Enrolled Bill Summary

            House Bill 1637 amends provisions of the Texas Limited Liability Company Act, the Texas Revised Limited Partnership Act, the Texas Revised Partnership Act, and the Government Code regarding the formation, organization, management, and documentation of limited liability companies (LLCs). The bill clarifies when an action is considered effective by a vote of the LLC members, when an LLC may issue a membership interest in the company, and how to allocate profits and losses if a procedure is not prescribed in the LLC regulations. The bill eliminates the provision requiring an LLC to be dissolved upon the death, expulsion, withdrawal, bankruptcy, or dissolution of a member and instead requires the LLC's dissolution under any event that terminates the last remaining member's membership; it also provides that an LLC is not dissolved if the legal representative or successor of the last remaining member agrees to continue the company and to become a member, or designates another person as a member, within a certain time frame. It sets forth procedures for revoking voluntary dissolution proceedings within the 120-day period after the issuance of a certificate of dissolution by the secretary of state.

            The bill exempts a foreign LLC that is not characterized as such under the laws of the jurisdiction where it was formed but that is applying for a certificate of authority in this state from the requirement to indicate in the company name that the company is an LLC, and it deletes a provision that required a foreign LLC to provide with its application a certificate from the company's jurisdiction of formation evidencing the company's existence, requiring instead that the company include a statement in the application that the company exists as a valid entity under the laws of its jurisdiction of formation.

            The bill allows a person, if provided in a written partnership agreement, to be admitted as a general partner in a limited partnership, including as the sole general partner, and acquire a partnership interest without making a contribution or assuming an obligation to make a contribution to the limited partnership. A person also may be admitted as a general partner or sole general partner without acquiring a partnership interest if the partnership agreement provides for admission under that condition. The bill clarifies that an event of withdrawal of a partner occurs on the partner's expulsion by a judicial decree for wrongful conduct or other cause, rather than on the partnership's application for the decree. Finally, the bill requires the secretary of state to permanently maintain as a public record, in any appropriate format, filings related to the organization of business entities in this state.