Texas 2025 - 89th Regular

Texas Senate Bill SB2411 Compare Versions

Version 1 (Old)

Version 2 (New)

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1	1		By: Schwertner S.B. No. 2411
2		-
3		-
	2	+	(In the Senate - Filed March 12, 2025; March 25, 2025, read
	3	+	first time and referred to Committee on Business & Commerce;
	4	+	April 9, 2025, reported adversely, with favorable Committee
	5	+	Substitute by the following vote: Yeas 10, Nays 0; April 9, 2025,
	6	+	sent to printer.)
	7	+	Click here to see the committee vote
	8	+	COMMITTEE SUBSTITUTE FOR S.B. No. 2411 By: Schwertner
4	9
5	10
6	11		A BILL TO BE ENTITLED
7	12		AN ACT
8	13		relating to business organizations.
9	14		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	15		SECTION 1. Subchapter B, Chapter 1, Business Organizations
11	16		Code, is amended by adding Sections 1.056 and 1.057 to read as
12	17		follows:
13	18		Sec. 1.056. REFERENCES IN CODE TO CERTAIN DISTRICT COURTS
14	19		INCLUDES BUSINESS COURTS. Notwithstanding any other law, a
15	20		reference or grant of jurisdiction in this code, including a grant
16	21		of exclusive jurisdiction, to a district court constitutes a
17	22		reference or grant of concurrent jurisdiction to a business court
18	23		established under Chapter 25A, Government Code, if the business
19	24		court has authority and jurisdiction under Chapter 25A, Government
20	25		Code, to adjudicate the action or claim. This section does not
21	26		expand the authority of the business court under Chapter 25A,
22	27		Government Code.
23	28		Sec. 1.057. LAWS GOVERNING FORMATION, INTERNAL AFFAIRS, AND
24	29		GOVERNANCE OF DOMESTIC ENTITY. (a) The plain meaning of the text
25	30		of this code may not be supplanted, contravened, or modified by the
26	31		laws or judicial decisions of any other state.
27	32		(b) The managerial officials of a domestic entity, in
28	33		exercising their powers with respect to the domestic entity, may
29	34		consider the laws and judicial decisions of other states and the
30	35		practices observed by entities formed in those other states. The
31	36		failure or refusal of a managerial official to consider, or to
32	37		conform the exercise of the managerial official's powers to, the
33	38		laws, judicial decisions, or practices of another state does not
34	39		constitute or imply a breach of this code or of any duty existing
35	40		under the laws of this state.
36	41		SECTION 2. Section 2.115(b), Business Organizations Code,
37	42		is amended to read as follows:
38	43		(b) The governing documents of a domestic entity [may
39	44		require], consistent with applicable state and federal
40	45		jurisdictional requirements, may require:
41	46		(1) that any internal entity claims shall be brought
42	47		only in a court in this state; and
43	48		(2) that one or more courts in this state having
44	49		jurisdiction shall serve as the exclusive forum and venue for any
45	50		internal entity claims.
46	51		SECTION 3. Section 3.007(a), Business Organizations Code,
47	52		is amended to read as follows:
48	53		(a) In addition to the information required by Section
49	54		3.005, the certificate of formation of a for-profit or professional
50	55		corporation must state:
51	56		(1) the aggregate number of shares the corporation is
52	57		authorized to issue;
53	58		(2) if the shares the corporation is authorized to
54	59		issue consist of one class of shares only, the par value of each
55	60		share or a statement that each share is without par value;
56	61		(3) if the corporation is to be managed by a board of
57	62		directors, the number of directors constituting the initial board
58	63		of directors and the name and address of each individual [person]
59	64		who will serve as director until the first annual meeting of
60	65		shareholders and until a successor is elected and qualified; and
61	66		(4) if the corporation is to be managed pursuant to a
62	67		shareholders' agreement in a manner other than by a board of
63	68		directors, the name and address of each person who will perform the
64	69		functions required by this code to be performed by the initial board
65	70		of directors.
66	71		SECTION 4. Section 3.015(a), Business Organizations Code,
67	72		is amended to read as follows:
68	73		(a) In addition to containing the information required
69	74		under Sections 3.005 and 3.014, the certificate of formation of a
70	75		professional association must:
71	76		(1) be signed by each member of the association; and
72	77		(2) state:
73	78		(A) the name and address of each original member
74	79		of the association;
75	80		(B) whether the association is to be governed by
76	81		a board of directors or by an executive committee; and
77	82		(C) the name and address of each individual
78	83		[person] serving as an initial member of the board of directors or
79	84		executive committee of the association.
80	85		SECTION 5. Section 3.060, Business Organizations Code, is
81	86		amended by amending Subsection (a) and adding Subsection (c) to
82	87		read as follows:
83	88		(a) In addition to the provisions authorized or required by
84	89		Section 3.059, a restated certificate of formation for a for-profit
85	90		corporation or professional corporation may omit:
86	91		(1) any prior statements regarding the number of
87	92		directors and the names and addresses of the individuals [persons]
88	93		serving as directors and, at the corporation's election, may insert
89	94		a statement regarding the current number of directors and the names
90	95		and addresses of the individuals [persons] currently serving as
91	96		directors; and
92	97		(2) any provisions that were necessary to effect a
93	98		change, exchange, reclassification, subdivision, combination, or
94	99		cancellation of shares, if the change, exchange, reclassification,
95	100		subdivision, combination, or cancellation has become effective.
96	101		(c) Any omission or insertion under Subsection (a) or
97	102		omission under Section 3.059(b) is not considered an amendment that
98	103		requires shareholder approval.
99	104		SECTION 6. Section 3.061, Business Organizations Code, is
100	105		amended by amending Subsection (a) and adding Subsection (c) to
101	106		read as follows:
102	107		(a) In addition to the provisions authorized or required by
103	108		Section 3.059, a restated certificate of formation for a nonprofit
104	109		corporation may omit any prior statements regarding the number of
105	110		directors and the names and addresses of the individuals [persons]
106	111		serving as directors and, at the corporation's election, may insert
107	112		a statement regarding the current number of directors and the names
108	113		and addresses of the individuals [persons] currently serving as
109	114		directors.
110	115		(c) Any omission or insertion under Subsection (a) or
111	116		omission under Section 3.059(b) is not considered an amendment that
112	117		requires member approval.
113	118		SECTION 7. Section 3.0611, Business Organizations Code, is
114	119		amended to read as follows:
115	120		Sec. 3.0611. SUPPLEMENTAL PROVISIONS FOR RESTATED
116	121		CERTIFICATE OF FORMATION FOR LIMITED LIABILITY COMPANY. (a) In
117	122		addition to the provisions authorized or required by Section 3.059,
118	123		a restated certificate of formation for a limited liability company
119	124		may omit any prior statements regarding whether the company has or
120	125		does not have managers and the names and addresses of managers or
121	126		members and, at the company's election, may insert a statement:
122	127		(1) regarding whether the company currently has or
123	128		does not have managers;
124	129		(2) that the company currently has managers and the
125	130		names and addresses of the persons currently serving as managers;
126	131		or
127	132		(3) that the company currently does not have managers
128	133		and the names and addresses of the current members of the company.
129	134		(b) Any omission or insertion under Subsection (a) or
130	135		omission under Section 3.059(b) is not considered an amendment that
131	136		requires member approval.
132	137		SECTION 8. Section 3.062, Business Organizations Code, is
133	138		amended to read as follows:
134	139		Sec. 3.062. SUPPLEMENTAL PROVISIONS FOR RESTATED
135	140		CERTIFICATE OF FORMATION FOR REAL ESTATE INVESTMENT TRUST. (a) In
136	141		addition to the provisions authorized or required by Section 3.059,
137	142		a restated certificate of formation for a real estate investment
138	143		trust may update the current number of trust managers and the names
139	144		and addresses of the individuals [persons] serving as trust
140	145		managers.
141	146		(b) Any update under Subsection (a) or Section 3.059(b) is
142	147		not considered an amendment that requires shareholder approval.
143	148		SECTION 9. Subchapter C, Chapter 3, Business Organizations
144	149		Code, is amended by adding Section 3.106 to read as follows:
145	150		Sec. 3.106. AUTHORIZATION OF PLANS, AGREEMENTS,
146	151		INSTRUMENTS, AND OTHER DOCUMENTS. (a) If this code expressly
147	152		requires the governing authority to approve or take other action
148	153		with respect to any plan, agreement, instrument, or other document,
149	154		the plan, agreement, instrument, or other document may be approved
150	155		by the governing authority in final form or in substantially final
151	156		form.
152	157		(b) If the governing authority has acted to approve or take
153	158		other action with respect to a plan, agreement, instrument, or
154	159		other document that is required by this code to be filed with the
155	160		secretary of state or referenced in any certificate to be filed with
156	161		the secretary of state, the governing authority may, at any time
157	162		after acting to approve or taking that other action and before the
158	163		effectiveness of the filing with the secretary of state, act to
159	164		ratify the plan, agreement, instrument, or other document. That
160	165		ratification is considered:
161	166		(1) to be effective as of the time of the original act
162	167		to approve or the original taking of other action by the governing
163	168		authority; and
164	169		(2) to satisfy any requirement under this code that
165	170		the governing authority approve or take other action with respect
166	171		to the plan, agreement, instrument, or other document in a specific
167	172		manner or sequence.
168		-	SECTION 10. Section 4.001(a), Business Organizations Code,
169		-	is amended to read as follows:
170		-	(a) A filing instrument must be:
171		-	(1) signed by a person authorized by this code to act
172		-	on behalf of the entity in regard to the filing instrument; and
173		-	(2) delivered to the secretary of state in person or by
174		-	mail, courier, [facsimile or] electronic transmission, or any other
175		-	method approved by the secretary of state [comparable form of
176		-	delivery].
177		-	SECTION 11. Section 4.152, Business Organizations Code, is
	173	+	SECTION 10. Section 4.152, Business Organizations Code, is
178	174		amended to read as follows:
179	175		Sec. 4.152. FILING FEES: FOR-PROFIT CORPORATIONS. For a
180	176		filing by or for a for-profit corporation, the secretary of state
181	177		shall impose the following fees:
182	178		(1) for filing a certificate of formation, $300;
183	179		(2) for filing a certificate of amendment, $150;
184	180		(3) for filing an application of a foreign corporation
185	181		for registration to transact business in this state, $750;
186	182		(4) for filing an application of a foreign corporation
187	183		for an amended registration to transact business in this state,
188	184		$150;
189	185		(5) for filing a restated certificate of formation and
190	186		accompanying statement, $300;
191	187		(6) for filing a statement of change of registered
192	188		office, registered agent, or both, $15;
193	189		(7) for filing a statement of change of name or address
194	190		of a registered agent, $15, except that the maximum fee for
195	191		simultaneous filings by a registered agent for more than one
196	192		corporation may not exceed $750;
197	193		(8) for filing a statement of resolution establishing
198	194		one or more series of shares, $15;
199	195		(9) for filing a certificate of termination, $40;
200	196		(10) for filing a certificate of withdrawal of a
201	197		foreign corporation, $15;
202	198		(11) for filing a certificate from the home state of a
203	199		foreign corporation that the corporation no longer exists in that
204	200		state, $15;
205	201		(12) for filing a bylaw or agreement restricting
206	202		transfer of shares or securities other than as an amendment to the
207	203		certificate of formation, $15;
208	204		(13) for filing an application for reinstatement of a
209	205		certificate of formation or registration as a foreign corporation
210	206		following forfeiture under the Tax Code, $75;
211	207		(14) for filing an application for reinstatement of a
212	208		corporation or registration as a foreign corporation after
213	209		involuntary termination or revocation, $75;
214	210		(15) for filing a certificate of validation, $15, plus
215	211		the filing fee imposed for filing each new filing instrument that is
216	212		attached as an exhibit to the certificate of validation under
217	213		Section 21.908(b)(3)(B) [21.908(b)(3)(C)]; and
218	214		(16) for filing any instrument as provided by this
219	215		code for which this section does not expressly provide a fee, $15.
220		-	SECTION 12. Section 4.153, Business Organizations Code, is
	216	+	SECTION 11. Section 4.153, Business Organizations Code, is
221	217		amended to read as follows:
222	218		Sec. 4.153. FILING FEES: NONPROFIT CORPORATIONS. For a
223	219		filing by or for a nonprofit corporation, the secretary of state
224	220		shall impose the following fees:
225	221		(1) for filing a certificate of formation, $25;
226	222		(2) for filing a certificate of amendment, $25;
227	223		(3) for filing a certificate of merger, conversion, or
228	224		consolidation, without regard to whether the surviving or new
229	225		corporation is a domestic or foreign corporation, $50;
230	226		(4) for filing a statement of change of a registered
231	227		office, registered agent, or both, $5;
232	228		(5) for filing a certificate of termination, $5;
233	229		(6) for filing an application of a foreign corporation
234	230		for registration to conduct affairs in this state, $25;
235	231		(7) for filing an application of a foreign corporation
236	232		for an amended registration to conduct affairs in this state, $25;
237	233		(8) for filing a certificate of withdrawal of a
238	234		foreign corporation, $5;
239	235		(9) for filing a restated certificate of formation and
240	236		accompanying statement, $50;
241	237		(10) for filing a statement of change of name or
242	238		address of a registered agent, $15, except that the maximum fee for
243	239		simultaneous filings by a registered agent for more than one
244	240		corporation may not exceed $250;
245	241		(11) for filing a report under Chapter 22, $5;
246	242		(12) for filing a report under Chapter 22 to reinstate
247	243		a corporation's right to conduct affairs in this state, $5, plus a
248	244		late fee in the amount of $5 or in the amount of $1 for each month or
249	245		part of a month that the report remains unfiled, whichever amount is
250	246		greater, except that the late fee may not exceed $25;
251	247		(13) for filing a report under Chapter 22 to reinstate
252	248		a corporation or registration following involuntary termination or
253	249		revocation, $25;
254	250		(14) for filing a certificate of validation, $5, plus
255	251		the filing fee imposed for filing each new filing instrument that is
256	252		attached as an exhibit to the certificate of validation under
257	253		Section 22.508(c)(3)(B) [22.508(c)(3)(C)]; and
258	254		(15) for filing any instrument of a domestic or
259	255		foreign corporation as provided by this code for which this section
260	256		does not expressly provide a fee, $5.
261		-	SECTION 13. Section 4.162(b), Business Organizations Code,
	257	+	SECTION 12. Section 4.162(b), Business Organizations Code,
262	258		is amended to read as follows:
263	259		(b) For a filing by or for a registered series of a domestic
264	260		limited liability company when no other fee has been provided, the
265	261		secretary of state shall impose the same fee as the filing fee for a
266	262		similar instrument under Section 4.151 or 4.154.
267		-	SECTION 14. Section 6.051, Business Organizations Code, is
	263	+	SECTION 13. Section 6.051, Business Organizations Code, is
268	264		amended by adding Subsection (c) to read as follows:
269	265		(c) When a notice is required or permitted by this code or
270	266		the governing documents of a domestic entity to be given to an
271	267		owner, member, or governing person of the domestic entity, a
272	268		document enclosed with, or annexed or appended to, the notice is
273	269		considered part of the notice for the purpose of determining
274	270		whether notice was properly given under this code and the governing
275	271		documents.
276		-	SECTION 15. Section 6.202(d), Business Organizations Code,
	272	+	SECTION 14. Section 6.202(d), Business Organizations Code,
277	273		is amended to read as follows:
278	274		(d) The entity shall promptly provide notice to [notify]
279	275		each person who is an owner or member as of the record date for the
280	276		action, as determined by Section 6.102, who did not sign a consent
281	277		described by Subsection (b) of the action that is the subject of the
282	278		consent. The notice required by this subsection:
283	279		(1) in addition to other information required by
284	280		applicable law, must contain a reasonable description of the action
285	281		that is the subject of the consent; and
286	282		(2) may, instead of containing the complete notice,
287	283		include information directing the owner or member to a publicly
288	284		available electronic resource at which a reasonable description of
289	285		the action that is the subject of the consent and any other
290	286		information required by applicable law may be accessed by the owner
291	287		or member without subscription or cost.
292		-	SECTION 16. Section 7.001, Business Organizations Code, is
	288	+	SECTION 15. Section 7.001, Business Organizations Code, is
293	289		amended to read as follows:
294	290		Sec. 7.001. LIMITATION OF LIABILITY OF MANAGERIAL OFFICIAL
295	291		[GOVERNING PERSON]. (a) Subsections (b) and (c) apply to:
296	292		(1) a domestic entity other than a partnership or
297	293		limited liability company;
298	294		(2) another organization incorporated or organized
299	295		under another law of this state; and
300	296		(3) to the extent permitted by federal law, a
301	297		federally chartered bank, savings and loan association, or credit
302	298		union.
303	299		(b) The certificate of formation or similar instrument of an
304	300		organization to which this section applies may provide that a
305	301		managerial official [governing person] of the organization is not
306	302		liable, or is liable only to the extent provided by the certificate
307	303		of formation or similar instrument, to the organization or its
308	304		owners or members for monetary damages for an act or omission by the
309	305		managerial official [person] in the managerial official's
310	306		[person's] capacity as a managerial official [governing person].
311	307		(c) Subsection (b) does not authorize the elimination or
312	308		limitation of the liability of a managerial official [governing
313	309		person] to the extent the managerial official [person] is found
314	310		liable under applicable law for:
315	311		(1) a breach of the managerial official's [person's]
316	312		duty of loyalty, if any, to the organization or its owners or
317	313		members;
318	314		(2) an act or omission not in good faith that:
319	315		(A) constitutes a breach of duty of the
320	316		managerial official [person] to the organization; or
321	317		(B) involves intentional misconduct or a knowing
322	318		violation of law;
323	319		(3) a transaction from which the managerial official
324	320		[person] received an improper benefit, regardless of whether the
325	321		benefit resulted from an action taken within the scope of the
326	322		managerial official's [person's] duties; or
327	323		(4) an act or omission for which the liability of a
328	324		managerial official [governing person] is expressly provided by an
329	325		applicable statute.
330	326		(d) The liability of a managerial official [governing
331	327		person] may be limited or eliminated:
332	328		(1) in a general partnership by its partnership
333	329		agreement to the same extent Subsections (b) and (c) permit the
334	330		limitation or elimination of liability of a managerial official
335	331		[governing person] of an organization to which those subsections
336	332		apply and to the additional extent permitted under Chapter 152;
337	333		(2) in a limited partnership by its partnership
338	334		agreement to the same extent Subsections (b) and (c) permit the
339	335		limitation or elimination of liability of a managerial official
340	336		[governing person] of an organization to which those subsections
341	337		apply and to the additional extent permitted under Chapter 153 and,
342	338		to the extent applicable to limited partnerships, Chapter 152; and
343	339		(3) in a limited liability company by its certificate
344	340		of formation or company agreement to the same extent Subsections
345	341		(b) and (c) permit the limitation or elimination of liability of a
346	342		managerial official [governing person] of an organization to which
347	343		those subsections apply and to the additional extent permitted
348	344		under Sections 101.052 and [Section] 101.401.
349		-	SECTION 17. Section 10.002, Business Organizations Code, is
	345	+	SECTION 16. Section 10.002, Business Organizations Code, is
350	346		amended by adding Subsection (e) to read as follows:
351	347		(e) Unless otherwise expressly provided by the plan of
352	348		merger, a disclosure letter, disclosure schedules, or similar
353	349		documents or instruments delivered in connection with the plan of
354	350		merger are not considered part of the plan of merger for purposes of
355	351		this chapter, but those documents or instruments have the effects
356	352		provided in the plan of merger.
357		-	SECTION 18. Section 10.004, Business Organizations Code, is
	353	+	SECTION 17. Section 10.004, Business Organizations Code, is
358	354		amended to read as follows:
359	355		Sec. 10.004. PLAN OF MERGER: PERMISSIVE PROVISIONS. (a) A
360	356		plan of merger may include:
361	357		(1) amendments to, restatements of, or amendments and
362	358		restatements of the governing documents of any surviving
363	359		organization, including a certificate of amendment, a restated
364	360		certificate of formation without amendment, or a restated
365	361		certificate of formation containing amendments;
366	362		(2) provisions relating to an interest exchange,
367	363		including a plan of exchange; [and]
368	364		(3) provisions for the appointment, at or after the
369	365		time at which the plan of merger is adopted by the owners or members
370	366		of a party to the merger, of one or more persons, which may include
371	367		an organization surviving or resulting from the merger or any
372	368		managerial official, representative, or agent of a party to the
373	369		merger or of a surviving or resulting organization, as
374	370		representative of the owners or members of a party to the merger,
375	371		including those whose ownership interests or membership interests
376	372		are cancelled, converted, or exchanged in the merger; and
377	373		(4) any other provisions relating to the merger that
378	374		are not required by this chapter.
379	375		(b) Provisions for the appointment of a representative in a
380	376		plan of merger under Subsection (a)(3) may:
381	377		(1) delegate to the representative the sole and
382	378		exclusive authority to take action on behalf of the owners or
383	379		members under the plan of merger, including the authority to take
384	380		any action the representative determines to enforce or settle the
385	381		rights of the owners or members under the plan of merger, subject to
386	382		the terms and conditions prescribed by the plan of merger;
387	383		(2) prescribe the irrevocable nature and binding
388	384		effect of the appointment as to all owners or members to be bound by
389	385		the appointment from and after the approval of the plan of merger by
390	386		those owners or members in accordance with this subchapter; and
391	387		(3) provide that any of the provisions:
392	388		(A) may not be amended after the merger has
393	389		become effective; or
394	390		(B) may be amended only with the consent or
395	391		approval of persons specified in the plan of merger.
396		-	SECTION 19. Section 10.006(e), Business Organizations
	392	+	SECTION 18. Section 10.006(e), Business Organizations
397	393		Code, is amended to read as follows:
398	394		(e) Sections 10.001(c)-(e), 10.002(c), 10.003, 10.004, and
399	395		10.007-10.010 apply to a merger approved under Subsection (d),
400	396		except that the resolution approving the merger should be
401	397		considered the plan of merger for purposes of those sections.
402		-	SECTION 20. Section 10.052, Business Organizations Code, is
	398	+	SECTION 19. Section 10.052, Business Organizations Code, is
403	399		amended by adding Subsection (d) to read as follows:
404	400		(d) Unless otherwise expressly provided by the plan of
405	401		exchange, a disclosure letter, disclosure schedules, or similar
406	402		documents or instruments delivered in connection with the plan of
407	403		exchange are not considered part of the plan of exchange for
408	404		purposes of this chapter, but the documents or instruments have the
409	405		effect provided in the plan of exchange.
410		-	SECTION 21. Section 10.053, Business Organizations Code, is
	406	+	SECTION 20. Section 10.053, Business Organizations Code, is
411	407		amended to read as follows:
412	408		Sec. 10.053. PLAN OF EXCHANGE: PERMISSIVE PROVISIONS. (a)
413	409		A plan of exchange may include:
414	410		(1) provisions for the appointment, at or after the
415	411		time at which the plan of exchange is adopted by the owners or
416	412		members whose ownership or membership interests are being acquired
417	413		in the interest exchange, of one or more persons, which may include
418	414		an organization that is a party to the interest exchange or any
419	415		managerial official, representative, or agent of a party to the
420	416		interest exchange, as representative of those owners or members;
421	417		and
422	418		(2) any other provisions not required by Section
423	419		10.052 relating to the interest exchange.
424	420		(b) Provisions for the appointment of a representative in a
425	421		plan of exchange under Subsection (a)(1) may:
426	422		(1) delegate to the representative the sole and
427	423		exclusive authority to take action on behalf of the owners or
428	424		members under the plan of exchange, including the authority to take
429	425		actions the representative determines to enforce or settle the
430	426		rights of the owners or members under the plan of exchange, subject
431	427		to the terms and conditions as prescribed by the plan of exchange;
432	428		(2) prescribe the irrevocable nature and binding
433	429		effect of the appointment as to all owners or members to be bound by
434	430		the appointment from and after the approval of the plan of exchange
435	431		by those owners or members in accordance with this subchapter; and
436	432		(3) provide that any of the provisions:
437	433		(A) may not be amended after the interest
438	434		exchange has become effective; or
439	435		(B) may be amended only with the consent or
440	436		approval of persons specified in the plan of exchange.
441		-	SECTION 22. Section 10.104, Business Organizations Code, is
	437	+	SECTION 21. Section 10.104, Business Organizations Code, is
442	438		amended to read as follows:
443	439		Sec. 10.104. PLAN OF CONVERSION: PERMISSIVE PROVISIONS.
444	440		(a) A plan of conversion may include other provisions relating to
445	441		the conversion that are not inconsistent with law.
446	442		(b) An action to be taken by the converted entity in
447	443		connection with the conversion of the converting entity that is
448	444		provided by the plan of conversion adopted in the manner required by
449	445		Section 10.101 or 10.102, as applicable, and that is within the
450	446		power of the converted entity under the law of its jurisdiction of
451	447		formation:
452	448		(1) is considered authorized, adopted, and approved,
453	449		as applicable, by:
454	450		(A) the converted entity; and
455	451		(B) the governing authority and owners or members
456	452		of the converted entity, as applicable; and
457	453		(2) does not require any further action of the
458	454		governing authority, owners, or members of the converted entity for
459	455		purposes of this code.
460		-	SECTION 23. Section 21.053, Business Organizations Code, is
	456	+	SECTION 22. Section 21.053, Business Organizations Code, is
461	457		amended by amending Subsection (c) and adding Subsections (d), (e),
462	458		(f), and (g) to read as follows:
463	459		(c) Notwithstanding Section 21.054 and except as otherwise
464	460		provided by the certificate of formation, the board of directors of
465	461		a corporation that has outstanding shares:
466	462		(1) may, without shareholder approval, adopt an
467	463		amendment to the corporation's certificate of formation to:
468	464		(A) change the word or abbreviation in its
469	465		corporate name as required by Section 5.054(a) to be a different
470	466		word or abbreviation required by that section;
471	467		(B) omit any provision that specifies the name
472	468		and address of each organizer or director; or
473	469		(C) omit any provisions that were necessary to
474	470		effect a change, exchange, reclassification, subdivision,
475	471		combination, or cancellation of shares, if the change, exchange,
476	472		reclassification, subdivision, combination, or cancellation has
477	473		become effective; and
478	474		(2) if the corporation has only one class of
479	475		outstanding stock that is not divided into series and in which no
480	476		change is made in any par value of shares of that class, may,
481	477		without shareholder approval, adopt an amendment to the
482	478		corporation's certificate of formation to:
483	479		(A) reclassify by subdividing the issued shares
484	480		of the class into a greater number of issued shares of the class;
485	481		and
486	482		(B) if the reclassification is primarily for the
487	483		purpose of maintaining the listing eligibility of the class on any
488	484		applicable national securities exchange, reclassify by combining
489	485		the issued shares of the class into a lesser number of issued shares
490	486		of the class.
491	487		(d) An amendment described by Subsection (c)(2)(A) may also
492	488		increase the number of authorized shares of the class up to an
493	489		amount determined by multiplying the existing number of authorized
494	490		shares of the class by the same multiple by which the issued shares
495	491		of the class are subdivided in the reclassification and rounding up
496	492		any resulting fractional number of shares to a whole number of
497	493		shares.
498	494		(e) An amendment described by Subsection (c)(2)(B) may also
499	495		decrease the number of authorized shares of the class to an amount
500	496		determined by dividing the existing number of authorized shares of
501	497		the class by the same multiple by which the issued shares of the
502	498		class are combined in the reclassification and rounding up any
503	499		resulting fractional number of shares to a whole number of shares.
504	500		(f) When a reclassification of issued shares:
505	501		(1) with par value is made by a corporation under
506	502		Subsection (c)(2)(A), an amount of surplus designated by the
507	503		corporation's board of directors that is not less than the
508	504		aggregate par value of the shares issued as a result of the
509	505		reclassification shall be transferred to stated capital; and
510	506		(2) without par value is made by a corporation under
511	507		Subsection (c)(2)(A), an amount of surplus equal to an aggregate
512	508		value with respect to the shares issued as a result of the
513	509		reclassification, as set by the board of directors when the
514	510		reclassification is authorized, shall be transferred to stated
515	511		capital.
516	512		(g) A corporation may not effect a reclassification under
517	513		Subsection (c)(2)(A) if the surplus of the corporation is less than
518	514		the amount required by Subsection (f)(1) or (f)(2), as applicable,
519	515		to be transferred to stated capital at the time the
520	516		reclassification becomes effective.
521		-	SECTION 24. Section 21.160(c), Business Organizations
	517	+	SECTION 23. Section 21.160(c), Business Organizations
522	518		Code, is amended to read as follows:
523	519		(c) A corporation may dispose of treasury shares for
524	520		consideration that may be determined by the board of directors. The
525	521		consideration received for treasury shares may:
526	522		(1) have a value greater or less than, or equal to, the
527	523		par value, if any, of the shares; and
528	524		(2) consist of the types of consideration described by
529	525		Section 21.159.
530		-	SECTION 25. Section 21.168(e), Business Organizations
	526	+	SECTION 24. Section 21.168(e), Business Organizations
531	527		Code, is amended to read as follows:
532	528		(e) An authorization of the board of directors may delegate
533	529		to a person or persons, in addition to the board of directors, the
534	530		authority to enter into one or more transactions to issue rights or
535	531		options. For a transaction entered into by a person or persons to
536	532		whom authority was delegated under this subsection, the rights or
537	533		options may be issued in the number, at the time, and for the
538	534		consideration, and under the other terms on which shares may be
539	535		issued on the exercise of those rights and options, as the person or
540	536		persons may determine if that authorization of the board of
541	537		directors:
542	538		(1) states:
543	539		(A) the maximum number of [rights or options, and
544	540		the maximum number of] shares issuable on exercise of those rights
545	541		or options, that may be issued under the authorization;
546	542		(B) the period of time during which the rights or
547	543		options[,] and the period of time during which the shares issuable
548	544		on exercise of those rights or options, may be issued; and
549	545		(C) the minimum amount of consideration:
550	546		(i) if any, for which the rights or options
551	547		may be issued; and
552	548		(ii) for the shares issuable on exercise of
553	549		the rights or options; and
554	550		(2) does not permit the person or persons to whom
555	551		authority was delegated to issue rights, options, or shares to that
556	552		person or those persons.
557		-	SECTION 26. Section 21.402, Business Organizations Code, is
	553	+	SECTION 25. Section 21.402, Business Organizations Code, is
558	554		amended to read as follows:
559	555		Sec. 21.402. BOARD MEMBER ELIGIBILITY REQUIREMENTS. Unless
560	556		the certificate of formation or bylaws of a corporation provide
561	557		otherwise, a director [person] is not required to be a resident of
562	558		this state or a shareholder of the corporation [to serve as a
563	559		director]. The certificate of formation or bylaws may prescribe
564	560		other qualifications for directors.
565		-	SECTION 27. Section 21.404, Business Organizations Code, is
	561	+	SECTION 26. Section 21.404, Business Organizations Code, is
566	562		amended to read as follows:
567	563		Sec. 21.404. DESIGNATION OF INITIAL BOARD OF DIRECTORS. If
568	564		the corporation is to be managed by a board of directors, the
569	565		certificate of formation of a corporation must state the name and
570	566		address [names and addresses] of each individual who will serve as
571	567		director until the first annual meeting of shareholders and until a
572	568		successor is elected and qualified [the persons constituting the
573	569		initial board of directors of the corporation].
574		-	SECTION 28. Section 21.561, Business Organizations Code, is
	570	+	SECTION 27. Section 21.561, Business Organizations Code, is
575	571		amended by adding Subsection (c) to read as follows:
576	572		(c) For purposes of Subsection (b)(1), substantial benefit
577	573		to the corporation does not include additional or amended
578	574		disclosures made to the shareholders, regardless of materiality.
579		-	SECTION 29. Section 21.562(a), Business Organizations
	575	+	SECTION 28. Section 21.562(a), Business Organizations
580	576		Code, is amended to read as follows:
581	577		(a) In a derivative proceeding brought in the right of a
582	578		foreign corporation, the matters covered by this subchapter are
583	579		governed by the laws of the jurisdiction of formation of the foreign
584	580		corporation, except for Sections 21.555, 21.560, and 21.561, which
585	581		with respect to foreign corporations are procedural provisions and
586	582		do not relate to the internal affairs of the foreign corporation,
587	583		unless applying the laws of the jurisdiction of formation of the
588	584		foreign corporation requires otherwise with respect to Section
589	585		21.555.
590		-	SECTION 30. Section 21.563(b), Business Organizations
	586	+	SECTION 29. Section 21.563(b), Business Organizations
591	587		Code, is amended to read as follows:
592	588		(b) Sections 21.552-21.560 do not apply to [a claim or] a
593	589		derivative proceeding by a shareholder of a closely held
594	590		corporation against a present or former director, officer, or
595	591		shareholder of the corporation. In the event the shareholder also
596	592		asserts a claim in the [or] derivative proceeding [is also made]
597	593		against a person who is not a present or former [that] director,
598	594		officer, or shareholder, this subsection applies only to a [the]
599	595		claim in the [or] derivative proceeding against a present or former
600	596		[the] director, officer, or shareholder.
601		-	SECTION 31. Sections 21.901(2) and (4), Business
	597	+	SECTION 30. Sections 21.901(2) and (4), Business
602	598		Organizations Code, are amended to read as follows:
603	599		(2) "Defective corporate act" means:
604	600		(A) an overissue;
605	601		(B) an election or appointment of directors that
606	602		is void or voidable due to a failure of authorization; or
607	603		(C) any act or transaction purportedly taken by
608	604		or on behalf of the corporation that is, and at the time the act or
609	605		transaction was purportedly taken would have been, within the power
610	606		of a corporation to take under the corporate statute, without
611	607		regard to the failure of authorization identified in Section
612	608		21.903(a)(4), but is ineffective, void, or voidable due to a
613	609		failure of authorization, including a failure to file with the
614	610		filing officer a filing instrument that was required under the
615	611		corporate statute to complete the effectiveness of the act or
616	612		transaction.
617	613		(4) "Failure of authorization" means:
618	614		(A) the failure to authorize or effect an act or
619	615		transaction in compliance with the provisions of the corporate
620	616		statute, the governing documents of the corporation, any plan or
621	617		agreement to which the corporation is a party, or the disclosure set
622	618		forth in any proxy or consent solicitation statement, if and to the
623	619		extent the failure would render the act or transaction ineffective,
624	620		void, or voidable; or
625	621		(B) the failure of the board of directors or an
626	622		officer of the corporation to authorize or approve an act or
627	623		transaction taken by or on behalf of the corporation that required
628	624		the prior authorization or approval of the board of directors or the
629	625		officer.
630		-	SECTION 32. Section 21.902, Business Organizations Code, is
	626	+	SECTION 31. Section 21.902, Business Organizations Code, is
631	627		amended to read as follows:
632	628		Sec. 21.902. RATIFICATION OF DEFECTIVE CORPORATE ACT AND
633	629		PUTATIVE SHARES. (a) Except as provided by Subsection (b) and
634	630		subject [Subject] to Section 21.909 or 21.910, a defective
635	631		corporate act or putative shares are not ineffective, void, or
636	632		voidable solely as a result of a failure of authorization if the act
637	633		or shares are:
638	634		(1) ratified in accordance with this subchapter; or
639	635		(2) validated by the district court in a proceeding
640	636		brought under Section 21.914.
641	637		(b) A corporation may not ratify with retroactive effect in
642	638		accordance with this subchapter a defective corporate act resulting
643	639		from a failure of authorization that is attributable to the failure
644	640		to file with the filing officer the following filing instrument:
645	641		(1) a statement of change of registered agent or a
646	642		statement of change of registered office under Subchapter E,
647	643		Chapter 5;
648	644		(2) a certificate of amendment or restated certificate
649	645		of formation that amends the registered agent or registered office
650	646		under Subchapter B, Chapter 3;
651	647		(3) a certificate of formation under Subchapter A,
652	648		Chapter 3;
653	649		(4) a certificate of termination under Subchapter C,
654	650		Chapter 11;
655	651		(5) a certificate of merger or certificate of
656	652		conversion under Subchapter D, Chapter 10; or
657	653		(6) a report under Subchapter E, Chapter 171, Tax
658	654		Code.
659		-	SECTION 33. Sections 21.908(a), (b), and (c), Business
	655	+	SECTION 32. Sections 21.908(a), (b), and (c), Business
660	656		Organizations Code, are amended to read as follows:
661	657		(a) The [If a defective corporate act ratified under this
662	658		subchapter would have required under any other provision of the
663	659		corporate statute the filing of a filing instrument or other
664	660		document with the filing officer, the] corporation shall file a
665	661		certificate of validation with respect to the defective corporate
666	662		act in accordance with Chapter 4, if:
667	663		(1) a defective corporate act ratified under this
668	664		subchapter would have required under any other provision of the
669	665		corporate statute the filing of a filing instrument or other
670	666		document with the filing officer; and
671	667		(2) the filing instrument or other document:
672	668		(A) previously filed with the filing officer
673	669		requires any change to give effect to the defective corporate act in
674	670		accordance with this subchapter, including a change to the date and
675	671		time of the effectiveness of the filed filing instrument or other
676	672		document; or
677	673		(B) was not previously filed with the filing
678	674		officer under any other provision of the corporate statute[,
679	675		regardless of whether a filing instrument or other document was
680	676		previously filed] with respect to the defective corporate act.
681	677		(b) The certificate of validation must include:
682	678		(1) a statement that the corporation has ratified one
683	679		or more defective corporate acts that would have required the
684	680		filing of a filing instrument or other document with the filing
685	681		officer under any provision of the corporate statute [each
686	682		defective corporate act that is a subject of the certificate of
687	683		validation, including:
688	684		[(A) for a defective corporate act involving the
689	685		issuance of putative shares, the number and type of putative shares
690	686		issued and the date or dates on which the putative shares were
691	687		purported to have been issued;
692	688		[(B) the date of the defective corporate act; and
693	689		[(C) the nature of the failure of authorization
694	690		with respect to the defective corporate act];
695	691		(2) a statement that each defective corporate act has
696	692		been [was] ratified in accordance with this subchapter[, including:
697	693		[(A) the date on which the board of directors
698	694		ratified each defective corporate act; and
699	695		[(B) the date, if any, on which the shareholders
700	696		approved the ratification of each defective corporate act]; and
701	697		(3) as appropriate:
702	698		(A) if a filing instrument was previously filed
703	699		with a filing officer under the corporate statute with respect to
704	700		the defective corporate act and [no change to the filing instrument
705	701		is required to give effect to the defective corporate act as
706	702		ratified in accordance with this subchapter:
707	703		[(i) the name, title, and filing date of the
708	704		previously filed filing instrument and of any certificate of
709	705		correction to the filing instrument; and
710	706		[(ii) a statement that a copy of the
711	707		previously filed filing instrument, together with any certificate
712	708		of correction to the filing instrument, is attached as an exhibit to
713	709		the certificate of validation;
714	710		[(B) if a filing instrument was previously filed
715	711		with a filing officer under the corporate statute with respect to
716	712		the defective corporate act and] the filing instrument requires any
717	713		change to give effect to the defective corporate act as ratified in
718	714		accordance with this subchapter, including a change to the date and
719	715		time of the effectiveness of the filing instrument:
720	716		(i) the name, title, and filing date of the
721	717		previously filed filing instrument and of any certificate of
722	718		correction to the filing instrument;
723	719		(ii) a statement that a filing instrument
724	720		containing all the information required to be included under the
725	721		applicable provisions of this code to give effect to the ratified
726	722		defective corporate act is attached as an exhibit to the
727	723		certificate of validation; and
728	724		(iii) the date and time that the attached
729	725		filing instrument is considered to have become effective under this
730	726		subchapter; or
731	727		(B) [(C)] if a filing instrument was not
732	728		previously filed with a filing officer under the corporate statute
733	729		with respect to the defective corporate act and the defective
734	730		corporate act as ratified under this subchapter would have required
735	731		under the other applicable provisions of this code the filing of a
736	732		filing instrument in accordance with Chapter 4, if the defective
737	733		corporate act had occurred when this code was in effect:
738	734		(i) a statement that a filing instrument
739	735		containing all the information required to be included under the
740	736		applicable provisions of this code to give effect to the defective
741	737		corporate act, as if the defective corporate act had occurred when
742	738		this code was in effect, is attached as an exhibit to the
743	739		certificate of validation; and
744	740		(ii) the date and time that the attached
745	741		filing instrument is considered to have become effective under this
746	742		subchapter.
747	743		(c) A filing instrument attached to a certificate of
748	744		validation under this section [Subsection (b)(3)(B) or (C)] does
749	745		not need to be executed separately and does not need to include any
750	746		statement required by any other provision of this code that the
751	747		instrument has been approved and adopted in accordance with that
752	748		provision.
753		-	SECTION 34. Section 21.909, Business Organizations Code, is
	749	+	SECTION 33. Section 21.909, Business Organizations Code, is
754	750		amended to read as follows:
755	751		Sec. 21.909. ADOPTION OF RESOLUTIONS; EFFECT ON DEFECTIVE
756	752		CORPORATE ACT. On or after the validation effective time, unless
757	753		determined otherwise in an action brought under Section 21.914 and
758	754		subject to Sections 21.902(b) and [Section] 21.907(e), each
759	755		defective corporate act ratified in accordance with this subchapter
760	756		may not be considered ineffective, void, or voidable as a result of
761	757		the failure of authorization described by the resolutions adopted
762	758		under Sections 21.903 and 21.904, and the effect shall be
763	759		retroactive to the time of the defective corporate act.
764		-	SECTION 35. Section 21.910, Business Organizations Code, is
	760	+	SECTION 34. Section 21.910, Business Organizations Code, is
765	761		amended to read as follows:
766	762		Sec. 21.910. ADOPTION OF RESOLUTIONS; EFFECT ON PUTATIVE
767	763		SHARES. On or after the validation effective time, unless
768	764		determined otherwise in an action brought under Section 21.914 and
769	765		subject to Sections 21.902(b) and [Section] 21.907(e), each
770	766		putative share or fraction of a putative share issued or
771	767		purportedly issued pursuant to a defective corporate act ratified
772	768		in accordance with this subchapter and described by the resolutions
773	769		adopted under Sections 21.903 and 21.904 may not be considered
774	770		ineffective, void, or voidable and is considered to be an identical
775	771		share or fraction of a share outstanding as of the time it was
776	772		purportedly issued.
777		-	SECTION 36. Section 21.913(b), Business Organizations
	773	+	SECTION 35. Section 21.913(b), Business Organizations
778	774		Code, is amended to read as follows:
779	775		(b) The absence or failure of ratification of an act or
780	776		transaction in accordance with this subchapter or of validation of
781	777		an act or transaction as provided by Sections 21.914 through 21.917
782	778		does not, of itself, affect the validity or effectiveness of any act
783	779		or transaction or the issuance of any shares properly ratified
784	780		under common law or otherwise, nor does it create a presumption that
785	781		any such act or transaction is or was a defective corporate act or
786	782		that those shares are ineffective, void, or voidable.
787		-	SECTION 37. Section 21.915, Business Organizations Code, is
	783	+	SECTION 36. Section 21.915, Business Organizations Code, is
788	784		amended to read as follows:
789	785		Sec. 21.915. EXCLUSIVE JURISDICTION. Subject to Section
790	786		1.056, the [The] district court has exclusive jurisdiction to hear
791	787		and determine any action brought under Section 21.914.
792		-	SECTION 38. Section 21.917(b), Business Organizations
	788	+	SECTION 37. Section 21.917(b), Business Organizations
793	789		Code, is amended to read as follows:
794	790		(b) Notwithstanding any other provision of this subchapter:
795	791		(1) an action claiming that a defective corporate act
796	792		or putative shares are ineffective, void, or voidable due to a
797	793		failure of authorization identified in the resolutions adopted in
798	794		accordance with Section 21.903 may not be filed in or must be
799	795		dismissed by any court after the applicable validation effective
800	796		time; and
801	797		(2) an action claiming that a court of appropriate
802	798		jurisdiction, in its discretion, should declare that a ratification
803	799		in accordance with this subchapter not take effect or that the
804	800		ratification take effect only on certain conditions may not be
805	801		filed with the court after the expiration of the 120th day after the
806	802		later of the validation effective time or the time that any notice
807	803		required to be given under Section 21.911 is given with respect to
808	804		the ratification.
809		-	SECTION 39. Sections 22.001(1) and (3-a), Business
	805	+	SECTION 38. Sections 22.001(1) and (3-a), Business
810	806		Organizations Code, are amended to read as follows:
811	807		(1) "Board of directors" means the group of
812	808		individuals [persons] vested with the management of the affairs of
813	809		the corporation, regardless of the name used to designate the
814	810		group. The term does not include the member or members of the
815	811		corporation if the certificate of formation of the corporation
816	812		vests the management of the affairs of the corporation in the
817	813		members.
818	814		(3-a) "Director" means an individual [a person] who is
819	815		a member of the board of directors, regardless of the name or title
820	816		used to designate the individual [person]. The term does not
821	817		include an individual [a person] designated as a director of the
822	818		corporation, or as an ex officio, honorary, or other type of
823	819		director of the corporation if the individual [person] is not
824	820		entitled to vote as a director.
825		-	SECTION 40. Section 22.218(a), Business Organizations
	821	+	SECTION 39. Section 22.218(a), Business Organizations
826	822		Code, is amended to read as follows:
827	823		(a) The [If authorized by the] certificate of formation or
828	824		bylaws of the corporation:
829	825		(1) [, the board of directors of a corporation, by
830	826		resolution adopted by the majority of the directors in office,] may
831	827		designate one or more committees to have and exercise all, or a
832	828		specified portion, of the authority of the board of directors of the
833	829		corporation in the management of the corporation; or
834	830		(2) may authorize the board of directors, by
835	831		resolution adopted by the majority of the directors in office, to
836	832		designate one or more committees to have and exercise all, or a
837	833		specified portion, of the authority of the board in the management
838	834		of the corporation to the extent permitted in the authorization in
839	835		the certificate of formation or bylaws [to the extent provided by:
840	836		[(1) the resolution;
841	837		[(2) the certificate of formation; or
842	838		[(3) the bylaws].
843		-	SECTION 41. Section 22.231(a), Business Organizations
	839	+	SECTION 40. Section 22.231(a), Business Organizations
844	840		Code, is amended to read as follows:
845	841		(a) The officers of a corporation shall include a president
846	842		and a secretary and may include one or more vice presidents, a
847	843		treasurer, and other officers and assistant officers as considered
848	844		necessary. Any two or more offices, other than the offices of
849	845		president and secretary, may be held by the same individual
850	846		[person].
851		-	SECTION 42. Sections 22.501(2) and (4), Business
	847	+	SECTION 41. Sections 22.501(2) and (4), Business
852	848		Organizations Code, are amended to read as follows:
853	849		(2) "Defective corporate act" means:
854	850		(A) an election or appointment of directors that
855	851		is void or voidable due to a failure of authorization; or
856	852		(B) any act or transaction purportedly taken by
857	853		or on behalf of the corporation that is, and at the time the act or
858	854		transaction was purportedly taken would have been, within the power
859	855		of a corporation to take under the corporate statute, but is
860	856		ineffective, void, or voidable due to a failure of authorization,
861	857		including a failure to file with the filing officer a filing
862	858		instrument that was required under the corporate statute to
863	859		complete the effectiveness of the act or transaction.
864	860		(4) "Failure of authorization" means:
865	861		(A) the failure to authorize or effect an act or
866	862		transaction in compliance with the provisions of the corporate
867	863		statute, the governing documents of the corporation, a corporate
868	864		resolution, or any plan or agreement to which the corporation is a
869	865		party, if and to the extent the failure would render the act or
870	866		transaction ineffective, void, or voidable; or
871	867		(B) the failure of the board of directors or an
872	868		officer of the corporation to authorize or approve an act or
873	869		transaction taken by or on behalf of the corporation that required
874	870		the prior authorization or approval of the board of directors or the
875	871		officer.
876		-	SECTION 43. Section 22.502, Business Organizations Code, is
	872	+	SECTION 42. Section 22.502, Business Organizations Code, is
877	873		amended to read as follows:
878	874		Sec. 22.502. RATIFICATION OF DEFECTIVE CORPORATE ACT. (a)
879	875		Except as provided by Subsection (b) and subject [Subject] to
880	876		Section 22.509, a defective corporate act is not ineffective, void,
881	877		or voidable solely as a result of a failure of authorization if the
882	878		act is:
883	879		(1) ratified in accordance with this subchapter; or
884	880		(2) validated by the district court in a proceeding
885	881		brought under Section 22.512.
886	882		(b) A corporation may not ratify with retroactive effect in
887	883		accordance with this subchapter a defective corporate act resulting
888	884		from a failure of authorization that is attributable to the failure
889	885		to file with the filing officer the following filing instrument:
890	886		(1) a statement of change of registered agent or a
891	887		statement of change of registered office under Subchapter E,
892	888		Chapter 5;
893	889		(2) a certificate of amendment or restated certificate
894	890		of formation that amends the registered agent or registered office
895	891		under Subchapter B, Chapter 3;
896	892		(3) a certificate of formation under Subchapter A,
897	893		Chapter 3;
898	894		(4) a certificate of termination under Subchapter C,
899	895		Chapter 11;
900	896		(5) a certificate of merger or certificate of
901	897		conversion under Subchapter D, Chapter 10;
902	898		(6) a report under Subchapter E, Chapter 171, Tax
903	899		Code; or
904	900		(7) a report under Sections 22.357 through 22.359.
905		-	SECTION 44. Sections 22.508(a), (c), and (d), Business
	901	+	SECTION 43. Sections 22.508(a), (c), and (d), Business
906	902		Organizations Code, are amended to read as follows:
907	903		(a) The [If a defective corporate act ratified under this
908	904		subchapter would have required under any other provision of the
909	905		corporate statute the filing of a filing instrument or other
910	906		document with the filing officer, the] corporation shall file a
911	907		certificate of validation with respect to the defective corporate
912	908		act in accordance with Chapter 4, if:
913	909		(1) a defective corporate act ratified under this
914	910		subchapter would have required under any other provision of the
915	911		corporate statute the filing of a filing instrument or other
916	912		document with the filing officer; and
917	913		(2) the filing instrument or other document:
918	914		(A) previously filed with the filing officer
919	915		requires any change to give effect to the defective corporate act in
920	916		accordance with this subchapter, including a change to the date and
921	917		time of the effectiveness of the filed filing instrument or other
922	918		document; or
923	919		(B) was not previously filed with the filing
924	920		officer under any other provision of the corporate statute[,
925	921		regardless of whether a filing instrument or other document was
926	922		previously filed] with respect to the defective corporate act.
927	923		(c) The certificate of validation must include:
928	924		(1) a statement that the corporation has ratified one
929	925		or more defective corporate acts that would have required the
930	926		filing of a filing instrument or other document with the filing
931	927		officer under any provision of the corporate statute [each
932	928		defective corporate act that is a subject of the certificate of
933	929		validation, including:
934	930		[(A) the date of the defective corporate act; and
935	931		[(B) the nature of the failure of authorization
936	932		with respect to the defective corporate act];
937	933		(2) a statement that each defective corporate act has
938	934		been [was] ratified in accordance with this subchapter[, including:
939	935		[(A) the date on which the board of directors
940	936		ratified each defective corporate act; and
941	937		[(B) if the corporation has members with voting
942	938		rights, the date, if any, on which the members approved the
943	939		ratification of each defective corporate act or, if the management
944	940		of the affairs of the corporation is vested in its members under
945	941		Section 22.202, the date on which the members ratified each
946	942		defective corporate act]; and
947	943		(3) as appropriate:
948	944		(A) [if a filing instrument was previously filed
949	945		with a filing officer under the corporate statute with respect to
950	946		the defective corporate act and no change to the filing instrument
951	947		is required to give effect to the defective corporate act as
952	948		ratified in accordance with this subchapter:
953	949		[(i) the name, title, and filing date of the
954	950		previously filed filing instrument and of any certificate of
955	951		correction to the filing instrument; and
956	952		[(ii) a statement that a copy of the
957	953		previously filed filing instrument, together with any certificate
958	954		of correction to the filing instrument, is attached as an exhibit to
959	955		the certificate of validation;
960	956		[(B)] if a filing instrument was previously filed
961	957		with a filing officer under the corporate statute with respect to
962	958		the defective corporate act and the filing instrument requires any
963	959		change to give effect to the defective corporate act as ratified in
964	960		accordance with this subchapter, including a change to the date and
965	961		time of the effectiveness of the filing instrument:
966	962		(i) the name, title, and filing date of the
967	963		previously filed filing instrument and of any certificate of
968	964		correction to the filing instrument;
969	965		(ii) a statement that a filing instrument
970	966		containing all the information required to be included under the
971	967		applicable provisions of this code to give effect to the ratified
972	968		defective corporate act is attached as an exhibit to the
973	969		certificate of validation; and
974	970		(iii) the date and time that the attached
975	971		filing instrument is considered to have become effective under this
976	972		subchapter; or
977	973		(B) [(C)] if a filing instrument was not
978	974		previously filed with a filing officer under the corporate statute
979	975		with respect to the defective corporate act and the defective
980	976		corporate act as ratified under this subchapter would have required
981	977		under the other applicable provisions of this code the filing of a
982	978		filing instrument in accordance with Chapter 4, if the defective
983	979		corporate act had occurred when this code was in effect:
984	980		(i) a statement that a filing instrument
985	981		containing all the information required to be included under the
986	982		applicable provisions of this code to give effect to the defective
987	983		corporate act, as if the defective corporate act had occurred when
988	984		this code was in effect, is attached as an exhibit to the
989	985		certificate of validation; and
990	986		(ii) the date and time that the attached
991	987		filing instrument is considered to have become effective under this
992	988		subchapter.
993	989		(d) A filing instrument attached to a certificate of
994	990		validation under this section [Subsection (c)(3)(B) or (C)] does
995	991		not need to be executed separately and does not need to include any
996	992		statement required by any other provision of this code that the
997	993		instrument has been approved and adopted in accordance with that
998	994		provision.
999		-	SECTION 45. Section 22.509, Business Organizations Code, is
	995	+	SECTION 44. Section 22.509, Business Organizations Code, is
1000	996		amended to read as follows:
1001	997		Sec. 22.509. ADOPTION OF RESOLUTIONS; EFFECT ON DEFECTIVE
1002	998		CORPORATE ACT. On or after the validation effective time, unless
1003	999		determined otherwise in an action brought under Section 22.512 and
1004	1000		subject to Section 22.502(b), each defective corporate act ratified
1005	1001		in accordance with this subchapter may not be considered
1006	1002		ineffective, void, or voidable as a result of the failure of
1007	1003		authorization described by the resolutions adopted under Sections
1008	1004		22.503 and 22.504, and the effect shall be retroactive to the time
1009	1005		of the defective corporate act.
1010		-	SECTION 46. Section 22.513, Business Organizations Code, is
	1006	+	SECTION 45. Section 22.513, Business Organizations Code, is
1011	1007		amended to read as follows:
1012	1008		Sec. 22.513. EXCLUSIVE JURISDICTION. Subject to Section
1013	1009		1.056, the [The] district court has exclusive jurisdiction to hear
1014	1010		and determine any action brought under Section 22.512.
1015		-	SECTION 47. Section 22.515(b), Business Organizations
	1011	+	SECTION 46. Section 22.515(b), Business Organizations
1016	1012		Code, is amended to read as follows:
1017	1013		(b) Notwithstanding any other provision of this subchapter:
1018	1014		(1) an action claiming that a defective corporate act
1019	1015		is ineffective, void, or voidable due to a failure of authorization
1020	1016		identified in the resolutions adopted in accordance with Section
1021	1017		22.503 may not be filed in or must be dismissed by any court after
1022	1018		the applicable validation effective time; and
1023	1019		(2) an action claiming that a court of appropriate
1024	1020		jurisdiction, in its discretion, should declare that a ratification
1025	1021		in accordance with this subchapter not take effect or that the
1026	1022		ratification take effect only on certain conditions may not be
1027	1023		filed with the court after the expiration of the 120th day after the
1028	1024		later of the validation effective time or the time that any notice
1029	1025		required to be given under Section 22.510 is given with respect to
1030	1026		the ratification.
1031		-	SECTION 48. Subchapter C, Chapter 101, Business
	1027	+	SECTION 47. Subchapter C, Chapter 101, Business
1032	1028		Organizations Code, is amended by adding Section 101.1055 to read
1033	1029		as follows:
1034	1030		Sec. 101.1055. SUBSCRIPTIONS. (a) A subscription to
1035	1031		purchase a membership interest in a limited liability company in
1036	1032		the process of being formed is irrevocable to the extent provided by
1037	1033		the terms of the subscription if:
1038	1034		(1) the subscription is in writing and signed by the
1039	1035		subscriber; and
1040	1036		(2) the subscription states that it is irrevocable.
1041	1037		(b) A written subscription entered into after the limited
1042	1038		liability company is formed is a contract between the subscriber
1043	1039		and the company.
1044		-	SECTION 49. Section 101.109(a), Business Organizations
	1040	+	SECTION 48. Section 101.109(a), Business Organizations
1045	1041		Code, is amended to read as follows:
1046	1042		(a) A person who is assigned a membership interest in a
1047	1043		limited liability company is entitled to:
1048	1044		(1) receive any allocation of income, gain, loss,
1049	1045		deduction, credit, or a similar item that the assignor is entitled
1050	1046		to receive to the extent the allocation of the item is assigned;
1051	1047		(2) receive any distribution the assignor is entitled
1052	1048		to receive to the extent the distribution is assigned; and
1053	1049		(3) the rights described by Section 101.502 [require,
1054	1050		for any proper purpose, reasonable information or a reasonable
1055	1051		account of the transactions of the company; and
1056	1052		[(4) make, for any proper purpose, reasonable
1057	1053		inspections of the books and records of the company].
1058		-	SECTION 50. Section 101.463(b), Business Organizations
	1054	+	SECTION 49. Section 101.463(b), Business Organizations
1059	1055		Code, is amended to read as follows:
1060	1056		(b) Sections 101.452-101.460 do not apply to [a claim or] a
1061	1057		derivative proceeding by a member of a closely held limited
1062	1058		liability company against a present or former governing person,
1063	1059		member, or officer of the limited liability company. In the event
1064	1060		the member also asserts a claim in the [or] derivative proceeding
1065	1061		[is also made] against a person who is not a present or former
1066	1062		[that] governing person, member, or officer, this subsection
1067	1063		applies only to a [the] claim in the [or] derivative proceeding
1068	1064		against a present or former [the] governing person, member, or
1069	1065		officer.
1070		-	SECTION 51. Subchapter F, Chapter 153, Business
	1066	+	SECTION 50. Subchapter F, Chapter 153, Business
1071	1067		Organizations Code, is amended by adding Section 153.258 to read as
1072	1068		follows:
1073	1069		Sec. 153.258. SUBSCRIPTIONS. (a) A subscription to
1074	1070		purchase a partnership interest in a limited partnership in the
1075	1071		process of being formed is irrevocable to the extent provided by the
1076	1072		terms of the subscription if:
1077	1073		(1) the subscription is in writing and signed by the
1078	1074		subscriber; and
1079	1075		(2) the subscription states that it is irrevocable.
1080	1076		(b) A written subscription entered into after the limited
1081	1077		partnership is formed is a contract between the subscriber and the
1082	1078		partnership.
1083		-	SECTION 52. Section 153.413(b), Business Organizations
	1079	+	SECTION 51. Section 153.413(b), Business Organizations
1084	1080		Code, is amended to read as follows:
1085	1081		(b) Sections 153.402-153.410 do not apply to [a claim or] a
1086	1082		derivative proceeding by a limited partner of a closely held
1087	1083		limited partnership against a present or former general partner,
1088	1084		limited partner, or officer of the limited partnership. In the
1089	1085		event the limited partner also asserts a claim in the [or]
1090	1086		derivative proceeding [is also made] against a person who is not a
1091	1087		present or former [that] general partner, limited partner, or
1092	1088		officer, this subsection shall apply only to a [the] claim in the
1093	1089		[or] derivative proceeding against a present or former [the]
1094	1090		general partner, limited partner, or officer.
1095		-	SECTION 53. Section 153.553(a-1), Business Organizations
	1091	+	SECTION 52. Section 153.553(a-1), Business Organizations
1096	1092		Code, is amended to read as follows:
1097	1093		(a-1) The following certificates shall be executed as
1098	1094		follows:
1099	1095		(1) an initial certificate of formation must be signed
1100	1096		as provided in Section 3.004(b)(1);
1101	1097		(2) a certificate of amendment or restated certificate
1102	1098		of formation containing amendments must be signed by at least one
1103	1099		general partner and by each other general partner designated in the
1104	1100		certificate of amendment or the restated certificate of formation
1105	1101		as a new general partner, unless signed and filed by a person under
1106	1102		Section 153.052(b) or (c), but the certificate of amendment or the
1107	1103		restated certificate of formation need not be signed by a
1108	1104		withdrawing general partner;
1109	1105		(3) a certificate of termination must be signed by all
1110	1106		general partners participating in the winding up of the limited
1111	1107		partnership's business or, if no general partners are winding up
1112	1108		the limited partnership's business, by all nonpartner liquidators
1113	1109		or, if the limited partners are winding up the limited
1114	1110		partnership's business, by a majority-in-interest of the limited
1115	1111		partners;
1116	1112		(4) a certificate of merger[, conversion, or exchange]
1117	1113		filed on behalf of a domestic limited partnership must be signed by
1118	1114		at least one general partner and by each other general partner
1119	1115		designated as a new general partner by any amendment to the
1120	1116		certificate of formation of the limited partnership being made by
1121	1117		the certificate of merger, but the certificate of merger need not be
1122	1118		signed by a withdrawing general partner; [as provided by Chapter
1123	1119		10; and]
1124	1120		(5) a certificate of conversion or exchange filed on
1125	1121		behalf of a domestic limited partnership must be signed by at least
1126	1122		one general partner; and
1127	1123		(6) a certificate filed under Subchapter G, Chapter
1128	1124		10, must be signed by the person designated by the court.
1129		-	SECTION 54. Section 251.352(a), Business Organizations
	1125	+	SECTION 53. Section 251.352(a), Business Organizations
1130	1126		Code, is amended to read as follows:
1131	1127		(a) A cooperative association shall submit a written report
1132	1128		to its members at the annual meeting of the cooperative
1133	1129		association. The annual report must contain:
1134	1130		(1) a balance sheet;
1135	1131		(2) an income and expense statement;
1136	1132		(3) the amount and nature of the cooperative
1137	1133		association's authorized, subscribed, and paid-in capital;
1138	1134		(4) the total number of shareholders;
1139	1135		(5) the number of shareholders who were admitted to or
1140	1136		withdrew from the association during the year;
1141	1137		(6) the par value of the association's shares;
1142	1138		(7) the rate at which any investment dividends have
1143	1139		been paid; [and]
1144	1140		(8) if the cooperative association does not issue
1145	1141		shares:
1146	1142		(A) the total number of members;
1147	1143		(B) the number of members who were admitted to or
1148	1144		withdrew from the association during the year; and
1149	1145		(C) the amount of membership fees received;
1150	1146		(9) the name, address, occupation, and date of
1151	1147		expiration of the term of office of each officer and director; and
1152	1148		(10) any compensation paid by the association to each
1153	1149		officer or director of the association.
1154		-	SECTION 55. Section 252.017(b), Business Organizations
	1150	+	SECTION 54. Section 252.017(b), Business Organizations
1155	1151		Code, is amended to read as follows:
1156	1152		(b) Chapters 1, 2, 4, [and] 10, and 11 and, if a nonprofit
1157	1153		association designates an agent for service of process, Subchapter
1158	1154		E, Chapter 5, apply to a nonprofit association.
1159		-	SECTION 56. Sections 153.502(c), 251.353, and 251.354,
	1155	+	SECTION 55. Sections 153.502(c), 251.353, and 251.354,
1160	1156		Business Organizations Code, are repealed.
1161		-	SECTION 57. Section 4.001(a), Business Organizations Code,
1162		-	as amended by this Act, applies only to a filing instrument
1163		-	delivered to the secretary of state on or after the effective date
1164		-	of this Act. A filing instrument delivered to the secretary of state
1165		-	before the effective date of this Act is governed by the law in
1166		-	effect on the date the filing instrument was delivered to the
1167		-	secretary of state, and the former law is continued in effect for
1168		-	that purpose.
1169		-	SECTION 58. Sections 21.561 and 21.562, Business
	1157	+	SECTION 56. Sections 21.561 and 21.562, Business
1170	1158		Organizations Code, as amended by this Act, apply only to a
1171	1159		derivative proceeding instituted on or after the effective date of
1172	1160		this Act. A derivative proceeding instituted before the effective
1173	1161		date of this Act is governed by the law in effect on the date the
1174	1162		proceeding was instituted, and the former law is continued in
1175	1163		effect for that purpose.
1176		-	SECTION 59. This Act takes effect September 1, 2025.
	1164	+	SECTION 57. This Act takes effect September 1, 2025.
	1165	+	* * * * *