Texas 2021 - 87th Regular

Texas House Bill HB3364 Compare Versions

Only one version of the bill is available at this time.

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1	1	87R5833 SRA-F
2	2	By: Turner of Tarrant H.B. No. 3364
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to business entities.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Sections 1.002(33), (49), and (53), Business
10	10	Organizations Code, are amended to read as follows:
11	11	(33) "General partner" means:
12	12	(A) each partner in a general partnership; or
13	13	(B) a person who has become, and has not ceased to
14	14	be, [is admitted to a limited partnership as] a general partner in a
15	15	limited partnership in accordance with the governing documents of
16	16	the limited partnership or this code.
17	17	(49) "Limited partner" means a person who has become,
18	18	and has not ceased to be, [been admitted to a limited partnership
19	19	as] a limited partner in a limited partnership in accordance with
20	20	the governing documents of the limited partnership or this code [as
21	21	provided by:
22	22	[(A) in the case of a domestic limited
23	23	partnership, Chapter 153; or
24	24	[(B) in the case of a foreign limited partnership,
25	25	the laws of its jurisdiction of formation].
26	26	(53) "Member" means:
27	27	(A) in the case of a limited liability company, a
28	28	person who [is a member or] has become, and has not ceased to be,
29	29	[been admitted as] a member in the limited liability company as
30	30	provided by [under] its governing documents or this code;
31	31	(B) in the case of a nonprofit corporation, a
32	32	person who has membership rights in the nonprofit corporation under
33	33	its governing documents;
34	34	(C) in the case of a cooperative association, a
35	35	member of a nonshare or share association;
36	36	(D) in the case of a nonprofit association, a
37	37	person who has membership rights in the nonprofit association under
38	38	its governing documents; or
39	39	(E) in the case of a professional association, a
40	40	person who has membership rights in the professional association
41	41	under its governing documents.
42	42	SECTION 2. Subchapter B, Chapter 2, Business Organizations
43	43	Code, is amended by adding Section 2.115 to read as follows:
44	44	Sec. 2.115. CHOICE OF FORUM PROVISIONS. (a) In this
45	45	section, "internal entity claim" means a claim of any nature,
46	46	including a derivative claim in the right of an entity, that is
47	47	based on, arises from, or relates to the internal affairs of the
48	48	entity, as defined by Section 1.105.
49	49	(b) The governing documents of a domestic entity may
50	50	require, consistent with applicable state and federal
51	51	jurisdictional requirements, that any internal entity claims shall
52	52	be brought only in a court in this state.
53	53	SECTION 3. Section 3.010, Business Organizations Code, is
54	54	amended to read as follows:
55	55	Sec. 3.010. SUPPLEMENTAL PROVISIONS REQUIRED IN
56	56	CERTIFICATE OF FORMATION OF LIMITED LIABILITY COMPANY. In addition
57	57	to the information required by Section 3.005, the certificate of
58	58	formation of a limited liability company must state:
59	59	(1) whether the limited liability company initially
60	60	has [will] or does [will] not have managers;
61	61	(2) if the limited liability company initially has
62	62	[will have] managers, the name and address of each initial manager
63	63	of the limited liability company; and
64	64	(3) if the limited liability company does [will] not
65	65	initially have managers, the name and address of each initial
66	66	member of the limited liability company.
67	67	SECTION 4. Section 3.060(a), Business Organizations Code,
68	68	is amended to read as follows:
69	69	(a) In addition to the provisions authorized or required by
70	70	Section 3.059, a restated certificate of formation for a for-profit
71	71	corporation or professional corporation may omit any prior
72	72	statements regarding [update] the [current] number of directors and
73	73	the names and addresses of the persons serving as directors and, at
74	74	the corporation's election, may insert a statement regarding the
75	75	current number of directors and the names and addresses of the
76	76	persons currently serving as directors.
77	77	SECTION 5. Section 3.061(a), Business Organizations Code,
78	78	is amended to read as follows:
79	79	(a) In addition to the provisions authorized or required by
80	80	Section 3.059, a restated certificate of formation for a nonprofit
81	81	corporation may omit any prior statements regarding [update] the
82	82	[current] number of directors and the names and addresses of the
83	83	persons serving as directors and, at the corporation's election,
84	84	may insert a statement regarding the current number of directors
85	85	and the names and addresses of the persons currently serving as
86	86	directors.
87	87	SECTION 6. Section 3.0611, Business Organizations Code, is
88	88	amended to read as follows:
89	89	Sec. 3.0611. SUPPLEMENTAL PROVISIONS FOR RESTATED
90	90	CERTIFICATE OF FORMATION FOR LIMITED LIABILITY COMPANY. In
91	91	addition to the provisions authorized or required by Section 3.059,
92	92	a restated certificate of formation for a limited liability company
93	93	may omit any prior statements regarding whether the company has or
94	94	does not have managers and the names and addresses of managers or
95	95	members and, at the company's election, may insert a statement:
96	96	(1) regarding whether [if the company's certificate of
97	97	formation states that] the company currently has or does not [will]
98	98	have [one or more] managers[, update the names and addresses of the
99	99	persons serving as managers]; [or]
100	100	(2) [if the certificate of formation states] that the
101	101	company currently has [will not have] managers and [, update] the
102	102	names and addresses of the persons currently serving as managers;
103	103	or
104	104	(3) that the company currently does not have managers
105	105	and the names and addresses of the current members of the company.
106	106	SECTION 7. Section 3.251, Business Organizations Code, is
107	107	amended to read as follows:
108	108	Sec. 3.251. DEFINITIONS [EMERGENCY DEFINED]. In [For
109	109	purposes of] this subchapter:
110	110	(1) "Emergency" means any of the following:
111	111	(A) an attack on the United States, a state, or a
112	112	political subdivision of a state;
113	113	(B) a nuclear or atomic disaster;
114	114	(C) the occurrence of a catastrophic event,
115	115	including:
116	116	(i) an epidemic or pandemic;
117	117	(ii) a hurricane, tropical storm, tornado,
118	118	or other weather condition; or
119	119	(iii) a riot or civil disturbance;
120	120	(D) the declaration of a national emergency by
121	121	the United States government;
122	122	(E) the declaration of an emergency by a state or
123	123	a political subdivision of a state; or
124	124	(F) any other similar emergency situation.
125	125	(2) "Emergency action" means an action taken by
126	126	majority vote of the governing persons present at a meeting of the
127	127	governing authority of a domestic entity during an emergency
128	128	period.
129	129	(3) "Emergency period" means any period during which
130	130	the governing authority of a domestic entity, due to a condition
131	131	that is a part of or results from an emergency, is unable to satisfy
132	132	one or more requirements of the entity's governing documents or
133	133	this code necessary for action by vote of the governing authority
134	134	outside of an emergency period[, an emergency exists if a majority
135	135	of a domestic entity's governing persons cannot readily participate
136	136	in a meeting because of the occurrence of a catastrophic event].
137	137	SECTION 8. Section 3.252, Business Organizations Code, is
138	138	amended to read as follows:
139	139	Sec. 3.252. PROVISIONS IN GOVERNING DOCUMENTS. (a) The
140	140	[Except as otherwise provided by the entity's governing documents,
141	141	the] governing persons and, if applicable, the owners[,] or members
142	142	of a domestic entity may adopt provisions in the domestic entity's
143	143	governing documents regarding [the management of the entity during
144	144	an] emergency actions, including provisions that apply only during
145	145	an emergency period that authorize, limit, or prohibit:
146	146	(1) [prescribing] procedures for calling a meeting of
147	147	the governing persons;
148	148	(2) the necessity of a quorum for action by vote at a
149	149	meeting of the governing persons;
150	150	(3) [establishing] minimum requirements for
151	151	participation at the meeting of the governing persons; and
152	152	(4) the designation of [(3) designating] additional
153	153	or substitute governing persons.
154	154	(b) Any [The emergency] provisions in a domestic entity's
155	155	governing documents that apply only during an emergency period must
156	156	be adopted in accordance with:
157	157	(1) the requirements of the governing documents that
158	158	apply outside of an emergency period; and
159	159	(2) the applicable provisions of this code that apply
160	160	outside of an emergency period.
161	161	SECTION 9. Subchapter F, Chapter 3, Business Organizations
162	162	Code, is amended by adding Section 3.2535 to read as follows:
163	163	Sec. 3.2535. ACTIONS DURING EMERGENCY PERIOD. (a) Except
164	164	as otherwise limited or prohibited by the domestic entity's
165	165	governing documents or except as provided by Subsection (b), the
166	166	governing authority of a domestic entity may take an emergency
167	167	action during an emergency period without satisfying the
168	168	requirements of the entity's governing documents or this code that
169	169	apply outside of an emergency period with respect to:
170	170	(1) procedures for calling a meeting of the governing
171	171	persons;
172	172	(2) the necessity of a quorum for action by vote at a
173	173	meeting of the governing persons;
174	174	(3) minimum requirements for participation at a
175	175	meeting of the governing persons; and
176	176	(4) any other procedural requirements for action at a
177	177	meeting of the governing persons.
178	178	(b) Subsection (a) does not apply to an action by the
179	179	governing authority of a domestic entity:
180	180	(1) to amend the entity's governing documents; or
181	181	(2) that must be approved by a separate vote of the
182	182	owners or members of the entity in accordance with the requirements
183	183	of the entity's governing documents or this code that apply outside
184	184	of an emergency period.
185	185	SECTION 10. Section 3.255, Business Organizations Code, is
186	186	amended to read as follows:
187	187	Sec. 3.255. EFFECT OF EMERGENCY ACTION [TAKEN]. An
188	188	emergency action taken by the governing persons of a domestic
189	189	entity in accordance with the entity's governing documents or
190	190	Section 3.2535, if taken in good faith and based on the reasonable
191	191	belief that the emergency action was in the entity's best interest
192	192	[in accordance with the emergency provisions]:
193	193	(1) is binding on the entity; and
194	194	(2) may not be used to impose liability on a managerial
195	195	official, employee, or agent of the entity.
196	196	SECTION 11. Section 6.201, Business Organizations Code, is
197	197	amended by amending Subsection (b) and adding Subsections (b-1),
198	198	(b-2), (b-3), (b-4), and (b-5) to read as follows:
199	199	(b) The owners or members or the governing authority of a
200	200	filing entity, or a committee of the governing authority, may take
201	201	action without holding a meeting, providing notice, or taking a
202	202	vote if each person entitled to vote on the action signs a written
203	203	consent or consents stating the action taken. Except as provided by
204	204	this section, the written consent or consents take effect when
205	205	signed by all persons entitled to vote on the action.
206	206	(b-1) By a provision in the written consent or consents or
207	207	by a written instruction to an agent of the filing entity by one or
208	208	more persons granting the written consent or consents, a written
209	209	consent or consents may be made to take effect at a future time,
210	210	which must be not later than the 60th day after the date all persons
211	211	entitled to vote on the action have signed the consent or consents.
212	212	If a written consent or consents described by this subsection are to
213	213	take effect at a future time, all of the written consents take
214	214	effect at that future effective time.
215	215	(b-2) If two or more of the written consents described by
216	216	Subsection (b-1) have different future effective times, the latest
217	217	future effective time of those consents applies to all of the
218	218	consents. The written consent or consents are considered to have
219	219	been given at the applicable effective time so long as all of the
220	220	persons entitled to vote on the action, which is determined as of
221	221	that effective time or, if applicable, the record date established
222	222	under Section 6.102, have:
223	223	(1) signed the consent or consents; and
224	224	(2) not revoked their consent or consents before the
225	225	applicable effective time.
226	226	(b-3) By a provision in the written consent or by a written
227	227	instruction to an agent of the filing entity, a person signing a
228	228	written consent may provide that the person's consent is to take
229	229	effect at a future time, which must be not later than the 60th day
230	230	after the date all persons entitled to vote on the action have
231	231	signed the person's consent or consents. A person's written consent
232	232	is considered to have been given at the later of that future
233	233	effective time or a later effective time determined under
234	234	Subsection (b-1) or (b-2), so long as the person:
235	235	(1) is entitled to vote on the action subject to the
236	236	consent, which is determined as of the applicable effective time
237	237	or, if applicable, the record date established under Section 6.102;
238	238	and
239	239	(2) did not revoke the consent before the applicable
240	240	effective time.
241	241	(b-4) A person signing a written consent may revoke the
242	242	person's consent any time before the applicable effective time of
243	243	the consent.
244	244	(b-5) For purposes of this section, a "future time" includes
245	245	a time that is determined on the happening of an event.
246	246	SECTION 12. Section 6.202, Business Organizations Code, is
247	247	amended by amending Subsection (c) and adding Subsections (c-1),
248	248	(c-2), (c-3), (c-4), (e), and (f) to read as follows:
249	249	(c) A written consent or consents described by Subsection
250	250	(b) must include:
251	251	(1) the date each owner or member signed the consent;
252	252	and
253	253	(2) the date of signing of the latest dated consent
254	254	satisfying the minimum number of owners or members necessary to
255	255	approve the action that is the subject of the consent.
256	256	(c-1) The date described by Subsection (c)(2) must be [is
257	257	effective to take the action that is the subject of the consent only
258	258	if the consent or consents are delivered to the entity] not later
259	259	than the 60th day after the date of the signing of the earliest
260	260	dated consent of the owners or members signing the consent or
261	261	consents. If a consent does not contain the date that an owner or
262	262	member signed the consent, the date that the owner or member signed
263	263	the consent is considered to be the date that the consent is
264	264	received by the filing entity. A written consent or consents
265	265	described by Subsection (b) that are not solicited by or on behalf
266	266	of a filing entity or the filing entity's governing authority must
267	267	be delivered to the entity as required by Section 6.203 to take
268	268	effect [is delivered to the entity as required by Section 6.203].
269	269	(c-2) By a provision in the written consent or consents or
270	270	by a written instruction to an agent of the filing entity from one
271	271	or more persons granting the written consent or consents, a written
272	272	consent or consents described by Subsection (b) may be made to take
273	273	effect at a future time, which must be not later than the 60th day
274	274	after the date the last of the minimum number of owners or members
275	275	necessary to sign the consent or consents as required by Subsection
276	276	(b) have signed the consent or consents. If the written consent or
277	277	consents described by this subsection are to take effect at a future
278	278	time, all of the written consent or consents take effect at that
279	279	future effective time.
280	280	(c-3) If two or more of the written consents described by
281	281	Subsection (c-2) have different future effective times, the latest
282	282	future effective time of those consents applies to all of the
283	283	consents. The written consent or consents are considered to have
284	284	been given for purposes of this section at the applicable effective
285	285	time so long as owners or members satisfying the minimum
286	286	requirements in Subsection (b):
287	287	(1) are determined to be owners or members, as
288	288	applicable, as of:
289	289	(A) that effective time; or
290	290	(B) if applicable, the record date established
291	291	under Section 6.102; and
292	292	(2) have signed and not revoked the owner's or member's
293	293	consent or consents at any time before the applicable effective
294	294	time of the consent.
295	295	(c-4) By a provision in the written consent or by a written
296	296	instruction to an agent of the filing entity, an owner or member of
297	297	a filing entity signing a written consent described by Subsection
298	298	(b) may provide that the owner's or member's consent is to take
299	299	effect at a future time, which must be not later than the 60th day
300	300	after the date on which the consent is signed by the last of the
301	301	minimum number of owners or members of the entity necessary to sign
302	302	the consent or consents as required by Subsection (b). The owner's
303	303	or member's consent is considered to have been given for purposes of
304	304	this section at the later of that future effective time or a later
305	305	effective time determined under Subsection (c-3) so long as:
306	306	(1) the person is an owner or member, as applicable, as
307	307	of:
308	308	(A) the applicable effective time; or
309	309	(B) if applicable, the record date established
310	310	under Section 6.102; and
311	311	(2) the owner or member did not revoke the consent at
312	312	any time before the applicable effective time of the consent.
313	313	(e) An owner or member of a filing entity signing a written
314	314	consent may revoke the owner's or member's consent at any time
315	315	before the applicable effective time of the consent.
316	316	(f) For purposes of this section, a "future time" includes a
317	317	time that is determined on the happening of an event.
318	318	SECTION 13. Section 8.002(a), Business Organizations Code,
319	319	is amended to read as follows:
320	320	(a) Except as provided by Subsection (b) and Section 8.005,
321	321	this chapter does not apply to a:
322	322	(1) general partnership; or
323	323	(2) limited liability company.
324	324	SECTION 14. Section 8.003, Business Organizations Code, is
325	325	amended to read as follows:
326	326	Sec. 8.003. LIMITATIONS IN GOVERNING DOCUMENTS. A
327	327	governing document [(a) The certificate of formation] of an
328	328	enterprise may restrict the circumstances under which the
329	329	enterprise must or may indemnify or may advance expenses to a person
330	330	under this chapter.
331	331	[(b) The written partnership agreement of a limited
332	332	partnership may restrict the circumstances in the same manner as
333	333	the certificate of formation under Subsection (a).]
334	334	SECTION 15. Subchapter A, Chapter 8, Business Organizations
335	335	Code, is amended by adding Section 8.005 to read as follows:
336	336	Sec. 8.005. INDEMNIFICATION AGAINST NEGLIGENCE. (a) This
337	337	section applies to:
338	338	(1) an enterprise subject to this chapter; and
339	339	(2) notwithstanding Section 8.002, a general
340	340	partnership or limited liability company.
341	341	(b) A requirement under the laws of this state that
342	342	indemnification or exculpation for negligence be expressly and
343	343	conspicuously stated does not apply to a provision in an
344	344	enterprise's governing documents that provides for indemnification
345	345	or exculpation.
346	346	SECTION 16. Section 9.251, Business Organizations Code, is
347	347	amended to read as follows:
348	348	Sec. 9.251. ACTIVITIES NOT CONSTITUTING TRANSACTING
349	349	BUSINESS IN THIS STATE. For purposes of this chapter, activities
350	350	that do not constitute transaction of business in this state
351	351	include:
352	352	(1) maintaining or defending an action or suit or an
353	353	administrative or arbitration proceeding, or effecting the
354	354	settlement of:
355	355	(A) such an action, suit, or proceeding; or
356	356	(B) a claim or dispute to which the entity is a
357	357	party;
358	358	(2) holding a meeting of the entity's managerial
359	359	officials, owners, or members or carrying on another activity
360	360	concerning the entity's internal affairs;
361	361	(3) maintaining a bank account;
362	362	(4) maintaining an office or agency for:
363	363	(A) transferring, exchanging, or registering
364	364	securities the entity issues; or
365	365	(B) appointing or maintaining a trustee or
366	366	depositary related to the entity's securities;
367	367	(5) voting the interest of an entity the foreign
368	368	entity has acquired;
369	369	(6) effecting a sale through an independent
370	370	contractor;
371	371	(7) creating, as borrower or lender, or acquiring
372	372	indebtedness or a mortgage or other security interest in real or
373	373	personal property;
374	374	(8) securing or collecting a debt due the entity or
375	375	enforcing a right in property that secures a debt due the entity;
376	376	(9) transacting business in interstate commerce;
377	377	(10) conducting an isolated transaction that:
378	378	(A) is completed within a period of 30 days; and
379	379	(B) is not in the course of a number of repeated,
380	380	similar transactions;
381	381	(11) in a case that does not involve an activity that
382	382	would constitute the transaction of business in this state if the
383	383	activity were one of a foreign entity acting in its own right:
384	384	(A) exercising a power of executor or
385	385	administrator of the estate of a nonresident decedent under
386	386	ancillary letters issued by a court of this state; or
387	387	(B) exercising a power of a trustee under the
388	388	will of a nonresident decedent, or under a trust created by one or
389	389	more nonresidents of this state, or by one or more foreign entities;
390	390	(12) regarding a debt secured by a mortgage or lien on
391	391	real or personal property in this state:
392	392	(A) acquiring the debt in a transaction outside
393	393	this state or in interstate commerce;
394	394	(B) collecting or adjusting a principal or
395	395	interest payment on the debt;
396	396	(C) enforcing or adjusting a right or property
397	397	securing the debt;
398	398	(D) taking an action necessary to preserve and
399	399	protect the interest of the mortgagee in the security; or
400	400	(E) engaging in any combination of transactions
401	401	described by this subdivision;
402	402	(13) investing in or acquiring, in a transaction
403	403	outside of this state, a royalty or other nonoperating mineral
404	404	interest;
405	405	(14) executing a division order, contract of sale, or
406	406	other instrument incidental to ownership of a nonoperating mineral
407	407	interest; [or]
408	408	(15) owning, without more, real or personal property
409	409	in this state; or
410	410	(16) acting as a governing person of a domestic or
411	411	foreign entity that is registered to transact business in this
412	412	state.
413	413	SECTION 17. Section 11.001(3), Business Organizations
414	414	Code, is amended to read as follows:
415	415	(3) "Existing claim" with respect to an entity means:
416	416	(A) a claim that existed before the entity's
417	417	termination and is not barred by limitations; or
418	418	(B) a claim that exists after the entity's
419	419	termination and before the third anniversary of the date of the
420	420	entity's termination and is not barred by limitations, including a
421	421	claim under a contractual or other obligation incurred after
422	422	termination.
423	423	SECTION 18. Section 11.153, Business Organizations Code, is
424	424	amended to read as follows:
425	425	Sec. 11.153. COURT REVOCATION OF FRAUDULENT TERMINATION.
426	426	(a) Notwithstanding any provision of this code to the contrary, a
427	427	court may order the revocation of termination of an entity's
428	428	existence that was terminated as a result of actual or constructive
429	429	fraud. In an action under this section, any limitation period
430	430	provided by law is tolled in accordance with the discovery
431	431	rule. The secretary of state shall take any action necessary to
432	432	implement an order under this section.
433	433	(b) If the termination of an entity's existence is revoked
434	434	under Subsection (a):
435	435	(1) the revocation relates back to the effective date
436	436	of the termination and takes effect as of that date; and
437	437	(2) the entity's status as an entity continues in
438	438	effect as if the termination of the entity's existence had never
439	439	occurred.
440	440	SECTION 19. Section 11.254, Business Organizations Code, is
441	441	amended to read as follows:
442	442	Sec. 11.254. REINSTATEMENT OF CERTIFICATE OF FORMATION
443	443	FOLLOWING TAX FORFEITURE. (a) A filing entity whose certificate of
444	444	formation has been forfeited under the provisions of the Tax Code
445	445	must follow the procedures in the Tax Code to reinstate its
446	446	certificate of formation. A filing entity whose certificate of
447	447	formation is reinstated under the provisions of the Tax Code is
448	448	considered to have continued in existence without interruption from
449	449	the date of forfeiture.
450	450	(b) The reinstatement of a filing entity's certificate of
451	451	formation after its forfeiture has no effect on any issue of the
452	452	personal liability of the governing persons, officers, or agents of
453	453	the filing entity during the period between forfeiture and
454	454	reinstatement of the certificate of formation.
455	455	SECTION 20. Section 11.359, Business Organizations Code, is
456	456	amended by adding Subsection (c) to read as follows:
457	457	(c) Notwithstanding Subsections (a) and (b), the
458	458	extinguishment of an existing claim with respect to a terminated
459	459	filing entity as provided by this section is nullified if:
460	460	(1) the filing entity's termination is revoked with
461	461	retroactive effect under Section 11.153;
462	462	(2) the terminated filing entity is reinstated with
463	463	retroactive effect as provided by Section 11.206;
464	464	(3) the terminated filing entity is reinstated with
465	465	retroactive effect as provided by Section 11.253(d); or
466	466	(4) the terminated filing entity's certificate of
467	467	formation is reinstated under the Tax Code with retroactive effect
468	468	as provided by Section 11.254.
469	469	SECTION 21. Section 21.314(a), Business Organizations
470	470	Code, is amended to read as follows:
471	471	(a) For purposes of this subchapter, the determination of
472	472	whether a corporation is or would be insolvent and the
473	473	determination of the amount [value] of a corporation's [net
474	474	assets,] stated capital[,] or surplus, the value of the
475	475	corporation's net assets, and the amount or value of any component
476	476	of the corporation's stated capital, surplus, or net assets, [each
477	477	of the components of net assets, stated capital, or surplus] may be
478	478	based on:
479	479	(1) financial statements of the corporation, which may
480	480	include financial statements of subsidiary entities or other
481	481	entities accounted for on a consolidated basis or on the equity
482	482	method of accounting, [including financial statements] that:
483	483	(A) [include subsidiary corporations or other
484	484	corporations accounted for on a consolidated basis or on the equity
485	485	method of accounting; or
486	486	[(B)] present the financial condition of the
487	487	corporation, and any subsidiary or other entities included in
488	488	those financial statements, in accordance with generally accepted
489	489	accounting principles or international financial reporting
490	490	standards; or
491	491	(B) have been [(2) financial statements]
492	492	prepared using the method of accounting used to file the
493	493	corporation's federal income tax return or using any other
494	494	accounting practices and principles that are reasonable under the
495	495	circumstances;
496	496	(2) [(3)] financial information, including condensed
497	497	or summary financial statements, that is prepared on the same basis
498	498	as financial statements described by Subdivision (1) [or (2)];
499	499	(3) [(4)] a projection, a forecast, or other
500	500	forward-looking information relating to the future economic
501	501	performance, financial condition, or liquidity of the corporation
502	502	that is reasonable under the circumstances;
503	503	(4) [(5)] a fair valuation or information from any
504	504	other method that is reasonable under the circumstances; or
505	505	(5) [(6)] a combination of a statement, a valuation,
506	506	or information authorized by this section.
507	507	SECTION 22. Subchapter H, Chapter 21, Business
508	508	Organizations Code, is amended by adding Section 21.3521 to read as
509	509	follows:
510	510	Sec. 21.3521. SHAREHOLDER MEETINGS BY REMOTE
511	511	COMMUNICATION. Except for any limitation or other requirements in
512	512	the governing documents of the corporation, if a meeting of a
513	513	corporation's shareholders under Section 21.351 or 21.352 is held
514	514	by means of a telephone conference or other communication system
515	515	authorized by Section 6.002, the meeting is considered to have
516	516	satisfied the requirement of Section 6.002(a) that shareholders
517	517	participating in the meeting be able to communicate with all other
518	518	persons participating in the meeting if the corporation implements
519	519	reasonable measures to provide each shareholder entitled to vote at
520	520	the meeting, or the shareholder's proxyholder, a reasonable
521	521	opportunity to:
522	522	(1) vote on matters submitted to the shareholders; and
523	523	(2) read or hear the proceedings of the meeting
524	524	substantially concurrently with those proceedings.
525	525	SECTION 23. Section 21.551(2), Business Organizations
526	526	Code, is amended to read as follows:
527	527	(2) "Shareholder" includes [means] a shareholder as
528	528	defined by Section 1.002 or a beneficial owner whose shares are held
529	529	in a voting trust or by a nominee on the beneficial owner's behalf.
530	530	SECTION 24. Section 21.908(a), Business Organizations
531	531	Code, is amended to read as follows:
532	532	(a) If a defective corporate act ratified under this
533	533	subchapter would have required under any other provision of the
534	534	corporate statute the filing of a filing instrument or other
535	535	document with the filing officer, the corporation shall file a
536	536	certificate of validation with respect to the defective corporate
537	537	act in accordance with Chapter 4, regardless of whether a filing
538	538	instrument or other document was previously filed with respect to
539	539	the defective corporate act. [The filing of another filing
540	540	instrument or document is not required.]
541	541	SECTION 25. Section 22.508(a), Business Organizations
542	542	Code, is amended to read as follows:
543	543	(a) If a defective corporate act ratified under this
544	544	subchapter would have required under any other provision of the
545	545	corporate statute the filing of a filing instrument or other
546	546	document with the filing officer, the corporation shall file a
547	547	certificate of validation with respect to the defective corporate
548	548	act in accordance with Chapter 4, regardless of whether a filing
549	549	instrument or other document was previously filed with respect to
550	550	the defective corporate act. [The filing of another filing
551	551	instrument or document is not required.]
552	552	SECTION 26. Section 101.052(d), Business Organizations
553	553	Code, is amended to read as follows:
554	554	(d) The company agreement may contain any provisions for the
555	555	regulation and management of the affairs of the limited liability
556	556	company not inconsistent with law [or the certificate of
557	557	formation].
558	558	SECTION 27. Section 101.206, Business Organizations Code,
559	559	is amended by adding Subsections (c-1), (c-2), and (g) to read as
560	560	follows:
561	561	(c-1) For purposes of this section, the determination of the
562	562	amount of a limited liability company's liabilities or the value of
563	563	a company's assets may be based on:
564	564	(1) financial statements of the company, which may
565	565	include the financial statements of subsidiary entities or other
566	566	entities accounted for on a consolidated basis or on the equity
567	567	method of accounting, that:
568	568	(A) present the financial condition of the
569	569	company and any subsidiary or other entities included in those
570	570	financial statements, in accordance with generally accepted
571	571	accounting principles or international financial reporting
572	572	standards; or
573	573	(B) have been prepared using the method of
574	574	accounting used to file the company's federal income tax return or
575	575	using any other accounting practices and principles that are
576	576	reasonable under the circumstances;
577	577	(2) financial information, including condensed or
578	578	summary financial statements, that is prepared on the same basis as
579	579	financial statements described by Subdivision (1);
580	580	(3) projections, forecasts, or other forward-looking
581	581	information relating to the future economic performance, financial
582	582	condition, or liquidity of the company that is reasonable under the
583	583	circumstances;
584	584	(4) a fair valuation or information from any other
585	585	method that is reasonable under the circumstances; or
586	586	(5) a combination of a statement, valuation, or
587	587	information authorized by this subsection.
588	588	(c-2) Subsection (c-1) does not apply to the computation of
589	589	the franchise tax or any other tax imposed on a limited liability
590	590	company under the laws of this state.
591	591	(g) An action alleging a distribution is made in violation
592	592	of this section must be commenced not later than the second
593	593	anniversary of the date of the distribution.
594	594	SECTION 28. Section 101.251, Business Organizations Code,
595	595	is amended to read as follows:
596	596	Sec. 101.251. GOVERNING AUTHORITY. (a) The governing
597	597	authority of a limited liability company consists of:
598	598	(1) the managers of the company, if the company
599	599	agreement provides [company's certificate of formation states]
600	600	that the company is managed by [will have] one or more managers; or
601	601	(2) the members of the company, if the company
602	602	agreement provides [company's certificate of formation states]
603	603	that the company is managed by the members [will not have managers].
604	604	(b) If the company agreement does not provide otherwise, the
605	605	governing authority of a limited liability company consists of:
606	606	(1) the managers of the company, if the company's
607	607	certificate of formation states that the company has managers; or
608	608	(2) the members of the company, if the company's
609	609	certificate of formation does not state that the company has
610	610	managers.
611	611	SECTION 29. Section 101.451(3), Business Organizations
612	612	Code, is amended to read as follows:
613	613	(3) "Member" includes [means] a person who is a member
614	614	or is an assignee of a membership interest or a person who
615	615	beneficially owns a membership interest through a voting trust or a
616	616	nominee on the person's behalf.
617	617	SECTION 30. Section 101.457, Business Organizations Code,
618	618	is amended to read as follows:
619	619	Sec. 101.457. TOLLING OF STATUTE OF LIMITATIONS. A written
620	620	demand filed with the limited liability company under Section
621	621	101.453 tolls the statute of limitations on the claim on which
622	622	demand is made until the later of:
623	623	(1) the 31st day after the expiration of any waiting
624	624	period under Section 101.453(a) [153.403]; or
625	625	(2) the 31st day after the expiration of any stay
626	626	granted under Section 101.455 [153.405], including all
627	627	continuations of the stay.
628	628	SECTION 31. Section 153.151, Business Organizations Code,
629	629	is amended by adding Subsection (a-1) to read as follows:
630	630	(a-1) On formation of a limited partnership, a person
631	631	becomes a general partner if the person:
632	632	(1) has entered into the partnership agreement as a
633	633	general partner; and
634	634	(2) is named as a general partner in the certificate of
635	635	formation of the limited partnership.
636	636	SECTION 32. Section 153.210, Business Organizations Code,
637	637	is amended by adding Subsections (c), (d), and (e) to read as
638	638	follows:
639	639	(c) For purposes of this section, the determination of the
640	640	amount of a limited partnership's liabilities or the value of a
641	641	limited partnership's assets may be based on:
642	642	(1) financial statements of the limited partnership,
643	643	which may include the financial statements of subsidiary entities
644	644	or other entities accounted for on a consolidated basis or on the
645	645	equity method of accounting, that:
646	646	(A) present the financial condition of the
647	647	limited partnership and any subsidiary or other entities included
648	648	in those financial statements in accordance with generally accepted
649	649	accounting principles or international financial reporting
650	650	standards; or
651	651	(B) have been prepared using the method of
652	652	accounting used to file the partnership's federal income tax return
653	653	or using any other accounting practices and principles that are
654	654	reasonable under the circumstances;
655	655	(2) financial information, including condensed or
656	656	summary financial statements, that are prepared on the same basis
657	657	as financial statements described by Subdivision (1);
658	658	(3) projections, forecasts, or other forward-looking
659	659	information relating to the future economic performance, financial
660	660	condition, or liquidity of the limited partnership that is
661	661	reasonable under the circumstances;
662	662	(4) a fair valuation or information from any other
663	663	method that is reasonable under the circumstances; or
664	664	(5) a combination of a statement, valuation, or
665	665	information authorized by this subsection.
666	666	(d) Subsection (c) does not apply to the computation of the
667	667	franchise tax or any other tax imposed on a limited partnership
668	668	under the laws of this state.
669	669	(e) An action alleging a distribution is made in violation
670	670	of this section must be commenced not later than the second
671	671	anniversary of the date of the distribution.
672	672	SECTION 33. Section 200.209, Business Organizations Code,
673	673	is amended to read as follows:
674	674	Sec. 200.209. DETERMINATION OF SOLVENCY, NET ASSETS, STATED
675	675	CAPITAL, AND SURPLUS. (a) The determination of whether a real
676	676	estate investment trust is or would be insolvent and the
677	677	determination of the amount [value] of a real estate investment
678	678	trust's [net assets,] stated capital[,] or surplus or any component
679	679	of the trust's stated capital or surplus, or the value of the real
680	680	estate investment trust's net assets or any component of the trust's
681	681	net assets, [and each of the components of net assets, stated
682	682	capital, or surplus] may be based on:
683	683	(1) financial statements of the real estate investment
684	684	trust that present the financial condition of the real estate
685	685	investment trust in accordance with generally accepted accounting
686	686	principles or international financial reporting standards,
687	687	including financial statements that include subsidiary entities or
688	688	other entities accounted for on a consolidated basis or on the
689	689	equity method of accounting;
690	690	(2) financial statements prepared using the method of
691	691	accounting used to file the real estate investment trust's federal
692	692	income tax return or using any other accounting practices and
693	693	principles that are reasonable under the circumstances;
694	694	(3) financial information, including condensed or
695	695	summary financial statements, that is prepared on the same basis as
696	696	financial statements described by Subdivision (1) or (2);
697	697	(4) a projection, a forecast, or other forward-looking
698	698	information relating to the future economic performance, financial
699	699	condition, or liquidity of the real estate investment trust that is
700	700	reasonable under the circumstances;
701	701	(5) a fair valuation or information from any other
702	702	method that is reasonable under the circumstances; or
703	703	(6) a combination of a statement, a valuation, or
704	704	information authorized by this section.
705	705	(b) Subsection (a) does not apply to the computation of the
706	706	franchise tax or any other tax imposed on a real estate investment
707	707	trust under the laws of this state.
708	708	SECTION 34. The following provisions of the Business
709	709	Organizations Code are repealed:
710	710	(1) Section 3.253; and
711	711	(2) Section 3.254.
712	712	SECTION 35. Sections 101.206 and 153.210, Business
713	713	Organizations Code, as amended by this Act, apply only to a
714	714	distribution made on or after the effective date of this Act. A
715	715	distribution made before the effective date of this Act is governed
716	716	by the law in effect on the date the distribution was made, and the
717	717	former law is continued in effect for that purpose.
718	718	SECTION 36. This Act takes effect September 1, 2021.