Enrolled Bill Summary

            House Bill 1165 amends the Texas Business Corporation Act to reflect technology changes and to ease requirements for filing certain documents with the Office of the Secretary of State. The bill authorizes the use of electronic transmission of documents between a corporation and its shareholders for granting proxies, providing notice of shareholder meetings, voting on corporate actions, and other purposes; however, electronic notice of meetings and electronic voting can only be used with the consent of shareholders and directors. The bill eliminates requirements to submit certain ancillary or evidential information to the secretary of state regarding amendments to a corporation's articles of incorporation and cancellation of shares and changes to stated capital. Requirements for filing an application for a certificate of authority by a foreign corporation also are revised by eliminating the need to submit details about capital structures, to meet minimum capitalization threshholds, and to submit a certificate of original incorporation. The bill makes several changes to merger provisions, including authorizing a plan of merger or exchange, including a provision requiring it to be submitted to shareholders even if the board of directors deems that the plan is not advisable and recommends that the shareholders reject it. Regarding shareholders' rights, the bill provides that shareholders have the preemptive right to purchase their pro rata share of any newly issued stock and to cumulate their votes in the election of directors only if the rights are specifically set forth in the articles of incorporation. The bill updates procedures related to approval of indemnification of current or former directors, officers, or employees in certain proceedings, subscriptions for shares, and receipt of stock rights and stock options, and it permits a board of directors to amend the terms of or delete an unissued series of shares. It expands the types of legal entities that may act as a registered agent for a corporation to include a limited liability company or a limited partnership, and it eliminates certain provisions relating to minimum capitalization before the start of business to conform to the Revised Model Business Corporation Act.

            The bill amends the Texas Non-Profit Corporation Act to remove an organization with charitable activities that relate to conservation and protection of wildlife, fisheries, and natural resources from the list of entities that are exempted from making financial activities available for public inspection, and it authorizes the secretary of state to reactivate a nonprofit corporation when there is a court-ordered revocation of articles of dissolution. The bill amends the Texas Miscellaneous Corporation Laws Act to repeal certain obsolete provisions.