Texas 2019 - 86th Regular

Texas House Bill HB3608 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	~~86R16837~~ CLG-F
	1	+	86R6912 CLG-F
2	2		By: Martinez Fischer H.B. No. 3608
3		-	Substitute the following for H.B. No. 3608:
4		-	By: Darby C.S.H.B. No. 3608
5	3
6	4
7	5		A BILL TO BE ENTITLED
8	6		AN ACT
9	7		relating to business entities.
10	8		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	9		SECTION 1. Section 1.002, Business Organizations Code, is
12	10		amended by amending Subdivisions (20-a) and (81) and adding
13	11		Subdivision (20-b) to read as follows:
14	12		(20-a) "Electronic data system" means an electronic
15	13		network or database. The term includes a distributed electronic
16		-	network or database~~, including one that employs~~ blockchain or
17		-	~~distributed ledger~~ technology.
	14	+	network or database employing blockchain or distributed ledger
	15	+	technology.
18	16		(20-b) "Electronic transmission" means a form of
19	17		communication, including communication by use of or participation
20	18		in one or more electronic data systems, that:
21	19		(A) does not directly involve the physical
22	20		transmission of paper;
23	21		(B) creates a record that may be retained,
24	22		retrieved, and reviewed by the recipient; and
25	23		(C) may be directly reproduced in paper form by
26	24		the recipient through an automated process.
27	25		(81) "Shareholder" or "holder of shares" means:
28	26		(A) the person in whose name shares issued by a
29	27		for-profit corporation, professional corporation, or real estate
30	28		investment trust are registered in the share transfer records
31	29		maintained by or on behalf of the for-profit corporation,
32	30		professional corporation, or real estate investment trust; or
33	31		(B) the beneficial owner of shares issued by a
34	32		for-profit corporation, whose shares are held in a voting trust or
35	33		by a nominee on the beneficial owner's behalf, to the extent of the
36	34		rights granted by a nominee statement on file with the for-profit
37	35		corporation in accordance with Sections 21.201(b) and (c).
38	36		SECTION 2. Sections 3.151(a) and (b), Business
39	37		Organizations Code, are amended to read as follows:
40	38		(a) Each filing entity shall keep:
41	39		(1) books and records of accounts;
42	40		(2) minutes of the proceedings of the owners or
43	41		members or governing authority of the filing entity and committees
44	42		of the owners or members or governing authority of the filing
45	43		entity;
46	44		(3) [at its registered office or principal place of
47	45		business, or at the office of its transfer agent or registrar,] a
48	46		current record of the name and mailing address of each owner or
49	47		member of the filing entity; and
50	48		(4) other books and records as required by the title of
51	49		this code governing the entity.
52	50		(b) The books, records, minutes, and ownership or
53	51		membership records of any filing entity[, including those described
54	52		in Subsection (a)(4),] may be:
55	53		(1) in written paper form; or
56	54		(2) maintained by or on behalf of the filing entity on,
57	55		or by means of, an information storage device or method or one or
58	56		more electronic data systems, provided that any books, records,
59	57		minutes, and ownership or membership records so maintained can be
60	58		[another form capable of being] converted into written paper form
61	59		within a reasonable time.
62	60		SECTION 3. Sections 3.205(a) and (c), Business
63	61		Organizations Code, are amended to read as follows:
64	62		(a) Except as provided by Subsection (c) and in accordance
65	63		with Chapter 8, Business & Commerce Code, after an issuance
66	64		[issuing] or transfer of [transferring] an uncertificated
67	65		ownership interest in a domestic entity, [a domestic entity shall
68	66		notify] the owner of the ownership interest shall be notified in
69	67		writing or by electronic transmission of any information required
70	68		under this subchapter to be stated on a certificate representing
71	69		the ownership interest.
72	70		(c) The owner of an uncertificated ownership interest in a
73	71		[A] domestic entity is not required to be notified [send a notice]
74	72		under Subsection (a) if:
75	73		(1) the required information is included in the
76	74		governing documents of the entity; and
77	75		(2) the owner of the uncertificated ownership interest
78	76		is provided with a copy of the governing documents.
79	77		SECTION 4. Sections 4.052, 4.053, 4.054, 4.055, and 4.056,
80	78		Business Organizations Code, are amended to read as follows:
81	79		Sec. 4.052. DELAYED EFFECTIVENESS OF CERTAIN FILINGS. (a)
82	80		Except as provided by Section 4.058, a filing instrument may take
83	81		effect after the time the instrument would otherwise take effect as
84	82		provided by this code for the entity filing the instrument.
85	83		(b) If the effectiveness of a filing instrument is to be
86	84		delayed as permitted by this section, the filing instrument may
87	85		take effect [and]:
88	86		(1) at a specified date;
89	87		(2) at a specified date and time; [or]
90	88		(3) [(2)] on the occurrence of a specified future
91	89		event or fact, including an act of any person; or
92	90		(4) after the occurrence of a future event or fact,
93	91		including the act of any person, at a specified date, at a specified
94	92		date and time, or after the passage of a specified period of time.
95	93		Sec. 4.053. CONDITIONS FOR DELAYED EFFECTIVENESS. (a) The
96	94		date, or the date and time, at which a filing instrument takes
97	95		effect is delayed if the instrument clearly and expressly states,
98	96		in addition to any other required statement or information:
99	97		(1) the specified date, or the specified [specific]
100	98		date and time, at which the instrument takes effect; or
101	99		(2) if the instrument takes effect on or after the
102	100		occurrence of a future event or fact that may occur:
103	101		(A) the [manner in which the] event or fact that
104	102		will cause the instrument to take effect; [and]
105		-	(B) when the filing instrument is to take effect
106		-	if the instrument is to take effect after the occurrence of a
107		-	specified future event or fact; and
	103	+	(B) when the filing instrument is to take effect,
	104	+	but only if the instrument is to take effect after the occurrence of
	105	+	a specified future event or fact; and
108	106		(C) the date of the 90th day after the date the
109	107		instrument is signed.
110	108		(b) If the effectiveness of a filing instrument is to be
111	109		delayed as permitted by Section 4.052 [take effect on a specific
112	110		date and time other than that provided by this code]:
113	111		(1) the effective date may not be later than the 90th
114	112		day after the date the instrument is signed; and
115	113		(2) the specified [specific] time at which the
116	114		instrument is to take effect may not be specified as "12:00 a.m." or
117	115		"12:00 p.m."
118	116		Sec. 4.054. DELAYED EFFECTIVENESS ON FUTURE EVENT OR FACT.
119	117		A filing instrument that is to take effect on or after the
120	118		occurrence of a future event or fact in accordance with Section
121	119		4.053(a)(2) [, other than the passage of time,] and for which the
122	120		statement required by Section 4.055 is filed within the prescribed
123	121		time[,] takes effect on:
124	122		(1) the date, or the date and time, at which the [last
125	123		specified] event or fact occurs or is waived; or
126	124		(2) the specified date, the specified date and time,
127	125		or the passage of the specified period of time after the occurrence
128	126		or waiver of the event or fact [or the date and time at which a
129	127		condition is satisfied or waived].
130	128		Sec. 4.055. STATEMENT OF EVENT OR FACT. An entity that
131	129		files a filing instrument that takes effect on or after the
132	130		occurrence of a future event or fact in accordance with Section
133	131		4.053(a)(2) [, other than the passage of time,] must sign and file
134	132		as provided by Subchapter A, not later than the 90th day after the
135	133		date the filing instrument is filed, a statement that:
136	134		(1) confirms that each event or fact on which the
137	135		effect of the instrument is conditioned has been satisfied or
138	136		waived; [and]
139	137		(2) states the date, or the date and time, on which the
140	138		condition was satisfied or waived; and
141	139		(3) if the filing instrument was to take effect after
142	140		the occurrence of a specified future event or fact, states the date,
143	141		or the date and time, at which the filing instrument took effect.
144	142		Sec. 4.056. FAILURE TO FILE STATEMENT. (a) If the [effect
145	143		of a] filing instrument is to take effect on or after [conditioned
146	144		on] the occurrence of a future event or fact in accordance with
147	145		Section 4.053(a)(2) [, other than the passage of time,] and the
148	146		statement required by Section 4.055 is not filed before the
149	147		expiration of the prescribed time, the filing instrument does not
150	148		take effect. This section does not preclude the filing of a
151	149		subsequent filing instrument required by this code to make the
152	150		action or transaction evidenced by the original filing instrument
153	151		effective.
154	152		(b) If the [effect of a] filing instrument is to take effect
155	153		on or after [conditioned on] the occurrence of a future event or
156	154		fact[, other than the passage of time,] and the specified event or
157	155		fact does not occur and is not waived, the parties to the filing
158	156		instrument must sign and file a certificate of abandonment as
159	157		provided by Section 4.057.
160	158		SECTION 5. Section 4.057(e), Business Organizations Code,
161	159		is amended to read as follows:
162	160		(e) If in the interim before a certificate of abandonment is
163	161		filed the name of an entity that is a party to the action or
164	162		transaction becomes indistinguishable from [the same as or
165	163		deceptively similar to] the name of another entity already on file
166	164		or reserved or registered under this code, the filing officer may
167	165		not file the certificate of abandonment unless the entity by or for
168	166		whom the certificate is filed changes its name in the manner
169	167		provided by this code for that entity.
170	168		SECTION 6. Section 4.059, Business Organizations Code, is
171	169		amended to read as follows:
172	170		Sec. 4.059. ACKNOWLEDGMENT OF FILING WITH DELAYED
173	171		EFFECTIVENESS. (a) An acknowledgment of filing issued or other
174	172		action taken by the secretary of state affirming the filing of a
175	173		filing instrument that has a specific delayed effective date, or a
176	174		specific delayed effective date and time, must state the date, or
177	175		the date and time, at which the instrument takes effect.
178	176		(b) An acknowledgment of filing issued or other action taken
179	177		by the secretary of state affirming the filing of a filing
180	178		instrument the effectiveness [effect] of which is delayed until on
181	179		or after the occurrence of a future event or fact must[:
182	180		[(1) state that the effective date and time of the
183	181		filing instrument is conditioned on the occurrence of a future
184	182		event or fact as described in the filing instrument; or
185	183		[(2) otherwise] indicate that the effective date, or
186	184		the effective date and time, of the instrument is conditioned on the
187	185		occurrence of a future event or fact.
188	186		SECTION 7. Section 6.205(b), Business Organizations Code,
189	187		is amended to read as follows:
190	188		(b) Except as otherwise provided by an entity's governing
191	189		documents, an electronic transmission of a consent by an owner,
192	190		member, or governing person to the taking of an action by the entity
193	191		is considered a signed writing if the transmission contains or is
194	192		accompanied by information from which it can be determined:
195	193		(1) that the electronic transmission was transmitted
196	194		by or on behalf of the owner, member, or governing person; and
197	195		(2) the date on which the electronic transmission was
198	196		transmitted by or on behalf of the owner, member, or governing
199	197		person [transmitted the electronic transmission].
200	198		SECTION 8. Section 101.302(c), Business Organizations
201	199		Code, is amended to read as follows:
202	200		(c) The number of managers of a limited liability company
203	201		may be increased or decreased by amendment to, or as provided by,
204	202		the company agreement[, except that a decrease in the number of
205	203		managers may not shorten the term of an incumbent manager].
206	204		SECTION 9. Section 101.501, Business Organizations Code, is
207	205		amended by adding Subsection (d) to read as follows:
208	206		(d) All books and records required to be maintained by a
209	207		limited liability company under this section may be maintained in
210	208		any form and manner permitted under Section 3.151(b).
211	209		SECTION 10. Section 101.503(a), Business Organizations
212	210		Code, is amended to read as follows:
213	211		(a) A limited liability company that refuses to allow a
214	212		member or an assignee of a membership interest to examine and copy,
215	213		on written request that complies with Section 101.502(a), records
216	214		or other information described by that section is liable to the
217	215		member or assignee for any cost or expense, including attorney's
218	216		fees, incurred in enforcing the member's or assignee's rights under
219	217		Section 101.502. The liability imposed on a limited liability
220	218		company under this subsection is in addition to any other damages or
221	219		remedy afforded to the member or assignee by law.
222	220		SECTION 11. Section 101.621, Business Organizations Code,
223	221		is amended to read as follows:
224	222		Sec. 101.621. WINDING UP BY COURT ORDER. A district court
225	223		in the county in which the registered office or principal place of
226	224		business in this state of a domestic limited liability company is
227	225		located, on application by or for a member associated with the
228	226		series, has jurisdiction to order the winding up and termination of
229	227		a series if the court determines that:
230	228		(1) it is not reasonably practicable to carry on the
231	229		business of the series in conformity with the company agreement;
232	230		(2) the economic purpose of the series is likely to be
233	231		unreasonably frustrated; or
234	232		(3) another member associated with the series has
235	233		engaged in conduct relating to the series' business that makes it
236	234		not reasonably practicable to carry on the business with that
237	235		member.
238	236		SECTION 12. Sections 152.306(b) and (c), Business
239	237		Organizations Code, are amended to read as follows:
240	238		(b) Except as provided by Subsection (c), a creditor may
241	239		proceed against [one or more partners or] the property of one or
242	240		more [the] partners to satisfy a judgment based on a claim against
243	241		the partnership only if a judgment:
244	242		(1) is [also] obtained against the partner; and
245	243		(2) based on the same claim:
246	244		(A) is obtained against the partnership;
247	245		(B) has not been reversed or vacated; and
248	246		(C) remains unsatisfied for 90 days after:
249	247		(i) the date on which the judgment is
250	248		entered; or
251	249		(ii) the date on which the stay expires, if
252	250		the judgment is contested by appropriate proceedings and execution
253	251		on the judgment is stayed.
254	252		(c) Subsection (b)(2) [(b)] does not prohibit a creditor
255	253		from proceeding directly against [one or more partners or] the
256	254		property of one or more [the] partners [without first seeking
257	255		satisfaction from partnership property] if:
258	256		(1) the partnership is a debtor in bankruptcy;
259	257		(2) the creditor and the partner or partners whose
260	258		property is the subject of the proceeding brought by the creditor
261	259		[partnership] agreed that the creditor is not required to comply
262	260		with Subsection (b)(2) [(b)];
263	261		(3) a court orders otherwise, based on a finding that
264	262		partnership property subject to execution in the state is clearly
265	263		insufficient to satisfy the judgment or that compliance with
266	264		Subsection (b)(2) [(b)] is excessively burdensome; or
267	265		(4) liability is imposed on the partner by law or
268	266		contract independently of the person's status as a partner.
269	267		SECTION 13. Section 152.606, Business Organizations Code,
270	268		is amended to read as follows:
271	269		Sec. 152.606. INDEMNIFICATION OF WITHDRAWN PARTNER [FOR
272	270		CERTAIN LIABILITY]. [(a)] A partnership shall indemnify a
273	271		withdrawn partner whose interest is redeemed against all [a]
274	272		partnership obligations, whether [liability] incurred before or
275	273		after the date of withdrawal, except for an obligation [a
276	274		liability:
277	275		[(1) that is unknown to the partnership at the time; or
278	276		[(2)] incurred by an act of the withdrawn partner
279	277		under Section 152.504.
280	278		[(b) For purposes of this section, a liability is unknown to
281	279		the partnership if it is not known to a partner other than the
282	280		withdrawn partner.]
283	281		SECTION 14. Sections 153.551(b) and (c), Business
284	282		Organizations Code, are amended to read as follows:
285	283		(b) All books and records required to be maintained by a [A]
286	284		limited partnership under this section may be maintained in any
287	285		form and manner permitted under Section 3.151(b) [shall maintain
288	286		its records in written form or in another form capable of being
289	287		converted to written form in a reasonable time].
290	288		(c) A limited partnership shall keep in its registered
291	289		office in this state and make available to a partner on reasonable
292	290		request the street address of its principal office in the United
293	291		States in which the records required by this section are maintained
294	292		or made available.
295	293		SECTION 15. This Act takes effect September 1, 2019.