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A BILL TO BE ENTITLED
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AN ACT
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relating to the authority of filing and foreign filing entities to |
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transact business in this state and the authority of the attorney |
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general to investigate those entities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 11.301(a), Business Organizations Code, |
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is amended to read as follows: |
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(a) A court may enter a decree requiring winding up of a |
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filing entity's business and termination of the filing entity's |
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existence if, as the result of an action brought under Section |
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11.303, the court finds that one or more of the following problems |
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exist: |
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(1) the filing entity or its organizers did not comply |
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with a condition precedent to its formation; |
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(2) the certificate of formation of the filing entity |
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or any amendment to the certificate of formation was fraudulently |
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filed; |
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(3) a misrepresentation of a material matter has been |
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made in an application, report, affidavit, or other document |
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submitted by the filing entity under this code; |
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(4) the filing entity has continued to transact |
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business beyond the scope of the purpose of the filing entity as |
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expressed in its certificate of formation; or |
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(5) public interest requires winding up and |
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termination of the filing entity because: |
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(A) the filing entity has been: |
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(i) convicted of a felony or a high |
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managerial agent of the filing entity has been convicted of a felony |
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committed in the conduct of the filing entity's affairs; or |
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(ii) in an action brought by the attorney |
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general in a district court in this state, proved by a preponderance |
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of the evidence to be civilly liable for conduct that constitutes a |
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felony or a high managerial agent of the filing entity has been |
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proved by a preponderance of the evidence to be civilly liable for |
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conduct that constitutes a felony committed in the conduct of the |
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filing entity's affairs; |
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(B) the filing entity or high managerial agent |
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has engaged in a persistent course of the [felonious] conduct; and |
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(C) termination is necessary to prevent future |
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[felonious] conduct of the same character. |
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SECTION 2. Section 12.151, Business Organizations Code, is |
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amended to read as follows: |
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Sec. 12.151. AUTHORITY OF ATTORNEY GENERAL TO EXAMINE OR |
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INVESTIGATE CERTAIN ENTITIES [BOOKS AND RECORDS]. (a) Each filing |
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entity and foreign filing entity shall permit the attorney general |
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to: |
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(1) inspect, examine, and make copies, as the attorney |
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general considers necessary in the performance of a power or duty of |
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the attorney general, of any record of the entity, including the |
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entity's[. A record of the entity includes] minutes and a book, |
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account, letter, memorandum, document, check, voucher, telegram, |
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constitution, and bylaw of the entity; and |
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(2) on receipt of a notice received under Section |
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11.302, interview witnesses and gather evidence necessary to |
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investigate the notice. |
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(b) An entity may file a suit for injunctive relief or a |
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declaratory judgment to contest an investigative action brought by |
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the attorney general under Subsection (a)(2). |
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SECTION 3. Section 11.301(b), Business Organizations Code, |
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is repealed. |
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SECTION 4. This Act takes effect September 1, 2025. |