subchapter, including a change to the date and
588	588	time of the effectiveness of the filing instrument:
589	589	(i) the name, title, and filing date of the
590	590	previously filed filing instrument and of any certificate of
591	591	correction to the filing instrument;
592	592	(ii) a statement that a filing instrument
593	593	containing all the information required to be included under the
594	594	applicable provisions of this code to give effect to the ratified
595	595	defective corporate act is attached as an exhibit to the
596	596	certificate of validation; and
597	597	(iii) the date and time that the attached
598	598	filing instrument is considered to have become effective under this
599	599	subchapter; or
600	600	(C) if a filing instrument was not previously
601	601	filed with a filing officer under the corporate statute with
602	602	respect to the defective corporate act and the defective corporate
603	603	act as ratified under this subchapter would have required under the
604	604	other applicable provisions of this code the filing of a filing
605	605	instrument in accordance with Chapter 4, if the defective corporate
606	606	act had occurred when this code was in effect:
607	607	(i) a statement that a filing instrument
608	608	containing all the information required to be included under the
609	609	applicable provisions of this code to give effect to the defective
610	610	corporate act, as if the defective corporate act had occurred when
611	611	this code was in effect, is attached as an exhibit to the
612	612	certificate of validation; and
613	613	(ii) the date and time that the attached
614	614	filing instrument is considered to have become effective under this
615	615	subchapter
616	616	[(3) the provisions that would be required under any
617	617	other section of this code to be included in the filing instrument
618	618	that otherwise would have been required to be filed with respect to
619	619	the defective corporate act under this code].
620	620	(c) A filing instrument attached to a certificate of
621	621	validation under Subsection (b)(3)(B) or (C) does not need to be
622	622	executed separately and does not need to include any statement
623	623	required by any other provision of this code that the instrument has
624	624	been approved and adopted in accordance with that provision.
625	625	SECTION 22. Section 21.909, Business Organizations Code, is
626	626	amended to read as follows:
627	627	Sec. 21.909. ADOPTION OF RESOLUTIONS [RESOLUTION]; EFFECT
628	628	ON DEFECTIVE CORPORATE ACT. On or after the validation effective
629	629	time, unless determined otherwise in an action brought under
630	630	Section 21.914 and subject to Section 21.907(e), each defective
631	631	corporate act ratified in accordance with this subchapter [set
632	632	forth in the resolution adopted under Sections 21.903 and 21.904]
633	633	may not be considered void or voidable as a result of the [a]
634	634	failure of authorization described by [identified in] the
635	635	resolutions adopted under Sections 21.903 and 21.904 [resolution],
636	636	and the effect shall be retroactive to the time of the defective
637	637	corporate act.
638	638	SECTION 23. Section 21.910, Business Organizations Code, is
639	639	amended to read as follows:
640	640	Sec. 21.910. ADOPTION OF RESOLUTIONS [RESOLUTION]; EFFECT
641	641	ON PUTATIVE SHARES. On or after the validation effective time,
642	642	unless determined otherwise in an action brought under Section
643	643	21.914 and subject to Section 21.907(e), each putative share or
644	644	fraction of a putative share issued or purportedly issued pursuant
645	645	to a [the] defective corporate act ratified in accordance with this
646	646	subchapter and described by [identified in] the resolutions
647	647	[resolution] adopted under Sections 21.903 and 21.904 may not be
648	648	considered void or voidable [as a result of a failure of
649	649	authorization identified in the resolution] and [, in the absence
650	650	of any failure of authorization not ratified,] is considered to be
651	651	an identical share or fraction of a share outstanding as of the time
652	652	it was purportedly issued.
653	653	SECTION 24. The heading to Section 21.911, Business
654	654	Organizations Code, is amended to read as follows:
655	655	Sec. 21.911. NOTICE TO SHAREHOLDERS FOLLOWING RATIFICATION
656	656	OF DEFECTIVE CORPORATE ACT [ADOPTION OF RESOLUTION].
657	657	SECTION 25. Section 21.911, Business Organizations Code, is
658	658	amended by amending Subsections (a), (d), (e), and (f) and adding
659	659	Subsection (g) to read as follows:
660	660	(a) For each defective corporate act ratified by the board
661	661	of directors under Sections 21.903 and 21.904, notice [Notice] of
662	662	the ratification [adoption of a resolution under this subchapter]
663	663	shall be given promptly to:
664	664	(1) each holder of valid shares and putative shares,
665	665	regardless of whether the shares are voting or nonvoting, as of the
666	666	date the board of directors adopted the resolutions ratifying the
667	667	defective corporate act [resolution]; or
668	668	(2) each holder of valid shares and putative shares,
669	669	regardless of whether the shares are voting or nonvoting, as of a
670	670	date not later than the 60th day after the date of adoption [on
671	671	which the resolution is adopted], as established by the board of
672	672	directors.
673	673	(d) The notice must contain:
674	674	(1) copies [a copy] of the resolutions adopted by the
675	675	board of directors under Section 21.903 or the information required
676	676	by Sections 21.903(a)(1)-(5) [resolution]; and
677	677	(2) a statement that, on ratification of the defective
678	678	corporate act or putative shares made in accordance with this
679	679	subchapter, the holder's rights to challenge the defective
680	680	corporate act or putative shares are limited to an action claiming
681	681	[the following must be brought not later than the 120th day of the
682	682	validation effective time:
683	683	[(A) any claim that the defective corporate act
684	684	or putative shares ratified under this subchapter are void or
685	685	voidable due to the identified failure of authorization; or
686	686	[(B) any claim] that a [the district] court of
687	687	appropriate jurisdiction, in its discretion, should declare:
688	688	(A) that the [a] ratification [made in accordance
689	689	with this subchapter] not take effect or that it take effect only on
690	690	certain conditions, if the action is filed not later than the 120th
691	691	day after the later of the applicable validation effective time or
692	692	the time at which the notice required by this section is given; or
693	693	(B) that the ratification was not accomplished in
694	694	accordance with this subchapter.
695	695	(e) Notwithstanding Subsections (a)-(d):
696	696	(1) [,] notice is not required to be given under this
697	697	section to a person if notice of the ratification of the defective
698	698	corporate act [resolution] is given to that person in accordance
699	699	with Section 21.906; and
700	700	(2) for a corporation that has a class of stock listed
701	701	on a national securities exchange, the notice required by this
702	702	section may be considered given if the information contained in the
703	703	notice is disclosed in a document publicly filed by the corporation
704	704	with the Securities and Exchange Commission under Section 13, 14,
705	705	or 15(d), Securities Exchange Act of 1934 (15 U.S.C. Section 78m,
706	706	78n, or 78o(d)), and any rules promulgated under that Act.
707	707	(f) For purposes of Sections 21.905, [Section] 21.906, and
708	708	21.907 and this section, notice to holders of putative shares and
709	709	notice to holders of valid shares and putative shares as of the time
710	710	of the defective corporate act shall be treated as notice to holders
711	711	of valid shares for purposes of Sections 6.051, 6.052, 6.053,
712	712	6.201, 6.202, 6.203, 6.204, 6.205, 21.353, and 21.3531.
713	713	(g) If the ratification of a defective corporate act has
714	714	been approved by shareholders acting under Section 6.202, the
715	715	notice required by this section may be included in any notice
716	716	required to be given under Section 6.202(d) and, if included:
717	717	(1) shall be sent to the shareholders entitled to the
718	718	notice under Section 6.202(d) and all other holders of valid shares
719	719	and putative shares otherwise entitled to the notice under
720	720	Subsection (a) of this section; and
721	721	(2) is not required to be sent to shareholders or
722	722	holders of valid shares or putative shares who signed a consent
723	723	described by Section 6.202(b).
724	724	SECTION 26. Section 21.913(a), Business Organizations
725	725	Code, is amended to read as follows:
726	726	(a) Ratification of an act or transaction under this
727	727	subchapter or validation of an act or transaction as provided by
728	728	Sections 21.914 through 21.917 is not the exclusive means of
729	729	ratifying or validating any act or transaction taken by or on behalf
730	730	of the corporation, including any defective corporate act or any
731	731	issuance of putative shares or other shares, or of adopting or
732	732	endorsing any act or transaction taken by or in the name of the
733	733	corporation before the corporation exists.
734	734	SECTION 27. Section 21.917, Business Organizations Code, is
735	735	amended by amending Subsection (b) and adding Subsection (c) to
736	736	read as follows:
737	737	(b) Notwithstanding any other provision of this
738	738	subchapter[, the following may not be brought after the expiration
739	739	of the 120th day of the validation effective time]:
740	740	(1) an action claiming [asserting] that a defective
741	741	corporate act or putative shares [ratified in accordance with this
742	742	subchapter] are void or voidable due to a failure of authorization
743	743	identified in the resolutions [resolution] adopted in accordance
744	744	with Section 21.903 may not be filed in or must be dismissed by any
745	745	court after the applicable validation effective time; and [or]
746	746	(2) an action claiming [asserting] that a [the
747	747	district] court of appropriate jurisdiction, in its discretion,
748	748	should declare that a ratification in accordance with this
749	749	subchapter not take effect or that the ratification take effect
750	750	only on certain conditions may not be filed with the court after the
751	751	expiration of the 120th day after the later of the validation
752	752	effective time or the time that any notice required to be given
753	753	under Section 21.911 is given with respect to the ratification.
754	754	(c) Except as otherwise provided by a corporation's
755	755	governing documents, for purposes of this section, notice under
756	756	Section 21.911 that is:
757	757	(1) mailed is considered to be given on the date the
758	758	notice is deposited in the United States mail with postage paid in
759	759	an envelope addressed to the holder at the holder's address
760	760	appearing or most recently appearing, as appropriate, in the
761	761	records of the corporation; and
762	762	(2) transmitted by facsimile or electronic message is
763	763	considered to be given when the facsimile or electronic message is
764	764	transmitted to a facsimile number or an electronic message address
765	765	provided by the holder, or to which the holder consents, for the
766	766	purpose of receiving notice.
767	767	SECTION 28. Section 22.154(a), Business Organizations
768	768	Code, is amended to read as follows:
769	769	(a) If the board of directors of a corporation fails to call
770	770	the annual meeting of members when required, a member of the
771	771	corporation may demand that the meeting be held within a reasonable
772	772	time. The demand must be made in writing and sent to an officer of
773	773	the corporation by certified or registered mail, return receipt
774	774	requested, or by other means specified in the corporation's
775	775	governing documents.
776	776	SECTION 29. Section 22.214, Business Organizations Code, is
777	777	amended to read as follows:
778	778	Sec. 22.214. ACTION BY DIRECTORS. The act of a majority of
779	779	the directors present in person or by proxy at a meeting at which a
780	780	quorum is present at the time of the act is the act of the board of
781	781	directors of a corporation, unless the act of a greater number is
782	782	required by the certificate of formation or bylaws of the
783	783	corporation.
784	784	SECTION 30. Section 22.227, Business Organizations Code, is
785	785	amended to read as follows:
786	786	Sec. 22.227. DISSENT TO OR ABSTENTION FROM ACTION. (a) A
787	787	director of a corporation who is present at a meeting of the board
788	788	of directors at which action is taken on a corporate matter
789	789	described by Section 22.226(a) is presumed to have assented to the
790	790	action unless:
791	791	(1) the director's dissent or abstention has been
792	792	entered in the minutes of the meeting;
793	793	(2) the director has filed a written dissent or
794	794	abstention with respect to the action with the person acting as the
795	795	secretary of the meeting before the meeting is adjourned; or
796	796	(3) the director has sent [a written dissent by
797	797	registered mail] to the secretary of the corporation, within a
798	798	reasonable time [immediately] after the meeting has been adjourned,
799	799	a written dissent or abstention by:
800	800	(A) certified or registered mail, return receipt
801	801	requested; or
802	802	(B) other means specified in the corporation's
803	803	governing documents.
804	804	(b) The right to dissent or abstain under this section does
805	805	not apply to a director who voted in favor of the action.
806	806	SECTION 31. Section 200.251, Business Organizations Code,
807	807	is amended by amending Subsection (b) and adding Subsection (b-1)
808	808	to read as follows:
809	809	(b) If the annual meeting is not held at the designated
810	810	time, a shareholder may [by certified or registered mail] make a
811	811	written request to an officer or trust manager of the real estate
812	812	investment trust that the meeting be held within a reasonable time.
813	813	The request calling for the meeting must be made by:
814	814	(1) certified or registered mail, return receipt
815	815	requested; or
816	816	(2) other means specified in the real estate
817	817	investment trust's governing documents.
818	818	(b-1) If the annual meeting is not called before the 61st
819	819	day after the date the written request calling for a meeting is made
820	820	under Subsection (b), any shareholder may bring suit at law or in
821	821	equity to compel the meeting to be held.
822	822	SECTION 32. Sections 251.354(a) and (b), Business
823	823	Organizations Code, are amended to read as follows:
824	824	(a) If a cooperative association required by Section
825	825	251.353 to file a copy of a report with the secretary of state does
826	826	not file the report within the prescribed time, the secretary of
827	827	state shall send written notice of the requirement [by registered
828	828	mail] to the cooperative association at [. The notice must be sent
829	829	to] the cooperative association's principal office not later than
830	830	the 60th day after the date the report becomes due.
831	831	(b) If a cooperative association [is] required by Section
832	832	251.353 to file a report at the cooperative association's [its]
833	833	registered office, but not with the secretary of state, [and] fails
834	834	to file the report within the prescribed time, the secretary of
835	835	state or any member of the cooperative association may send written
836	836	notice of the requirement [by registered mail] to the cooperative
837	837	association's principal office.
838	838	SECTION 33. Section 252.017(b), Business Organizations
839	839	Code, is amended to read as follows:
840	840	(b) Chapters 1, [and] 4, and 10 and, if a nonprofit
841	841	association designates an agent for service of process, Subchapter
842	842	E, Chapter 5, apply to a nonprofit association.
843	843	SECTION 34. Chapter 252, Business Organizations Code, is
844	844	amended by adding Section 252.018 to read as follows:
845	845	Sec. 252.018. MERGERS AND CONVERSIONS. A nonprofit
846	846	association may effect a merger or conversion by complying with the
847	847	applicable provisions of Chapter 10 and the nonprofit association's
848	848	governing documents.
849	849	SECTION 35. Chapter 402, Business Organizations Code, is
850	850	amended by adding Section 402.015 to read as follows:
851	851	Sec. 402.015. PERPETUAL DURATION OF OLD CORPORATIONS. (a)
852	852	Notwithstanding any provision in the articles of incorporation
853	853	limiting the period of duration of a domestic for-profit
854	854	corporation formed before September 6, 1955, the period of duration
855	855	of the corporation became perpetual on May 2, 1979, if the
856	856	corporation was in existence according to the records of the
857	857	secretary of state on May 2, 1979. A corporation described by this
858	858	subsection may amend the corporation's articles of incorporation or
859	859	certificate of formation, as applicable, to limit the corporation's
860	860	period of duration after May 2, 1979.
861	861	(b) Notwithstanding a provision in the articles of
862	862	incorporation limiting the period of duration of a domestic
863	863	nonprofit corporation formed before August 10, 1959, the period of
864	864	duration of the corporation became perpetual on May 2, 1979, if the
865	865	corporation was in existence according to the records of the
866	866	secretary of state on May 2, 1979. A corporation described by this
867	867	subsection may amend the corporation's articles of incorporation or
868	868	certificate of formation, as applicable, to limit the corporation's
869	869	period of duration after May 2, 1979.
870	870	SECTION 36. This Act takes effect September 1, 2017.