Texas 2023 - 88th Regular

Texas Senate Bill SB1514 Compare Versions

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1	1	S.B. No. 1514
2	2
3	3
4	4	AN ACT
5	5	relating to business entities and nonprofit entities.
6	6	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
7	7	SECTION 1. Sections 71.002(2) and (7), Business & Commerce
8	8	Code, are amended to read as follows:
9	9	(2) "Assumed name" means:
10	10	(A) for an individual, a name that does not
11	11	include the surname of the individual;
12	12	(B) for a partnership, a name that does not
13	13	include the surname or other legal name of each joint venturer or
14	14	general partner;
15	15	(C) for an individual or a partnership, a name,
16	16	including a surname, that suggests the existence of additional
17	17	owners by including words such as "Company," "& Company," "& Son,"
18	18	"& Sons," "& Associates," "Brothers," and similar words, but not
19	19	words that merely describe the business being conducted or the
20	20	professional service being rendered;
21	21	(D) for a limited partnership, a name other than
22	22	the name stated in its certificate of formation;
23	23	(E) for a company, a name used by the company;
24	24	(F) for a corporation, a name other than the name
25	25	stated in its certificate of formation or a comparable document;
26	26	(G) for a limited liability partnership, a name
27	27	other than the name stated in its application filed with the office
28	28	of the secretary of state or a comparable document;
29	29	(H) for a limited liability company, a name other
30	30	than the name stated in its certificate of formation or a comparable
31	31	document, including the name of any protected series of the limited
32	32	liability company established by its company agreement if the name
33	33	of the protected series does not include the name of the limited
34	34	liability company stated in the limited liability company's
35	35	certificate of formation or a comparable document; and
36	36	(I) for a registered series of a domestic limited
37	37	liability company, a name other than the name stated in its
38	38	certificate of registered series.
39	39	(7) "Office" means,[:
40	40	[(A)] for a person that is not an individual [or
41	41	that is a corporation that is not required to or does not maintain a
42	42	registered office in this state], the person's[:
43	43	[(i)] principal office in this state or
44	44	outside of this state, as applicable[; and
45	45	[(ii) principal place of business if not
46	46	the same as the person's principal office; and
47	47	[(B) for a corporation, limited partnership,
48	48	limited liability partnership, limited liability company, or
49	49	foreign filing entity that is required to maintain a registered
50	50	office in this state, the entity's:
51	51	[(i) registered office; and
52	52	[(ii) principal office if not the same as
53	53	the entity's registered office].
54	54	SECTION 2. Subchapter B, Chapter 1, Business Organizations
55	55	Code, is amended by adding Section 1.055 to read as follows:
56	56	Sec. 1.055. DOCTRINE OF INDEPENDENT LEGAL SIGNIFICANCE. An
57	57	action validly taken under a provision of this code may not be
58	58	considered invalid because the action is identical or similar in
59	59	substance to an action that could have been taken under another
60	60	provision of this code but fails to satisfy one or more requirements
61	61	prescribed by that other provision.
62	62	SECTION 3. Section 3.059(b), Business Organizations Code,
63	63	is amended to read as follows:
64	64	(b) A restated certificate of formation may omit:
65	65	(1) the name and address of each organizer other than
66	66	the name and address of each general partner of a limited
67	67	partnership or trust manager of a real estate investment trust;
68	68	[and]
69	69	(2) the initial mailing address of the filing entity;
70	70	and
71	71	(3) any other information that may be omitted under
72	72	the provisions of this code applicable to the filing entity.
73	73	SECTION 4. Section 3.203, Business Organizations Code, is
74	74	amended to read as follows:
75	75	Sec. 3.203. SIGNATURE REQUIREMENT. (a) A certificate
76	76	representing an ownership interest in [The managerial official or
77	77	officials of] a domestic entity must contain the signature or
78	78	signatures of each managerial official of the entity that is
79	79	authorized by the governing documents of the entity to sign
80	80	certificated ownership interests of the entity [must sign any
81	81	certificate representing an ownership interest in the entity].
82	82	(b) A certificated ownership interest that contains the
83	83	[manual or facsimile] signature of a person who is no longer a
84	84	managerial official of a domestic entity when the certificate is
85	85	issued may be issued by the entity in the same manner and with the
86	86	same effect as if the person had remained a managerial official.
87	87	SECTION 5. Section 3.251(3), Business Organizations Code,
88	88	is amended to read as follows:
89	89	(3) "Emergency period" means any period during which
90	90	the governing authority of a domestic entity, due to a condition
91	91	that is a part of or results from an emergency, is unable to satisfy
92	92	one or more requirements of the entity's governing documents or
93	93	this code necessary for action by vote at a meeting of the governing
94	94	authority outside of an emergency period.
95	95	SECTION 6. Section 4.005, Business Organizations Code, is
96	96	amended by adding Subsection (f) to read as follows:
97	97	(f) Subject to any qualification stated in the certificate,
98	98	a certificate issued by the secretary of state stating that a
99	99	domestic registered series is in existence may be relied on as
100	100	conclusive evidence of the existence of the domestic registered
101	101	series.
102	102	SECTION 7. Section 5.051, Business Organizations Code, is
103	103	amended to read as follows:
104	104	Sec. 5.051. ASSUMED NAME. A domestic entity, a protected
105	105	series or registered series of a domestic limited liability
106	106	company, or a foreign entity having authority to transact business
107	107	in this state may transact business under an assumed name on
108	108	compliance [by filing an assumed name certificate in accordance]
109	109	with Chapter 71, Business & Commerce Code. The requirements of this
110	110	subchapter do not apply to an assumed name set forth in an assumed
111	111	name certificate filed under that chapter.
112	112	SECTION 8. Section 6.201(b-3), Business Organizations
113	113	Code, is amended to read as follows:
114	114	(b-3) By a provision in the written consent or by a written
115	115	instruction to an agent of the filing entity, a person signing a
116	116	written consent may provide that the person's consent is to take
117	117	effect at a future time, which must be not later than the 60th day
118	118	after the date all persons entitled to vote on the action have
119	119	signed the [person's] consent or consents. The [A] person's written
120	120	consent is considered to have been given at the later of that future
121	121	effective time or a later effective time determined under
122	122	Subsection (b-1) or (b-2), so long as the person:
123	123	(1) is entitled to vote on the action subject to the
124	124	consent, which is determined as of the applicable effective time
125	125	or, if applicable, the record date established under Section 6.102;
126	126	and
127	127	(2) did not revoke the consent before the applicable
128	128	effective time.
129	129	SECTION 9. Sections 6.202(b) and (c-3), Business
130	130	Organizations Code, are amended to read as follows:
131	131	(b) Except as provided by this code, the certificate of
132	132	formation of a filing entity may authorize the owners or members of
133	133	the entity to take action without holding a meeting, providing
134	134	prior notice, or taking a vote if owners or members of the entity
135	135	having at least the minimum number of votes that would be necessary
136	136	to take the action that is the subject of the consent at a meeting,
137	137	in which each owner or member entitled to vote on the action is
138	138	present and votes, sign a written consent or consents stating the
139	139	action taken.
140	140	(c-3) If two or more of the written consents described by
141	141	Subsection (c-2) have different future effective times, the latest
142	142	future effective time of those consents applies to all of the
143	143	consents. The written consent or consents are considered to have
144	144	been given for purposes of this section at the applicable effective
145	145	time so long as owners or members satisfying the minimum
146	146	requirements in Subsection (b):
147	147	(1) are determined to be owners or members, as
148	148	applicable, as of:
149	149	(A) that effective time; or
150	150	(B) if applicable, the record date established
151	151	under Section 6.102; and
152	152	(2) have signed and not revoked the [the owner's or
153	153	member's] consent or consents at any time before the applicable
154	154	effective time of the consent or consents.
155	155	SECTION 10. Section 10.151(a), Business Organizations
156	156	Code, is amended to read as follows:
157	157	(a) A [After approval of a plan of merger or a plan of
158	158	exchange as provided by this code, a] certificate of merger, which
159	159	may also include an exchange, or a certificate of exchange, as
160	160	applicable, must be filed for a merger or interest exchange to
161	161	become effective if:
162	162	(1) for a merger:
163	163	(A) any domestic entity that is a party to the
164	164	merger is a filing entity; or
165	165	(B) any domestic entity to be created under the
166	166	plan of merger is a filing entity; or
167	167	(2) for an exchange, an ownership or membership
168	168	interest in any filing entity is to be acquired in the interest
169	169	exchange.
170	170	SECTION 11. Section 10.154(a), Business Organizations
171	171	Code, is amended to read as follows:
172	172	(a) A [After approval of a plan of conversion as provided by
173	173	this code, a] certificate of conversion must be filed for the
174	174	conversion to become effective if:
175	175	(1) any domestic entity that is a party to the
176	176	conversion is a filing entity; or
177	177	(2) any domestic entity to be created under the plan of
178	178	conversion is a filing entity.
179	179	SECTION 12. Section 10.355(c), Business Organizations
180	180	Code, is amended to read as follows:
181	181	(c) A notice required to be provided under Subsection (a),
182	182	(b), or (b-1) must:
183	183	(1) be accompanied by:
184	184	(A) a copy of this subchapter; or
185	185	(B) information directing the owner to a publicly
186	186	available electronic resource at which this subchapter may be
187	187	accessed without subscription or cost; and
188	188	(2) advise the owner of the location of the
189	189	responsible organization's principal executive offices to which a
190	190	notice required under Section 10.356(b)(1) or a demand under
191	191	Section 10.356(b)(3), or both, may be provided.
192	192	SECTION 13. Section 10.364(d), Business Organizations
193	193	Code, is amended to read as follows:
194	194	(d) The responsible organization shall[:
195	195	[(1) immediately] pay the amount of the judgment to
196	196	the [a] holder of the [an uncertificated] ownership interest on the
197	197	terms and conditions ordered by the court[; and
198	198	[(2) pay the amount of the judgment to a holder of a
199	199	certificated ownership interest immediately after the certificate
200	200	holder surrenders to the responsible organization an endorsed
201	201	certificate representing the ownership interest].
202	202	SECTION 14. Section 11.056, Business Organizations Code, is
203	203	amended by amending Subsection (a) and adding Subsection (c) to
204	204	read as follows:
205	205	(a) The termination of the continued membership of the last
206	206	remaining member of a domestic limited liability company is an
207	207	event requiring winding up under Section 11.051(4) unless, not
208	208	later than one year [the 90th day] after the date of the termination
209	209	or within the period of time provided by the company agreement:
210	210	(1) [,] the legal representative or successor of the
211	211	last remaining member agrees:
212	212	(A) [(1)] to continue the company; and
213	213	(B) [(2)] to become a member of the company
214	214	effective as of the date of the termination or to designate another
215	215	person who agrees to become a member of the company effective as of
216	216	the date of the termination; or
217	217	(2) a member is admitted to the company in the manner
218	218	provided by the company agreement, effective as of the occurrence
219	219	of the termination, under a provision of the company agreement that
220	220	specifically provides for the admission of a member to the company
221	221	after there is no longer a remaining member of the company.
222	222	(c) The company agreement may provide that the legal
223	223	representative or successor of the last remaining member is
224	224	obligated to agree to continue the company and to the admission of
225	225	the legal representative or successor, or the representative's or
226	226	successor's nominee or designee, as a member effective as of the
227	227	occurrence of the event that terminates the continued membership of
228	228	the last remaining member.
229	229	SECTION 15. Sections 11.202(a) and (c), Business
230	230	Organizations Code, are amended to read as follows:
231	231	(a) To the extent applicable, a terminated entity, to be
232	232	reinstated, must complete the requirements of this section [not
233	233	later than the third anniversary of the date the termination of the
234	234	terminated entity's existence took effect].
235	235	(c) After approval of the reinstatement of a filing entity
236	236	that was terminated, [and not later than the third anniversary of
237	237	the date of the filing of the entity's certificate of termination,]
238	238	the filing entity shall file a certificate of reinstatement in
239	239	accordance with Chapter 4.
240	240	SECTION 16. Section 11.253, Business Organizations Code, is
241	241	amended by adding Subsection (e) to read as follows:
242	242	(e) The reinstatement of a terminated limited liability
243	243	company automatically reinstates any protected series or
244	244	registered series that terminated because of the termination of the
245	245	company.
246	246	SECTION 17. Section 11.254, Business Organizations Code, is
247	247	amended by adding Subsection (c) to read as follows:
248	248	(c) The reinstatement of a limited liability company's
249	249	certificate of formation after its forfeiture automatically
250	250	reinstates any protected series or registered series that
251	251	terminated because of the forfeiture.
252	252	SECTION 18. Subchapter F, Chapter 11, Business
253	253	Organizations Code, is amended by adding Section 11.255 to read as
254	254	follows:
255	255	Sec. 11.255. REINSTATEMENT OF CERTIFICATE OF FORMATION
256	256	FOLLOWING FAILURE TO REVIVE; REINSTATEMENT RETROACTIVE. (a) A
257	257	nonprofit corporation whose certificate of formation has been
258	258	terminated under Section 22.364 must follow the procedure required
259	259	by Section 22.365 to reinstate the nonprofit corporation's
260	260	certificate of formation. A nonprofit corporation whose
261	261	certificate of formation is reinstated under Section 22.365 is
262	262	considered to have continued in existence without interruption from
263	263	the date of termination.
264	264	(b) A limited partnership whose certificate of formation
265	265	has been terminated under Section 153.311 must follow the procedure
266	266	required by Section 153.312 to reinstate the limited partnership's
267	267	certificate of formation. A limited partnership whose certificate
268	268	of formation is reinstated under Section 153.312 is considered to
269	269	have continued in existence without interruption from the date of
270	270	termination.
271	271	SECTION 19. Sections 11.356(a) and (b), Business
272	272	Organizations Code, are amended to read as follows:
273	273	(a) Notwithstanding the termination of a domestic filing
274	274	entity under this code or the Tax Code [chapter], the terminated
275	275	filing entity continues in existence until the third anniversary of
276	276	the effective date of the entity's termination only for purposes
277	277	of:
278	278	(1) prosecuting or defending in the terminated filing
279	279	entity's name an action or proceeding brought by or against the
280	280	terminated entity;
281	281	(2) permitting the survival of an existing claim by or
282	282	against the terminated filing entity;
283	283	(3) holding title to and liquidating property that
284	284	remained with the terminated filing entity at the time of
285	285	termination or property that is collected by the terminated filing
286	286	entity after termination;
287	287	(4) applying or distributing property, or its
288	288	proceeds, as provided by Section 11.053; and
289	289	(5) settling affairs not completed before
290	290	termination.
291	291	(b) A terminated filing entity may not continue its
292	292	existence for the purpose of continuing the business or affairs for
293	293	which the terminated filing entity was formed unless the terminated
294	294	filing entity is reinstated under this code or the Tax Code
295	295	[Subchapter E].
296	296	SECTION 20. Section 11.359(c), Business Organizations
297	297	Code, is amended to read as follows:
298	298	(c) Notwithstanding Subsections (a) and (b), the
299	299	extinguishment of an existing claim with respect to a terminated
300	300	filing entity as provided by this section is nullified if:
301	301	(1) the filing entity's termination is revoked with
302	302	retroactive effect under Section 11.153;
303	303	(2) the terminated filing entity is reinstated with
304	304	retroactive effect as provided by Section 11.206;
305	305	(3) the terminated filing entity is reinstated with
306	306	retroactive effect as provided by Section 11.253(d); [or]
307	307	(4) the terminated filing entity's certificate of
308	308	formation is reinstated under the Tax Code with retroactive effect
309	309	as provided by Section 11.254;
310	310	(5) the terminated filing entity's certificate of
311	311	formation is reinstated under Chapter 22 with retroactive effect as
312	312	provided by Section 11.255(a); or
313	313	(6) the terminated filing entity's certificate of
314	314	formation is reinstated under Chapter 153 with retroactive effect
315	315	as provided by Section 11.255(b).
316	316	SECTION 21. Section 20.002(c), Business Organizations
317	317	Code, is amended to read as follows:
318	318	(c) The fact that an act or transfer is beyond the scope of
319	319	the expressed purpose or purposes of the corporation or is
320	320	inconsistent with an expressed limitation on the authority of an
321	321	officer or director may be asserted in a proceeding:
322	322	(1) by a shareholder or member against the corporation
323	323	to enjoin the performance of an act or the transfer of property by
324	324	or to the corporation;
325	325	(2) by the corporation, acting directly or through a
326	326	receiver, trustee, or other legal representative, or through
327	327	members or shareholders in a representative suit, against an
328	328	officer or director or former officer or director of the
329	329	corporation for exceeding that person's authority; or
330	330	(3) by the attorney general to:
331	331	(A) terminate the corporation;
332	332	(B) enjoin the corporation from performing an
333	333	unauthorized act; or
334	334	(C) enforce divestment of real property acquired
335	335	or held contrary to the laws of this state.
336	336	SECTION 22. Section 21.157, Business Organizations Code, is
337	337	amended by amending Subsections (a) and (d) and adding Subsections
338	338	(e), (f), and (g) to read as follows:
339	339	(a) Except as provided by Section 21.158, a corporation may
340	340	issue shares for consideration if authorized by the board of
341	341	directors of the corporation. Shares may be issued in one or more
342	342	transactions in the number, at the time, and for the consideration
343	343	stated in or determined by the authorization of the board of
344	344	directors.
345	345	(d) An authorization of the board of directors may delegate
346	346	to a person or persons, in addition to the board of directors, the
347	347	authority to enter into one or more transactions to issue shares.
348	348	With respect to a transaction entered into by a person or persons to
349	349	whom authority was delegated under this subsection, shares may be
350	350	issued in the number, at the time, and for the consideration the
351	351	person or persons may determine [The authorization by the board of
352	352	directors for the issuance of shares may provide that any shares to
353	353	be issued under the authorization may be issued:
354	354	[(1) in one or more transactions in the numbers and at
355	355	the times as stated in or determined by the authorization; or
356	356	[(2) in the manner stated in the authorization, which
357	357	may include a determination or action by any person or persons,
358	358	including the corporation,] if that [the] authorization of the
359	359	board of directors:
360	360	(1) states:
361	361	(A) the maximum number of shares that may be
362	362	issued under the authorization;
363	363	(B) the period of time during which the shares
364	364	may be issued; and
365	365	(C) the minimum amount of consideration for which
366	366	the shares may be issued; and
367	367	(2) does not permit the person or persons to whom
368	368	authority was delegated to issue shares to that person or those
369	369	persons.
370	370	(e) A provision of an authorization provided under
371	371	Subsection (a) or (d) may depend on a fact ascertainable outside of
372	372	the authorization, if the manner in which the fact operates on the
373	373	authorization is clearly and expressly included in the
374	374	authorization. In this subsection, "fact" includes the occurrence
375	375	of any event, including a determination or action by any person or
376	376	persons.
377	377	(f) If the authorization of the board of directors delegates
378	378	to a person or persons the authority to enter into a transaction to
379	379	issue shares under Subsection (d), the provisions of the
380	380	authorization under Subsection (d)(1) may not depend on a
381	381	determination or action by the person or persons to whom authority
382	382	was delegated.
383	383	(g) In this section and notwithstanding Section 1.002,
384	384	"person" includes a committee of the board of directors.
385	385	SECTION 23. Section 21.160(a), Business Organizations
386	386	Code, is amended to read as follows:
387	387	(a) Subject to Subsection (b) and Section 21.157,
388	388	consideration to be received for shares must be determined:
389	389	(1) by the board of directors;
390	390	(2) by a plan of conversion, if the shares are to be
391	391	issued by a converted corporation under the plan; or
392	392	(3) by a plan of merger, if the shares are to be issued
393	393	under the plan by a corporation created under the plan.
394	394	SECTION 24. Section 21.168, Business Organizations Code, is
395	395	amended by amending Subsections (c) and (d) and adding Subsections
396	396	(e), (f), (g), and (h) to read as follows:
397	397	(c) Subject to the certificate of formation, a right or
398	398	option described by this section must state the terms and
399	399	conditions on which, the time within which, and any consideration,
400	400	including a formula by which the consideration may be determined,
401	401	for which the shares may be purchased or received from the
402	402	corporation on the exercise of the right or option. [A formula by
403	403	which the consideration may be determined may include or be made
404	404	dependent on facts ascertainable outside the formula, if the manner
405	405	in which those facts operate on the formula is clearly or expressly
406	406	set forth in the formula or in the authorization approving the
407	407	formula.]
408	408	(d) Subject to the certificate of formation, convertible
409	409	indebtedness described by this section must state the terms and
410	410	conditions on which, the time within which, and the conversion
411	411	ratio, which may be stated as a formula by which the conversion
412	412	ratio may be determined, at which the indebtedness may be converted
413	413	into shares. The formula may include or be made dependent on facts
414	414	ascertainable outside the formula, if the manner in which those
415	415	facts operate on the formula is clearly or expressly provided by the
416	416	formula or in the authorization approving the formula.
417	417	(e) An authorization of the board of directors may delegate
418	418	to a person or persons, in addition to the board of directors, the
419	419	authority to enter into one or more transactions to issue rights or
420	420	options. For a transaction entered into by a person or persons to
421	421	whom authority was delegated under this subsection, the rights or
422	422	options may be issued in the number, at the time, and for the
423	423	consideration as the person or persons may determine if that
424	424	authorization of the board of directors:
425	425	(1) states:
426	426	(A) the maximum number of rights or options, and
427	427	the maximum number of shares issuable on exercise of those rights or
428	428	options, that may be issued under the authorization;
429	429	(B) the period of time during which the rights or
430	430	options, and the shares issuable on exercise of those rights or
431	431	options, may be issued; and
432	432	(C) the minimum amount of consideration:
433	433	(i) if any, for which the rights or options
434	434	may be issued; and
435	435	(ii) for the shares issuable on exercise of
436	436	the rights or options; and
437	437	(2) does not permit the person or persons to whom
438	438	authority was delegated to issue rights, options, or shares to that
439	439	person or those persons.
440	440	(f) A provision of a right or option or an authorization of a
441	441	right or option under this section may depend on a fact
442	442	ascertainable outside of the right, option, or authorization, if
443	443	the manner in which the fact operates on the right, option, or
444	444	authorization is clearly and expressly set forth in the right,
445	445	option, or authorization. In this subsection, "fact" includes the
446	446	occurrence of any event, including a determination or action by any
447	447	person or persons.
448	448	(g) If the authorization of the board of directors delegates
449	449	to a person or persons the authority to enter into a transaction to
450	450	issue rights or options under Subsection (e), the provisions of the
451	451	authorization under Subsection (e)(1) may not depend on a
452	452	determination or action by the person or persons to whom authority
453	453	was delegated.
454	454	(h) In this section and notwithstanding Section 1.002,
455	455	"person" includes a committee of the board of directors.
456	456	SECTION 25. Section 21.169(c), Business Organizations
457	457	Code, is amended to read as follows:
458	458	(c) Except as provided by Section 21.168, unless [Unless]
459	459	otherwise provided under the terms of rights or options or the
460	460	agreement or plan under which the rights or options are issued, the
461	461	authority to grant, amend, redeem, extend, or replace the rights or
462	462	options on behalf of a corporation is vested exclusively in the
463	463	board of directors of the corporation. A bylaw may not require the
464	464	board to grant, amend, redeem, extend, or replace the rights or
465	465	options.
466	466	SECTION 26. Section 21.218, Business Organizations Code, is
467	467	amended by amending Subsections (b) and (c) and adding Subsection
468	468	(b-1) to read as follows:
469	469	(b) On written demand stating a proper purpose, a holder of
470	470	shares of a corporation for at least six months immediately
471	471	preceding the holder's demand, or a holder of at least five percent
472	472	of all of the outstanding shares of a corporation, is entitled to
473	473	examine and copy, at a reasonable time at the corporation's
474	474	principal place of business or other location approved by the
475	475	corporation and the holder, the corporation's books, records of
476	476	account, minutes, [and] share transfer records, and other records,
477	477	whether in written or other tangible form, if the record is
478	478	reasonably related to and appropriate to examine and copy for that
479	479	proper [relating to the stated] purpose.
480	480	(b-1) The examination and copying may be conducted by the
481	481	holder of shares [in person] or through an agent, accountant, or
482	482	attorney. An agent, accountant, or attorney who conducts an
483	483	examination and copying under this section is subject to any
484	484	obligations of the shareholder with respect to the records made
485	485	available for examination and copying.
486	486	(c) This section does not impair the power of a court, on the
487	487	presentation of proof of proper purpose by a beneficial or record
488	488	holder of shares, to compel the production for examination by the
489	489	holder, at the holder's cost, of the books and records of account
490	490	[accounts], minutes, [and] share transfer records, and other
491	491	records, whether in written or other tangible form, of a
492	492	corporation, regardless of the period during which the holder was a
493	493	beneficial holder or record holder and regardless of the number of
494	494	shares held by the person.
495	495	SECTION 27. Section 21.220, Business Organizations Code, is
496	496	amended to read as follows:
497	497	Sec. 21.220. PENALTY FOR FAILURE TO PREPARE VOTING LIST. An
498	498	officer or agent of a corporation who is in charge of the
499	499	corporation's share transfer records and who does not prepare the
500	500	list of shareholders, keep the list on file for a 10-day period
501	501	before the annual meeting, or [produce and] keep the list available
502	502	for inspection [at the annual meeting] as required by Sections
503	503	21.354 and 21.372 is liable to a shareholder who suffers damages
504	504	because of the failure for the damage caused by the failure.
505	505	SECTION 28. Section 21.354(a), Business Organizations
506	506	Code, is amended to read as follows:
507	507	(a) The list of shareholders entitled to vote at the meeting
508	508	prepared under Section 21.372 shall be[:
509	509	[(1)] subject to inspection by a shareholder during
510	510	regular business hours[; and
511	511	[(2) produced and kept open at the meeting].
512	512	SECTION 29. Section 21.372(a-1), Business Organizations
513	513	Code, is amended to read as follows:
514	514	(a-1) Instead of being kept on file, the list required by
515	515	Subsection (a) may be kept on a reasonably accessible electronic
516	516	data system if the information required to gain access to the list
517	517	is provided with notice of the meeting. Section 21.353(c)[,
518	518	Section 21.354(a-1),] and this subsection may not be construed to
519	519	require a corporation to include any electronic contact information
520	520	of a shareholder on the list. A corporation that elects to make the
521	521	list available on an electronic data system must take reasonable
522	522	measures to ensure the information is available only to
523	523	shareholders of the corporation.
524	524	SECTION 30. Section 22.220, Business Organizations Code, is
525	525	amended by amending Subsection (a) and adding Subsection (c) to
526	526	read as follows:
527	527	(a) The certificate of formation or bylaws of a corporation
528	528	may provide that an action required by this chapter to be taken at a
529	529	meeting of the corporation's directors or an action that may be
530	530	taken at a meeting of the directors or a committee may be taken
531	531	without holding a meeting, providing prior notice, or taking a vote
532	532	if a written consent, stating the action to be taken, is signed by
533	533	the number of directors or committee members necessary to take that
534	534	action at a meeting at which all of the directors or committee
535	535	members are present and voting. The consent must state the date of
536	536	each director's or committee member's signature.
537	537	(c) Notwithstanding a provision of this code, advance
538	538	notice is not required to be given to take an action by written
539	539	consent as provided by this section.
540	540	SECTION 31. Section 22.230(e), Business Organizations
541	541	Code, is amended to read as follows:
542	542	(e) If at least one of the conditions of Subsection (b) is
543	543	satisfied, neither the corporation nor any of the corporation's
544	544	members [shareholders] will have a cause of action against any of
545	545	the persons described by Subsection (a) for breach of duty with
546	546	respect to the making, authorization, or performance of the
547	547	contract or transaction because the person had the relationship or
548	548	interest described by Subsection (a) or took any of the actions
549	549	authorized by Subsection (d).
550	550	SECTION 32. Section 101.001(1), Business Organizations
551	551	Code, is amended to read as follows:
552	552	(1) "Company agreement" means any agreement, written,
553	553	implied, or oral, of the members concerning the affairs or the
554	554	conduct of the business of a limited liability company. A company
555	555	agreement of a limited liability company having only one member is
556	556	not unenforceable because only one person is a party to the company
557	557	agreement. A written company agreement may consist of one or more
558	558	agreements, instruments, or other writings and may include or
559	559	incorporate one or more schedules, supplements, or other writings
560	560	providing for the conduct of the business and affairs of the limited
561	561	liability company or of a series of the limited liability company.
562	562	SECTION 33. Section 101.051, Business Organizations Code,
563	563	is amended to read as follows:
564	564	Sec. 101.051. CERTAIN PROVISIONS CONTAINED IN CERTIFICATE
565	565	OF FORMATION. (a) A provision that may be included [contained] in
566	566	the company agreement of a limited liability company may
567	567	[alternatively] be included in the certificate of formation of the
568	568	company as provided by Section 3.005(b).
569	569	(b) A reference in this title to the company agreement of a
570	570	limited liability company includes any provision contained in the
571	571	company's certificate of formation to the extent that the provision
572	572	reflects the agreement of each member concerning the affairs or the
573	573	conduct of the business of the limited liability company [instead
574	574	of the company agreement as provided by Subsection (a)].
575	575	SECTION 34. Section 101.052, Business Organizations Code,
576	576	is amended by amending Subsection (f) and adding Subsection (g) to
577	577	read as follows:
578	578	(f) A company agreement is enforceable by or against the
579	579	limited liability company, including a protected series or
580	580	registered series of the company, regardless of whether the
581	581	company, or the protected series or registered series of the
582	582	company, has signed or otherwise expressly adopted the agreement.
583	583	(g) A member or manager of a limited liability company, or
584	584	an assignee of a membership interest of a limited liability
585	585	company, is bound by the company agreement, regardless of whether
586	586	the member, manager, or assignee signs the company agreement.
587	587	SECTION 35. Sections 101.054(a) and (e), Business
588	588	Organizations Code, are amended to read as follows:
589	589	(a) Except as provided by this section, the following
590	590	provisions may not be waived or modified in the company agreement of
591	591	a limited liability company:
592	592	(1) this section;
593	593	(2) Section 101.101, 101.151, 101.206, 101.501, or
594	594	Subchapter M of Chapter 101, except that Sections 101.601(d),
595	595	101.610, 101.611, 101.613(a), 101.616(2)(A) through (D), 101.618,
596	596	or 101.619(b) may be waived or modified in the company agreement;
597	597	(3) Chapter 1, if the provision is used to interpret a
598	598	provision or define a word or phrase contained in a section listed
599	599	in this subsection;
600	600	(4) Chapter 2, except that Section 2.104(c)(2),
601	601	2.104(c)(3), or 2.113 may be waived or modified in the company
602	602	agreement;
603	603	(5) Chapter 3, except that Subchapters C and E may be
604	604	waived or modified in the company agreement; or
605	605	(6) Chapter 4, 5, 10, 11, or 12[, other than Section
606	606	11.056].
607	607	(e) The company agreement may not unreasonably restrict a
608	608	member's or assignee's rights [person's right of access to records
609	609	and information] under Section 101.502.
610	610	SECTION 36. Subchapter B, Chapter 101, Business
611	611	Organizations Code, is amended by adding Section 101.056 to read as
612	612	follows:
613	613	Sec. 101.056. RATIFICATION OF VOID OR VOIDABLE ACTS OR
614	614	TRANSACTIONS. (a) Any act or transaction taken by or with respect
615	615	to a limited liability company under this code or a company
616	616	agreement that is void or voidable when taken may be ratified, and
617	617	the failure to comply with any requirements of the company
618	618	agreement which caused the act or transaction to be void or voidable
619	619	may be waived, in accordance with this section.
620	620	(b) An act or transaction may be ratified or waived, as
621	621	applicable, with the approval of the members, managers, or other
622	622	persons whose approval would be required under the company
623	623	agreement at the time of the ratification or waiver:
624	624	(1) for the void or voidable act or transaction to be
625	625	validly taken; or
626	626	(2) to amend the company agreement in a manner that
627	627	would permit the void or voidable act or transaction to be validly
628	628	taken.
629	629	(c) If the void or voidable act or transaction was the
630	630	issuance or assignment of any membership interests, the membership
631	631	interests purportedly issued or assigned are deemed to have not
632	632	been issued or assigned for purposes of determining whether the
633	633	void or voidable act or transaction is ratified or waived under this
634	634	section.
635	635	(d) Any act or transaction ratified or waived under this
636	636	section is deemed validly taken at the time the act or transaction
637	637	occurred.
638	638	(e) This section may not be construed to limit the
639	639	accomplishment of a ratification or waiver of a void or voidable act
640	640	or transaction by other lawful means.
641	641	SECTION 37. Section 101.206(e), Business Organizations
642	642	Code, is amended to read as follows:
643	643	(e) This section may not be construed to affect the
644	644	obligation of a member of a limited liability company to return a
645	645	distribution to the company under the company agreement, another
646	646	agreement, or other state or federal law.
647	647	SECTION 38. Section 101.252, Business Organizations Code,
648	648	is amended to read as follows:
649	649	Sec. 101.252. MANAGEMENT BY GOVERNING AUTHORITY. The
650	650	governing authority of a limited liability company shall direct the
651	651	management of [manage] the business and affairs of the company and
652	652	exercise or authorize the exercise of the powers of the company as
653	653	provided by:
654	654	(1) the company agreement; and
655	655	(2) this title and the provisions of Title 1
656	656	applicable to a limited liability company to the extent that the
657	657	company agreement does not provide for the management of the
658	658	company.
659	659	SECTION 39. Section 101.358(b), Business Organizations
660	660	Code, is amended to read as follows:
661	661	(b) Notwithstanding Sections 6.201 and 6.202, an action may
662	662	be taken without holding a meeting, providing prior or subsequent
663	663	notice, or taking a vote if a written consent or consents stating
664	664	the action to be taken is signed by the number of governing persons,
665	665	members, or committee members of a limited liability company, as
666	666	appropriate, necessary to have at least the minimum number of votes
667	667	that would be necessary to take the action at a meeting at which
668	668	each governing person, member, or committee member, as appropriate,
669	669	entitled to vote on the action is present and votes.
670	670	SECTION 40. Section 101.457, Business Organizations Code,
671	671	is amended to read as follows:
672	672	Sec. 101.457. TOLLING OF STATUTE OF LIMITATIONS. A written
673	673	demand filed with the limited liability company under Section
674	674	101.453 tolls the statute of limitations on the claim on which
675	675	demand is made until the later of:
676	676	(1) the 31st day after the expiration of any waiting
677	677	period under Section 101.453 [101.453(a)]; or
678	678	(2) the 31st day after the expiration of any stay
679	679	granted under Section 101.455, including all continuations of the
680	680	stay.
681	681	SECTION 41. Section 101.502, Business Organizations Code,
682	682	is amended to read as follows:
683	683	Sec. 101.502. RIGHT TO EXAMINE RECORDS [AND CERTAIN OTHER
684	684	INFORMATION]. (a) A member of a limited liability company or an
685	685	assignee of a membership interest in a limited liability company,
686	686	[or a representative of the member or assignee,] on written demand
687	687	stating [request and for] a proper purpose, is entitled to [may]
688	688	examine and copy at a [any] reasonable time at the limited liability
689	689	company's principal office identified under Section 101.501(c) or
690	690	another location approved by the limited liability company and the
691	691	member or assignee, any records of the limited liability company,
692	692	whether in written or other tangible form, which are reasonably
693	693	related to and appropriate to examine and copy for that proper
694	694	purpose [and at the member's or assignee's expense:
695	695	[(1) records required under Sections 3.151 and
696	696	101.501; and
697	697	[(2) other information regarding the business,
698	698	affairs, and financial condition of the company that is reasonable
699	699	for the person to examine and copy].
700	700	(b) The examination and copying under Subsection (a) may be
701	701	conducted [A limited liability company shall provide to a member of
702	702	the company or an assignee of a membership interest in the company,
703	703	on written request] by the member or assignee or through an agent,
704	704	accountant, or attorney. An agent, accountant, or attorney who
705	705	conducts an examination and copying under this section is subject
706	706	to any obligations of the member or assignee with respect to the
707	707	records made available for examination and copying. [sent to the
708	708	company's principal office in the United States or, if different,
709	709	the person and address designated in the company agreement, a free
710	710	copy of:]
711	711	(c) On written request of a member or an assignee of a
712	712	membership interest, the limited liability company shall provide to
713	713	the requesting member or assignee without charge copies of:
714	714	(1) the company's certificate of formation, including
715	715	any amendments to or restatements of the certificate of formation;
716	716	(2) if in writing, the company agreement, including
717	717	any amendments to or restatements of the company agreement; and
718	718	(3) any tax returns described by Section
719	719	101.501(a)(2).
720	720	(d) A demand or request made by a member or assignee under
721	721	Subsection (a) or (c) must be made to:
722	722	(1) the person who is designated to receive the demand
723	723	or request in the company agreement at the address designated in the
724	724	company agreement; or
725	725	(2) if there is no designation, a manager or managing
726	726	member at the limited liability company's principal office in the
727	727	United States.
728	728	SECTION 42. Section 101.601(c), Business Organizations
729	729	Code, is amended to read as follows:
730	730	(c) Nothing in this subchapter shall be construed to limit
731	731	the application of the principle of freedom of [to] contract to a
732	732	series that is not a protected series or a registered series.
733	733	Except as otherwise provided by Sections 101.627 through 101.636, a
734	734	series may not merge or convert.
735	735	SECTION 43. Section 101.623(b), Business Organizations
736	736	Code, is amended to read as follows:
737	737	(b) A certificate of registered series must state:
738	738	(1) the name of the limited liability company;
739	739	(2) the name of the registered series being formed,
740	740	which must conform with the requirements of Section 5.0561
741	741	[5.056(c)]; and
742	742	(3) if the registered series is formed under a plan of
743	743	conversion or merger, a statement to that effect.
744	744	SECTION 44. Section 101.624(d), Business Organizations
745	745	Code, is amended to read as follows:
746	746	(d) A manager associated with a registered series or, if
747	747	there is no manager, any member associated with the registered
748	748	series who becomes aware that any statement in a certificate of
749	749	registered series filed with respect to the registered series was
750	750	false when made, or that any provision in the certificate of
751	751	registered series has changed making the certificate of registered
752	752	series false in any material respect, or that the name of the
753	753	registered series does not comply with Section 101.626, shall
754	754	promptly amend the certificate of registered series.
755	755	SECTION 45. Section 101.625(b), Business Organizations
756	756	Code, is amended to read as follows:
757	757	(b) The certificate of termination must contain:
758	758	(1) the name of the limited liability company;
759	759	(2) the name of the registered series;
760	760	(3) the registered series' filing number assigned by
761	761	the secretary of state;
762	762	(4) the nature of the event requiring winding up of the
763	763	registered series;
764	764	(5) a statement that the registered series has
765	765	complied with the provisions of this code governing the series'
766	766	winding up; and
767	767	(6) any other information the person filing the
768	768	certificate of termination determines.
769	769	SECTION 46. Section 101.627(a), Business Organizations
770	770	Code, is amended to read as follows:
771	771	(a) Upon compliance with Section 101.628, a registered
772	772	series of a domestic limited liability company may convert to a
773	773	protected series of the domestic limited liability company by
774	774	filing a certificate of conversion that complies with Section
775	775	101.631 with the secretary of state in accordance with[,] and
776	776	taking effect as a filing instrument as specified[,] by Chapter 4.
777	777	SECTION 47. Section 101.628(g), Business Organizations
778	778	Code, is amended to read as follows:
779	779	(g) Any of the terms of the plan of conversion may be made
780	780	dependent on a fact ascertainable outside of the plan if the manner
781	781	in which the fact [those facts] will operate on the terms of the
782	782	conversion is clearly and expressly stated in the plan. In this
783	783	subsection, "fact" ["facts"] includes the occurrence of any event,
784	784	including a determination or action by any person.
785	785	SECTION 48. Section 101.631(a), Business Organizations
786	786	Code, is amended to read as follows:
787	787	(a) A [After adoption of a plan of conversion as provided by
788	788	Section 101.628, a] certificate of conversion must be signed by the
789	789	converting series and must include a statement certifying the
790	790	following:
791	791	(1) the name of the limited liability company and, if
792	792	it has been changed, the name under which the company's certificate
793	793	of formation was originally filed;
794	794	(2) the filing number of the limited liability company
795	795	assigned by the secretary of state;
796	796	(3) the name of the converting series and, if it is a
797	797	registered series and its name has been changed, the name under
798	798	which its certificate of registered series was originally filed;
799	799	(4) if the converting series is a registered series,
800	800	the filing number of the registered series assigned by the
801	801	secretary of state;
802	802	(5) that a plan of conversion is on file at the
803	803	principal place of business of the converting series, and the
804	804	address of the principal place of business;
805	805	(6) that a plan of conversion will be on file after the
806	806	conversion at the principal place of business of the converted
807	807	series, and the address of the principal place of business;
808	808	(7) that a copy of the plan of conversion will be on
809	809	written request furnished without cost by the converting series
810	810	before the conversion or by the converted series after the
811	811	conversion to any owner or member of the converting series or the
812	812	converted series; and
813	813	(8) that the plan of conversion has been adopted as
814	814	required by the company agreement of the limited liability company
815	815	and Section 101.628.
816	816	SECTION 49. Section 101.633(a)(1), Business Organizations
817	817	Code, is amended to read as follows:
818	818	(1) "Merger" means:
819	819	(A) the division of a merging series into:
820	820	(i) two or more new protected series or
821	821	[and] registered series; or
822	822	(ii) a surviving merging series and one or
823	823	more new protected series or registered series; or
824	824	(B) the combination of one or more merging series
825	825	with one or more merging series resulting in:
826	826	(i) one or more surviving merging series;
827	827	(ii) the creation of one or more new
828	828	protected series or registered series; or
829	829	(iii) one or more surviving merging series
830	830	and the creation of one or more new protected series or registered
831	831	series.
832	832	SECTION 50. Sections 101.633(b) and (e), Business
833	833	Organizations Code, are amended to read as follows:
834	834	(b) One or more merging series of the same limited liability
835	835	company may effect [affect] a merger as provided by a plan of merger
836	836	that is approved in accordance with this section and that complies
837	837	with Sections 101.634 through 101.636. The plan of merger shall
838	838	provide for one or more surviving or new protected series or
839	839	registered series of the same limited liability company.
840	840	(e) An item required by Subsection [Subsections] (d)(6),
841	841	(7), or [and] (8) may be included in the plan of merger by an
842	842	attachment or exhibit to the plan.
843	843	SECTION 51. Sections 101.634(a), (d), and (e), Business
844	844	Organizations Code, are amended to read as follows:
845	845	(a) If [After approval of a plan of merger as provided by
846	846	Section 101.633, if] a registered series is a party to the merger or
847	847	if a new registered series is to be created by the merger, a
848	848	certificate of merger must be signed by each merging series that is
849	849	a party to the merger and must include a statement certifying the
850	850	following:
851	851	(1) the name of each merging series that is a party to
852	852	the merger and the name of the limited liability company that formed
853	853	that merging series;
854	854	(2) that a plan of merger has been approved and
855	855	executed by or on behalf of each merging series that is to merge;
856	856	(3) the name of each merging series that survives the
857	857	merger and each new registered series or protected series that is
858	858	created by the merger;
859	859	(4) any amendment to the certificate of registered
860	860	series of any registered series that is a surviving merging series,
861	861	including a change in the name of the surviving registered series,
862	862	to be effected by the merger or a statement that amendments are
863	863	being made to the certificate of registered series of any
864	864	registered series that is a surviving merging series under a
865	865	certificate of amendment attached to the certificate of merger
866	866	under Subsection (d);
867	867	(5) the certificate of registered series for each new
868	868	registered series that is to be created by the merger is being filed
869	869	with the certificate of merger;
870	870	(6) that the plan of merger is on file at a place of
871	871	business of each surviving or new registered series or the limited
872	872	liability company that formed the registered series, and the
873	873	address of that place of business;
874	874	(7) that a copy of the plan of merger will be on
875	875	written request furnished without cost by each surviving merging
876	876	series or new registered series or protected series to any member of
877	877	any merging series that is a party to the merger or any registered
878	878	series or protected series created by the plan of merger and, for a
879	879	merger with multiple surviving or new series, to any creditor or
880	880	obligee of the parties to the merger at the time of the merger if a
881	881	liability or obligation is then outstanding;
882	882	(8) if approval of the members of any merging series
883	883	that was a party to the plan of merger is not required by this code
884	884	or the company agreement, a statement to that effect; and
885	885	(9) a statement that the plan of merger has been
886	886	approved as required by this code and by the company agreement.
887	887	(d) The certificate of merger must be filed with the
888	888	secretary of state in accordance with[,] and take effect as a filing
889	889	instrument as specified by Chapter 4. If a new registered series is
890	890	to be created by the merger, a certificate of registered series for
891	891	the new registered series that complies with Section 101.623 must
892	892	be simultaneously filed with the certificate of merger in
893	893	accordance with Chapter 4 as a filing instrument and must take
894	894	effect simultaneously with the effectiveness of the certificate of
895	895	merger.
896	896	(e) Whenever this section requires the filing of a
897	897	certificate of merger, that requirement may be [is] satisfied by
898	898	the filing of the plan of merger containing the information
899	899	required to be included in the certificate of merger as provided by
900	900	this section.
901	901	SECTION 52. Section 101.636, Business Organizations Code,
902	902	is amended to read as follows:
903	903	Sec. 101.636. PROHIBITION ON MERGER PERMITTED. A company
904	904	agreement may provide that a protected series or registered series
905	905	[company] does not have the power to merge under Section 101.633.
906	906	SECTION 53. Section 151.001(5), Business Organizations
907	907	Code, is amended to read as follows:
908	908	(5) "Partnership agreement" means any agreement,
909	909	written, implied, or oral, of the partners concerning a partnership
910	910	and the partnership's affairs or business, and includes amendments
911	911	to the partnership agreement. A partnership is not required to sign
912	912	its partnership agreement. A partnership is bound by its
913	913	partnership agreement whether or not the partnership signs the
914	914	partnership agreement. A partnership agreement may provide rights
915	915	to any person, including a person who is not a party to the
916	916	partnership agreement, to the extent contained in the partnership
917	917	agreement. A partner of a partnership or a transferee or assignee
918	918	of a partnership interest is bound by the partnership agreement
919	919	whether or not the partner, transferee, or assignee signs the
920	920	partnership agreement. A written partnership agreement may consist
921	921	of one or more agreements, instruments, or other writings and may
922	922	include or incorporate one or more schedules, supplements, or other
923	923	writings providing for the conduct of the business and affairs of
924	924	the partnership.
925	925	SECTION 54. Section 152.002(b), Business Organizations
926	926	Code, is amended to read as follows:
927	927	(b) A partnership agreement or the partners may not:
928	928	(1) unreasonably restrict a partner's or former
929	929	partner's right of access to books and records under Section
930	930	152.212;
931	931	(2) eliminate the duty of loyalty under Section
932	932	152.205, except that the partners by agreement may identify
933	933	specific types of activities or categories of activities that do
934	934	not violate the duty of loyalty if the types or categories are not
935	935	manifestly unreasonable;
936	936	(3) eliminate the duty of care under Section 152.206,
937	937	except that the partners by agreement may determine the standards
938	938	by which the performance of the obligation is to be measured if the
939	939	standards are not manifestly unreasonable;
940	940	(4) eliminate the obligation of good faith under
941	941	Section 152.204(b), except that the partners by agreement may
942	942	determine the standards by which the performance of the obligation
943	943	is to be measured if the standards are not manifestly unreasonable;
944	944	(5) vary the power to withdraw as a partner under
945	945	Section 152.501(b)(1), (7), or (8), except for the requirement that
946	946	notice be in writing;
947	947	(6) vary the right to expel a partner by a court in an
948	948	event specified by Section 152.501(b)(5);
949	949	(7) restrict rights of a third party under this
950	950	chapter or the other partnership provisions, except for a
951	951	limitation on an individual partner's liability in a limited
952	952	liability partnership as provided by this chapter;
953	953	(8) select a governing law not permitted under
954	954	Sections 1.103 and 1.002(43)(C); or
955	955	(9) except as provided in Subsections (c) and (d),
956	956	waive or modify the following provisions of Title 1:
957	957	(A) Chapter 1, if the provision is used to
958	958	interpret a provision or to define a word or phrase contained in a
959	959	section listed in this subsection;
960	960	(B) Chapter 2, other than Sections 2.104(c)(2),
961	961	2.104(c)(3), and 2.113;
962	962	(C) Chapter 3, other than Subchapters C and E of
963	963	that chapter; or
964	964	(D) Chapters 4, 5, 10, 11, and 12, other than
965	965	Sections 11.057(a), (b), (c)(1), (c)(3), (d), and (f).
966	966	SECTION 55. Section 153.004(a), Business Organizations
967	967	Code, is amended to read as follows:
968	968	(a) Except as provided by this section, the following
969	969	provisions of Title 1 may not be waived or modified in the
970	970	partnership agreement of a limited partnership:
971	971	(1) Chapter 1, if the provision is used to interpret a
972	972	provision or define a word or phrase contained in a section listed
973	973	in this subsection;
974	974	(2) Chapter 2, other than Section 2.104(c)(2),
975	975	2.104(c)(3), or 2.113;
976	976	(3) Chapter 3, other than Subchapters C and E of that
977	977	chapter and Section 3.151 (provided, that in all events a
978	978	partnership agreement may not validly waive or modify Section
979	979	153.551 or unreasonably restrict a partner's or assignee's rights
980	980	[right of access to books and records] under Section 153.552); or
981	981	(4) Chapter 4, 5, 10, 11, or 12, other than Section
982	982	11.058.
983	983	SECTION 56. Section 153.112, Business Organizations Code,
984	984	is amended to read as follows:
985	985	Sec. 153.112. RECEIPT OF WRONGFUL DISTRIBUTION. A limited
986	986	partner who receives a distribution that is not permitted under
987	987	Section 153.210 is not required to return the distribution unless
988	988	the limited partner knew that the distribution violated the
989	989	prohibition of Section 153.210. This section does not affect an
990	990	obligation of the limited partner under the partnership agreement,
991	991	another agreement, or other applicable law to return the
992	992	distribution.
993	993	SECTION 57. Section 153.552, Business Organizations Code,
994	994	is amended to read as follows:
995	995	Sec. 153.552. EXAMINATION OF RECORDS [AND INFORMATION].
996	996	(a) On written demand [request] stating a proper purpose, a partner
997	997	or an assignee of a partnership interest in a limited partnership is
998	998	entitled [may examine and copy, in person or through a
999	999	representative, records required to be kept under Section 153.551
1000	1000	and other information regarding the business, affairs, and
1001	1001	financial condition of the limited partnership as is just and
1002	1002	reasonable for the person] to examine and copy, at a reasonable time
1003	1003	at the partnership's principal office identified under Section
1004	1004	153.551 or other location approved by the partnership and the
1005	1005	partner or assignee, any records of the partnership, whether in
1006	1006	written or other tangible form, which are reasonably related to and
1007	1007	appropriate to examine and copy for that proper purpose.
1008	1008	(b) The examination and copying [records requested] under
1009	1009	Subsection (a) may be conducted by the partner or assignee or
1010	1010	through an agent, accountant, or attorney. An agent, accountant,
1011	1011	or attorney who conducts an examination and copying under this
1012	1012	section is subject to any obligations of the partner or assignee
1013	1013	with respect to the records made available for examination and
1014	1014	copying [examined and copied at a reasonable time and at the
1015	1015	partner's sole expense].
1016	1016	(c) On written request by a partner or an assignee of a
1017	1017	partnership interest, the partnership shall provide to the
1018	1018	requesting partner or assignee without charge copies of:
1019	1019	(1) the partnership agreement and certificate of
1020	1020	formation and all amendments or restatements; and
1021	1021	(2) any tax return described by Section 153.551(a)(2).
1022	1022	(d) A demand or request made by a partner or assignee under
1023	1023	Subsection (a) or (c) must be made to:
1024	1024	(1) the person who is designated to receive the demand
1025	1025	or request in the partnership agreement at the address designated
1026	1026	in the partnership agreement; or
1027	1027	(2) if there is no designation, a general partner at
1028	1028	the partnership's principal office in the United States.
1029	1029	SECTION 58. Subchapter C, Chapter 154, Business
1030	1030	Organizations Code, is amended by adding Section 154.205 to read as
1031	1031	follows:
1032	1032	Sec. 154.205. RATIFICATION OF VOID OR VOIDABLE ACTS OR
1033	1033	TRANSACTIONS. (a) Any act or transaction taken by or with respect
1034	1034	to a partnership under this code or a partnership agreement that is
1035	1035	void or voidable when taken may be ratified, and the failure to
1036	1036	comply with any requirements of the partnership agreement which
1037	1037	caused the act or transaction to be void or voidable may be waived,
1038	1038	in accordance with this section.
1039	1039	(b) An act or transaction may be ratified or waived, as
1040	1040	applicable, with the approval of the partners or other persons
1041	1041	whose approval would be required under the partnership agreement at
1042	1042	the time of the ratification or waiver:
1043	1043	(1) for the void or voidable act or transaction to be
1044	1044	validly taken; or
1045	1045	(2) to amend the partnership agreement in a manner
1046	1046	that would permit the void or voidable act or transaction to be
1047	1047	validly taken.
1048	1048	(c) If the void or voidable act or transaction was the
1049	1049	issuance or assignment of any partnership interests, the
1050	1050	partnership interests purportedly issued or assigned are deemed to
1051	1051	have not been issued or assigned for purposes of determining
1052	1052	whether the void or voidable act or transaction is ratified or
1053	1053	waived under Subsection (b).
1054	1054	(d) Any act or transaction ratified or waived under this
1055	1055	section is deemed validly taken at the time the act or transaction
1056	1056	occurred.
1057	1057	(e) This section may not be construed to limit the
1058	1058	accomplishment of a ratification or waiver of a void or voidable act
1059	1059	or transaction by other lawful means.
1060	1060	SECTION 59. The following provisions of the Business
1061	1061	Organizations Code are repealed:
1062	1062	(1) Section 21.160(d);
1063	1063	(2) Sections 21.169(d) and (e);
1064	1064	(3) Section 21.354(a-1); and
1065	1065	(4) Section 22.158(d).
1066	1066	SECTION 60. This Act takes effect September 1, 2023.
1067	1067	______________________________ ______________________________
1068	1068	President of the Senate Speaker of the House
1069	1069	I hereby certify that S.B. No. 1514 passed the Senate on
1070	1070	April 20, 2023, by the following vote: Yeas 31, Nays 0.
1071	1071	______________________________
1072	1072	Secretary of the Senate
1073	1073	I hereby certify that S.B. No. 1514 passed the House on
1074	1074	April 28, 2023, by the following vote: Yeas 139, Nays 5, two
1075	1075	present not voting.
1076	1076	______________________________
1077	1077	Chief Clerk of the House
1078	1078	Approved:
1079	1079	______________________________
1080	1080	Date
1081	1081	______________________________
1082	1082	Governor