89R5005 SRA-F
By: Hopper H.B. No. 4716
A BILL TO BE ENTITLED
AN ACT
relating to the authority of filing and foreign filing entities to
transact business in this state and the authority of the attorney
general to investigate those entities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.301(a), Business Organizations Code,
is amended to read as follows:
(a) A court may enter a decree requiring winding up of a
filing entity's business and termination of the filing entity's
existence if, as the result of an action brought under Section
11.303, the court finds that one or more of the following problems
exist:
(1) the filing entity or its organizers did not comply
with a condition precedent to its formation;
(2) the certificate of formation of the filing entity
or any amendment to the certificate of formation was fraudulently
filed;
(3) a misrepresentation of a material matter has been
made in an application, report, affidavit, or other document
submitted by the filing entity under this code;
(4) the filing entity has continued to transact
business beyond the scope of the purpose of the filing entity as
expressed in its certificate of formation; or
(5) public interest requires winding up and
termination of the filing entity because:
(A) the filing entity has been:
(i) convicted of a felony or a high
managerial agent of the filing entity has been convicted of a felony
committed in the conduct of the filing entity's affairs; or
(ii) in an action brought by the attorney
general in a district court in this state, proved by a preponderance
of the evidence to be civilly liable for conduct that constitutes a
felony or a high managerial agent of the filing entity has been
proved by a preponderance of the evidence to be civilly liable for
conduct that constitutes a felony committed in the conduct of the
filing entity's affairs;
(B) the filing entity or high managerial agent
has engaged in a persistent course of the [felonious] conduct; and
(C) termination is necessary to prevent future
[felonious] conduct of the same character.
SECTION 2. Section 12.151, Business Organizations Code, is
amended to read as follows:
Sec. 12.151. AUTHORITY OF ATTORNEY GENERAL TO EXAMINE OR
INVESTIGATE CERTAIN ENTITIES [BOOKS AND RECORDS]. (a) Each filing
entity and foreign filing entity shall permit the attorney general
to:
(1) inspect, examine, and make copies, as the attorney
general considers necessary in the performance of a power or duty of
the attorney general, of any record of the entity, including the
entity's[. A record of the entity includes] minutes and a book,
account, letter, memorandum, document, check, voucher, telegram,
constitution, and bylaw of the entity; and
(2) on receipt of a notice received under Section
11.302, interview witnesses and gather evidence necessary to
investigate the notice.
(b) An entity may file a suit for injunctive relief or a
declaratory judgment to contest an investigative action brought by
the attorney general under Subsection (a)(2).
SECTION 3. Section 11.301(b), Business Organizations Code,
is repealed.
SECTION 4. This Act takes effect September 1, 2025.