Texas 2025 - 89th Regular

Texas House Bill HB15 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	89R22293 PRL-F
2		-	By: Meyer, Leach, Schofield, Anchía, H.B. No. 15
3		-	Longoria, et al.
4		-	Substitute the following for H.B. No. 15:
5		-	By: Leach C.S.H.B. No. 15
	1	+	89R15624 PRL-F
	2	+	By: Meyer H.B. No. 15
6	3
7	4
8	5
9	6
10	7		A BILL TO BE ENTITLED
11	8		AN ACT
12		-	relating to the formation, governance, and internal management of
13		-	domestic entities.
	9	+	relating to business entities.
14	10		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	11		SECTION 1. Section 1.002(55-a), Business Organizations
16	12		Code, is amended to read as follows:
17	13		(55-a) "National securities exchange" means:
18	14		(A) an exchange registered as a national
19	15		securities exchange under Section 6, Securities Exchange Act of
20	16		1934 (15 U.S.C. Section 78f); or
21	17		(B) a stock exchange that:
22	18		(i) has its principal office in this state;
23	19		and
24	20		(ii) has received approval by the
25	21		securities commissioner under Subchapter C, Chapter 4005,
26	22		Government Code.
27	23		SECTION 2. Subchapter B, Chapter 1, Business Organizations
28	24		Code, is amended by adding Section 1.056 to read as follows:
29	25		Sec. 1.056. LAWS GOVERNING FORMATION, INTERNAL AFFAIRS, AND
30		-	GOVERNANCE OF DOMESTIC ENTITY. The managerial officials of a
31		-	domestic entity, in exercising their powers with respect to the
32		-	domestic entity, may consider the laws and judicial decisions of
33		-	other states and the practices observed by entities formed in those
34		-	other states. The failure or refusal of a managerial official to
35		-	consider, or to conform the exercise of the managerial official's
36		-	powers to, the laws, judicial decisions, or practices of another
37		-	state does not constitute or imply a breach of this code or of any
38		-	duty existing under the laws of this state.
	26	+	GOVERNANCE OF DOMESTIC ENTITY. (a) The plain meaning of the text
	27	+	of this code may not be supplanted, contravened, or modified by the
	28	+	laws or judicial decisions of any other state.
	29	+	(b) The managerial officials of a domestic entity, in
	30	+	exercising their powers with respect to the domestic entity, may
	31	+	consider the laws and judicial decisions of other states and the
	32	+	practices observed by entities formed in those other states. The
	33	+	failure or refusal of a managerial official to consider, or to
	34	+	conform the exercise of the managerial official's powers to, the
	35	+	laws, judicial decisions, or practices of another state does not
	36	+	constitute or imply a breach of this code or of any duty existing
	37	+	under the laws of this state.
39	38		SECTION 3. Section 2.115(b), Business Organizations Code,
40	39		is amended to read as follows:
41	40		(b) The governing documents of a domestic entity [may
42	41		require], consistent with applicable state and federal
43	42		jurisdictional requirements, may require:
44	43		(1) that any internal entity claims shall be brought
45	44		only in a court in this state; and
46	45		(2) that one or more courts in this state having
47	46		jurisdiction shall serve as the exclusive forum and venue for any
48	47		internal entity claims.
49	48		SECTION 4. Subchapter B, Chapter 2, Business Organizations
50	49		Code, is amended by adding Section 2.116 to read as follows:
51	50		Sec. 2.116. WAIVER OF TRIAL BY JURY. (a) In this section,
52	51		"internal entity claim" has the meaning assigned by Section 2.115.
53	52		(b) The governing documents of a domestic entity may contain
54		-	a waiver of the right to a jury trial concerning any internal entity
55		-	claim.
56		-	(c) In a lawsuit asserting an internal entity claim, a
57		-	waiver of the right to a jury trial contained in the governing
58		-	documents of a domestic entity is enforceable, regardless of
59		-	whether the applicable governing document is signed by the members,
60		-	owners, officers, or governing persons.
61		-	(d) A person asserting an internal entity claim is
62		-	considered to have been informed of the waiver of the right to a
63		-	jury trial contained in the governing documents and to have
64		-	knowingly waived the right in the action if the person:
	53	+	an enforceable waiver of the right to a jury trial concerning any
	54	+	internal entity claim, regardless of whether the applicable
	55	+	governing document is signed by the members, owners, officers, or
	56	+	governing persons.
	57	+	(c) A waiver of jury trial in the governing documents of a
	58	+	domestic entity shall be a knowing and informed waiver of a person
	59	+	who:
65	60		(1) voted for or affirmatively ratified the governing
66		-	document containing the waiver; or
	61	+	document containing the waiver;
67	62		(2) acquired an equity security of the domestic entity
68		-	or a predecessor to the entity at a time at which the waiver was
69		-	included in the governing documents of the domestic entity or a
70		-	predecessor to the entity, as applicable.
71		-	(e) Nothing in this section prevents an entity from showing
72		-	that a person asserting an internal entity claim knowingly and
73		-	informedly waived the right to a jury trial by any evidence
74		-	satisfactory to the court having jurisdiction, including by the
75		-	person's consent or acquiescence to the waiver contained in the
76		-	governing documents.
77		-	SECTION 5. Section 21.218, Business Organizations Code, is
	63	+	at a time at which the waiver was included in the governing
	64	+	documents; or
	65	+	(3) is otherwise shown by evidence satisfactory to an
	66	+	appropriate court to have knowingly and informedly consented or
	67	+	acquiesced to the waiver.
	68	+	SECTION 5. Section 4.051, Business Organizations Code, is
	69	+	amended to read as follows:
	70	+	Sec. 4.051. GENERAL RULE. (a) A filing instrument
	71	+	submitted to the secretary of state takes effect on filing, except
	72	+	as permitted by Section 4.052 or as provided by the provisions of
	73	+	this code that apply to the entity making the filing or other law.
	74	+	(b) Subject to Subsection (c), a revised filing instrument,
	75	+	curing the deficiencies in the initial rejected filing instrument
	76	+	identified by the secretary of state, is considered filed as of the
	77	+	date of the delivery to the secretary of state of the initial
	78	+	rejected filing instrument and takes effect as specified in this
	79	+	subchapter if the revised filing instrument:
	80	+	(1) is delivered to the secretary of state not later
	81	+	than the 10th business day following the date on which the notice of
	82	+	rejection is mailed by the secretary of state;
	83	+	(2) is found to be acceptable by the secretary of
	84	+	state; and
	85	+	(3) is the first revised filing instrument.
	86	+	(c) Subsection (b) applies to a filing instrument that
	87	+	creates or forms a new domestic entity or amends the name of an
	88	+	existing domestic entity only if:
	89	+	(1) the name of the new domestic entity or the amended
	90	+	name of the existing domestic entity, as applicable, was reserved
	91	+	under Subchapter C, Chapter 5, or was registered under Subchapter
	92	+	D, Chapter 5, with the secretary of state by or on behalf of the
	93	+	filer on or before the date the initial rejected filing instrument
	94	+	is delivered to the secretary of state; and
	95	+	(2) the name reservation or registration remains in
	96	+	effect at least until the revised filing instrument delivered to
	97	+	the secretary of state under Subsection (b) takes effect.
	98	+	SECTION 6. Section 21.218, Business Organizations Code, is
78	99		amended by amending Subsection (b) and adding Subsections (b-2) and
79	100		(b-3) to read as follows:
80	101		(b) On written demand stating a proper purpose, a holder of
81	102		shares of a corporation for at least six months immediately
82	103		preceding the holder's demand, or a holder of at least five percent
83	104		of all of the outstanding shares of a corporation, is entitled to
84	105		examine and copy, at a reasonable time at the corporation's
85	106		principal place of business or other location approved by the
86	107		corporation and the holder, the corporation's books, records of
87	108		account, minutes, share transfer records, and other records,
88	109		whether in written or other tangible form, if the records are
89	110		[record is] reasonably related to and appropriate to examine and
90	111		copy for that proper purpose. For purposes of this subsection, the
91	112		records of the corporation shall not include e-mails, text messages
92	113		or similar electronic communications, or information from social
93	114		media accounts unless the particular e-mail, communication, or
94		-	social media information ~~effectuates~~ an action by the corporation.
	115	+	social media information affects an action by the corporation.
95	116		(b-2) This subsection applies only to a corporation that has
96	117		a class or series of voting shares listed on a national securities
97	118		exchange or that has made an affirmative election to be governed by
98	119		Section 21.419. For purposes of Subsection (b), a written demand
99	120		shall not be for a proper purpose if the corporation reasonably
100	121		determines that the demand is in connection with:
101	122		(1) an active or pending derivative proceeding in the
102	123		right of the corporation under Subchapter L that is or is expected
103	124		to be instituted or maintained by the holder or the holder's
104	125		affiliate; or
105	126		(2) an active or pending civil lawsuit to which the
106	127		corporation, or its affiliate, and the holder, or the holder's
107	128		affiliate, are or are expected to be adversarial named parties.
108	129		(b-3) Subsection (b-2) does not impair any rights of:
109	130		(1) the holder or the holder's affiliate to obtain
110	131		discovery of records from the corporation in:
111	132		(A) a civil lawsuit described by Subsection
112	133		(b-2)(2); or
113	134		(B) the derivative proceeding subject to Section
114	135		21.556; or
115	136		(2) the holder to obtain a court order to compel
116	137		production of records of the corporation for examination by the
117	138		holder as provided by Subsection (c).
118		-	SECTION 6. Section 21.416, Business Organizations Code, is
	139	+	SECTION 7. Section 21.416, Business Organizations Code, is
119	140		amended by adding Subsection (g) to read as follows:
120	141		(g) This subsection applies only to a corporation that has a
121	142		class or series of voting shares listed on a national securities
122	143		exchange or that has made an affirmative election to be governed by
123	144		Section 21.419. The board of directors may adopt resolutions that
124	145		authorize the formation of a committee of independent and
125	146		disinterested directors to review and approve transactions,
126	147		whether or not contemplated at the time of the committee's
127	148		formation or a petition under Section 21.4161, involving the
128	149		corporation or any of its subsidiaries and a controlling
129	150		shareholder, director, or officer.
130		-	SECTION 7. Subchapter I, Chapter 21, Business Organizations
	151	+	SECTION 8. Subchapter I, Chapter 21, Business Organizations
131	152		Code, is amended by adding Section 21.4161 to read as follows:
132	153		Sec. 21.4161. DETERMINATION OF INDEPENDENT AND
133	154		DISINTERESTED DIRECTORS. (a) A corporation that adopts a
134	155		resolution to authorize the formation of a committee of independent
135	156		and disinterested directors under Section 21.416(g) may petition a
136		-	court having jurisdiction to hold an evidentiary hearing to
137		-	determine whether the directors appointed to the committee are
138		-	independent and disinterested with respect to any transactions
139		-	involving the corporation or any of its subsidiaries and a
140		-	controlling shareholder, director, or officer.
141		-	(b) A petition under Subsection (a) shall be filed in the
142		-	business court unless the corporation's principal place of business
143		-	in this state is located in a county not contained within an
144		-	operating division of the business court, in which case the
145		-	petition may be filed in a district court in the county in which the
146		-	corporation's principal place of business in this state is located.
147		-	(c) In the petition, the corporation shall designate legal
	157	+	court having appropriate jurisdiction to hold an evidentiary
	158	+	hearing to determine whether the directors appointed to the
	159	+	committee are independent and disinterested with respect to any
	160	+	transactions involving the corporation or any of its subsidiaries
	161	+	and a controlling shareholder, director, or officer.
	162	+	(b) In the petition, the corporation shall designate legal
148	163		counsel to act on behalf of the corporation and its shareholders,
149	164		other than the controlling shareholder, director, or officer
150		-	involved in the transaction.
151		-	(d) The corporation shall give notice to the corporation's
152		-	shareholders that:
153		-	(1) a petition has been filed under this section;
154		-	(2) identifies the court in which the petition is
155		-	filed and provides the case number for the proceeding;
156		-	(3) identifies counsel designated to act on behalf of
157		-	the corporation and its shareholders, other than the controlling
158		-	shareholder, director, or officer involved in the transaction; and
159		-	(4) the shareholders, other than the controlling
160		-	shareholder, director, or officer involved in the transaction, have
161		-	the right to participate in the proceeding in person or through
162		-	counsel.
163		-	(e) If the corporation has a class of its shares listed on a
164		-	national securities exchange, the notice required by Subsection (d)
	165	+	involved in the transaction, and shall give notice to the
	166	+	shareholders of the designated counsel and the petition.
	167	+	(c) If the corporation has a class of its shares listed on a
	168	+	national securities exchange, the notice required by Subsection (b)
165	169		may be provided through the filing of a current report with the
166	170		United States Securities and Exchange Commission in accordance with
167	171		the requirements of the Securities Exchange Act of 1934 (15 U.S.C.
168		-	Section 78a et seq.), and any rules promulgated under that Act.
169		-	(f) Not earlier than the 10th day after the date the notice
170		-	required under Subsection (d) is given, the court shall hold a
171		-	preliminary hearing to determine the appropriate legal counsel to
172		-	represent the corporation and its shareholders, other than the
173		-	controlling shareholder, director, or officer involved in the
174		-	transaction, whether or not the same as the legal counsel
175		-	identified in the petition. Any other legal counsel representing a
176		-	shareholder, other than the controlling shareholder, director, or
177		-	officer involved in the transaction, may participate in the hearing
178		-	to:
179		-	(1) object to counsel designated by the corporation in
180		-	the petition on the ground that the designated counsel is
181		-	insufficiently independent and disinterested; or
182		-	(2) request designation by the court as the
183		-	appropriate legal counsel.
184		-	(g) After the court determines the appropriate legal
185		-	counsel under Subsection (f), the court shall promptly hold an
	172	+	Section 78 et seq.), and any rules promulgated under that Act.
	173	+	(d) Promptly after receiving a petition, and not earlier
	174	+	than the 10th day after the date the notice required under
	175	+	Subsection (b) is given, the court shall hold a preliminary hearing
	176	+	to determine the appropriate legal counsel to represent the
	177	+	corporation and its shareholders, other than the controlling
	178	+	shareholder, director, or officer involved in the transaction,
	179	+	whether or not the same as the legal counsel identified in the
	180	+	petition. Any other legal counsel representing a shareholder,
	181	+	other than the controlling shareholder, director, or officer
	182	+	involved in the transaction, may participate in the hearing to
	183	+	request designation by the court as the appropriate legal counsel.
	184	+	(e) After the court determines the appropriate legal
	185	+	counsel under Subsection (d), the court shall promptly hold an
186	186		evidentiary hearing as to whether the directors on the committee
187	187		are independent and disinterested with respect to transactions
188	188		involving the corporation or any of its subsidiaries and a
189	189		controlling shareholder, director, or officer. The appropriate
190		-	legal counsel determined under Subsection (f) and legal counsel for
	190	+	legal counsel determined under Subsection (d) and legal counsel for
191	191		the corporation may participate in the hearing. After hearing and
192	192		reviewing the evidence presented, the court shall make its
193	193		determination as to whether the directors on the committee are
194	194		independent and disinterested.
195		-	(h) The court's determination that the directors are
196		-	independent and disinterested under Subsection (g) shall be
	195	+	(f) The court's determination that the directors are
	196	+	independent and disinterested under Subsection (e) shall be
197	197		dispositive in the absence of facts, not presented to the court,
198	198		constituting evidence sufficient to prove that one or more of those
199	199		directors is not independent and disinterested with respect to a
200	200		particular transaction involving the corporation or any of its
201	201		subsidiaries and a controlling shareholder, director, or officer.
202		-	SECTION 8. Section 21.418, Business Organizations Code, is
	202	+	SECTION 9. Section 21.418, Business Organizations Code, is
203	203		amended by adding Subsection (f) to read as follows:
204	204		(f) This subsection applies only to a corporation that has a
205	205		class or series of voting shares listed on a national securities
206	206		exchange or has made an affirmative election to be governed by
207	207		Section 21.419. Regardless of whether the conditions of Subsection
208	208		(b) are satisfied, neither the corporation nor any of the
209	209		corporation's shareholders will have a cause of action against any
210	210		director or officer for breach of duty with respect to the making,
211	211		authorization, or performance of the contract or transaction
212	212		because the director or officer had the relationship or interest
213	213		described by Subsection (a) or took any of the actions authorized by
214	214		Subsection (d) unless the cause of action is permitted by Section
215	215		21.419.
216		-	SECTION 9. Subchapter I, Chapter 21, Business Organizations
217		-	Code, is amended by adding Section 21.419 to read as follows:
	216	+	SECTION 10. Subchapter I, Chapter 21, Business
	217	+	Organizations Code, is amended by adding Section 21.419 to read as
	218	+	follows:
218	219		Sec. 21.419. PRESUMPTIONS FOR DIRECTORS AND OFFICERS OF
219	220		CERTAIN CORPORATIONS. (a) This section applies only to a
220	221		corporation that has:
221	222		(1) a class or series of voting shares listed on a
222	223		national securities exchange; or
223	224		(2) included in its governing documents a statement
224	225		affirmatively electing to be governed by this section.
225	226		(b) In taking or declining to take any action on any matters
226	227		of a corporation's business, a director or officer is presumed to
227	228		act:
228	229		(1) in good faith;
229	230		(2) on an informed basis;
230	231		(3) in furtherance of the interests of the
231	232		corporation; and
232	233		(4) in obedience to the law and the corporation's
233	234		governing documents.
234	235		(c) Neither a corporation nor any of the corporation's
235	236		shareholders has a cause of action against a director or officer of
236	237		the corporation as a result of any act or omission in the person's
237	238		capacity as a director or officer unless:
238	239		(1) the claimant rebuts one or more of the
239	240		presumptions established by Subsection (b); and
240	241		(2) it is proven by the claimant that:
241	242		(A) the director's or officer's act or omission
242	243		constituted a breach of one or more of the person's duties as a
243	244		director or officer; and
244	245		(B) the breach involved fraud, intentional
245	246		misconduct, an ultra vires act, or a knowing violation of law.
246	247		(d) The presumptions established by this section:
247	248		(1) are in addition to any legal presumption arising
248	249		under common law or this code, in favor of any managerial official
249	250		of a corporation to which this section applies; and
250	251		(2) do not abrogate, preempt, or lessen any other
251	252		defense, presumption, immunity, or privilege under other
252	253		constitutional, statutory, case, or common law or rule provisions,
253	254		in favor of any managerial official of any domestic entity,
254	255		including any corporation to which this section does not apply.
255	256		(e) In alleging fraud, intentional misconduct, an ultra
256	257		vires act, or a knowing violation of the law under Subsection
257	258		(c)(2)(B), a party must state with particularity the circumstances
258	259		constituting the fraud, intentional misconduct, ultra vires act, or
259	260		knowing violation of law.
260		-	(f) This section does not limit the ~~effectiveness or~~
261		-	~~applicability of a provision~~ contained in the certificate of
262		-	~~formation or similar instrument of~~ a corporation limiting monetary
263		-	~~liability of a governing person~~.
264		-	SECTION 10. Section 21.551(2), Business Organizations
	261	+	(f) This section does not limit the effect of a provision
	262	+	contained in the certificate of formation or similar instrument of
	263	+	a corporation limiting monetary liability of a governing person as
	264	+	permitted by Section 7.001.
	265	+	SECTION 11. Section 21.551(2), Business Organizations
265	266		Code, is amended to read as follows:
266	267		(2) "Shareholder" includes:
267	268		(A) a shareholder as defined by Section 1.002;
268	269		(B) [or] a beneficial owner whose shares are held
269	270		in a voting trust or by a nominee on the beneficial owner's behalf;
270	271		or
271	272		(C) two or more shareholders acting in concert
272	273		under an informal or formal agreement or understanding with respect
273	274		to a derivative proceeding.
274		-	SECTION 11. Section 21.552(a), Business Organizations
	275	+	SECTION 12. Section 21.552(a), Business Organizations
275	276		Code, is amended to read as follows:
276	277		(a) Subject to Subsection (b), a shareholder may not
277	278		institute or maintain a derivative proceeding unless:
278	279		(1) the shareholder:
279	280		(A) was a shareholder of the corporation at the
280	281		time of the act or omission complained of; or
281	282		(B) became a shareholder by operation of law
282	283		originating from a person that was a shareholder at the time of the
283	284		act or omission complained of; [and]
284	285		(2) the shareholder fairly and adequately represents
285	286		the interests of the corporation in enforcing the right of the
286	287		corporation; and
287	288		(3) for a corporation with common shares listed on a
288		-	national securities exchange or a corporation that has made an
289		-	affirmative election to be governed by Section 21.419 and has 500 or
290		-	more shareholders, at the time the derivative proceeding is
291		-	instituted, the shareholder beneficially owns a number of the
292		-	common shares sufficient to meet the required ownership threshold
293		-	to institute a derivative proceeding in the right of the
294		-	corporation identified in the corporation's certificate of
295		-	formation or bylaws, provided that the required ownership threshold
296		-	does not exceed three percent of the outstanding shares of the
297		-	corporation.
298		-	SECTION 12. Section 21.554, Business Organizations Code, is
	289	+	national securities exchange or that has made an affirmative
	290	+	election to be governed by Section 21.419, at the time the
	291	+	derivative proceeding is instituted, the shareholder beneficially
	292	+	owns a number of the common shares sufficient to meet the required
	293	+	ownership threshold to institute a derivative proceeding in the
	294	+	right of the corporation identified in the corporation's
	295	+	certificate of formation or bylaws, provided that the required
	296	+	ownership threshold does not exceed three percent of the
	297	+	outstanding shares of the corporation.
	298	+	SECTION 13. Section 21.554, Business Organizations Code, is
299	299		amended by amending Subsection (b) and adding Subsections (c), (d),
300		-	(e), ~~(f), (g), (h),~~ and (i) to read as follows:
	300	+	(e), and (f) to read as follows:
301	301		(b) The court shall appoint a panel under Subsection (a)(3)
302		-	if the court finds that the individuals recommended by ~~the~~
303		-	corporation are independent and disinterested and are otherwise
	302	+	if the court determines [finds] that the individuals recommended by
	303	+	the corporation are independent and disinterested and are otherwise
304	304		qualified with respect to expertise, experience, independent
305	305		judgment, and other factors considered appropriate by the court
306	306		under the circumstances to make the determinations. An individual
307		-	appointed by the court to a panel under this section may be a
308		-	director. An individual appointed by the court to a panel under
309		-	this section may not be held liable to the corporation or the
310		-	corporation's shareholders for an action taken or omission made by
311		-	the individual in that capacity, except for an act or omission
312		-	constituting fraud or wilful misconduct.
	307	+	appointed by the court to a panel under this section may not be held
	308	+	liable to the corporation or the corporation's shareholders for an
	309	+	action taken or omission made by the individual in that capacity,
	310	+	except for an act or omission constituting fraud or wilful
	311	+	misconduct.
313	312		(c) Before the corporation's determination of how to
314	313		proceed on the allegations under Subsection (a), the corporation
315		-	may petition the court having jurisdiction to make a finding as to
	314	+	may petition the court in which the derivative proceeding has been
	315	+	instituted, or a court having proper jurisdiction if no derivative
	316	+	proceeding has been instituted, to request a determination as to
316	317		whether the directors identified or appointed under Subsection
317	318		(a)(1) or (2) are independent and disinterested with respect to the
318	319		allegations made in the demand.
319		-	(d) If a derivative proceeding has been instituted, a
320		-	petition under Subsection (c) shall be filed in the court in which
321		-	the proceeding was instituted. If no derivative proceeding has
322		-	been instituted, a petition under Subsection (c) shall be filed in
323		-	the business court unless the corporation's principal place of
324		-	business in this state is located in a county not contained within
325		-	an operating division of the business court, in which case the
326		-	petition may be filed in a district court in the county in which the
327		-	corporation's principal place of business in this state is located.
328		-	(e) The corporation must serve a copy of the petition on the
329		-	shareholder filing the derivative proceeding or making the demand.
330		-	(f) Unless extended for good cause, a court in which a
331		-	petition under Subsection (c) is filed must conduct an evidentiary
332		-	hearing on the petition on or before the 45th day after the date the
333		-	petition is filed.
334		-	(g) A shareholder on whom a petition is served under
335		-	Subsection (e) is entitled to be served with all notices and papers
336		-	filed in the action and to intervene in the action to challenge the
337		-	petition. Unless good cause is shown, a shareholder who is not
338		-	already a party to the action must intervene not later than the
339		-	seventh day before the date the petition is heard by the court.
340		-	(h) Unless extended for good cause, not later than the 75th
341		-	day after the date the petition is filed, the court shall sign an
342		-	order stating whether the directors are independent and
343		-	disinterested.
344		-	(i) A court's finding that the directors or individuals are
345		-	independent and disinterested under this section shall be
346		-	dispositive in the absence of discovery of facts, not presented to
347		-	the court, constituting evidence sufficient to prove that one or
348		-	more of those directors or individuals are not independent and
349		-	disinterested.
350		-	SECTION 13. Section 21.561, Business Organizations Code, is
	320	+	(d) For purposes of Subsection (c), if a derivative
	321	+	proceeding was not instituted, the corporation must promptly
	322	+	deliver a copy of the petition to the shareholder making the demand
	323	+	who will have the right, if promptly exercised, to challenge the
	324	+	petition before the court makes its determination.
	325	+	(e) After hearing and reviewing the evidence presented, the
	326	+	court shall make its determination as to whether the directors are
	327	+	independent and disinterested.
	328	+	(f) A court's determination that the directors or
	329	+	individuals are independent and disinterested under this section
	330	+	shall be dispositive in the absence of discovery of facts, not
	331	+	presented to the court, constituting evidence sufficient to prove
	332	+	that one or more of those directors or individuals are not
	333	+	independent and disinterested.
	334	+	SECTION 14. Section 21.561, Business Organizations Code, is
351	335		amended by adding Subsection (c) to read as follows:
352	336		(c) For purposes of Subsection (b), a substantial benefit to
353	337		the corporation does not include additional or amended disclosures
354	338		made to the shareholders, regardless of materiality.
355		-	SECTION 14. Section 21.562(a), Business Organizations
	339	+	SECTION 15. Section 21.562(a), Business Organizations
356	340		Code, is amended to read as follows:
357	341		(a) In a derivative proceeding brought in the right of a
358	342		foreign corporation, the matters covered by this subchapter are
359	343		governed by the laws of the jurisdiction of formation of the foreign
360	344		corporation, except for Sections 21.555, 21.560, and 21.561, which
361	345		with respect to foreign corporations are procedural provisions and
362	346		do not relate to the internal affairs of the foreign corporation,
363	347		unless applying the laws of the jurisdiction of formation of the
364	348		foreign corporation requires otherwise with respect to Section
365	349		21.555.
366		-	SECTION 15. Subchapter F, Chapter 101, Business
367		-	Organizations Code, is amended by adding Section 101.256 to read as
368		-	follows:
369		-	Sec. 101.256. PRESUMPTIONS FOR GOVERNING PERSONS OF CERTAIN
370		-	LIMITED LIABILITY COMPANIES. (a) This section applies only to a
371		-	limited liability company that has:
372		-	(1) a class or series of voting membership interests
373		-	listed on a national securities exchange; or
374		-	(2) included in its company agreement a statement
375		-	affirmatively electing to be governed by this section.
376		-	(b) In taking or declining to take any action on any matters
377		-	of a limited liability company's business, a governing person or
378		-	officer, and each affiliate or associate of a governing person or
379		-	officer, is presumed to act:
380		-	(1) in good faith;
381		-	(2) on an informed basis;
382		-	(3) in furtherance of the interests of the limited
383		-	liability company; and
384		-	(4) in obedience to the law and the limited liability
385		-	company's company agreement.
386		-	(c) Neither a limited liability company nor any of the
387		-	company's members has a cause of action against a governing person
388		-	or officer or any affiliate or associate of a governing person or
389		-	officer of the company as a result of any act or omission in the
390		-	person's capacity as a governing person or officer of the company
391		-	unless:
392		-	(1) the claimant rebuts one or more of the
393		-	presumptions established by Subsection (b); and
394		-	(2) it is proven by the claimant that:
395		-	(A) the act or omission of the governing person
396		-	or officer or affiliate or associate of a governing person or
397		-	officer constituted a breach of one or more of the person's duties
398		-	as a governing person or officer; and
399		-	(B) the breach involved fraud, intentional
400		-	misconduct, an ultra vires act, or a knowing violation of law.
401		-	(d) The presumptions established by this section:
402		-	(1) are in addition to any legal presumption arising
403		-	under common law or this code, in favor of any governing person or
404		-	officer to which this section applies; and
405		-	(2) do not abrogate, preempt, or lessen any other
406		-	defense, presumption, immunity, or privilege under other
407		-	constitutional, statutory, case, or common law or rule provisions,
408		-	in favor of any governing person or officer of any domestic entity,
409		-	including any limited liability company to which this section does
410		-	not apply.
411		-	(e) In alleging fraud, intentional misconduct, an ultra
412		-	vires act, or a knowing violation of the law under Subsection
413		-	(c)(2)(B), a party must state with particularity the circumstances
414		-	constituting the fraud, intentional misconduct, ultra vires act, or
415		-	knowing violation of law.
416		-	(f) This section does not limit the effectiveness or
417		-	applicability of a provision contained in the certificate of
418		-	formation or company agreement or similar instrument of a limited
419		-	liability company limiting monetary liability of a governing person
420		-	or officer.
421		-	SECTION 16. Section 101.401, Business Organizations Code,
422		-	is amended to read as follows:
423		-	Sec. 101.401. EXPANSION, [OR] RESTRICTION, OR ELIMINATION
424		-	OF DUTIES AND LIABILITIES. The company agreement of a limited
425		-	liability company may expand, [or] restrict, or eliminate any
426		-	duties, including fiduciary duties, and related liabilities that a
427		-	member, manager, officer, or other person has to the company or to a
428		-	member or manager of the company.
429		-	SECTION 17. Section 101.451(3), Business Organizations
430		-	Code, is amended to read as follows:
431		-	(3) "Member" includes:
432		-	(A) a person who is a member or is an assignee of
433		-	a membership interest or a person who beneficially owns a
434		-	membership interest through a voting trust or a nominee on the
435		-	person's behalf; and
436		-	(B) two or more members described by Paragraph
437		-	(A) acting in concert under an informal or formal agreement or
438		-	understanding with respect to a derivative proceeding.
439		-	SECTION 18. Section 101.452(a), Business Organizations
440		-	Code, is amended to read as follows:
441		-	(a) Subject to Subsection (b), a member may not institute or
442		-	maintain a derivative proceeding unless:
443		-	(1) the member:
444		-	(A) was a member of the limited liability company
445		-	at the time of the act or omission complained of; or
446		-	(B) became a member by operation of law
447		-	originating from a person that was a member at the time of the act or
448		-	omission complained of; [and]
449		-	(2) the member fairly and adequately represents the
450		-	interests of the limited liability company in enforcing the right
451		-	of the limited liability company; and
452		-	(3) for a limited liability company with membership
453		-	interests listed on a national securities exchange or that has made
454		-	an affirmative election to be governed by Section 101.256 and has
455		-	500 or more members, at the time the derivative proceeding is
456		-	instituted, the member beneficially owns a number of the membership
457		-	interests sufficient to meet the required ownership threshold to
458		-	institute a derivative proceeding in the right of the limited
459		-	liability company identified in the limited liability company's
460		-	certificate of formation or company agreement, provided that the
461		-	required ownership threshold does not exceed three percent of the
462		-	outstanding membership interests of the limited liability company.
463		-	SECTION 19. Section 101.461, Business Organizations Code,
464		-	is amended by adding Subsection (c) to read as follows:
465		-	(c) For purposes of Subsection (b), a substantial benefit to
466		-	the limited liability company does not include additional or
467		-	amended disclosures made to the members, regardless of materiality.
468		-	SECTION 20. Section 101.502, Business Organizations Code,
469		-	is amended by amending Subsection (a) and adding Subsections (a-1),
470		-	(a-2), and (a-3) to read as follows:
471		-	(a) Unless otherwise provided by the governing documents of
472		-	a limited liability company, a [A] member of a limited liability
473		-	company or an assignee of a membership interest in a limited
474		-	liability company, on written demand stating a proper purpose, is
475		-	entitled to examine and copy at a reasonable time at the limited
476		-	liability company's principal office identified under Section
477		-	101.501(c) or another location approved by the limited liability
478		-	company and the member or assignee, any records of the limited
479		-	liability company, whether in written or other tangible form, which
480		-	are reasonably related to and appropriate to examine and copy for
481		-	that proper purpose. For purposes of this subsection, the records
482		-	of the limited liability company shall not include e-mails, text
483		-	messages or similar electronic communications, or information from
484		-	social media accounts unless the particular e-mail, communication,
485		-	or social media information effectuates an action by the limited
486		-	liability company.
487		-	(a-1) This subsection applies only to a limited liability
488		-	company that has a class or series of voting membership interests
489		-	listed on a national securities exchange or that has made an
490		-	affirmative election to be governed by Section 101.256. For
491		-	purposes of Subsection (a), a written demand may be made only by a
492		-	member or an assignee that has held the membership interest for at
493		-	least six months immediately preceding the member's or assignee's
494		-	demand.
495		-	(a-2) This subsection applies only to a limited liability
496		-	company that has a class or series of voting membership interests
497		-	listed on a national securities exchange or that has made an
498		-	affirmative election to be governed by Section 101.256. For
499		-	purposes of Subsection (a), a written demand shall not be for a
500		-	proper purpose if the limited liability company reasonably
501		-	determines that the demand is in connection with:
502		-	(1) an active or pending derivative proceeding in the
503		-	right of the limited liability company under Subchapter J that is or
504		-	is expected to be instituted or maintained by the member or assignee
505		-	or the member's or assignee's affiliate; or
506		-	(2) an active or pending civil lawsuit to which the
507		-	company, or its affiliate, and the member or assignee, or the
508		-	member's or assignee's affiliate, are or are expected to be
509		-	adversarial named parties.
510		-	(a-3) Subsection (a-2) does not impair any rights of the
511		-	member or assignee or the member's or assignee's affiliate to obtain
512		-	discovery of records from the limited liability company in:
513		-	(1) a civil lawsuit described by Subsection (a-2)(2);
514		-	or
515		-	(2) the derivative proceeding subject to Section
516		-	101.456.
517		-	SECTION 21. Section 152.002, Business Organizations Code,
518		-	is amended by adding Subsection (e) to read as follows:
519		-	(e) This subsection applies only to a limited partnership
520		-	that has a class or series of voting limited partnership interests
521		-	listed on a national securities exchange or that has made an
522		-	affirmative election to be governed by Section 153.163.
523		-	Notwithstanding Subsection (b)(2), (3), or (4), a partnership
524		-	agreement may eliminate the duty of loyalty under Section 152.205,
525		-	the duty of care under Section 152.206, and the obligation of good
526		-	faith under Section 152.204(b), to the extent the governing
527		-	documents of the partnership include a statement affirmatively
528		-	electing to do so under this subsection.
529		-	SECTION 22. Subchapter D, Chapter 153, Business
530		-	Organizations Code, is amended by adding Section 153.163 to read as
531		-	follows:
532		-	Sec. 153.163. PRESUMPTIONS FOR GENERAL PARTNERS AND
533		-	OFFICERS OF CERTAIN LIMITED PARTNERSHIPS. (a) This section
534		-	applies only to a limited partnership that has:
535		-	(1) a class or series of voting limited partnership
536		-	interests listed on a national securities exchange; or
537		-	(2) included in its governing documents a statement
538		-	affirmatively electing to be governed by this section.
539		-	(b) In taking or declining to take any action on any matters
540		-	of a limited partnership's business, any general partner of the
541		-	limited partnership, including any director, officer, member, or
542		-	other affiliate of the general partner, is presumed to act:
543		-	(1) in good faith;
544		-	(2) on an informed basis;
545		-	(3) in furtherance of the interests of the limited
546		-	partnership; and
547		-	(4) in obedience to the law and the limited
548		-	partnership's partnership agreement.
549		-	(c) Neither a limited partnership nor any of the limited
550		-	partnership's partners has a cause of action against a general
551		-	partner of the limited partnership, including any director,
552		-	officer, member, or other affiliate of the general partner, as a
553		-	result of any act or omission in the person's capacity as a general
554		-	partner or as an officer or director of the general partner unless:
555		-	(1) the claimant rebuts one or more of the
556		-	presumptions established by Subsection (b); and
557		-	(2) it is proven by the claimant that:
558		-	(A) the general partner's or any director,
559		-	officer, member, or other affiliate of the general partner's act or
560		-	omission constituted a breach of one or more of the person's duties
561		-	as a general partner, director, or officer; and
562		-	(B) the breach involved fraud, intentional
563		-	misconduct, an ultra vires act, or a knowing violation of law.
564		-	(d) The presumptions established by this section:
565		-	(1) are in addition to any legal presumption arising
566		-	under common law or this code, in favor of any general partner or
567		-	member or managerial official of a general partner to which this
568		-	section applies; and
569		-	(2) do not abrogate, preempt, or lessen any other
570		-	defense, presumption, immunity, or privilege under other
571		-	constitutional, statutory, case, or common law or rule provisions,
572		-	in favor of any managerial official of any domestic entity,
573		-	including any limited partnership to which this section does not
574		-	apply.
575		-	(e) In alleging fraud, intentional misconduct, an ultra
576		-	vires act, or a knowing violation of the law under Subsection
577		-	(c)(2)(B), a party must state with particularity the circumstances
578		-	constituting the fraud, intentional misconduct, ultra vires act, or
579		-	knowing violation of law.
580		-	(f) This section does not limit the effectiveness or
581		-	applicability of a provision contained in the certificate of
582		-	formation or partnership agreement or similar instrument of a
583		-	partnership limiting monetary liability of a governing person.
584		-	SECTION 23. Section 153.401(2), Business Organizations
585		-	Code, is amended to read as follows:
586		-	(2) "Limited partner" means:
587		-	(A) a person who is a limited partner or is an
588		-	assignee of a partnership interest, including the partnership
589		-	interest of a general partner; and
590		-	(B) two or more limited partners described by
591		-	Paragraph (A) acting in concert under an informal or formal
592		-	agreement or understanding with respect to a derivative proceeding.
593		-	SECTION 24. Section 153.402(a), Business Organizations
594		-	Code, is amended to read as follows:
595		-	(a) Subject to Subsection (b), a limited partner may not
596		-	institute or maintain a derivative proceeding unless:
597		-	(1) the limited partner:
598		-	(A) was a limited partner of the limited
599		-	partnership at the time of the act or omission complained of; or
600		-	(B) became a limited partner by operation of law
601		-	originating from a person that was a limited partner or general
602		-	partner at the time of the act or omission complained of; [and]
603		-	(2) the limited partner fairly and adequately
604		-	represents the interests of the limited partnership in enforcing
605		-	the right of the limited partnership; and
606		-	(3) for a limited partnership with limited partnership
607		-	interests listed on a national securities exchange or that has made
608		-	an affirmative election to be governed by Section 153.163 and has
609		-	500 or more limited partners, at the time the derivative proceeding
610		-	is instituted, the partner beneficially owns a number of limited
611		-	partnership interests sufficient to meet the required ownership
612		-	threshold to institute a derivative proceeding in the right of the
613		-	limited partnership identified in the limited partnership's
614		-	certificate of formation or partnership agreement, provided that
615		-	the required ownership threshold does not exceed three percent of
616		-	the outstanding limited partnership interests of the limited
617		-	partnership.
618		-	SECTION 25. Section 153.411, Business Organizations Code,
619		-	is amended by adding Subsection (c) to read as follows:
620		-	(c) For purposes of Subsection (b), a substantial benefit to
621		-	the limited partnership does not include additional or amended
622		-	disclosures made to the limited partners, regardless of
623		-	materiality.
624		-	SECTION 26. Section 153.552, Business Organizations Code,
625		-	is amended by amending Subsection (a) and adding Subsections (a-1)
626		-	and (a-2) to read as follows:
627		-	(a) Unless otherwise provided by the governing documents of
628		-	a limited partnership, on [On] written demand stating a proper
629		-	purpose, a partner or an assignee of a partnership interest in a
630		-	limited partnership is entitled to examine and copy, at a
631		-	reasonable time at the partnership's principal office identified
632		-	under Section 153.551 or other location approved by the partnership
633		-	and the partner or assignee, any records of the partnership,
634		-	whether in written or other tangible form, which are reasonably
635		-	related to and appropriate to examine and copy for that proper
636		-	purpose. For purposes of this subsection, the records of the
637		-	limited partnership shall not include e-mails, text messages or
638		-	similar electronic communications, or information from social
639		-	media accounts unless the particular e-mail, communication, or
640		-	social media information effectuates an action by the limited
641		-	partnership.
642		-	(a-1) This subsection applies only to a limited partnership
643		-	that has a class or series of voting limited partnership interests
644		-	listed on a national securities exchange or that has made an
645		-	affirmative election to be governed by Section 153.163. For
646		-	purposes of Subsection (a), a written demand:
647		-	(1) may be made only by a limited partner or an
648		-	assignee that has held the limited partnership interest for at
649		-	least six months immediately preceding the limited partner's or
650		-	assignee's demand; and
651		-	(2) shall not be for a proper purpose if the limited
652		-	partnership reasonably determines that the demand is in connection
653		-	with:
654		-	(A) an active or pending derivative proceeding in
655		-	the right of the limited partnership under Subchapter I that is or
656		-	is expected to be instituted or maintained by the limited partner or
657		-	assignee or the limited partner's or assignee's affiliate; or
658		-	(B) an active or pending civil lawsuit to which
659		-	the partnership, or its affiliate, and the limited partner or
660		-	assignee, or the limited partner's or assignee's affiliate, are or
661		-	are expected to be adversarial named parties.
662		-	(a-2) Subsection (a-1) does not impair any rights of the
663		-	limited partner or assignee or the limited partner's or assignee's
664		-	affiliate to obtain discovery of records from the limited
665		-	partnership in:
666		-	(1) a civil lawsuit described by Subsection
667		-	(a-1)(2)(B); or
668		-	(2) the derivative proceeding subject to Section
669		-	153.406.
670		-	SECTION 27. Sections 21.552(a), 21.561, 101.452(a),
671		-	101.461, 153.402(a), and 153.411, Business Organizations Code, as
672		-	amended by this Act, apply only to a derivative proceeding
	350	+	SECTION 16. (a) Section 4.051, Business Organizations
	351	+	Code, as amended by this Act, applies only to a filing instrument
	352	+	submitted to the secretary of state on or after the effective date
	353	+	of this Act. A filing instrument submitted to the secretary of
	354	+	state before the effective date of this Act is governed by the law
	355	+	in effect on the date the filing instrument was submitted, and the
	356	+	former law is continued in effect for that purpose.
	357	+	(b) Sections 21.552(a) and 21.561, Business Organizations
	358	+	Code, as amended by this Act, apply only to a derivative proceeding
673	359		instituted on or after the effective date of this Act. A derivative
674	360		proceeding instituted before the effective date of this Act is
675	361		governed by the law in effect on the date the proceeding was
676	362		instituted, and the former law is continued in effect for that
677	363		purpose.
678		-	SECTION 28. This Act takes effect immediately if it
	364	+	SECTION 17. This Act takes effect immediately if it
679	365		receives a vote of two-thirds of all the members elected to each
680	366		house, as provided by Section 39, Article III, Texas Constitution.
681	367		If this Act does not receive the vote necessary for immediate
682	368		effect, this Act takes effect September 1, 2025.