By Brimer H.B. No. 1239
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the organization and operation of certain business
1-3 organizations that provide for limited liability; providing
1-4 penalties.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 ARTICLE 1. LIMITED LIABILITY COMPANIES
1-7 SECTION 1.01. Section A, Article 1.02, Texas Limited
1-8 Liability Company Act (Article 1528n, Vernon's Texas Civil
1-9 Statutes), is amended by amending Subsection (9) and adding
1-10 Subsection (10) to read as follows:
1-11 (9) "Foreign Limited Liability Company" means an
1-12 entity formed under the laws of a jurisdiction other than this
1-13 state (a) that is characterized as a limited liability company by
1-14 such laws or (b) although not so characterized by such laws, that
1-15 elects to procure a certificate of authority pursuant to Article
1-16 7.01 of this act, that is formed under laws which provide
1-17 <provides> that some or all of the persons entitled to receive a
1-18 distribution of the assets thereof upon the entity's dissolution or
1-19 otherwise or to exercise voting rights with respect to an interest
1-20 in the entity shall not be liable for the debts, obligations or
1-21 liabilities of the entity and which is not eligible to become
1-22 authorized to <qualify to> do business in this state under any
1-23 other statute.
1-24 (10) "Merger" means (a) the division of a domestic
2-1 limited liability company into two or more new domestic limited
2-2 liability companies or into a surviving limited liability company
2-3 and one or more new domestic or foreign limited liability companies
2-4 or other entities, or (b) the combination of one or more domestic
2-5 limited liability companies with one or more domestic or foreign
2-6 limited liability companies or other entities resulting in (i) one
2-7 or more surviving domestic or foreign limited liability companies
2-8 or other entities, (ii) the creation of one or more new domestic or
2-9 foreign limited liability companies or other entities, or (iii) one
2-10 or more surviving domestic or foreign limited liability companies
2-11 or other entities and the creation of one or more new domestic or
2-12 foreign limited liability companies or other entities.
2-13 SECTION 1.02. Section A, Article 2.03, Texas Limited
2-14 Liability Company Act (Article 1528n, Vernon's Texas Civil
2-15 Statutes), is amended to read as follows:
2-16 A. The limited liability company name shall conform to the
2-17 following requirements:
2-18 (1) It shall either contain the words <word> "Limited
2-19 Liability Company" or "Limited Company" or the abbreviations
2-20 <abbreviation "Ltd." or> "L.L.C.," "LLC," "LC," or "L.C." and shall
2-21 contain such additional words as may be required by law. The word
2-22 "Limited" may be abbreviated as "Ltd." or "LTD" and the word
2-23 "Company" may be abbreviated as "Co." However, a limited liability
2-24 company formed before September 1, 1993, that complied with this
2-25 Section on the date of formation, but does not comply with this
2-26 Section as revised, is not required to change its name.
2-27 (2) It shall not contain any word or phrase which
3-1 indicates or implies that it is organized for any purpose other
3-2 than one or more of the purposes contained in its articles of
3-3 organization.
3-4 (3) It shall not be the same as, or deceptively
3-5 similar to, the name of any domestic limited liability company,
3-6 corporation or limited partnership existing under the laws of this
3-7 state, or the name of any foreign limited liability company,
3-8 corporation or limited partnership authorized to transact business
3-9 in this state, or a name the exclusive right to which is, at the
3-10 time, reserved in the manner provided in this Act or any other
3-11 statute providing for reservation of names by a corporation or
3-12 limited partnership, or the name of a limited liability company,
3-13 corporation or limited partnership which has in effect a
3-14 registration of its company name as provided in this act or any
3-15 other applicable law provided that a name may be similar if written
3-16 consent is obtained from the existing limited liability company,
3-17 corporation or limited partnership having the name deemed to be
3-18 similar or the person for whom the name deemed to be similar is
3-19 reserved in the office of the Secretary of State.
3-20 SECTION 1.03. Section A, Article 2.08, Texas Limited
3-21 Liability Company Act (Article 1528n, Vernon's Texas Civil
3-22 Statutes), is amended to read as follows:
3-23 A. The managers, if any, and the registered agent shall be
3-24 agents of a limited liability company or foreign limited liability
3-25 company upon whom any process, notice, or demand required or
3-26 permitted by law to be served upon the limited liability company or
3-27 foreign limited liability company may be served.
4-1 SECTION 1.04. Article 2.09, Texas Limited Liability Company
4-2 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
4-3 read as follows:
4-4 Art. 2.09. Regulations of limited liability company.
4-5 A. The power to adopt, alter, amend, or repeal the regulations of
4-6 a limited liability company shall be vested in the members of the
4-7 company unless vested in whole or part in the manager or managers
4-8 of the company by the articles of organization or regulations.
4-9 Regulations adopted by the members or by the managers may be
4-10 repealed or altered; new regulations may be adopted by the members;
4-11 and regulations may provide that they may not, in whole or
4-12 specified part, be altered, amended, or repealed by the managers.
4-13 The regulations may contain any provisions for the regulation and
4-14 management of the affairs of the limited liability company not
4-15 inconsistent with law or the articles of organization. Unless
4-16 otherwise provided in the articles of organization, the <The>
4-17 initial regulations of the limited liability company shall be
4-18 adopted by the manager or managers named in the articles of
4-19 organization, if any, or by the member or members named in the
4-20 articles of organization, if any. Any provision of this Act
4-21 subject to variation or modification by the regulations of a
4-22 limited liability company is also subject to variation or
4-23 modification by the articles of organization of the limited
4-24 liability company.
4-25 SECTION 1.05. Article 2.11, Texas Limited Liability Company
4-26 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
4-27 read as follows:
5-1 Art. 2.11. Limited liability company property. A. Real or
5-2 personal property owned or purchased by a limited liability company
5-3 may <shall> be held and owned, and conveyance may <shall> be made,
5-4 in the name of the limited liability company. Instruments and
5-5 documents providing for the acquisition, mortgage, or disposition
5-6 of the property of the limited liability company shall be valid and
5-7 binding upon the company, if they are executed by one or more
5-8 persons as provided in Article 2.21 of this Act <the preceding
5-9 Article>.
5-10 SECTION 1.06. Article 2.12, Texas Limited Liability Company
5-11 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
5-12 read as follows:
5-13 Art. 2.12. Managers. A. Except and to the extent the
5-14 articles of organization or the regulations shall reserve
5-15 management of the limited liability company <the same> to the
5-16 members in whole or in part, and subject to provisions in the
5-17 articles of organization, the regulations, or this Act restricting
5-18 or enlarging the powers, rights, and duties of any manager or group
5-19 or class of managers, the powers of a limited liability company
5-20 shall be exercised by or under the authority of, and the business
5-21 and affairs of a limited liability company shall be managed under
5-22 the direction of, the manager or managers of the limited liability
5-23 company. If management of the limited liability company is fully
5-24 reserved to the members, the limited liability company need not
5-25 have managers. Managers need not be residents of this State or
5-26 members of the limited liability company unless the regulations so
5-27 require. The regulations may prescribe other qualifications for
6-1 managers. If the management of the limited liability company is
6-2 reserved in whole or in part to the members, Articles 2.17, 2.18,
6-3 2.19, and 2.20 of this Act apply to the members who manage the
6-4 limited liability company to the same extent as those articles
6-5 would otherwise apply to managers of a limited liability company.
6-6 SECTION 1.07. Article 2.13, Texas Limited Liability Company
6-7 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
6-8 read as follows:
6-9 Art. 2.13. Number and election of managers. A. The
6-10 managers of a limited liability company, if any, shall consist of
6-11 one or more persons. The number of managers shall be fixed by, or
6-12 in the manner provided in, the regulations, except as to the number
6-13 constituting the initial managers, which number shall be fixed by
6-14 the articles of organization. The number of managers may be
6-15 increased or decreased from time to time by amendment to, or in the
6-16 manner provided in, the regulations, but no decrease shall have the
6-17 effect of shortening the term of any incumbent manager. In the
6-18 absence of a regulation fixing the number of managers or providing
6-19 for the manner in which the number of managers shall be fixed, the
6-20 number of managers shall be the same as the number constituting the
6-21 initial managers. The names and addresses of the initial managers,
6-22 if any, shall be stated in the articles of organization. Unless
6-23 otherwise provided in the regulations or in any resolution of the
6-24 managers or members appointing that manager in accordance with
6-25 <removed in accordance with the provisions of> the regulations or
6-26 articles of organization, each manager <such persons> shall hold
6-27 office for the term for which elected, if any term is specified,
7-1 and until that manager's successor has been elected, or until that
7-2 manager's earlier death, resignation, or removal. The regulations
7-3 may provide for the time or times at which the members entitled to
7-4 vote in the election of managers shall elect managers and the term
7-5 for which the managers shall hold office <until the first annual
7-6 meeting of members, and until their successors shall have been
7-7 elected and qualified. At the first annual meeting of members and
7-8 at each annual meeting thereafter, the holders of membership
7-9 interests entitled to vote in the election of managers shall elect
7-10 managers to hold office until the next succeeding annual meeting,
7-11 except in case of the classification of managers as permitted by
7-12 this Act>. The regulations may provide that <the holders of> any
7-13 class or group of members <series of membership interests> shall be
7-14 entitled to elect one or more managers, who shall hold office for
7-15 such terms as shall be stated in the regulations. <Unless removed
7-16 in accordance with provisions of the regulations, each manager
7-17 shall hold office for the term for which elected and until a
7-18 successor shall have been duly elected and qualified.> The
7-19 regulations may provide that at any meeting of members called
7-20 expressly for that purpose any managers may be removed, with or
7-21 without cause, as provided therein; however, if<. Whenever the
7-22 holders of> any class or group <series> of members is <shares are>
7-23 entitled to elect one or more managers by the provisions of the
7-24 regulations, only the members <holders of membership interests> of
7-25 that class or group <series> shall be entitled to vote for or
7-26 against the removal of any managers elected by the members
7-27 <holders> of that class or group <series>.
8-1 SECTION 1.08. Article 2.14, Texas Limited Liability Company
8-2 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
8-3 read as follows:
8-4 Art. 2.14. Classification of managers. A. The regulations
8-5 may provide that the managers shall be divided into more than one
8-6 class <either two or three classes>, each class to be the number
8-7 specified in the regulations <as nearly equal in number as
8-8 possible>, the terms <of office> of managers of each <the first>
8-9 class to expire in the order provided in the regulations and at the
8-10 meetings of the members at which the regulations provide that
8-11 managers are to be elected <at the first annual meeting of members
8-12 after their election, that of the second class to expire at the
8-13 second annual meeting after their election, and that of the third
8-14 class, if any, to expire at the third annual meeting after their
8-15 election>. If the regulations provide for the classification of
8-16 managers, (1) the whole number of managers of the limited liability
8-17 company need not be elected annually or at any regularly scheduled
8-18 meeting of the members, and (2) <at each annual meeting> after such
8-19 classification, at each meeting at which the regulations provide
8-20 that managers are to be elected, the number of managers equal to
8-21 the number of the class whose term expires at the time of such
8-22 meeting shall be elected to hold office until the next succeeding
8-23 meeting at which the regulations provide that the successors to the
8-24 managers are to be elected. A classification of managers adopted
8-25 after the last meeting of members at which managers were elected
8-26 may not be effective before the next meeting of members at which
8-27 managers are elected unless the classification is effected by an
9-1 amendment to the regulations adopted by the members <the second
9-2 succeeding annual meeting, if there be two classes, or until the
9-3 third succeeding annual meeting, if there be three classes>.
9-4 SECTION 1.09. Section A, Article 2.18, Texas Limited
9-5 Liability Company Act (Article 1528n, Vernon's Texas Civil
9-6 Statutes), is amended to read as follows:
9-7 A. If the regulations so provide, the managers, by
9-8 resolution, may designate from among the managers one or more
9-9 committees, each of which shall be comprised of one or more of the
9-10 managers, and may designate one or more of the managers as
9-11 alternate members of any committee, who may, subject to any
9-12 limitations imposed by the managers, replace absent or disqualified
9-13 managers at any meeting of that committee. Any such committee, to
9-14 the extent provided in such resolution or in the regulations, shall
9-15 have and may exercise all of the authority of the managers, subject
9-16 to the limitations set forth in Sections B and C of this Article.
9-17 Unless the resolution designating a particular committee, the
9-18 articles of organization, or the regulations expressly so provides,
9-19 a committee of the managers does not have the authority to
9-20 authorize or make a distribution of limited liability company cash
9-21 or property to the members or to authorize the issuance of
9-22 interests in the limited liability company.
9-23 SECTION 1.10. Article 2.21, Texas Limited Liability Company
9-24 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
9-25 read as follows:
9-26 Art. 2.21. DESIGNATION OF OFFICERS; AUTHORITY AND APPARENT
9-27 AUTHORITY OF OFFICERS, AGENTS, MANAGERS, AND MEMBERS <POWERS OF
10-1 MANAGERS AND OFFICERS>. A. One or more persons, who may or may
10-2 not be managers or members, may be designated as officers of the
10-3 limited liability company by the manager or managers, if management
10-4 is vested in one or more managers, or by the member or members, if
10-5 management of the limited liability company is reserved to the
10-6 members <The managers may designate one or more persons as officers
10-7 of the limited liability company who are not managers. Every
10-8 manager and officer is an agent of the limited liability company
10-9 for the purpose of its business and the act of a manager or
10-10 officer, including the execution in the name of the limited
10-11 liability company of any instrument for apparently carrying on in
10-12 the usual way the business of the limited liability company, binds
10-13 the limited liability company unless the manager or officer so
10-14 acting otherwise lacks the authority to act for the limited
10-15 liability company and the person with whom the manager or officer
10-16 is dealing has knowledge of the fact that the manager or officer
10-17 has no such authority>.
10-18 B. All officers, agents, managers, and members of the
10-19 limited liability company, as among themselves and the limited
10-20 liability company, have authority and perform duties in the
10-21 management of the limited liability company as may be provided in
10-22 the regulations or as may be determined by resolution of the
10-23 manager or managers, if management is vested in one or more
10-24 managers, or of the member or members, if management is reserved to
10-25 the members, in each case not inconsistent with the regulations or
10-26 the articles of organization.
10-27 C. Except as otherwise provided in this Article, the
11-1 following are agents of a limited liability company for the purpose
11-2 of its business:
11-3 (1) any one or more officers or other agents of a
11-4 limited liability company who are vested with actual or apparent
11-5 authority;
11-6 (2) each manager, to the extent that management of the
11-7 limited liability company is vested in that manager; and
11-8 (3) each member, to the extent that management of the
11-9 limited liability company has been reserved to that member.
11-10 D. An act, including the execution in the name of the
11-11 limited liability company of any instrument, for the purpose of
11-12 apparently carrying on in the usual way the business of the limited
11-13 liability company by any of the persons described in Section C of
11-14 this Article binds the limited liability company unless:
11-15 (1) the officer, agent, manager, or member so acting
11-16 otherwise lacks the authority to act for the limited liability
11-17 company; and
11-18 (2) the person with whom the officer, agent, manager,
11-19 or member is dealing has knowledge of the fact that the officer,
11-20 agent, manager, or member does not have that authority.
11-21 SECTION 1.11. Part Two, Texas Limited Liability Company Act
11-22 (Article 1528n, Vernon's Texas Civil Statutes), is amended by
11-23 adding Article 2.23 to read as follows:
11-24 Art. 2.23. VOTING, QUORUM, AND ACTION. A. Except as
11-25 otherwise provided in this Article, in the articles of
11-26 organization, or in the regulations, a majority of the members,
11-27 managers, or members of any committee constitutes a quorum for the
12-1 transaction of business at any meeting of the members, the
12-2 managers, or the committee. An act of a majority of the members
12-3 entitled to vote, the managers, or the members of a committee, who
12-4 are present at a meeting of the members, the managers, or the
12-5 committee at which a quorum is present is the act of the members,
12-6 the managers, or the committee.
12-7 B. (1) Unless otherwise provided by the articles of
12-8 organization or the regulations, any act required or permitted to
12-9 be taken at any meeting of the members, the managers, or any
12-10 committee may be taken without a meeting, without prior notice, and
12-11 without a vote if a consent or consents in writing, setting forth
12-12 the action so taken, is signed by the members, managers, or
12-13 committee members, as the case may be, having not fewer than the
12-14 minimum number of votes that would be necessary to take the action
12-15 at a meeting at which all members, managers, or committee members,
12-16 as the case may be, entitled to vote on the action were present and
12-17 voted.
12-18 (2) Unless otherwise provided in the regulations, a
12-19 telegram, telex, cablegram, or similar transmission by a person, or
12-20 a photographic, photostatic, facsimile, or similar reproduction of
12-21 a writing signed by a person, shall be regarded as signed by that
12-22 person for the purposes of this Article.
12-23 C. Subject to the provisions required or permitted by this
12-24 Act, unless otherwise provided in the articles of organization or
12-25 the regulations, members, managers, or members of any committee may
12-26 participate in and hold a meeting of the members, managers, or
12-27 committee by means of conference telephone or similar
13-1 communications equipment by means of which all persons
13-2 participating in the meeting may hear each other. Participation in
13-3 a meeting pursuant to this Section constitutes presence in person
13-4 at the meeting except where a person participates in the meeting
13-5 for the express purpose of objecting to the transaction of any
13-6 business on the ground that the meeting is not lawfully called or
13-7 convened.
13-8 D. Except as provided in the articles of organization or the
13-9 regulations, the affirmative vote, approval, or consent of a
13-10 majority of all the members is required to:
13-11 (1) amend the articles of organization or regulations;
13-12 (2) change the status of the limited liability company
13-13 from one in which management is reserved to the members to one in
13-14 which management is vested in one or more managers, or vice versa;
13-15 (3) issue any additional membership interests in the
13-16 limited liability company subsequent to the issuance of membership
13-17 interests to the initial members of the limited liability company;
13-18 (4) approve any merger, consolidation, share or
13-19 interest exchange, or other transaction authorized by or subject to
13-20 the provisions of Part Ten of this Act;
13-21 (5) voluntarily cause the dissolution of the limited
13-22 liability company;
13-23 (6) authorize any transaction, agreement, or action on
13-24 behalf of the limited liability company that is unrelated to its
13-25 purpose as set forth in the regulations or articles of organization
13-26 or that otherwise contravenes the regulations; or
13-27 (7) authorize any act that would make it impossible to
14-1 carry on the ordinary business of the limited liability company.
14-2 E. Except as provided in the regulations, the affirmative
14-3 vote, approval, or consent of a majority of all of the managers, if
14-4 management of the limited liability company is vested in one or
14-5 more managers, or of the members, if management of the limited
14-6 liability company is reserved to the members, is required to take
14-7 any action, other than an action listed in Section D of this
14-8 Article, that is not apparently for the carrying on of the business
14-9 of the limited liability company in the usual way.
14-10 F. Except as otherwise provided in the articles of
14-11 organization or the regulations, for purposes of this Act, a
14-12 "majority" of the members, managers, or any committee of the
14-13 managers means more than one-half, by number, of all the members,
14-14 managers, or members of the committee, as the case may be.
14-15 SECTION 1.12. Section A, Article 3.02, Texas Limited
14-16 Liability Company Act (Article 1528n, Vernon's Texas Civil
14-17 Statutes), is amended to read as follows:
14-18 A. The initial Articles of Organization shall set forth:
14-19 (1) The name of the limited liability company;
14-20 (2) The period of duration, which may be perpetual
14-21 <not exceed 30 years from the date of filing with the Secretary of
14-22 State>;
14-23 (3) The purpose for which the limited liability
14-24 company is organized which may be stated to be, or to include, the
14-25 transaction of any or all lawful business for which limited
14-26 liability companies may be organized under this Act;
14-27 (4) The address of its initial registered office
15-1 <principal place of business in the state> and the name <and
15-2 address> of its initial registered agent at that address <in the
15-3 state>;
15-4 (5) If the limited liability company is to have <be
15-5 managed by> a manager or managers, a statement to that effect <that
15-6 the company is to be managed by a manager or managers> and the
15-7 names and addresses of the initial manager or <such> managers <who
15-8 are to serve as managers until the first annual meeting of members
15-9 or until their successors are duly elected>. If the <management of
15-10 a> limited liability company will not have managers, a statement to
15-11 that effect and <is reserved to the members,> the name and
15-12 addresses of the initial members;<.>
15-13 (6) The name and address of each organizer;
15-14 (7) Any provision required by Part Eleven of this Act,
15-15 if the limited liability company is a professional limited
15-16 liability company; and
15-17 (8) Any other provisions, not inconsistent with law,
15-18 which the members elect to set out in the articles of organization
15-19 for the regulation of the internal affairs of the limited liability
15-20 company, including any provisions which under this Act are
15-21 <required or> permitted to be set out in the regulations of the
15-22 limited liability company.
15-23 SECTION 1.13. Section B, Article 3.06, Texas Limited
15-24 Liability Company Act (Article 1528n, Vernon's Texas Civil
15-25 Statutes), is amended to read as follows:
15-26 B. The articles of amendment shall set forth:
15-27 (1) The name of the limited liability company.
16-1 (2) If the amendment alters any provision of the
16-2 original or amended articles of organization an identification by
16-3 reference or description of the altered provision and a statement
16-4 of its text as it is amended to read. If the amendment is an
16-5 addition to the original or amended articles of organization a
16-6 statement of that fact and the text of each provision added.
16-7 (3) A statement that the amendment was approved in
16-8 accordance with Section D of Article 2.23 of this Act or as
16-9 otherwise provided in the articles of organization or regulations
16-10 and the date of the approval.
16-11 SECTION 1.14. Part Three, Texas Limited Liability Company
16-12 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended by
16-13 adding Article 3.09 to read as follows:
16-14 Art. 3.09. RESTATED ARTICLES OF ORGANIZATION. A. By
16-15 following the procedure to amend the articles of organization
16-16 provided by this Act, a limited liability company may authorize,
16-17 execute, and file restated articles of organization that restate
16-18 the entire text of the articles of organization, as amended or
16-19 supplemented by:
16-20 (1) all certificates of amendment previously issued by
16-21 the Secretary of State; or
16-22 (2) all certificates of amendment previously issued by
16-23 the Secretary of State and by further amendments included in the
16-24 restated articles of organization.
16-25 Unless otherwise provided by the articles of organization or
16-26 the regulations, member approval is not required if further
16-27 amendment is not made by the restated articles of organization.
17-1 B. Restated articles of organization that restate the entire
17-2 articles of organization as amended and supplemented by all
17-3 certificates of amendment previously issued by the Secretary of
17-4 State, without making a further amendment, must contain an
17-5 introductory paragraph stating that the instrument accurately
17-6 copies the articles of organization and all amendments to the
17-7 articles of organization that are in effect to date and that the
17-8 instrument does not contain any other change in a provision of the
17-9 articles of organization or a previous amendment, other than:
17-10 (1) the insertion of the current number of managers,
17-11 if any, and the names and addresses of the persons then serving as
17-12 managers, if any, in lieu of similar information concerning the
17-13 initial managers; and
17-14 (2) the omission of the name and address of each
17-15 organizer.
17-16 C. An instrument containing restated articles of
17-17 organization that restate the entire articles of organization as
17-18 amended and supplemented by all certificates of amendment
17-19 previously issued by the Secretary of State and as further amended
17-20 by the restated articles of organization must:
17-21 (1) state that each amendment made by the restated
17-22 articles of organization has been effected in conformity with this
17-23 Act;
17-24 (2) include the statements required by this Act to be
17-25 contained in articles of amendment; and
17-26 (3) state that the instrument accurately copies the
17-27 articles of organization and all amendments that are in effect to
18-1 date and as further amended by the restated articles of
18-2 organization and that the instrument does not contain any other
18-3 change in a provision of the articles of organization or the
18-4 previous amendments, other than:
18-5 (a) the insertion of the current number of
18-6 managers, if any, and the names and addresses of the persons then
18-7 serving as managers, if any, in lieu of similar information
18-8 concerning the initial managers; and
18-9 (b) the omission of the name and address of each
18-10 organizer.
18-11 D. Restated articles of organization must be executed on
18-12 behalf of the limited liability company by an authorized manager or
18-13 member unless capital has not been paid into the limited liability
18-14 company and the restated articles of organization have been adopted
18-15 by the organizer, in which case the restated articles of
18-16 organization may be executed on behalf of the limited liability
18-17 company by the organizer. The original and a copy of the restated
18-18 articles of organization shall be delivered to the Secretary of
18-19 State. If the Secretary of State finds that the restated articles
18-20 of organization conform to law, and the appropriate filing fee is
18-21 paid as required by law, the Secretary of State shall:
18-22 (1) endorse on the original and the copy the word
18-23 "Filed" and the month, day, and year of filing;
18-24 (2) file the original in the Secretary of State's
18-25 office; and
18-26 (3) issue a restated certificate of organization and
18-27 affix the copy to the restated certificate of organization.
19-1 E. The restated certificate of organization, together with
19-2 the copy of the restated articles of organization affixed to the
19-3 restated certificate of organization by the Secretary of State,
19-4 shall be delivered to the limited liability company or its
19-5 representative.
19-6 F. On issuance of a restated certificate of organization by
19-7 the Secretary of State, the original articles of organization and
19-8 all amendments to the original articles are superseded, and the
19-9 restated articles of organization are the articles of organization
19-10 of the limited liability company.
19-11 SECTION 1.15. Section A, Article 4.01, Texas Limited
19-12 Liability Company Act (Article 1528n, Vernon's Texas Civil
19-13 Statutes), is amended to read as follows:
19-14 A. A limited liability company may have one or more members.
19-15 In connection with the formation of a limited liability company, a
19-16 person acquiring an interest as a member becomes a member on the
19-17 latter of:
19-18 (1) the date of formation of the limited liability
19-19 company; or
19-20 (2) the date stated in the records of the limited
19-21 liability company as the date that the person becomes a member or,
19-22 if no date is stated in those records, on the date that the
19-23 person's admission is first reflected in the records of the limited
19-24 liability company.
19-25 SECTION 1.16. Article 4.05, Texas Limited Liability Company
19-26 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended by
19-27 amending Section A and adding Section C to read as follows:
20-1 A. Unless otherwise provided by the regulations:
20-2 (1) a membership interest is assignable in whole or in
20-3 part;
20-4 (2) an assignment of a membership interest does not of
20-5 itself dissolve the limited liability company or entitle the
20-6 assignee to participate in the management and affairs of the
20-7 limited liability company or to become<,> or <to> exercise any
20-8 rights <or powers> of<,> a member;
20-9 (3) an assignment entitles the assignee to be
20-10 allocated income, gain, loss, deduction, credit, or similar items,
20-11 and to receive distributions, to which the assignor was entitled,
20-12 to the extent those items are assigned, and, for any proper
20-13 purpose, to require reasonable information or account of
20-14 transactions of the limited liability company and to make
20-15 reasonable inspection of the books and records of the limited
20-16 liability company; and
20-17 (4) until the assignee becomes a member, the assignor
20-18 member continues to be a member and to have the power to exercise
20-19 any rights or powers of a member, except to the extent those rights
20-20 or powers are assigned.
20-21 C. Until an assignee of the interest of a member in a
20-22 limited liability company is admitted as a member, the assignee
20-23 does not have liability as a member solely as a result of the
20-24 assignment.
20-25 SECTION 1.17. Section B, Article 5.02, Texas Limited
20-26 Liability Company Act (Article 1528n, Vernon's Texas Civil
20-27 Statutes), is amended to read as follows:
21-1 B. Except as otherwise provided by the articles of
21-2 organization or regulations, a member or the member's legal
21-3 representative or successor is obligated to the limited liability
21-4 company to perform an enforceable promise to make a contribution to
21-5 or otherwise pay cash or transfer property to a limited liability
21-6 company, notwithstanding the member's death, disability, or other
21-7 change in circumstances. If a member or a member's legal
21-8 representative or successor does not make a contribution or other
21-9 payment of cash or transfer of property required by the enforceable
21-10 promise, whether as a contribution or with respect to a
21-11 contribution previously made, that member or the member's legal
21-12 representative or successor is obligated, at the option of the
21-13 limited liability company, to pay to the limited liability company
21-14 an amount of cash equal to that portion of the agreed value, as
21-15 stated in the regulations or in the limited liability company
21-16 records required to be kept under Article 2.22 of this Act <act>,
21-17 of the contribution represented by the amount of cash that has not
21-18 been paid or the value of the property that has not been
21-19 transferred.
21-20 SECTION 1.18. Part Five, Texas Limited Liability Company Act
21-21 (Article 1528n, Vernon's Texas Civil Statutes), is amended by
21-22 adding Article 5.02-1 to read as follows:
21-23 Art. 5.02-1. ALLOCATION OF PROFITS AND LOSSES. A. The
21-24 profits and losses of a limited liability company shall be
21-25 allocated among the members and among classes of members in the
21-26 manner provided in the regulations. If the regulations do not
21-27 otherwise provide, the profits and losses shall be allocated in
22-1 accordance with the then current percentage or other interest in
22-2 the limited liability company of the members stated in limited
22-3 liability company records of the kind described in Section A of
22-4 Article 2.22 of this Act.
22-5 SECTION 1.19. Article 5.05, Texas Limited Liability Company
22-6 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
22-7 read as follows:
22-8 Art. 5.05. WITHDRAWAL OR EXPULSION <RESIGNATION> OF MEMBER.
22-9 A. A member may withdraw or be expelled from a limited liability
22-10 company at the time or on the occurrence of events specified in the
22-11 regulations.
22-12 SECTION 1.20. Article 6.01, Texas Limited Liability Company
22-13 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
22-14 read as follows:
22-15 Art. 6.01. DISSOLUTION. A. Except as provided by Section B
22-16 of this Article, a <A> limited liability company shall be dissolved
22-17 on the first of the following to occur:
22-18 (1) <When> the period fixed for the duration of the
22-19 limited liability company expires;<.>
22-20 (2) <On> the occurrence of events specified in the
22-21 articles of organization or regulations to cause dissolution;<.>
22-22 (3) the action of the members to dissolve the limited
22-23 liability company; <Written consent of all members to dissolution.>
22-24 (4) if no capital has been paid into the limited
22-25 liability company, the act of the organizer or the managers of the
22-26 limited company to dissolve the limited liability company;
22-27 (5) except <Except> as otherwise provided in the
23-1 regulations, upon the death, <retirement, resignation,> expulsion,
23-2 withdrawal pursuant to or as provided in the articles of
23-3 organization or regulations, bankruptcy, or dissolution of a member
23-4 or the occurrence of any other event which terminates the continued
23-5 membership of a member in the limited liability company<, unless
23-6 there is at least one remaining member and the business of the
23-7 limited liability company is continued by the consent of the number
23-8 of members or class thereof stated in the articles of organization
23-9 or regulations of the limited liability company or if not so
23-10 stated, by all remaining members.>; or
23-11 (6) entry <(5) Entry> of a decree of judicial
23-12 dissolution under Section 6.02 of this Act.
23-13 B. A limited liability company is not dissolved if an event
23-14 of dissolution described by Subsection (1), (2), or (5) of Section
23-15 A of this Article occurs, there is at least one remaining member,
23-16 and the business of the limited liability company is continued by
23-17 the vote of the members or class as stated in the articles of
23-18 organization or regulations of the limited liability company, or if
23-19 not so stated, by all remaining members. Unless otherwise provided
23-20 in the articles of organization or in the regulations, an election
23-21 to continue the business of the limited liability company must be
23-22 made within 90 days after the date of the occurrence of the event
23-23 of dissolution. If an election to continue the business of the
23-24 limited liability company is made following the termination of the
23-25 period fixed for the duration of the limited liability company or
23-26 the occurrence of events specified in the articles of organization
23-27 to cause dissolution, the election is not effective unless an
24-1 appropriate amendment is made by the limited liability company to
24-2 its articles of organization during the three-year period following
24-3 the date of the event of dissolution, extending the period fixed
24-4 for the duration of the limited liability company or deleting the
24-5 event specified in the articles of organization that caused the
24-6 dissolution, as applicable.
24-7 SECTION 1.21. Article 6.03, Texas Limited Liability Company
24-8 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
24-9 read as follows:
24-10 Art. 6.03. WINDING UP. A. On the dissolution of a limited
24-11 liability company, the limited liability company's affairs shall be
24-12 wound up as soon as reasonably practicable. The winding up shall
24-13 be accomplished by the managers or members or by any other person
24-14 or persons designated by the articles of organization, by the
24-15 regulations, or by resolution of the managers or members. In
24-16 addition, a court of competent jurisdiction, on cause shown, may
24-17 wind up the limited liability company's affairs on application of
24-18 any member or the member's legal representative or assignee and, in
24-19 connection with the winding up, may appoint a person to carry out
24-20 the liquidation and may make all other orders, directions, and
24-21 inquiries that the circumstances require.
24-22 SECTION 1.22. Article 6.05, Texas Limited Liability Company
24-23 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
24-24 read as follows:
24-25 Art. 6.05. Procedure before filing articles of dissolution.
24-26 A. Before filing articles of dissolution:
24-27 (1) The limited liability company shall cease to carry
25-1 on its business, except insofar as may be necessary for the winding
25-2 up thereof.
25-3 (2) The limited liability company shall cause written
25-4 notice by registered or certified mail of its intention to dissolve
25-5 to be mailed to each known creditor of and claimant against the
25-6 limited liability company.
25-7 (3) The limited liability company shall proceed to
25-8 collect its assets, convey and dispose of such of its properties as
25-9 are not to be distributed in kind to its members, pay, satisfy or
25-10 discharge its liabilities and obligations, or make adequate
25-11 provisions for payment and discharge thereof, and do all other acts
25-12 required to liquidate its business and affairs; in case its
25-13 property and assets are not sufficient to satisfy or discharge all
25-14 the limited liability company's liabilities and obligations, the
25-15 limited liability company shall apply them so far as they will go
25-16 to the just and equitable payment of the liabilities and
25-17 obligations. After paying or discharging all of its obligations,
25-18 or making adequate provisions for payment and discharge thereof,
25-19 the limited liability company shall then distribute the remainder
25-20 of its assets, either in cash or in kind, among its members
25-21 <shareholders> according to their respective rights and interest.
25-22 (4) The limited liability company, at any time during
25-23 the liquidation of its business and affairs, may make application
25-24 to any district court of this state in the county in which the
25-25 registered office of the limited liability company is situated to
25-26 have the liquidation continued under the supervision of such court
25-27 as provided in this Act.
26-1 SECTION 1.23. Article 6.07, Texas Limited Liability Company
26-2 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
26-3 read as follows:
26-4 Art. 6.07. Articles of dissolution. A. If voluntary
26-5 dissolution proceedings have not been revoked, then, when all
26-6 liabilities and obligations of the limited liability company have
26-7 been paid or discharged, or adequate provision has been made
26-8 therefor <thereof>, or in case its property and assets are not
26-9 sufficient to satisfy and discharge all the limited liability
26-10 company's liabilities and obligations, then when all the property
26-11 and assets have been applied so far as they will go to the just and
26-12 equitable payment of the limited liability company's liabilities
26-13 and obligations, and all of the remaining property and assets of
26-14 the limited liability have been distributed to its members
26-15 according to their respective rights and interest, articles of
26-16 dissolution shall be executed on behalf of the limited liability
26-17 company by a manager or authorized member, or in the case of a
26-18 dissolution by action of the organizer of the limited liability
26-19 company, by the organizer, which shall set forth:
26-20 (1) The name of the limited liability company.
26-21 (2) The names and respective addresses of its
26-22 managers, if any.
26-23 (3) That all debts, obligations, and liabilities of
26-24 the limited liability company have been paid or discharged or that
26-25 adequate provision has been made therefor, or, in case the limited
26-26 liability company's property and assets were not sufficient to
26-27 satisfy and discharge all its debts, liabilities, and obligations,
27-1 that all property and assets have been applied so far as they will
27-2 go to the payment thereof in a just and equitable manner and that
27-3 no property or assets remain available for distribution among its
27-4 members, or, that the limited liability company has not acquired
27-5 any debts, obligations, or liabilities.
27-6 (4) That all remaining property and assets of the
27-7 limited liability company have been distributed among its members
27-8 in accordance with their respective rights and interest or that no
27-9 property remained for distribution to members after applying it as
27-10 far as it would go to the just and equitable payment of the debts,
27-11 liabilities, and obligations of the limited liability company, or
27-12 that the limited liability company has not acquired any property or
27-13 assets and therefore distributions to members were not required.
27-14 (5) If capital has not been paid into the limited
27-15 liability company, a copy of the resolution to dissolve, together
27-16 with a statement that the resolution was adopted by the act of the
27-17 organizer or the managers of the limited liability company and of
27-18 the date of adoption <There are no suits pending against the
27-19 limited liability company in any court, or that adequate provisions
27-20 have been made for satisfaction of any judgment, order, or decree
27-21 which may be entered against it in any pending suit>.
27-22 (6) If the limited liability company elected to
27-23 dissolve by action <written consent> of its <all> members, a<:>
27-24 <(a) A> copy of the resolution <written consent>
27-25 to dissolve, together with <and> a statement that the resolution
27-26 was adopted in accordance with Section D, Article 2.23, of this Act
27-27 or as otherwise provided in the articles of incorporation or the
28-1 regulations and the date of adoption <such written consent has been
28-2 signed by all members of the limited liability company or signed in
28-3 their names by their attorneys thereunto duly authorized>.
28-4 SECTION 1.24. Article 7.03, Texas Limited Liability Company
28-5 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
28-6 read as follows:
28-7 Art. 7.03. Limited Liability Company Name of Foreign Limited
28-8 Liability Company. A. No certificate of authority shall be issued
28-9 to a foreign limited liability company unless the limited liability
28-10 company name of such limited liability company:
28-11 (1) Shall contain the word "Limited Liability Company"
28-12 or "Limited Company" or the abbreviations "L.L.C.," "LLC," "LC,"
28-13 <"Ltd."> or "L.C." and shall contain such additional words as may
28-14 be required by law. The word "Limited" may be abbreviated as
28-15 "Ltd." or "LTD" and the word "Company" may be abbreviated as "Co."
28-16 However, a foreign limited liability company that procured a
28-17 certificate of authority to transact business in this state before
28-18 September 1, 1993, and that complied with this Section on the date
28-19 of procuring the certificate, but does not comply with this Section
28-20 as revised, is not required to change its name.
28-21 (2) Shall not contain any word or phrase which
28-22 indicates or implies that it is organized for any purpose other
28-23 than one or more of the purposes contained in its articles of
28-24 organization.
28-25 (3) Shall not be the same as, or deceptively similar
28-26 to, the name of any domestic limited liability company, corporation
28-27 or limited partnership existing under the laws of this state or of
29-1 any foreign limited liability company, corporation or limited
29-2 partnership authorized to transact business in this state, or a
29-3 name the exclusive right to which is, at the time, reserved or
29-4 registered in the manner provided in this Act or any other statute
29-5 relating to corporations, partnerships, or other business entities;
29-6 provided that a name may be similar if written consent is obtained
29-7 from the existing limited liability company, corporation or limited
29-8 partnership having the name deemed to be similar or the person, or
29-9 limited liability company, for whom the name deemed to be similar
29-10 is reserved or registered in the office of the Secretary of State.
29-11 A certificate of authority shall be issued as provided in this Act
29-12 to any foreign limited liability company having a name the same as,
29-13 deceptively similar to, or, if no consent is given, similar to the
29-14 name of any limited liability company existing under the laws of
29-15 this state or of any foreign limited liability company authorized
29-16 to transact business in this state, or a name the exclusive right
29-17 to which is, at the time, reserved or registered, provided such
29-18 foreign limited liability company qualifies and does business under
29-19 a name that meets the requirements of this article. The foreign
29-20 limited liability company shall set forth in the application for a
29-21 certificate of authority the name under which it is qualifying and
29-22 shall file an assumed name certificate as required by law.
29-23 SECTION 1.25. Article 8.12, Texas Limited Liability Company
29-24 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
29-25 read as follows:
29-26 Art. 8.12. Applicability of other statutes. A. Subject to
29-27 Section C of this Article, Articles 2.07, 4.14, and 5.14 and Part
30-1 Seven of the TBCA apply to a limited liability company and its
30-2 members, managers, and officers.
30-3 B. Subject to Section C of this Article, Articles 2.03
30-4 through 2.06, 2.09, 2.09A, 3.01, and 7.01 through 7.07, Texas
30-5 Miscellaneous Corporation Laws Act (Article 1302-1.01 et seq.,
30-6 Vernon's Texas Civil Statutes), as amended, apply to a limited
30-7 liability company and its members, managers, and officers.
30-8 C. For purposes of the application of the articles of the
30-9 TBCA and the Texas Miscellaneous Corporation Laws Act as provided
30-10 by Sections A and B of this Article, as context requires:
30-11 (1) a reference to a corporation includes a limited
30-12 liability company;
30-13 (2) a reference to a share includes a membership
30-14 interest;
30-15 (3) a reference to a shareholder includes a member;
30-16 (4) a reference to a director includes a manager;
30-17 (5) a reference to articles of incorporation includes
30-18 articles of organization; and
30-19 (6) a reference to bylaws includes regulations. <To
30-20 the extent this Act contains no provision with respect to one of
30-21 the matters provided for in the TBCA or the Texas Miscellaneous
30-22 Corporation Laws Act as such acts shall be amended from time to
30-23 time, the provisions of the TBCA and the Texas Miscellaneous
30-24 Corporation Laws Act shall supplement the provisions of this Act to
30-25 the extent they are not inconsistent with the provisions of this
30-26 Act. Without limiting the generality of the foregoing, Article 5
30-27 of the TBCA shall supplement the provisions of this Act and a
31-1 limited liability company shall be an "other entity" as that term
31-2 is defined in the TBCA and Article 7.06 of the Texas Miscellaneous
31-3 Corporation Laws Act shall be applicable to limited liability
31-4 company managers to the same extent as to directors.>
31-5 SECTION 1.26. Section A, Article 9.01, Texas Limited
31-6 Liability Company Act (Article 1528n, Vernon's Texas Civil
31-7 Statutes), is amended to read as follows:
31-8 A. The Secretary of State is authorized and required to
31-9 collect for the use of the State the following fees:
31-10 (1) Filing articles of organization of a domestic
31-11 limited liability company and issuing the certificate of
31-12 organization, Two Hundred Dollars ($200.00).
31-13 (2) Filing articles of amendment of a domestic limited
31-14 liability company and issuing the certificate of amendment, One
31-15 Hundred Dollars ($100.00).
31-16 (3) Filing articles of merger involving one or more
31-17 <a> domestic or foreign limited liability companies: <company,>
31-18 (a) Two Hundred Dollars ($200.00), if another
31-19 type of domestic entity is not a party to the merger; or
31-20 (b) the greater of Two Hundred Dollars ($200.00)
31-21 or the highest filing fee for articles of merger under the
31-22 applicable Texas statute under which the other domestic entity or
31-23 entities are incorporated or organized, if another type of domestic
31-24 entity is party to the merger.
31-25 (4) Filing an application of a foreign limited
31-26 liability company for certificate of authority to transact business
31-27 in this state and issuing such a certificate of authority, Five
32-1 Hundred Dollars ($500.00).
32-2 (5) Filing an application of a foreign limited
32-3 liability company for an amended certificate of authority to
32-4 transact business in this state and issuing such an amended
32-5 certificate of authority, One Hundred Dollars ($100.00).
32-6 (6) Filing restated articles of organization of a
32-7 domestic limited liability company, Two Hundred Dollars ($200.00).
32-8 (7) Filing application for reservations of a limited
32-9 liability company name and issuing certificate thereof, Twenty-Five
32-10 Dollars ($25.00).
32-11 (8) Filing notice of transfer of reserved limited
32-12 liability company name and issuing a certificate therefor, Ten
32-13 Dollars ($10.00).
32-14 (9) Filing statement of change of registered office or
32-15 registered agent, or both, Ten Dollars ($10.00).
32-16 (10) Filing statement of change of address of
32-17 registered agent, Ten Dollars ($10.00); provided, however, that the
32-18 maximum fee for simultaneous filings by a registered agent for more
32-19 than one limited liability company shall not exceed Five Hundred
32-20 Dollars ($500.00).
32-21 (11) Filing articles of dissolution and issuing
32-22 certificate therefor, Twenty-Five Dollars ($25.00).
32-23 (12) Filing application for withdrawal and issuing
32-24 certificate therefor, Ten Dollars ($10.00).
32-25 (13) Filing certificate from home state that foreign
32-26 limited liability company is no longer existent in said state, Ten
32-27 Dollars ($10.00).
33-1 (14) Maintaining the record of service of any process,
33-2 notice or demand upon the Secretary of State as agent for foreign
33-3 and domestic limited liability companies, Twenty-Five Dollars
33-4 ($25.00).
33-5 (15) Filing any instrument pursuant to this act not
33-6 expressly provided for above, Ten Dollars ($10.00).
33-7 SECTION 1.27. Part Nine, Texas Limited Liability Company Act
33-8 (Article 1528n, Vernon's Texas Civil Statutes), is amended by
33-9 adding Article 9.03 to read as follows:
33-10 Art. 9.03. DELAYED EFFECTIVENESS OF CERTAIN FILINGS. A.
33-11 (1) For purposes of this Article, "permitted act" means a filing
33-12 with the Secretary of State under this Act for:
33-13 (a) the articles of organization of a limited
33-14 liability company under this Act;
33-15 (b) an amendment to or restatement of the
33-16 articles of organization;
33-17 (c) a merger;
33-18 (d) the application of a foreign limited
33-19 liability company to procure a certificate of authority to transact
33-20 business in this state or to withdraw from doing business in this
33-21 state;
33-22 (e) an amendment to the certificate of authority
33-23 of a foreign limited liability company to transact business in this
33-24 state;
33-25 (f) a change in registered office or registered
33-26 agent;
33-27 (g) a change of address of a registered agent;
34-1 or
34-2 (h) a voluntary dissolution.
34-3 (2) A permitted act may be made effective as of a time
34-4 and date after the time and date otherwise provided in this Act or
34-5 may be made effective on the occurrence of events or facts that may
34-6 occur in the future. Those events or facts may include future acts
34-7 of any person if the articles of organization, articles of
34-8 amendment or restatement, articles of merger, application, or other
34-9 document required by this Act to be filed with the Secretary of
34-10 State to make the permitted act effective clearly and expressly
34-11 states, in addition to any other statement or information required:
34-12 (a) a time and date certain on which the
34-13 permitted act is to become effective; or
34-14 (b) if the permitted act is to become effective
34-15 on the occurrence of events or facts that may occur in the future:
34-16 (i) the manner in which the events or
34-17 facts cause the permitted act to become effective; and
34-18 (ii) the date of the 90th day after the
34-19 date of the filing of the articles of organization, articles of
34-20 amendment or restatement, articles of merger, application, or other
34-21 document.
34-22 (3) A permitted act becoming effective as of a time or
34-23 date certain that is after the time and date otherwise provided in
34-24 this Act must specify a subsequent effective time and date that is
34-25 not more than 90 days after the date of the filing of the articles
34-26 of organization, articles of amendment or restatement, articles of
34-27 merger, application, or other document required by this Act. The
35-1 time certain on which the permitted act is to become effective may
35-2 not be midnight or 12 p.m.
35-3 (4) Within 90 days after the date of filing of the
35-4 articles of organization, articles of amendment or restatement,
35-5 articles of merger, application, or other document for a permitted
35-6 act becoming effective on the occurrence of events or facts that
35-7 may occur in the future, other than the mere passage of time, a
35-8 statement must be filed with the Secretary of State confirming that
35-9 all the events or facts on which the effectiveness of the permitted
35-10 act is conditioned have been satisfied or waived and the date on
35-11 which the condition was satisfied or waived.
35-12 B. A statement required by Section A of this Article must be
35-13 executed on behalf of each domestic or foreign limited liability
35-14 company or other person required to execute the articles of
35-15 organization, articles of amendment or restatement, articles of
35-16 merger, application, or other document required by this Act to be
35-17 filed with the Secretary of State to make the permitted act
35-18 effective by a member, manager, officer, or other duly authorized
35-19 representative, including a member, manager, officer, or duly
35-20 authorized representative of any successor domestic or foreign
35-21 limited liability company or other entity. An original and a copy
35-22 of the statement must be filed with the Secretary of State.
35-23 C. Notwithstanding any other provision of this Act to the
35-24 contrary, a permitted act that is to become effective as of a time
35-25 or date after the time and date otherwise provided in this Act, to
35-26 the extent permitted by this Article, shall become effective as of
35-27 the subsequent time and date. Any certificate issued by the
36-1 Secretary of State on the filing of the articles of organization,
36-2 articles of amendment or restatement, articles of merger,
36-3 application, or other document otherwise required by this Act for
36-4 the permitted act to become effective shall expressly set forth the
36-5 time and date on which the permitted act is to become effective.
36-6 D. (1) A permitted act to be made effective on the
36-7 occurrence of events or facts that may occur in the future, other
36-8 than the mere passage of time, and for which the statement required
36-9 by Subsection (4) of Section A of this Article is filed with the
36-10 Secretary of State within the prescribed time becomes effective as
36-11 of the time and date on which the latest specified event or fact
36-12 occurred or the time and date on which the condition is otherwise
36-13 satisfied or waived. Any certificate issued or notation,
36-14 acknowledgment, or other statement made by the Secretary of State
36-15 on the filing of the articles of organization, articles of
36-16 amendment or restatement, articles of merger, application, or other
36-17 document otherwise required by this Act for the permitted act to
36-18 become effective must:
36-19 (a) state that "The effectiveness of the action
36-20 to which this instrument relates is conditioned on the occurrence
36-21 of certain facts or events described in the filing to which this
36-22 instrument relates"; or
36-23 (b) make reference in any manner approved by the
36-24 Secretary of State to the fact that the effectiveness of the action
36-25 is so conditioned.
36-26 (2) The time and date on which a condition to the
36-27 effectiveness of a permitted act is satisfied or waived as set
37-1 forth in a statement filed with the Secretary of State pursuant to
37-2 Subsection (4) of Section A of this Article shall be conclusively
37-3 regarded as the time and date on which the condition was satisfied
37-4 or waived for purposes of this section.
37-5 E. If the effectiveness of any permitted act is conditioned
37-6 on the occurrence of events or facts that may occur in the future,
37-7 other than the mere passage of time, and the statement required by
37-8 Subsection (4) of Section A of this Article is not filed with the
37-9 Secretary of State within the prescribed time, the permitted act
37-10 does not become effective unless there is subsequently filed with
37-11 the Secretary of State the articles of organization, articles of
37-12 amendment or restatement, articles of merger, application, or other
37-13 document required by this Act to be filed with the Secretary of
37-14 State to make the permitted act effective.
37-15 F. If articles of organization, articles of amendment or
37-16 restatement, articles of merger, an application, or any other
37-17 document permitted to be filed pursuant to this Act with the
37-18 Secretary of State have been filed but the event or transaction
37-19 evidenced by the filing has not become effective, the filing may be
37-20 abandoned in accordance with the agreement of the parties to the
37-21 filing by filing a certificate of abandonment with the Secretary of
37-22 State before the effectiveness of the event or transaction in
37-23 accordance with the terms of the document so filed. The
37-24 certificate of abandonment must be signed on behalf of each
37-25 domestic or foreign limited liability company or other entity that
37-26 is a party to the event or transaction by a member, manager,
37-27 officer, or other authorized representative and must state the
38-1 nature of the filing to be abandoned, the date of the filing to be
38-2 abandoned, the parties to the filing to be abandoned, and that the
38-3 event or transaction has been abandoned in accordance with the
38-4 agreement of the parties. On the filing of the statement of
38-5 abandonment with the Secretary of State, the event or transaction
38-6 evidenced by the original filing shall be considered abandoned and
38-7 may not become effective.
38-8 SECTION 1.28. The Texas Limited Liability Company Act
38-9 (Article 1528n, Vernon's Texas Civil Statutes) is amended by adding
38-10 Parts Ten and Eleven to read as follows:
38-11 PART TEN
38-12 Art. 10.01. MERGER. A. A domestic limited liability
38-13 company may adopt a plan of merger and one or more domestic limited
38-14 liability companies may merge with one or more domestic or foreign
38-15 limited liability companies or other entities if:
38-16 (1) each constituent entity enters into a written plan
38-17 of merger containing the provisions set forth in Article 10.02 of
38-18 this Act for which:
38-19 (a) approval exists by all domestic limited
38-20 liability companies by the vote of a majority of their respective
38-21 members, unless the respective regulations or articles of
38-22 organization of each limited liability company provide otherwise;
38-23 and
38-24 (b) if one or more foreign limited liability
38-25 companies or other entities is a party to the merger or is to be
38-26 created by the terms of the plan of merger:
38-27 (i) the merger is permitted by the laws
39-1 under which each foreign limited liability company and each other
39-2 entity that is a party to the merger is formed or organized or by
39-3 the organizational documents or other constituent documents of the
39-4 foreign limited liability company or other entity that are not
39-5 inconsistent with those laws; and
39-6 (ii) each foreign limited liability
39-7 company or other entity that is a party to the merger complies with
39-8 those laws or documents in effecting the merger; and
39-9 (2) a member of a domestic limited liability company
39-10 that is a party to the merger, as a result of the merger, will not
39-11 become personally liable for the liabilities or obligations of any
39-12 other person unless the member consents to becoming personally
39-13 liable by action taken in connection with the specific plan of
39-14 merger approved by the domestic limited liability company.
39-15 Art. 10.02. PLAN OF MERGER. A. A plan of merger must
39-16 include:
39-17 (1) the name and state of domicile of each domestic or
39-18 foreign limited liability company or other entity that is a party
39-19 to the merger;
39-20 (2) the name of each domestic or foreign limited
39-21 liability company or other entity, if any, that will survive the
39-22 merger, which may be one or more of the domestic or foreign limited
39-23 companies or other entities party to the merger;
39-24 (3) the name and state of domicile of each new
39-25 domestic or foreign limited liability company or other entity, if
39-26 any, that may be created by the terms of the plan of merger;
39-27 (4) the terms and conditions of the merger, including,
40-1 if more than one domestic or foreign limited liability company or
40-2 other entity is to survive or to be created by the terms of the
40-3 plan of merger, the manner and basis of allocating and vesting:
40-4 (a) real estate and other property of each
40-5 domestic or foreign limited liability company and of each other
40-6 entity that is a party to the merger among one or more of the
40-7 surviving or new domestic or foreign limited liability companies
40-8 and other entities; and
40-9 (b) all liabilities and obligations of each
40-10 domestic or foreign limited liability company and other entity that
40-11 is a party to the merger among one or more of the surviving or new
40-12 domestic or foreign limited liability companies and other entities
40-13 or making adequate provision for the payment and discharge of the
40-14 liabilities and obligations;
40-15 (5) the manner and basis of converting any of the
40-16 limited liability company interests or other evidences of ownership
40-17 of each domestic or foreign limited liability company or other
40-18 entity that is a party to the merger into:
40-19 (a) limited liability company interests, shares,
40-20 obligations, evidences of ownership, rights to purchase securities,
40-21 or other securities of one or more of the surviving or new domestic
40-22 or foreign limited liability company or other entities;
40-23 (b) cash or other property, including shares,
40-24 obligations, evidences of ownership, rights to purchase securities,
40-25 or other securities of any other person or entity; or
40-26 (c) any combination of the items described in
40-27 Subdivisions (a) and (b) of this Subsection;
41-1 (6) the articles of organization of any new domestic
41-2 limited liability company to be created by the terms of the plan of
41-3 merger; and
41-4 (7) the articles of organization or other
41-5 organizational documents of each other entity that is a party to
41-6 the merger and that is to be created by the terms of the plan of
41-7 merger.
41-8 B. The plan of merger may include:
41-9 (1) any amendments to the articles of organization or
41-10 regulations of any surviving domestic limited liability company or
41-11 to the organizational documents or other constituent documents of
41-12 any other surviving entity; and
41-13 (2) any other provision relating to the merger.
41-14 Art. 10.03. ARTICLES OF MERGER. A. After a plan of merger
41-15 has been approved by each of the limited liability companies or
41-16 other entities that is a party to the plan of merger, articles of
41-17 merger shall be executed on behalf of each domestic limited
41-18 liability company that is a party to the plan of merger by at least
41-19 one member, manager, officer, or other agent or representative of
41-20 the limited liability company who is authorized to execute articles
41-21 of merger by the articles of organization or regulations or shall
41-22 be approved by authorizing resolutions adopted by the act of the
41-23 members. At least one authorized representative of each other
41-24 foreign limited liability company or other entity that is a party
41-25 to the plan of merger shall also execute the articles of merger.
41-26 The articles of merger must include:
41-27 (1) the plan of merger; and
42-1 (2) as to each domestic or foreign limited liability
42-2 company or other entity that is a party to the plan of merger, a
42-3 statement that the plan of merger was authorized by all action
42-4 required by the laws under which it was formed or organized or by
42-5 its constituent documents.
42-6 B. The original of the articles of merger and a number of
42-7 copies equal to the number of surviving and new domestic or foreign
42-8 limited liability companies and other entities that are a party to
42-9 the plan of merger or that will be created by its terms shall be
42-10 delivered to the Secretary of State. Unless the Secretary of State
42-11 finds that the articles of merger do not conform to law, on receipt
42-12 of all applicable filing fees and franchise taxes, if any, required
42-13 by law, the Secretary of State shall:
42-14 (1) certify that the articles of merger have been
42-15 filed in the Secretary of State's office by endorsing on the
42-16 original the word "Filed" and the date of the filing;
42-17 (2) file and index the endorsed articles of merger;
42-18 and
42-19 (3) issue a certificate of merger, together with a
42-20 copy of the articles affixed to the certificate, to each surviving
42-21 or new domestic or foreign limited liability company or other
42-22 entity that is a party to the plan of merger or that is created by
42-23 the merger, or to its respective representatives.
42-24 C. Except as provided by Article 9.03 of this Act, the
42-25 merger is effective on the issuance of the certificate of merger by
42-26 the Secretary of State.
42-27 Art. 10.04. EFFECT OF MERGER. A. When a merger takes
43-1 effect:
43-2 (1) the separate existence of every domestic or
43-3 foreign limited liability company or other entity that is a party
43-4 to the merger, except any surviving or new domestic or foreign
43-5 limited liability company or other entity, ceases;
43-6 (2) all rights, title, and interests to all real
43-7 estate and other property owned by each domestic or foreign limited
43-8 liability company and by each other entity that is a party to the
43-9 merger shall be allocated to and vested in one or more of the
43-10 surviving or resulting entities as provided in the plan of merger
43-11 without reversion or impairment, without further act or deed, and
43-12 without any transfer or assignment having occurred, but subject to
43-13 any existing liens or other encumbrances on the property;
43-14 (3) all liabilities and obligations of each domestic
43-15 or foreign limited liability company and each other entity that is
43-16 a party to the merger shall be allocated to one or more of the
43-17 surviving or new domestic or foreign limited liability companies
43-18 and other entities in the manner provided by the plan of merger,
43-19 and each surviving or new domestic or foreign limited liability
43-20 company or other entity to which a liability or obligation has been
43-21 allocated under the plan of merger becomes the primary obligor for
43-22 the liability or obligation, and, except as otherwise provided by
43-23 the plan of merger, law, or contract, a party to the merger other
43-24 than a surviving domestic or foreign limited liability company or
43-25 other entity liable at the time of the merger or another new
43-26 domestic or foreign limited liability company or other entity
43-27 created is not liable for the liability or obligation;
44-1 (4) a proceeding pending by or against a domestic or
44-2 foreign limited liability company or another entity that is a party
44-3 to the merger may be continued as if the merger did not occur, or
44-4 the surviving or new domestic or foreign limited liability company
44-5 or limited liability companies or the surviving or new other entity
44-6 or other entities the liability, obligation, asset, or right
44-7 associated with the proceeding is allocated to and vested in under
44-8 the plan of merger may be substituted in the proceeding;
44-9 (5) the articles of organization and regulations of
44-10 each surviving domestic limited liability company and the
44-11 organizational documents and other constituent documents of each
44-12 surviving foreign limited liability company and other entity shall
44-13 be amended to the extent provided in the plan of merger;
44-14 (6) each new domestic limited liability company, the
44-15 articles of organization of which are included in the plan of
44-16 merger under Article 10.02 of this Act, shall be formed as a
44-17 limited liability company under this Act, and each other entity to
44-18 be formed or organized under the laws of this state, the
44-19 organizational documents of which are included in the plan of
44-20 merger, on an executed copy of the certificate of merger being
44-21 delivered to or filed with any required governmental entity with
44-22 which organizational documents of the other entity are required to
44-23 be delivered or filed and on meeting additional requirements, if
44-24 any, of law for its formation or organization, shall be formed or
44-25 organized as provided in the plan of merger;
44-26 (7) the limited liability company interests of each
44-27 domestic or foreign limited liability company and the interests,
45-1 shares, or evidences of ownership in each other entity that is a
45-2 party to the merger that are to be converted or exchanged, in whole
45-3 or in part, into limited liability company interests, shares,
45-4 obligations, evidences of ownership, rights to purchase securities,
45-5 or other securities of one or more of the surviving or new domestic
45-6 or foreign limited liability companies or other entities, into cash
45-7 or other property, including shares, obligations, evidences of
45-8 ownership, rights to purchase securities, or other securities of
45-9 any other person or entity, or into a combination of those items,
45-10 shall be so converted and exchanged, and the former members of each
45-11 domestic limited liability company that is a party to the merger
45-12 shall be entitled only to the rights provided in the plan of
45-13 merger; and
45-14 (8) if the plan of merger does not provide for the
45-15 allocation and vesting of the right, title, and interest in a
45-16 particular item of real estate or other property or for the
45-17 allocation of a liability or obligation of a party to the merger,
45-18 the item of real estate or other property shall be owned in
45-19 undivided interests by, or the liability or obligation shall be a
45-20 joint and several liability and obligation of, each of the
45-21 surviving and new domestic and foreign limited liability companies
45-22 and other entities, pro rata to the total number of surviving and
45-23 new domestic and foreign limited liability companies and other
45-24 entities resulting from the merger.
45-25 Art. 10.05. MERGER INVOLVING SUBSIDIARY ENTITIES.
45-26 A. (1) This article applies to a merger if:
45-27 (a) at least 90 per cent of the outstanding
46-1 membership interests, shares of stock, or other ownership interests
46-2 of one or more domestic or foreign limited liability companies or
46-3 other entities is owned by another domestic or foreign limited
46-4 liability company or other entity;
46-5 (b) at least one of the parent or subsidiary
46-6 entities is a domestic limited liability company; and
46-7 (c) for each parent or subsidiary entity that is
46-8 not a domestic limited liability company:
46-9 (i) the merger of the entity with or into
46-10 a domestic limited liability company is permitted by the laws under
46-11 which that entity is formed or organized or by the organizational
46-12 documents or other constituent documents of the entity that are not
46-13 inconsistent with those laws; and
46-14 (ii) the entity complies with those laws
46-15 or documents in effectuating the merger.
46-16 (2) A parent entity described in Subsection (1) of
46-17 this Section having at least 90 percent ownership may:
46-18 (a) merge the other entity or entities into
46-19 itself;
46-20 (b) merge itself into the other entity or
46-21 entities; or
46-22 (c) merge any one or more of the entities,
46-23 including itself, into one or more of the other entities.
46-24 (3) If the parent entity having at least 90 percent
46-25 ownership is a surviving entity in the merger, the parent entity
46-26 must execute and file articles of merger as provided by Section B
46-27 of this Article. If the parent entity having at least 90 percent
47-1 ownership is not a surviving entity in the merger, the parent
47-2 entity must:
47-3 (a) adopt a plan of merger in the manner
47-4 required by Article 10.01 of this Act, except that an action under
47-5 Article 10.01 is not required by the entity or entities whose
47-6 membership interests, shares of stock, or other ownership interests
47-7 are so owned; and
47-8 (b) execute and file articles of merger as
47-9 provided by Section B of this Article.
47-10 B. The articles of merger must be signed on behalf of the
47-11 parent entity by a member, manager, officer, or other agent or
47-12 representative authorized by (i) the organizational or other
47-13 constituent documents of the parent entity, or (ii) resolutions
47-14 adopted by the parent entity in accordance with the laws of its
47-15 jurisdiction of organization or formation and the documents. The
47-16 articles of merger must include:
47-17 (1) the name of the parent entity and the name of each
47-18 respective subsidiary entity;
47-19 (2) for each entity listed in Subsection (1) of this
47-20 Section, the type of entity and the respective jurisdiction under
47-21 which the entity is formed or organized;
47-22 (3) the total number or percentage of membership
47-23 interests, shares, or other ownership interests in each subsidiary
47-24 entity, identified by class, series, or group, and the number or
47-25 percentage of membership interests, shares, or other ownership
47-26 interests in each class, series, or group owned by the parent
47-27 entity;
48-1 (4) a copy of the resolution of merger adopted by the
48-2 parent entity in accordance with the laws of its jurisdiction of
48-3 organization or formation and its organizational or other
48-4 constituent documents, together with a statement that the
48-5 resolution was so adopted and the date of adoption;
48-6 (5) if the parent entity does not own all of the
48-7 outstanding membership interest, shares, or other ownership
48-8 interests of each subsidiary entity party to the merger, the
48-9 resolution described in Subsection (4) of this Section must state
48-10 the terms and conditions of the merger, including the securities,
48-11 cash, or other property to be used, paid, or delivered by the
48-12 surviving corporation on surrender of each membership interest,
48-13 share, or other ownership interest of the subsidiary entity or
48-14 entities not owned by the parent entity;
48-15 (6) if the surviving entity is a foreign limited
48-16 liability company or other entity, the address, including street
48-17 number, if any, of its registered or principal office in the
48-18 jurisdiction under whose laws it is governed; and
48-19 (7) if a plan of merger is required by Section A of
48-20 this Article to be adopted in the manner required by Article 10.01
48-21 of this Act, the information required by Section A of Article 10.03
48-22 of this Act.
48-23 C. The articles of merger shall be filed as provided by
48-24 Section B of Article 10.03 of this Act, become effective as
48-25 provided by Section C of Article 10.03 of this Act, and have the
48-26 effect stated in Article 10.04 of this Act.
48-27 Art. 10.06. INTEREST EXCHANGE. A. One or more domestic or
49-1 foreign limited liability companies or other entities may adopt a
49-2 plan of exchange by which an entity acquires all of the outstanding
49-3 limited liability company interests of one or more domestic limited
49-4 liability companies or all of the outstanding interests, stock,
49-5 partnership interests, or other ownership interests in one or more
49-6 other entities in exchange for cash or securities of the acquiring
49-7 entity if:
49-8 (1) each domestic limited liability company, the
49-9 interests of which are to be acquired under the plan of exchange,
49-10 approves the plan of exchange by majority vote or consent of its
49-11 members or in a manner prescribed in its regulations; and
49-12 (2) each acquiring domestic or foreign limited
49-13 liability company or other entity takes all action that may be
49-14 required by the laws of the state or country under which it was
49-15 formed and as required by its constituent documents to effect the
49-16 exchange.
49-17 B. A filing with the Secretary of State is not necessary to
49-18 evidence or effect the interest exchange with respect to a domestic
49-19 limited liability company that is a party to the interest exchange.
49-20 When an interest exchange takes effect as provided in the plan of
49-21 exchange:
49-22 (1) the limited liability company interests of each
49-23 domestic limited liability company that are to be acquired under
49-24 the plan of exchange are considered exchanged as provided in the
49-25 plan of exchange;
49-26 (2) the former holders of the limited liability
49-27 company interests exchanged under the plan of exchange are entitled
50-1 only to the exchange rights provided in the plan of exchange; and
50-2 (3) the acquiring domestic or foreign limited
50-3 liability company or other entity or entities are entitled to all
50-4 rights, title, and interests with respect to the interests so
50-5 acquired and exchanged, subject to the provisions in the plan of
50-6 exchange.
50-7 Art. 10.07. DEFINITION OF "OTHER ENTITY." A. For purposes
50-8 of this Part, "other entity" means any entity, whether organized
50-9 for profit or not, that is a corporation, limited partnership,
50-10 general partnership, joint venture, joint stock company,
50-11 cooperative, association, bank, insurance company, or other legal
50-12 entity organized under the laws of this state or any other state or
50-13 country to the extent the laws or the constituent documents of that
50-14 entity, not inconsistent with law, permit that entity to enter into
50-15 a merger or interest exchange as permitted by this Part.
50-16 PART ELEVEN
50-17 Art. 11.01. PROFESSIONAL LIMITED LIABILITY COMPANIES
50-18 AUTHORIZED; DEFINITIONS. A. (1) One or more persons may organize
50-19 a professional limited liability company by filing articles of
50-20 organization with the Secretary of State in accordance with Part
50-21 Three of this Act. In addition to other provisions required or
50-22 permitted by law, the articles of organization of a professional
50-23 limited liability company must include a statement:
50-24 (a) that the limited liability company is a
50-25 professional limited liability company; and
50-26 (b) describing the one specific kind of
50-27 professional service to be rendered by the limited liability
51-1 company.
51-2 (2) A professional limited liability company may be
51-3 organized under this Act only for the purpose of rendering one
51-4 specific type of professional service and ancillary services. A
51-5 professional limited liability company organized under this Act may
51-6 not render more than one kind of professional service.
51-7 B. In this Act:
51-8 (1) "Professional service" means any type of personal
51-9 service that requires as a condition precedent to the rendering of
51-10 the service the obtaining of a license, permit, certificate of
51-11 registration, or other legal authorization, including the personal
51-12 service rendered by an architect, attorney-at-law, certified public
51-13 accountant, dentist, doctor, physician, public accountant, surgeon,
51-14 or veterinarian.
51-15 (2) "Professional limited liability company" means a
51-16 limited liability company that is organized under this Act for the
51-17 sole and specific purpose of rendering professional service and
51-18 that has as its members only individuals licensed or otherwise
51-19 authorized within this state to render the same professional
51-20 service as the limited liability company.
51-21 Art. 11.02. NAME. A. A professional limited liability
51-22 company may adopt a name not contrary to the law or ethics
51-23 regulating the practice of the professional service rendered
51-24 through the professional limited liability company. The name of
51-25 the limited liability company must contain the words "Professional
51-26 Limited Liability Company" or the abbreviations "P.L.L.C." or
51-27 "PLLC" and must contain other words as may be required by law. A
52-1 limited liability company formed before September 1, 1993, that
52-2 complied with Section A of Article 2.03 of this Act or with Section
52-3 A of Article 7.03 of this Act on the date of formation, but does
52-4 not comply with this Article, is not required to change its name.
52-5 Art. 11.03. RESTRICTIONS ON MEMBERS, MANAGERS, AND OFFICERS.
52-6 A. A person who is not licensed or otherwise authorized to render
52-7 the professional service of the professional limited liability
52-8 company may not be a member, manager, or officer of the
52-9 professional limited liability company. A membership interest in
52-10 the professional limited liability company may not be transferred
52-11 to a person who is not licensed or otherwise authorized to render
52-12 the professional service of the professional limited liability
52-13 company.
52-14 B. If a member, manager, or officer of a professional
52-15 limited liability company, or an agent or employee of the company
52-16 who has been rendering professional service for or with the company
52-17 of the same type for which the professional limited liability
52-18 company was organized to render, becomes legally disqualified to
52-19 render the professional service, the person shall sever all
52-20 employment with the professional limited liability company and
52-21 immediately terminate all financial interest in the company. The
52-22 professional limited liability company shall purchase or cause to
52-23 be purchased from the person all membership interests owned by the
52-24 person in the professional limited liability company, at a price
52-25 and on terms as may be provided in the articles of organization,
52-26 the regulations, or any applicable agreement among the members and
52-27 the professional limited liability company. If the person is the
53-1 sole member of the professional limited liability company, the
53-2 person may continue to act as member, manager, or officer only for
53-3 the purposes of winding up the affairs of the professional limited
53-4 liability company and effecting its dissolution, including selling
53-5 the assets of or outstanding membership interests in the
53-6 professional limited liability company, but not including rendering
53-7 professional service.
53-8 C. If a person who is not licensed or authorized to render
53-9 the professional service that a professional limited liability
53-10 company was organized to render succeeds to the interest of a
53-11 member of the professional limited liability company, the person
53-12 holding the interest shall immediately terminate all financial
53-13 interest in the professional limited liability company, and the
53-14 professional limited liability company shall purchase or cause to
53-15 be purchased from the person all membership interests owned by the
53-16 person in the professional limited liability company, at a price
53-17 and on terms as may be provided in the articles of organization,
53-18 the regulations, or any applicable agreement among the members and
53-19 the professional limited liability company. If the person
53-20 succeeded to all of the membership interests in the professional
53-21 limited liability company, the person may continue to act as
53-22 member, manager, or officer only for the purposes of winding up the
53-23 affairs of the professional limited liability company and effecting
53-24 its dissolution, including selling the assets of or the outstanding
53-25 membership interests in the professional limited liability company,
53-26 but not including rendering professional service.
53-27 Art. 11.04. RENDERING OF PROFESSIONAL SERVICES. A. A
54-1 professional limited liability company may render professional
54-2 service in this state only through:
54-3 (1) an individual member, manager, officer, employee,
54-4 or agent who is licensed to render the professional service in this
54-5 state; or
54-6 (2) an agent of the professional limited liability
54-7 company that is a professional limited liability company,
54-8 professional corporation, or professional association that is
54-9 authorized in this state to render the professional service of the
54-10 professional limited liability company and that renders the
54-11 professional service only through a licensed individual member,
54-12 manager, officer, or employee.
54-13 B. This Article does not prohibit employment by a
54-14 professional limited liability company of clerks, secretaries,
54-15 bookkeepers, technicians, nurses, assistants, and other individuals
54-16 who are not usually and ordinarily considered by custom and
54-17 practice to be rendering professional service for which a license
54-18 or other legal authorization is required. A person may not, under
54-19 the guise of employment, practice a profession in this state unless
54-20 licensed or otherwise legally authorized to practice that
54-21 profession under the laws of this state.
54-22 Art. 11.05. PROFESSIONAL RELATIONSHIPS NOT AFFECTED. A.
54-23 Notwithstanding anything contained in Article 4.03 of this Act to
54-24 the contrary, this Act does not alter or affect the professional
54-25 relationship between a person rendering professional service and a
54-26 person receiving the service, and a confidential relationship
54-27 enjoyed in this state between those persons remains unchanged.
55-1 This Act does not remove or diminish any rights at law that a
55-2 person receiving professional service has against a person
55-3 rendering the service for an error, an omission, negligence,
55-4 incompetence, or malfeasance. A limited liability company, but not
55-5 the other individual members, managers, or officers, is jointly and
55-6 severally liable with a member, manager, officer, employee, or
55-7 agent rendering professional service for an error, omission,
55-8 negligence, incompetence, or malfeasance on the part of the member,
55-9 manager, officer, employee, or agent when the member, manager,
55-10 officer, employee, or agent is rendering professional service in
55-11 the course of employment for the limited liability company.
55-12 Art. 11.06. EXEMPTION FROM SECURITIES LAWS. A. The sale,
55-13 issuance, or offering of membership interests of a professional
55-14 limited liability company to persons permitted by this Part to own
55-15 the membership interests is exempt from all laws of this state,
55-16 other than this Act, that provide for supervision, registration, or
55-17 regulation in connection with the sale, issuance, or offering of
55-18 securities. The sale, issuance, or offering of membership
55-19 interests to those persons is legal without any action or approval
55-20 on the part of any official or state regulatory agency authorized
55-21 to license, regulate, or supervise the sale, issuance, or offering
55-22 of securities.
55-23 Art. 11.07. FOREIGN PROFESSIONAL LIMITED LIABILITY
55-24 COMPANIES. A. A foreign professional limited liability company
55-25 may apply for a certificate of authority to perform professional
55-26 service in this state by filing an application in accordance with
55-27 Part Seven of this Act. The Secretary of State may not issue the
56-1 certificate unless the name of the limited liability company or the
56-2 name the limited liability company elects in this state meets the
56-3 requirements of Article 11.02 of this Act. A member, manager,
56-4 officer, employee, or agent of the limited liability company who
56-5 renders professional service in this state on behalf of the limited
56-6 liability company must be licensed or otherwise authorized to
56-7 render that professional service in this state.
56-8 B. A certificate may not be issued to a limited liability
56-9 company under this Article unless the application for the
56-10 certificate includes a statement that the jurisdiction in which the
56-11 limited liability company is organized would permit reciprocal
56-12 admission of the limited liability company if it were organized in
56-13 this state.
56-14 SECTION 1.29. Section 36.02, Business & Commerce Code, is
56-15 amended to read as follows:
56-16 Sec. 36.02. DEFINITIONS. In this chapter, unless the
56-17 context otherwise requires:
56-18 (1) "Partnership" means a joint venture or<,> general
56-19 partnership other than a limited partnership or a registered
56-20 limited liability<, or limited> partnership.
56-21 (2) "Company" means a real estate investment trust,
56-22 joint-stock company, or any other business, professional, or other
56-23 association or legal entity that is not incorporated other than a
56-24 partnership, limited partnership, limited liability company, or
56-25 registered limited liability partnership.
56-26 (3) "Corporation" means a domestic or foreign
56-27 corporation, professional corporation, professional association,
57-1 other corporation, or any other business, professional, or other
57-2 association or legal entity that is incorporated.
57-3 (4) "Person" includes an individual, partnership,
57-4 limited partnership, limited liability company, registered limited
57-5 liability partnership, company, or corporation.
57-6 (5) "Representative" means a trustee, administrator,
57-7 executor, independent executor, guardian, conservator, trustee in
57-8 bankruptcy, receiver, or any other person appointed by a court or
57-9 by trust or will to have custody of, take possession of, have title
57-10 to, or otherwise be empowered to control the person or property of
57-11 any person.
57-12 (6) "Estate" means the property of any person which is
57-13 administered by a representative.
57-14 (7) "Assumed name" means:
57-15 (A) in the case of an individual, a name that
57-16 does not include the surname of the individual;
57-17 (B) in the case of a <joint venture or general>
57-18 partnership, a name that does not include the surname or other
57-19 legal name of each joint venturer or general partner;
57-20 (C) in the case of an individual<, joint
57-21 venture,> or a <general> partnership, a name, including a surname,
57-22 that suggests the existence of additional owners by including words
57-23 such as "Company," "& Company," "& Son," "& Sons," "& Associates,"
57-24 "Brothers," and the like, but not words that merely describe the
57-25 business or professional service being conducted or rendered;
57-26 (D) in the case of a limited partnership, any
57-27 name other than the name stated in its certificate of limited
58-1 partnership;
58-2 (E) in the case of a company, any name used by
58-3 the company; <and>
58-4 (F) in the case of a corporation, any name other
58-5 than the name stated in its articles of incorporation or
58-6 association or comparable document;
58-7 (G) in the case of a registered limited
58-8 liability partnership, any name other than the name stated in its
58-9 application filed with the office of the Secretary of State or
58-10 comparable document; and
58-11 (H) in the case of a limited liability company,
58-12 any name other than the name stated in its articles of organization
58-13 or comparable document.
58-14 (8) "Registrant" means any person that has filed, or
58-15 on whose behalf there has been filed, an assumed name certificate
58-16 under the provisions of this chapter or other law.
58-17 (9) "Office" means, in the case of any person that is
58-18 not an individual or that is a corporation which is not required to
58-19 or does not maintain a registered office in this state, the
58-20 principal office of such person and also its principal place of
58-21 business if not the same as its principal office. In the case of a
58-22 corporation, limited partnership, registered limited liability
58-23 partnership, or limited liability company which is required to
58-24 maintain a registered office in this state, "office" means the
58-25 registered office and also its principal office if not the same as
58-26 its registered office.
58-27 (10) "Address" means a post office address and also
59-1 the street address if not the same as the post office address.
59-2 SECTION 1.30. Section 36.10, Business & Commerce Code, is
59-3 amended by amending the section heading and Subsection (a) to read
59-4 as follows:
59-5 Sec. 36.10. FOR UNINCORPORATED BUSINESS OR PROFESSION OTHER
59-6 THAN A LIMITED PARTNERSHIP, REGISTERED LIMITED LIABILITY
59-7 PARTNERSHIP, OR LIMITED LIABILITY COMPANY. (a) Any person who
59-8 regularly conducts business or renders professional services other
59-9 than as a corporation, limited partnership, registered limited
59-10 liability partnership, or limited liability company in this state
59-11 under an assumed name shall file in the office of the county clerk
59-12 in each county in which such person has or will maintain business
59-13 or professional premises or, if no business or professional
59-14 premises are or will be maintained in any county, in each county
59-15 where such person conducts business or renders a professional
59-16 service, a certificate setting forth:
59-17 (1) the assumed name under which such business or
59-18 professional service is or is to be conducted or rendered;
59-19 (2) if the registrant is:
59-20 (A) an individual, his full name and residence
59-21 address;
59-22 (B) a partnership, (i) the venture or
59-23 partnership name, (ii) the venture or partnership office address,
59-24 and (iii) the full name of each joint venturer or general partner
59-25 and his residence address if he is an individual or its office
59-26 address if not an individual;
59-27 (C) an estate, (i) the name of the estate, (ii)
60-1 the estate's office address, if any, and (iii) the full name of
60-2 each representative of the estate and his residence address if he
60-3 is an individual or its office address if not an individual;
60-4 (D) a real estate investment trust, (i) the name
60-5 of the trust, (ii) the address of the trust, (iii) the full name of
60-6 each trustee manager and his residence address if he is an
60-7 individual and its office address if not an individual; or
60-8 (E) a company other than a real estate
60-9 investment trust, or a corporation, (i) the name of the company or
60-10 corporation, (ii) the state, country, or other jurisdiction under
60-11 the laws of which it was organized, incorporated, or associated,
60-12 and (iii) its office address;
60-13 (3) the period, not to exceed 10 years, during which
60-14 the assumed name will be used; and
60-15 (4) a statement specifying that the business or
60-16 professional service that is or is to be conducted or rendered in
60-17 the county under such assumed name is being or will be conducted or
60-18 rendered as a proprietorship, sole practitioner, <joint venture,
60-19 general> partnership, <limited partnership,> real estate investment
60-20 trust, joint-stock company, or some other form of unincorporated
60-21 business or professional association or entity, other than a
60-22 limited partnership, limited liability company, or registered
60-23 limited liability partnership, as the case may be.
60-24 SECTION 1.31. Section 36.11, Business & Commerce Code, is
60-25 amended to read as follows:
60-26 Sec. 36.11. FOR INCORPORATED BUSINESS OR PROFESSION, LIMITED
60-27 PARTNERSHIP, REGISTERED LIMITED LIABILITY PARTNERSHIP, OR LIMITED
61-1 LIABILITY COMPANY. (a) Any corporation, limited partnership,
61-2 registered limited liability partnership, or limited liability
61-3 company which regularly conducts business or renders professional
61-4 services in this state under an assumed name, or which may be
61-5 required by law to use an assumed name in this state to conduct
61-6 such business or render such services, shall file in the office of
61-7 the Secretary of State and, (1) if such corporation, limited
61-8 partnership, registered limited liability partnership, or limited
61-9 liability company is required to maintain a registered office in
61-10 this state, in the office of the county clerk of the county in
61-11 which such registered office is located and of the county in which
61-12 its principal office is located if within this state and not the
61-13 same county where the registered office is located; or (2) if such
61-14 corporation, limited partnership, registered limited liability
61-15 partnership, or limited liability company is not required to or
61-16 does not maintain a registered office in this state, in the office
61-17 of the county clerk of the county in which its office within this
61-18 state is located or if the corporation, limited partnership,
61-19 registered limited liability partnership, or limited liability
61-20 company is not incorporated, organized, or associated under the
61-21 laws of this state, in the office of the county clerk of the county
61-22 in which its principal place of business in this state is located
61-23 if not the same as its office, a certificate setting forth:
61-24 (1) the assumed name under which such business or
61-25 professional service is or is to be conducted or rendered;
61-26 (2) the name of the corporation, limited partnership,
61-27 registered limited liability partnership, or limited liability
62-1 company as stated in its articles of incorporation, <or>
62-2 association, or organization or in its certificate of limited
62-3 partnership or application filed with the office of the Secretary
62-4 of State, or other comparable document;
62-5 (3) the state, country, or other jurisdiction under
62-6 the laws of which it was incorporated, organized, or associated and
62-7 address of its registered or similar office in that state, country,
62-8 or jurisdiction;
62-9 (4) the period, not to exceed 10 years, during which
62-10 the assumed name will be used;
62-11 (5) a statement specifying that the entity
62-12 <corporation> is a business corporation, nonprofit corporation,
62-13 professional corporation, professional association, or other type
62-14 of corporation, limited partnership, registered limited liability
62-15 partnership, limited liability company, or some other type of
62-16 incorporated business, professional or other association, or legal
62-17 entity;
62-18 (6) if the corporation, limited partnership,
62-19 registered limited liability partnership, or limited liability
62-20 company is required to maintain a registered office in this state,
62-21 (A) the address of such registered office and the name of its
62-22 registered agent at such address, and (B) the address of its
62-23 principal office if not the same as that of its registered office
62-24 in this state;
62-25 (7) if the corporation, limited partnership,
62-26 registered limited liability partnership, or limited liability
62-27 company is not required to or does not maintain a registered office
63-1 in this state, its office address in this state and if the
63-2 corporation, limited partnership, registered limited liability
63-3 partnership, or limited liability company is not incorporated,
63-4 organized, or associated under the laws of this state, the address
63-5 of its place of business in this state and its office address
63-6 elsewhere, if any; and
63-7 (8) the county or counties within the state where
63-8 business or professional services are being or are to be conducted
63-9 or rendered under such assumed name.
63-10 (b) A certificate filed under Subsection (a) of this section
63-11 shall be executed and duly acknowledged by an officer, general
63-12 partner, member, manager, representative, or attorney in fact for
63-13 the corporation, limited partnership, registered limited liability
63-14 partnership, or limited liability company. A certificate executed
63-15 and acknowledged by an attorney in fact shall include a statement
63-16 that the attorney in fact has been duly authorized in writing by
63-17 his principal to execute and acknowledge the same.
63-18 (c) Nothing in this chapter shall require a corporation,
63-19 limited partnership, registered limited liability partnership, or
63-20 limited liability company or its shareholders, associates,
63-21 partners, or members to file an assumed business or professional
63-22 name certificate in order to conduct business or render a
63-23 professional service within this state under the name of the
63-24 corporation, limited partnership, registered limited liability
63-25 partnership, or limited liability company as stated in its articles
63-26 of incorporation, association, or organization, certificate of
63-27 limited partnership, application filed with the office of the
64-1 Secretary of State, or other comparable document.
64-2 (d) Notwithstanding Subsections (a)-(c) of this section, a
64-3 limited partnership, registered limited liability partnership, or
64-4 limited liability company that filed a certificate in compliance
64-5 with Section 36.10 of this chapter before September 1, 1993, is not
64-6 required to file a new certificate that complies with this section
64-7 until the earlier of:
64-8 (1) the expiration of the period specified in the
64-9 existing certificate during which the assumed name will be used; or
64-10 (2) a material change occurs in the information set
64-11 forth in the existing certificate.
64-12 SECTION 1.32. The following articles or sections of the
64-13 Texas Limited Liability Company Act (Article 1528n, Vernon's Texas
64-14 Civil Statutes) are repealed:
64-15 (1) Article 2.10;
64-16 (2) Article 2.16; and
64-17 (3) Sections B, C, and D, Article 4.02.
64-18 ARTICLE 2. BUSINESS CORPORATIONS; PROFESSIONAL ASSOCIATIONS
64-19 SECTION 2.01. Article 1.02, Texas Business Corporation Act,
64-20 is amended by amending Section A and adding Section C to read as
64-21 follows:
64-22 A. As used in this Act, unless the context otherwise
64-23 requires, the term:
64-24 (1) "Articles of incorporation" means the original or
64-25 restated articles of incorporation and all amendments thereto.
64-26 (2) "Authorized shares" means the shares of all
64-27 classes which the corporation is authorized to issue.
65-1 (3) "Cancel" means to restore issued shares to the
65-2 status of authorized but unissued shares.
65-3 (4) "Certificated shares" means shares represented by
65-4 instruments in bearer or registered form.
65-5 (5) "Conspicuous" or "conspicuously," when prescribed
65-6 for information appearing on a certificate for shares or other
65-7 securities, means the location of such information or use of type
65-8 of sufficient size, color, or character that a reasonable person
65-9 against whom such information may operate should notice it. For
65-10 example, a printed or typed statement in capitals, or boldface or
65-11 underlined type, or in type that is larger than or that contrasts
65-12 in color with that used for other statements on the same
65-13 certificate, is "conspicuous."
65-14 (6) "Consuming assets corporation" means a corporation
65-15 which is engaged in the business of exploiting assets subject to
65-16 depletion or amortization and which elects to state in its articles
65-17 of incorporation that it is a consuming assets corporation and
65-18 includes as a part of its official corporate name the phrase "a
65-19 consuming assets corporation," giving such phrase equal prominence
65-20 with the rest of the corporate name on its financial statements and
65-21 certificates representing shares. All its certificates
65-22 representing shares shall also contain a further sentence: "This
65-23 corporation is permitted by law to pay dividends out of reserves
65-24 which may impair its stated capital."
65-25 (7) "Corporation" or "domestic corporation" means a
65-26 corporation for profit subject to the provisions of this Act,
65-27 except a foreign corporation.
66-1 (8) "Distribution" means a transfer of money or other
66-2 property (except its own shares or rights to acquire its own
66-3 shares), or issuance of indebtedness, by a corporation to its
66-4 shareholders in the form of:
66-5 (a) a dividend on any class or series of the
66-6 corporation's outstanding shares;
66-7 (b) a purchase, <or> redemption, or other
66-8 acquisition by the corporation, directly or indirectly, of any of
66-9 its own shares; or
66-10 (c) a payment by the corporation in liquidation
66-11 of all or a portion of its assets.
66-12 (9) "Foreign corporation" means a corporation for
66-13 profit organized under laws other than the laws of this State.
66-14 (10) "Insolvency" means inability of a corporation to
66-15 pay its debts as they become due in the usual course of its
66-16 business.
66-17 (11) "Investment Company Act" means the Investment
66-18 Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.);
66-19 (12) "Merger" means (a) the division of a domestic
66-20 corporation into two or more new domestic corporations or into a
66-21 surviving corporation and one or more new domestic or foreign
66-22 corporations or other entities, or (b) the combination of one or
66-23 more domestic corporations with one or more domestic or foreign
66-24 corporations or other entities resulting in (i) one or more
66-25 surviving domestic or foreign corporations or other entities, (ii)
66-26 the creation of one or more new domestic or foreign corporations or
66-27 other entities, or (iii) one or more surviving domestic or foreign
67-1 corporations or other entities and the creation of one or more new
67-2 domestic or foreign corporations or other entities.
67-3 (13) <(12)> "Net assets" means the amount by which the
67-4 total assets of a corporation exceed the total debts of the
67-5 corporation.
67-6 (14) <(13)> "Other entity" means any entity, whether
67-7 organized for profit or not, that is a corporation (other than a
67-8 domestic or foreign corporation), limited or general partnership,
67-9 joint venture, joint stock company, cooperative, association, bank,
67-10 insurance company or other legal entity organized pursuant to the
67-11 laws of this state or any other state or country to the extent such
67-12 laws or the constituent documents of that entity, not inconsistent
67-13 with such laws, permit that entity to enter into a merger or share
67-14 exchange as permitted by Article 5.03 of this Act.
67-15 (15) <(14)> "Share dividend" means a dividend by a
67-16 corporation that is payable in its own authorized but unissued
67-17 shares or in treasury shares.
67-18 (16) <(15)> "Shareholder" or "holder of shares" means
67-19 the person in whose name shares issued by a corporation are
67-20 registered at the relevant time in the share transfer records
67-21 maintained by the corporation pursuant to Article 2.44 of this Act.
67-22 (17) <(16)> "Shares" means the units into which the
67-23 proprietary interests in a corporation are divided, whether
67-24 certificated or uncertificated shares.
67-25 (18) <(17)> "Stated capital" means, at any particular
67-26 time, the sum of:
67-27 (a) the par value of all shares of the
68-1 corporation having a par value that have been issued;
68-2 (b) the consideration fixed by the corporation
68-3 in the manner provided by Article 2.15 of this Act for all shares
68-4 of the corporation without par value that have been issued, except
68-5 such part of the consideration that is actually received therefor
68-6 (which part must be less than all of that consideration) that the
68-7 board by resolution adopted no later than sixty (60) days after the
68-8 issuance of those shares may have allocated to surplus; and
68-9 (c) such amounts not included in paragraphs (a)
68-10 and (b) of this subsection as have been transferred to stated
68-11 capital of the corporation, whether upon the payment of a share
68-12 dividend or upon adoption by the board of directors of a resolution
68-13 directing that all or part of surplus be transferred to stated
68-14 capital, minus all reductions from such sum as have been effected
68-15 in a manner permitted by law.
68-16 (19) <(18)> "Subscriber" means the offeror in a
68-17 subscription.
68-18 (20) <(19)> "Subscription" means a memorandum in
68-19 writing, executed before or after incorporation, wherein an offer
68-20 is made to purchase and pay for a specified number of theretofore
68-21 unissued shares of a corporation.
68-22 (21) <(20)> "Surplus" means the excess of the net
68-23 assets of a corporation over its stated capital.
68-24 (22) <(21)> "Treasury shares" means shares of a
68-25 corporation which have been issued, have been subsequently acquired
68-26 by and belong to the corporation, and have not been canceled and
68-27 restored to the status of authorized but unissued shares. Treasury
69-1 shares shall be deemed to be "issued" shares but not "outstanding"
69-2 shares, and shall not be included in the total assets of a
69-3 corporation for purposes of determining its "net assets."
69-4 (23) <(22)> "Uncertificated shares" means shares not
69-5 represented by instruments and the transfers of which are
69-6 registered upon books maintained for that purpose by or on behalf
69-7 of the issuing corporation.
69-8 C. A reference in this Act to another statute is a reference
69-9 to that statute as amended.
69-10 SECTION 2.02. Section A, Article 2.02, Texas Business
69-11 Corporation Act, is amended to read as follows:
69-12 A. Subject to the provisions of Sections B and C of this
69-13 Article, each corporation shall have power:
69-14 (1) To have perpetual succession by its corporate name
69-15 unless a limited period of duration is stated in its articles of
69-16 incorporation. Notwithstanding the articles of incorporation, the
69-17 period of duration for any corporation incorporated before
69-18 September 6, 1955, is perpetual if all fees and franchise taxes
69-19 have been paid as provided by law.
69-20 (2) To sue and be sued, complain and defend, in its
69-21 corporate name.
69-22 (3) To have a corporate seal which may be altered at
69-23 pleasure, and to use the same by causing it, or a facsimile
69-24 thereof, to be impressed on, affixed to, or in any manner
69-25 reproduced upon, instruments of any nature required to be executed
69-26 by its proper officers.
69-27 (4) To purchase, receive, lease, or otherwise acquire,
70-1 own, hold, improve, use and otherwise deal in and with, real or
70-2 personal property, or any interest therein, wherever situated, as
70-3 the purposes of the corporation shall require.
70-4 (5) To sell, convey, mortgage, pledge, lease,
70-5 exchange, transfer and otherwise dispose of all or any part of its
70-6 property and assets.
70-7 (6) To lend money to, and otherwise assist, its
70-8 employees, officers, and directors if such a loan or assistance
70-9 reasonably may be expected to benefit, directly or indirectly, the
70-10 lending or assisting corporation.
70-11 (7) To purchase, receive, subscribe for, or otherwise
70-12 acquire, own, hold, vote, use, employ, mortgage, lend, pledge, sell
70-13 or otherwise dispose of, and otherwise use and deal in and with,
70-14 shares or other interests in, or obligations of, other domestic or
70-15 foreign corporations, associations, partnerships, or individuals,
70-16 or direct or indirect obligations of the United States or of any
70-17 other government, state, territory, government district, or
70-18 municipality, or of any instrumentality thereof.
70-19 (8) To purchase or otherwise acquire its own bonds,
70-20 debentures, or other evidences of its indebtedness or obligations;
70-21 to purchase or otherwise acquire its own unredeemable shares and
70-22 hold those acquired shares as treasury shares or cancel or
70-23 otherwise dispose of those acquired shares; and to redeem or
70-24 purchase shares made redeemable by the provisions of its articles
70-25 of incorporation.
70-26 (9) To make contracts and incur liabilities, borrow
70-27 money at such rates of interest as the corporation may determine,
71-1 issue its notes, bonds, and other obligations, and secure any of
71-2 its obligations by mortgage or pledge of all or any of its
71-3 property, franchises, and income.
71-4 (10) To lend money for its corporate purposes, invest
71-5 and reinvest its funds, and take and hold real and personal
71-6 property as security for the payment of funds so loaned or
71-7 invested.
71-8 (11) To conduct its business, carry on its operations,
71-9 and have offices and exercise the powers granted by this Act,
71-10 within or without this State.
71-11 (12) To elect or appoint officers and agents of the
71-12 corporation for such period of time as the corporation may
71-13 determine, and define their duties and fix their compensation.
71-14 (13) To make and alter bylaws, not inconsistent with
71-15 its articles of incorporation or with the laws of this State, for
71-16 the administration and regulation of the affairs of the
71-17 corporation.
71-18 (14) To make donations for the public welfare or for
71-19 charitable, scientific, or educational purposes.
71-20 (15) To transact any lawful business which the board
71-21 of directors shall find will be in aid of government policy.
71-22 (16) To indemnify directors, officers, employees, and
71-23 agents of the corporation and to purchase and maintain liability
71-24 insurance for those persons.
71-25 (17) To pay pensions and establish pension plans,
71-26 pension trusts, profit sharing plans, stock bonus plans, and other
71-27 incentive plans for any or all of, or any class<,> or classes of,
72-1 <its officers and employees, or> its directors, officers, or <its>
72-2 employees.
72-3 (18) To be an organizer, partner, member, associate,
72-4 or manager of any partnership, joint venture, or other enterprise,
72-5 and to the extent permitted in any other jurisdiction to be an
72-6 incorporator of any other corporation of any type or kind.
72-7 (19) To cease its corporate activities and terminate
72-8 its existence by voluntary dissolution.
72-9 (20) Whether included in the foregoing or not, to have
72-10 and exercise all powers necessary or appropriate to effect any or
72-11 all of the purposes for which the corporation is organized.
72-12 SECTION 2.03. Section B, Article 2.05, Texas Business
72-13 Corporation Act, is amended to read as follows:
72-14 B. Any domestic or foreign corporation having authority to
72-15 transact business in this State<,> may do so under an assumed
72-16 name<,> by filing an assumed name certificate in the manner
72-17 prescribed by law. The assumed name may, but is not required to,
72-18 comply with the requirements of Section A(1) of this Article.
72-19 SECTION 2.04. Article 2.12, Texas Business Corporation Act,
72-20 is amended by amending Section A and adding Section C to read as
72-21 follows:
72-22 A. Each corporation may issue the number of shares stated in
72-23 its articles of incorporation. Such shares may be divided into one
72-24 or more classes, any or all of which classes may consist of shares
72-25 with par value or shares without par value, as shall be stated in
72-26 the articles of incorporation. Any such class of shares may be
72-27 divided into one or more series, as shall be stated in the articles
73-1 of incorporation. All shares of the same class shall be of the
73-2 same par value or be without par value. Unless the shares of a
73-3 class have been divided into series, all shares of the same class
73-4 shall be identical in all respects. If the shares of a class have
73-5 been divided into series, shares of the same class may vary between
73-6 series, but all shares of the same series shall be identical in all
73-7 respects. Any such class or series of shares shall be so
73-8 designated as to distinguish the shares of that class or series
73-9 from the shares of all other classes and series. Any such class or
73-10 series shall have such designations, preferences, limitations, and
73-11 relative rights, including voting rights, as shall be stated in the
73-12 articles of incorporation. The articles of incorporation may limit
73-13 or deny the voting rights of, or provide special voting rights for,
73-14 the shares of any class or series to the extent that such
73-15 limitation, denial, or provision is not inconsistent with the
73-16 provisions of this Act. Any of the designations, preferences,
73-17 limitations, and <or> relative rights, including voting rights, of
73-18 any class or series of shares may be made dependent upon facts
73-19 ascertainable outside the articles of incorporation, which facts
73-20 may include future acts of the corporation, provided that the
73-21 manner in which such facts shall operate upon the designations,
73-22 preferences, limitations, and relative rights, including voting
73-23 rights, of such class or series of shares is clearly and expressly
73-24 set forth in the articles of incorporation.
73-25 C. (1) The board of directors of a corporation registered
73-26 as an open-end company under the Investment Company Act may:
73-27 (a) establish classes of shares and series of
74-1 unissued shares of any class by fixing and determining the
74-2 designations, preferences, limitations, and relative rights,
74-3 including voting rights, of the shares of any class or series so
74-4 established to the same extent that the designations, preferences,
74-5 limitations, and relative rights could be stated if fully set forth
74-6 in the articles of incorporation; and
74-7 (b) increase or decrease the aggregate number of
74-8 shares or the number of shares of, or eliminate and remove from the
74-9 articles of incorporation, a class or series of shares that the
74-10 corporation has authority to issue, unless a provision has been
74-11 included in the articles of incorporation of the corporation after
74-12 September 1, 1993, expressly prohibiting those actions by the board
74-13 of directors. The board of directors may not:
74-14 (i) decrease the number of shares within a
74-15 class or series to less than the number of shares of that class or
74-16 series that are then outstanding; or
74-17 (ii) eliminate or remove from the articles
74-18 of incorporation any reference to any class or series of which
74-19 shares are then outstanding.
74-20 To establish a class or series, the board of directors shall
74-21 adopt a resolution setting forth the designation of the class or
74-22 series and fixing and determining the designations, preferences,
74-23 limitations, and relative rights, including voting rights, of the
74-24 class or series. In order to increase or decrease the number of
74-25 shares of, or eliminate and remove from the articles of
74-26 incorporation any reference to, a class or series of shares, the
74-27 board of directors shall adopt a resolution fixing and determining
75-1 the new number of shares of each class or series in which the
75-2 number of shares is increased or decreased or eliminating the class
75-3 or series and removing references to the class or series from the
75-4 articles of incorporation. The shares of any eliminated series
75-5 shall resume the status of authorized but unissued shares of the
75-6 class of shares from which the series was established unless
75-7 otherwise provided in the resolution or the articles of
75-8 incorporation.
75-9 (2) Before the first issuance of any shares of a class
75-10 or series established or increased or decreased by resolution
75-11 adopted by the board of directors under Subsection (1) of this
75-12 section, and in order to eliminate from the articles of
75-13 incorporation a class or series of shares and all references to the
75-14 class or series contained in the articles, the corporation shall
75-15 file with the Secretary of State a statement setting forth:
75-16 (a) the name of the corporation;
75-17 (b) if the statement relates to the
75-18 establishment of a class or series of shares, a copy of the
75-19 resolution establishing and designating the class or series and
75-20 fixing and determining the preferences, limitations, and relative
75-21 rights of the class or series;
75-22 (c) if the statement relates to an increase or
75-23 decrease in the number of shares of any class or series, a copy of
75-24 the resolution fixing and determining the new number of shares of
75-25 each class or series in which the number of shares is increased or
75-26 decreased;
75-27 (d) if the statement relates to the elimination
76-1 of a class or series of shares and to the removal of all references
76-2 to the class or series from the articles of incorporation, a copy
76-3 of the resolution eliminating the class or series and removing all
76-4 references to the class or series from the articles of
76-5 incorporation;
76-6 (e) the date of adoption of the resolution; and
76-7 (f) that the resolution was duly adopted by all
76-8 necessary action on the part of the corporation.
76-9 (3) The statement shall be executed on behalf of the
76-10 corporation by an officer. The original and a copy of the
76-11 statement shall be delivered to the Secretary of State. If the
76-12 Secretary of State finds that the statement conforms to law, when
76-13 the appropriate filing fee is paid as provided by law, the
76-14 Secretary of State shall:
76-15 (a) endorse on the original and the copy the
76-16 word "Filed," and the month, day, and year of the filing of the
76-17 statement;
76-18 (b) file the original in the Secretary of
76-19 State's office; and
76-20 (c) return the copy to the corporation or its
76-21 representative.
76-22 (4) On the filing of a statement by the Secretary of
76-23 State, the resolution establishing and designating the class or
76-24 series and fixing and determining the preferences, limitations, and
76-25 relative rights of the class or series, the resolution fixing the
76-26 new number of shares of each class or series in which the number of
76-27 shares is increased or decreased, or the resolution eliminating a
77-1 class or series and all references to the class or series from the
77-2 articles of incorporation, as appropriate, becomes an amendment of
77-3 the articles of incorporation. An amendment of the articles of
77-4 incorporation effected as provided by this Article is not subject
77-5 to the procedure to amend the articles contained in Article 4.02 of
77-6 this Act.
77-7 SECTION 2.05. Sections A and B, Article 2.21, Texas Business
77-8 Corporation Act, are amended to read as follows:
77-9 A. A holder of shares, an owner of any beneficial interest
77-10 in shares, or a subscriber for shares whose subscription has been
77-11 accepted shall be under no obligation to the corporation or to its
77-12 obligees with respect to:
77-13 (1) such shares other than the obligation to pay to
77-14 the corporation the full amount of the consideration, fixed in
77-15 compliance with Article 2.15 of this Act, for which such shares
77-16 were or are to be issued;
77-17 (2) any contractual obligation of the corporation on
77-18 the basis that the holder, owner, or subscriber is or was the alter
77-19 ego of the corporation, or on the basis of actual fraud or
77-20 constructive fraud, <or> a sham to perpetrate a fraud, or other
77-21 similar theory, unless the obligee demonstrates that the holder,
77-22 owner, or subscriber caused the corporation to be used for the
77-23 purpose of perpetrating and did perpetrate an actual fraud on the
77-24 obligee primarily for the direct personal benefit of the holder,
77-25 owner, or subscriber; or
77-26 (3) any contractual obligation of the corporation on
77-27 the basis of the failure of the corporation to observe any
78-1 corporate formality, including without limitation: (a) the failure
78-2 to comply with any requirement of this Act or of the articles of
78-3 incorporation or bylaws of the corporation; or (b) the failure to
78-4 observe any requirement prescribed by this Act or by the articles
78-5 of incorporation or bylaws for acts to be taken by the corporation,
78-6 its board of directors, or its shareholders.
78-7 B. The liability of a holder, owner, or subscriber of shares
78-8 of a corporation for an obligation that is limited by Section A of
78-9 this article is exclusive and preempts any other liability imposed
78-10 on a holder, owner, or subscriber of shares of a corporation for
78-11 that obligation under common law or otherwise, except that nothing
78-12 <Nothing> contained in this article shall limit the obligation of a
78-13 holder, owner, or subscriber to an obligee of the corporation when:
78-14 (1) the holder, owner, or subscriber has expressly
78-15 assumed, guaranteed, or agreed to be personally liable to the
78-16 obligee for the obligation; or
78-17 (2) the holder, owner, or subscriber is otherwise
78-18 liable to the obligee for the obligation under this Act or another
78-19 applicable statute.
78-20 SECTION 2.06. Article 2.24, Texas Business Corporation Act,
78-21 is amended by adding Section D to read as follows:
78-22 D. If the articles of incorporation or bylaws of a
78-23 corporation registered under the Investment Company Act so provide,
78-24 the corporation is not required to hold an annual meeting of
78-25 shareholders or elect directors in any year that the election of
78-26 directors is not required to be acted on under the Investment
78-27 Company Act. If the corporation is required by the Investment
79-1 Company Act to hold a meeting of shareholders to elect directors,
79-2 the meeting shall be designated as the annual meeting of
79-3 shareholders for that year.
79-4 SECTION 2.07. Sections A and C, Article 2.27, Texas Business
79-5 Corporation Act, are amended to read as follows:
79-6 A. The officer or agent having charge of the share <stock>
79-7 transfer records <books> for shares of a corporation shall make, at
79-8 least ten (10) days before each meeting of shareholders, a complete
79-9 list of the shareholders entitled to vote at such meeting or any
79-10 adjournment thereof, arranged in alphabetical order, with the
79-11 address of and the number of shares held by each, which list, for a
79-12 period of ten (10) days prior to such meeting, shall be kept on
79-13 file at the registered office or principal place of business of the
79-14 corporation and shall be subject to inspection by any shareholder
79-15 at any time during usual business hours. Such list shall also be
79-16 produced and kept open at the time and place of the meeting and
79-17 shall be subject to the inspection of any shareholder during the
79-18 whole time of the meeting. The original share <stock> transfer
79-19 records <books> shall be prima-facie evidence as to who are the
79-20 shareholders entitled to examine such list or transfer records
79-21 <books> or to vote at any meeting of shareholders.
79-22 C. An officer or agent having charge of the share <stock>
79-23 transfer records <books> who shall fail to prepare the list of
79-24 shareholders or keep the same on file for a period of ten (10)
79-25 days, or produce and keep it open for inspection at the meeting, as
79-26 provided in this Article, shall be liable to any shareholder
79-27 suffering damage on account of such failure, to the extent of such
80-1 damage. In the event that such officer or agent does not receive
80-2 notice of a meeting of shareholders sufficiently in advance of the
80-3 date of such meeting reasonably to enable him to comply with the
80-4 duties prescribed by this Article, the corporation, but not such
80-5 officer or agent, shall be liable to any shareholder suffering
80-6 damage on account of such failure, to the extent of such damage.
80-7 SECTION 2.08. Article 2.32, Texas Business Corporation Act,
80-8 is amended by adding Section B to read as follows:
80-9 B. Notwithstanding Section A of this Article, a director of
80-10 a corporation registered under the Investment Company Act, unless
80-11 removed in accordance with the provisions of the articles of
80-12 incorporation or bylaws, holds office for the term for which the
80-13 director is elected and until the director's successor has been
80-14 elected and qualified.
80-15 SECTION 2.09. Article 2.34, Texas Business Corporation Act,
80-16 is amended to read as follows:
80-17 Art. 2.34. Vacancies. A. Any vacancy occurring in the
80-18 initial board of directors before the issuance of shares may be
80-19 filled by the affirmative vote or written consent of a majority of
80-20 the incorporators or by the affirmative vote of a majority of the
80-21 remaining directors though less than a quorum of the board of
80-22 directors. A director elected to fill a vacancy shall be elected
80-23 for the unexpired term of the director's predecessor in office.
80-24 B. Any vacancy occurring in the board of directors after the
80-25 issuance of shares may be filled in accordance with Section D <C>
80-26 of this article or may be filled by the affirmative vote of a
80-27 majority of the remaining directors though less than a quorum of
81-1 the board of directors. A director elected to fill a vacancy shall
81-2 be elected for the unexpired term of his predecessor in office.
81-3 C <B>. A directorship to be filled by reason of an increase
81-4 in the number of directors may be filled in accordance with Section
81-5 D <C> of this article or may be filled by the board of directors
81-6 for a term of office continuing only until the next election of one
81-7 or more directors by the shareholders; provided that the board of
81-8 directors may not fill more than two such directorships during the
81-9 period between any two successive annual meetings of shareholders.
81-10 D <C>. Any vacancy occurring in the board of directors or
81-11 any directorship to be filled by reason of an increase in the
81-12 number of directors may be filled by election at an annual or
81-13 special meeting of shareholders called for that purpose.
81-14 E <D>. Notwithstanding Sections <A,> B, <and> C, and D of
81-15 this article, whenever the holders of any class or series of shares
81-16 or group of classes or series of shares are entitled to elect one
81-17 or more directors by the provisions of the articles of
81-18 incorporation, any vacancies in such directorships and any newly
81-19 created directorships of such class or series to be filled by
81-20 reason of an increase in the number of such directors may be filled
81-21 by the affirmative vote of a majority of the directors elected by
81-22 such class or series, or by such group, then in office, or by a
81-23 sole remaining director so elected, or by the vote of the holders
81-24 of the outstanding shares of such class or series or of such group,
81-25 and such directorships shall not in any case be filled by the vote
81-26 of the remaining directors or the holders of the outstanding shares
81-27 as a whole unless otherwise provided in the articles of
82-1 incorporation.
82-2 SECTION 2.10. Section C, Article 2.41, Texas Business
82-3 Corporation Act, is amended to read as follows:
82-4 C. A director shall not be liable under Subsection (1) of
82-5 Section A of this Article if, in voting for or assenting to the
82-6 distribution, the director:
82-7 (1) relied in good faith and with ordinary care upon
82-8 the statements, valuations, or information referred to in Article
82-9 2.38-3 of this Act, or upon other information, opinions, reports,
82-10 or statements, including financial statements and other financial
82-11 data, concerning the corporation or another person, that were
82-12 prepared or presented by:
82-13 (a) one or more officers or employees of the
82-14 corporation;
82-15 (b) legal counsel, public accountants,
82-16 investment bankers, or other persons as to matters the director
82-17 reasonably believes are within the person's professional or expert
82-18 competence; or
82-19 (c) a committee of the board of directors of
82-20 which the director is not a member;
82-21 (2) acting in good faith and with ordinary care,
82-22 considered the assets of the corporation to be at least of their
82-23 book value; or
82-24 (3) in determining whether the corporation made
82-25 adequate provision for payment, satisfaction or discharge of all of
82-26 its liabilities and obligations as provided in Articles <Article>
82-27 6.04 and 7.12 of this Act, relied in good faith and with ordinary
83-1 care upon financial statements of, or other information concerning,
83-2 any person who was or became contractually obligated to pay,
83-3 satisfy, or discharge some or all of those liabilities or
83-4 obligations.
83-5 SECTION 2.11. Sections B-F, Article 2.44, Texas Business
83-6 Corporation Act, are amended to read as follows:
83-7 B. A director may examine the corporation's books and
83-8 records of account, share transfer records, corporate minutes and
83-9 any other corporate books and records for any purpose reasonably
83-10 related to the director's service as a director. A court of
83-11 competent jurisdiction may compel a corporation to open its books
83-12 and records of account, share transfer records, corporate minutes
83-13 or any other corporate books and records to permit the director to
83-14 inspect the books or records and make copies or extracts from the
83-15 books or records on a showing by a director that:
83-16 (1) he is a director;
83-17 (2) he demanded to inspect the corporate books and
83-18 records;
83-19 (3) his purpose for inspecting the corporate books and
83-20 records was reasonably related to his service as a director; and
83-21 (4) his right of access to the books and records was
83-22 refused by the corporation.
83-23 The court may also award the director attorneys' fees and any other
83-24 relief that the court deems just and proper.
83-25 C. Any person who shall have been a shareholder for at least
83-26 six (6) months immediately preceding his demand, or shall be the
83-27 holder of at least five per cent (5%) of all the outstanding shares
84-1 of a corporation, upon written demand stating the purpose thereof,
84-2 shall have the right to examine, in person or by agent, accountant,
84-3 or attorney, at any reasonable time or times, for any proper
84-4 purpose, its relevant books and records of account, minutes, and
84-5 share transfer records, and to make extracts therefrom.
84-6 D <C>. Any corporation which shall refuse to allow any such
84-7 shareholder or his agent, accountant or attorney, so to examine and
84-8 make extracts from its books and records of account, minutes, and
84-9 share transfer records, for any proper purpose, shall be liable to
84-10 such shareholder for all costs and expenses, including attorneys'
84-11 fees, incurred in enforcing his rights under this Article in
84-12 addition to any other damages or remedy afforded him by law. It
84-13 shall be a defense to any action for penalties under this section
84-14 that the person suing therefor has within two (2) years sold or
84-15 offered for sale any list of shareholders or of holders of voting
84-16 trust certificates for shares of such corporation or any other
84-17 corporation or has aided or abetted any person in procuring any
84-18 list of shareholders or of holders of voting trust certificates for
84-19 any such purpose, or has improperly used any information secured
84-20 through any prior examination of the books and records of account,
84-21 minutes, or share transfer records of such corporation or any other
84-22 corporation, or was not acting in good faith or for a proper
84-23 purpose in making his demand.
84-24 E <D>. Nothing herein contained shall impair the power of
84-25 any court of competent jurisdiction, upon proof of proper purpose
84-26 by a beneficial or record holder of shares, irrespective of the
84-27 period of time during which such holder shall have been a
85-1 beneficial or record holder and irrespective of the number of
85-2 shares held by him, to compel the production for examination by
85-3 such holder of the books and records of account, minutes, and share
85-4 transfer records of a corporation.
85-5 F <E>. Upon the written request of any shareholder of a
85-6 corporation, the corporation shall mail to such shareholder its
85-7 annual statements for its last fiscal year showing in reasonable
85-8 detail its assets and liabilities and the results of its operations
85-9 and the most recent interim statements, if any, which have been
85-10 filed in a public record or otherwise published. The corporation
85-11 shall be allowed a reasonable time to prepare such annual
85-12 statements.
85-13 G <F>. A holder of a beneficial interest in a voting trust
85-14 entered into pursuant to Article 2.30 of this Act shall be regarded
85-15 as a holder of the shares represented by such beneficial interest
85-16 for the purposes of this Article.
85-17 SECTION 2.12. Article 4.14, Texas Business Corporation Act,
85-18 is amended to read as follows:
85-19 Art. 4.14. REORGANIZATION UNDER A FEDERAL STATUTE <Amendment
85-20 of Articles, Merger, Share Exchange, and Dissolution Pursuant to
85-21 Federal Reorganization Proceedings>. A. Authorization.
85-22 Notwithstanding any other provision of this Act to the contrary, a
85-23 trustee appointed for a corporation being reorganized under a
85-24 federal statute, the designated officers of the corporation, or any
85-25 other individual or individuals designated by the court to act on
85-26 behalf of the corporation <a corporation being reorganized under a
85-27 federal statute> may do any of the following without action by or
86-1 notice to its board of directors or shareholders in order to carry
86-2 out a plan of reorganization ordered or decreed by a court of
86-3 competent jurisdiction under the federal statute:
86-4 (1) amend or restate its articles of incorporation if
86-5 the articles after amendment or restatement contain only provisions
86-6 required or permitted in articles;
86-7 (2) merge or engage in a share exchange with one or
86-8 more domestic or foreign corporations or other entities pursuant to
86-9 a plan of merger or exchange having such terms and provisions as
86-10 required or permitted by Articles <Article> 5.01 and 5.02 of this
86-11 Act;
86-12 (3) change the location of its registered office,
86-13 change its registered agent, and remove or appoint any agent to
86-14 receive service of process;
86-15 (4) alter, amend, or repeal its bylaws;
86-16 (5) constitute or reconstitute and classify or
86-17 reclassify its board of directors, and name, constitute, or appoint
86-18 directors and officers in place of or in addition to all or some of
86-19 the officers or directors then in place;
86-20 (6) sell, lease, exchange or otherwise dispose of all,
86-21 or substantially all, of its property and assets; <or>
86-22 (7) authorize and fix the terms, manner, and
86-23 conditions of the issuance of bonds, debentures, or other
86-24 obligations, whether or not convertible into shares of any class or
86-25 bearing warrants or other evidences of optional rights to purchase
86-26 or subscribe for any shares of any class; or
86-27 (8) <(4)> dissolve.
87-1 Actions taken under Subsection (4) or (5) of this section are
87-2 effective on entry of the order or decree approving the plan of
87-3 reorganization or on another effective date as may be specified,
87-4 without further action of the corporation, as and to the extent set
87-5 forth in the plan of reorganization or the order or decree
87-6 approving the plan of reorganization.
87-7 B. Authority to Sign Documents. A trustee appointed for a
87-8 corporation being reorganized under a federal statute, the
87-9 designated officers of the corporation, or any other <The>
87-10 individual or individuals designated by the court may sign on
87-11 behalf of a corporation that is being reorganized:
87-12 (1) articles of amendment or restated articles of
87-13 incorporation setting forth:
87-14 (a) the name of the corporation;
87-15 (b) the text of each amendment or the
87-16 restatement approved by the court;
87-17 (c) the date of the court's order or decree
87-18 approving the articles of amendment or restatement;
87-19 (d) the court, file name, and case number of the
87-20 reorganization case <proceeding> in which the order or decree was
87-21 entered; and
87-22 (e) a statement that the court had jurisdiction
87-23 of the case <proceeding> under federal statute; or
87-24 (2) articles of merger or exchange setting forth:
87-25 (a) the name of the corporation;
87-26 (b) the text of the part of the plan of
87-27 reorganization that contains the plan of merger or exchange
88-1 approved by the court, which shall include the information required
88-2 by Article 5.04A or 5.16B of this Act, as applicable, but need not
88-3 include the resolution of the board of directors referred to in
88-4 Article 5.16B(3) of this Act;
88-5 (c) the date of the court's order or decree
88-6 approving the plan of merger or consolidation;
88-7 (d) the court, file name, and case number of the
88-8 reorganization case <proceeding> in which the order or decree was
88-9 entered; and
88-10 (e) a statement that the court had jurisdiction
88-11 of the case <proceeding> under federal statute; or
88-12 (3) articles of dissolution setting forth:
88-13 (a) the name of the corporation;
88-14 (b) the information required by Articles
88-15 <Article> 6.06A(1)(2) and (3) of this Act;
88-16 (c) the date of the court's order or decree
88-17 approving the articles of dissolution;
88-18 (d) that the debts, obligations and liabilities
88-19 of the corporation have been paid or discharged as provided in the
88-20 plan of reorganization and that the remaining property and assets
88-21 of the corporation have been distributed as provided in the plan of
88-22 reorganization;
88-23 (e) the court, file name, and case number of the
88-24 reorganization case <proceeding> in which the order or decree was
88-25 entered; and
88-26 (f) a statement that the court had jurisdiction
88-27 of the case <proceeding> under federal statute; or
89-1 (4) a statement of change of registered office or
89-2 registered agent, or both, setting forth:
89-3 (a) the name of the corporation;
89-4 (b) the information required by Article 2.10A of
89-5 this Act, as applicable, but not the information included in the
89-6 statement referred to in Article 2.10A(7) of this Act;
89-7 (c) the date of the court's order or decree
89-8 approving the statement of change of registered office or
89-9 registered agent, or both;
89-10 (d) the court, file name, and case number of the
89-11 reorganization case in which the order or decree was entered; and
89-12 (e) a statement that the court had jurisdiction
89-13 of the case under federal statute.
89-14 C. Procedure for Merger or Share Exchange. When a domestic
89-15 or foreign corporation or other entity that is not being
89-16 reorganized merges or engages in a share exchange with a
89-17 corporation that is being reorganized pursuant to a plan of
89-18 reorganization:
89-19 (1) Articles 5.01, 5.02, 5.03, 5.11, 5.12, and 5.13 of
89-20 this Act shall apply to the domestic or foreign corporation or
89-21 other entity that is not being reorganized to the same extent they
89-22 would apply if it were merging or engaging in a share exchange with
89-23 a corporation that is not being reorganized;
89-24 (2) Article 5.06 of this Act shall apply to the
89-25 domestic or foreign corporation or other entity that is not being
89-26 reorganized to the same extent it would apply if that domestic or
89-27 foreign corporation or other entity were merging or engaging in a
90-1 share exchange with a corporation that is not being reorganized,
90-2 except as otherwise provided in the plan of reorganization ordered
90-3 or decreed by a court of competent jurisdiction under the federal
90-4 statute;
90-5 (3) Article 5.16E of this Act shall apply to a
90-6 subsidiary corporation that is not being reorganized to the same
90-7 extent it would apply if that corporation were merging with a
90-8 parent corporation that is not being reorganized;
90-9 (4) Upon the receipt of all required authorization for
90-10 all action required by this Act for each corporation that is a
90-11 party to the plan of merger or exchange that is not being
90-12 reorganized and all action by each corporation, foreign
90-13 corporation, or other entity that is a party to the plan of merger
90-14 or exchange required by the laws under which it is incorporated or
90-15 organized and its constituent documents, articles of merger or
90-16 exchange shall be signed by each domestic or foreign corporation or
90-17 other entity that is a party to the merger or exchange other than
90-18 the corporation that is being reorganized as provided in Article
90-19 5.04 of this Act and on behalf of the corporation that is being
90-20 reorganized by the persons specified in Section B of this Article;
90-21 <and>
90-22 (5) The articles of merger or exchange shall set forth
90-23 the information required in Section B(2) of this Article;<.>
90-24 (6) <D. Filing.> The articles of merger or exchange
90-25 shall be filed with the Secretary of State in the manner and with
90-26 such number of copies as is provided in Article 5.04B of this Act;
90-27 and<.>
91-1 (7) <E. Effect.> Upon the issuance of the certificate
91-2 of merger or share exchange by the Secretary of State as provided
91-3 in Article 5.04 of this Act, the merger or share exchange shall
91-4 become effective with the same effect as if it had been adopted by
91-5 unanimous action of the directors and shareholders of the
91-6 corporation being reorganized. The effectiveness of the merger or
91-7 share exchange shall be determined as provided in Article 5.05 of
91-8 this Act.
91-9 D <F>. Dissenters' Rights. Shareholders of a corporation
91-10 being reorganized under a federal statute do not have a right to
91-11 dissent under Article 5.11 or 5.16E of this Act, except as the plan
91-12 of reorganization may provide.
91-13 E <G>. When Applicable. This Article shall not apply after
91-14 the entry of a final decree in the reorganization case <proceeding>
91-15 even though the court may retain jurisdiction of the case
91-16 <proceeding> for limited purposes unrelated to consummation of the
91-17 plan of reorganization.
91-18 F <H>. Nonexclusivity. This Article shall not preclude
91-19 other changes in a corporation or its securities by a plan of
91-20 reorganization ordered or decreed by a court of competent
91-21 jurisdiction under federal statute.
91-22 SECTION 2.13. Sections A, B, and G, Article 5.03, Texas
91-23 Business Corporation Act, are amended to read as follows:
91-24 A. Except as provided by Section G of this Article, after
91-25 <After> acting on a plan of merger or exchange in the manner
91-26 prescribed by Subsection (1) of Section B of this Article, the
91-27 board of directors of each domestic corporation that is a party to
92-1 the merger, and the board of directors of each domestic corporation
92-2 whose shares are to be acquired in the share exchange, shall submit
92-3 the plan of merger <(except as provided in Section G of this
92-4 Article)> or exchange for approval by its shareholders.
92-5 B. Except as provided by Section G of this Article, for
92-6 <For> a plan of merger or exchange to be approved:
92-7 (1) the board of directors of the corporation may
92-8 adopt a resolution recommending that the plan of merger or exchange
92-9 be approved by the shareholders of the corporation, unless the
92-10 board of directors determines that for any reason it should not
92-11 make that recommendation, in which case the board of directors may
92-12 adopt a resolution directing that the plan of merger or exchange be
92-13 submitted to shareholders for approval without recommendation and,
92-14 in connection with the submission, communicate the basis for its
92-15 determination that the plan be submitted to shareholders without
92-16 any recommendation; and
92-17 (2) <except as provided in Section G of this Article,>
92-18 the shareholders entitled to vote on the plan of merger or exchange
92-19 must approve the plan.
92-20 G. Unless the articles of incorporation otherwise require,
92-21 approval by the shareholders of a corporation on a plan of merger
92-22 shall not be required and the provisions of Sections A, B, C, D, E,
92-23 and F of this Article do not apply if:
92-24 (1) the corporation is the sole surviving corporation
92-25 in the merger;
92-26 (2) the articles of incorporation of the corporation
92-27 will not differ from its articles of incorporation before the
93-1 merger;
93-2 (3) each shareholder of the corporation whose shares
93-3 were outstanding immediately before the effective date of the
93-4 merger will hold the same number of shares, with identical
93-5 designations, preferences, limitations, and relative rights,
93-6 immediately after the effective date of the merger;
93-7 (4) the voting power of the number of voting shares
93-8 outstanding immediately after the merger, plus the voting power of
93-9 the number of voting shares issuable as a result of the merger
93-10 (either by the conversion of securities issued pursuant to the
93-11 merger or the exercise of rights to purchase securities issued
93-12 pursuant to the merger), will not exceed by more than 20 percent
93-13 the voting power of the total number of voting shares of the
93-14 corporation outstanding immediately before the merger;
93-15 (5) the number of participating shares outstanding
93-16 immediately after the merger, plus the number of participating
93-17 shares issuable as a result of the merger (either by the conversion
93-18 of securities issued pursuant to the merger or the exercise of
93-19 rights to purchase securities issued pursuant to the merger), will
93-20 not exceed by more than 20 percent the total number of
93-21 participating shares of the corporation outstanding immediately
93-22 before the merger; and
93-23 (6) the board of directors of the corporation adopts a
93-24 resolution approving the plan of merger.
93-25 SECTION 2.14. Section B, Article 5.09, Texas Business
93-26 Corporation Act, is amended to read as follows:
93-27 B. A transaction referred to in this Article and in Article
94-1 5.10 of this Act shall be in the usual and regular course of
94-2 business if the corporation shall, directly or indirectly, either
94-3 continue to engage in one or more businesses or apply a portion of
94-4 the consideration received in connection with the transaction to
94-5 the conduct of a business in which it engages following the
94-6 transaction.
94-7 SECTION 2.15. Section A, Article 5.10, Texas Business
94-8 Corporation Act, is amended to read as follows:
94-9 A. A sale, lease, exchange, or other disposition (not
94-10 including any pledge, mortgage, deed of trust or trust indenture
94-11 unless otherwise provided in the articles of incorporation) of all,
94-12 or substantially all, the property and assets, with or without the
94-13 good will of a corporation, if not made in the usual and regular
94-14 course of its business, may be made upon such terms and conditions
94-15 and for such consideration, which may consist in whole or in part
94-16 of money or property, real or personal, including shares of any
94-17 corporation, domestic or foreign, as may be authorized in the
94-18 following manner:
94-19 (1) The board of directors may adopt a resolution
94-20 recommending that such sale, lease, exchange, or other disposition
94-21 be approved by shareholders of the corporation, unless the board of
94-22 directors determines that for any reason it should not make the
94-23 recommendation in which case the board of directors may adopt a
94-24 resolution directing that such sale, lease, exchange, or other
94-25 disposition be submitted to shareholders without recommendation
94-26 and, in connection with the submission, communicate the basis for
94-27 its determination that the sale, lease, exchange or other
95-1 disposition be submitted without recommendation.
95-2 (2) The board of directors may submit the proposed
95-3 sale, lease, exchange or other disposition for authorization by the
95-4 corporation's shareholders at a meeting of shareholders, which may
95-5 be either an annual or a special meeting.
95-6 (3) Written or printed notice shall be given to each
95-7 shareholder of record entitled to vote at such meeting within the
95-8 time and in the manner provided for in this Act for the giving of
95-9 notice of meetings of shareholders, and, whether the meeting be an
95-10 annual or a special meeting shall state that the purpose, or one of
95-11 the purposes, of such meeting is to consider the proposed sale,
95-12 lease, exchange, or other disposition.
95-13 (4) At such meeting, the shareholders may authorize
95-14 such sale, lease, exchange or other disposition and may fix, or may
95-15 authorize the board of directors to fix, any or all of the terms
95-16 and conditions thereof and the consideration to be received by the
95-17 corporation therefor. Such authorization shall require the
95-18 affirmative vote of the holders of at least two-thirds of the
95-19 outstanding shares of the corporation entitled to vote thereon,
95-20 unless any class or series of shares of the corporation is entitled
95-21 to vote as a class thereon, in which event the vote required for
95-22 authorization by the shareholders shall be the affirmative vote of
95-23 the holders of at least two-thirds of the outstanding shares within
95-24 each such class or series entitled to vote thereon as a class and
95-25 at least two-thirds of the outstanding shares otherwise entitled to
95-26 vote thereon. Shares entitled to vote as a class shall be entitled
95-27 to vote only as a class unless otherwise entitled to vote on each
96-1 matter submitted to the shareholders generally or provided in the
96-2 articles of incorporation.
96-3 (5) After such authorization by vote of shareholders,
96-4 the board of directors, nevertheless, in its discretion, may
96-5 abandon such sale, lease, exchange or other disposition of assets,
96-6 subject to the rights of third parties under any contracts relating
96-7 thereto, without further action or approval by shareholders.
96-8 SECTION 2.16. Sections A and D, Article 5.12, Texas Business
96-9 Corporation Act, are amended to read as follows:
96-10 A. Any shareholder of any domestic corporation who has the
96-11 right to dissent from any of the corporate actions referred to in
96-12 Article 5.11 of this Act may exercise that right to dissent only by
96-13 complying with the following procedures:
96-14 (1)(a) With respect to proposed corporate action that
96-15 is submitted to a vote of shareholders at a meeting, the
96-16 shareholder shall file with the corporation, prior to the meeting,
96-17 a written objection to the action, setting out that the
96-18 shareholder's right to dissent will be exercised if the action is
96-19 effective and giving the shareholder's address, to which notice
96-20 thereof shall be delivered or mailed in that event. If the action
96-21 is effected and the shareholder shall not have voted in favor of
96-22 the action, the corporation, in the case of action other than a
96-23 merger, or the surviving or new corporation (foreign or domestic)
96-24 or other entity that is liable to discharge the shareholder's right
96-25 of dissent, in the case of a merger, shall, within ten (10) days
96-26 after the action is effected, deliver or mail to the shareholder
96-27 written notice that the action has been effected, and the
97-1 shareholder may, within ten (10) days from the delivery or mailing
97-2 of the notice, make written demand on the existing, surviving, or
97-3 new corporation (foreign or domestic) or other entity, as the case
97-4 may be, for payment of the fair value of the shareholder's shares.
97-5 The fair value of the shares shall be the value thereof as of the
97-6 day immediately preceding the meeting, excluding any appreciation
97-7 or depreciation in anticipation of the proposed action. The demand
97-8 shall state the number and class of the shares owned by the
97-9 shareholder and the fair value of the shares as estimated by the
97-10 shareholder. Any shareholder failing to make demand within the ten
97-11 (10) day period shall be bound by the action.
97-12 (b) With respect to proposed corporate action
97-13 that is approved pursuant to Section A of Article 9.10 of this Act,
97-14 the corporation, in the case of action other than a merger, and the
97-15 surviving or new corporation (foreign or domestic) or other entity
97-16 that is liable to discharge the shareholder's right of dissent, in
97-17 the case of a merger, shall, within ten (10) days after the date
97-18 the action is effected, mail to each shareholder of record as of
97-19 the effective date of the action notice of the fact and date of the
97-20 action and that the shareholder may exercise the shareholder's
97-21 right to dissent from the action. The notice shall be accompanied
97-22 by a copy of this Article and any articles or documents filed by
97-23 the corporation with the Secretary of State to effect the action.
97-24 If the shareholder shall not have consented to the taking of the
97-25 action, the shareholder may, within twenty (20) days after the
97-26 mailing of the notice, make written demand on the existing,
97-27 surviving, or new corporation (foreign or domestic) or other
98-1 entity, as the case may be, for payment of the fair value of the
98-2 shareholder's shares. The fair value of the shares shall be the
98-3 value thereof as of the date the written consent authorizing the
98-4 action was delivered to the corporation pursuant to Section A of
98-5 Article 9.10 of this Act, excluding any appreciation or
98-6 depreciation in anticipation of the <proposed> action. The demand
98-7 shall state the number and class of shares owned by the dissenting
98-8 shareholder and the fair value of the shares as estimated by the
98-9 shareholder. Any shareholder failing to make demand within the
98-10 twenty (20) day period shall be bound by the action.
98-11 (2) Within twenty (20) days after receipt by the
98-12 existing, surviving, or new corporation (foreign or domestic) or
98-13 other entity, as the case may be, of a demand for payment made by a
98-14 dissenting shareholder in accordance with Subsection (1) of this
98-15 Section, the corporation (foreign or domestic) or other entity
98-16 shall deliver or mail to the shareholder a written notice that
98-17 shall either set out that the corporation (foreign or domestic) or
98-18 other entity accepts the amount claimed in the demand and agrees to
98-19 pay that amount within ninety (90) days after the date on which the
98-20 action was effected, and, in the case of shares represented by
98-21 certificates, upon the surrender of the certificates duly endorsed,
98-22 or shall contain an estimate by the corporation (foreign or
98-23 domestic) or other entity of the fair value of the shares, together
98-24 with an offer to pay the amount of that estimate within ninety (90)
98-25 days after the date on which the action was effected, upon receipt
98-26 of notice within sixty (60) days after that date from the
98-27 shareholder that the shareholder agrees to accept that amount and,
99-1 in the case of shares represented by certificates, upon the
99-2 surrender of the certificates duly endorsed.
99-3 (3) If, within sixty (60) days after the date on which
99-4 the corporate action was effected, the value of the shares is
99-5 agreed upon between the shareholder and the existing, surviving, or
99-6 new corporation (foreign or domestic) or other entity, as the case
99-7 may be, payment for the shares shall be made within ninety (90)
99-8 days after the date on which the action was effected and, in the
99-9 case of shares represented by certificates, upon surrender of the
99-10 certificates duly endorsed. Upon payment of the agreed value, the
99-11 shareholder shall cease to have any interest in the shares or in
99-12 the corporation.
99-13 D. The appraisers shall determine the fair value of the
99-14 shares of the shareholders adjudged by the court to be entitled to
99-15 payment for their shares and shall file their report of that value
99-16 in the office of the clerk of the court. Notice of the filing of
99-17 the report shall be given by the clerk to the parties in interest.
99-18 The report shall be subject to exceptions to be heard before the
99-19 court both upon the law and the facts. The court shall by its
99-20 judgment determine the fair value of the shares of the shareholders
99-21 entitled to payment for their shares and shall direct the payment
99-22 of that value by the existing, surviving, or new corporation
99-23 (foreign or domestic) or other entity, together with interest
99-24 thereon, beginning 91 days after the date on which the applicable
99-25 corporate action from which the shareholder elected to dissent was
99-26 effected to the date of such judgment, to the shareholders entitled
99-27 to payment. The judgment shall be payable to the holders of
100-1 uncertificated shares immediately but to the holders of shares
100-2 represented by certificates only upon, and simultaneously with, the
100-3 surrender to the existing, surviving, or new corporation (foreign
100-4 or domestic) or other entity, as the case may be, of duly endorsed
100-5 certificates for those shares. Upon payment of the judgment, the
100-6 dissenting shareholders shall cease to have any interest in those
100-7 shares or in the corporation. The court shall allow the appraisers
100-8 a reasonable fee as court costs, and all court costs shall be
100-9 allotted between the parties in the manner that the court
100-10 determines to be fair and equitable.
100-11 SECTION 2.17. Article 5.13, Texas Business Corporation Act,
100-12 is amended to read as follows:
100-13 Art. 5.13. Provisions Affecting Remedies of Dissenting
100-14 Shareholders. A. Any shareholder who has demanded payment for his
100-15 shares in accordance with either Article 5.12 or 5.16 of this Act
100-16 shall not thereafter be entitled to vote or exercise any other
100-17 rights of a shareholder except the right to receive payment for his
100-18 shares pursuant to the provisions of those articles <said Article
100-19 5.12> and the right to maintain an appropriate action to obtain
100-20 relief on the ground that the corporate action would be or was
100-21 fraudulent, and the respective shares for which payment has been
100-22 demanded shall not thereafter be considered outstanding for the
100-23 purposes of any subsequent vote of shareholders.
100-24 B. Upon receiving a demand for payment from any dissenting
100-25 shareholder, the corporation shall make an appropriate notation
100-26 thereof in its shareholder records. Within twenty (20) days after
100-27 demanding payment for his shares in accordance with either Article
101-1 5.12 or 5.16 of this Act, each holder of certificates representing
101-2 shares so demanding payment shall submit such certificates to the
101-3 corporation for notation thereon that such demand has been made.
101-4 The failure of holders of certificated shares to do so shall, at
101-5 the option of the corporation, terminate such shareholder's rights
101-6 under Articles <Article> 5.12 and 5.16 of this Act unless a court
101-7 of competent jurisdiction for good and sufficient cause shown shall
101-8 otherwise direct. If uncertificated shares for which payment has
101-9 been demanded or shares represented by a certificate on which
101-10 notation has been so made shall be transferred, any new certificate
101-11 issued therefor shall bear similar notation together with the name
101-12 of the original dissenting holder of such shares and a transferee
101-13 of such shares shall acquire by such transfer no rights in the
101-14 corporation other than those which the original dissenting
101-15 shareholder had after making demand for payment of the fair value
101-16 thereof.
101-17 C. Any shareholder who has demanded payment for his shares
101-18 in accordance with either Article 5.12 or 5.16 of this Act may
101-19 withdraw such demand at any time before payment for his shares or
101-20 before any petition has been filed pursuant to Article 5.12 or 5.16
101-21 of this Act asking for a finding and determination of the fair
101-22 value of such shares, but no such demand may be withdrawn after
101-23 such payment has been made or, unless the corporation shall consent
101-24 thereto, after any such petition has been filed. If, however, such
101-25 demand shall be withdrawn as hereinbefore provided, or if pursuant
101-26 to Section B of this Article the corporation shall terminate the
101-27 shareholder's rights under Article 5.12 or 5.16 of this Act, as the
102-1 case may be, or if no petition asking for a finding and
102-2 determination of fair value of such shares by a court shall have
102-3 been filed within the time provided in Article 5.12 or 5.16 of this
102-4 Act, as the case may be, or if after the hearing of a petition
102-5 filed pursuant to Article 5.12 or 5.16, the court shall determine
102-6 that such shareholder is not entitled to the relief provided by
102-7 those articles <Article 5.12>, then, in any such case, such
102-8 shareholder and all persons claiming under him shall be
102-9 conclusively presumed to have approved and ratified the corporate
102-10 action from which he dissented and shall be bound thereby, the
102-11 right of such shareholder to be paid the fair value of his shares
102-12 shall cease, and his status as a shareholder shall be restored
102-13 without prejudice to any corporate proceedings which may have been
102-14 taken during the interim, and such shareholder shall be entitled to
102-15 receive any dividends or other distributions made to shareholders
102-16 in the interim.
102-17 SECTION 2.18. Sections B, E, and F, Article 5.16, Texas
102-18 Business Corporation Act, are amended to read as follows:
102-19 B. Signature of articles; contents. The articles of merger
102-20 shall be signed on behalf of the parent corporation by an officer
102-21 and shall set forth:
102-22 (1) The name of the parent corporation, and the name
102-23 or names of the subsidiary corporations and the respective
102-24 jurisdiction under which each such corporation is organized.
102-25 (2) The number of outstanding shares of each class of
102-26 each subsidiary corporation and the number of such shares of each
102-27 class owned by the parent corporation.
103-1 (3) A copy of the resolution adopted by the board of
103-2 directors of the parent corporation to so merge and the date of the
103-3 adoption thereof. If the parent corporation does not own all the
103-4 outstanding shares of each class of each subsidiary corporation
103-5 that is a party to the merger, the resolution shall state the terms
103-6 and conditions of the merger, including the <securities,> cash or
103-7 other property, including shares, obligations, evidences of
103-8 ownership, rights to purchase securities, or other securities of
103-9 any person or entity or any combination of the shares, obligations,
103-10 evidences of ownership, rights, or other securities, to be used,
103-11 paid or delivered by the surviving corporation upon surrender of
103-12 each share of the subsidiary corporation or corporations not owned
103-13 by the parent corporation.
103-14 (4) If the surviving corporation is a foreign
103-15 corporation, the address, including street number if any, of its
103-16 registered or principal office in the jurisdiction under whose laws
103-17 it is governed. If the surviving corporation is a foreign
103-18 corporation, on the merger taking effect the surviving foreign
103-19 corporation is deemed to (a) appoint the Secretary of State of this
103-20 state as its agent for service of process to enforce an obligation
103-21 or the rights of dissenting shareholders of each domestic
103-22 corporation that is a party to the merger, and (b) agree that it
103-23 will promptly pay to the dissenting shareholders of each domestic
103-24 corporation that is a party to the merger the amount, if any, to
103-25 which they are entitled under this Article <It shall comply also
103-26 with the provisions of Section D of Article 5.01 of this Act>.
103-27 (5) If a plan of merger is required by Section A of
104-1 this Article to be adopted in the manner required by Article 5.03
104-2 of this Act, the information required by Section A of Article 5.04
104-3 of this Act.
104-4 E. Remedy of minority shareholders. In the event all of the
104-5 shares of a subsidiary domestic corporation that is a party to a
104-6 merger effected under this Article are not owned by the parent
104-7 corporation immediately prior to the merger, the surviving
104-8 corporation (foreign or domestic) shall, within ten (10) days after
104-9 the effective date of the merger, mail to each shareholder of
104-10 record of each subsidiary domestic corporation a copy of the
104-11 articles of merger and notify the shareholder <him> that the merger
104-12 has become effective. Any <In case any> such shareholder who holds
104-13 shares of a class or series that would have been entitled to vote
104-14 on the merger if it had been effected pursuant to Article 5.03 of
104-15 this Act shall have the right <and who elects> to dissent from the
104-16 merger and demand payment of the fair value for his shares in lieu
104-17 of the <securities,> cash or other property to be used, paid or
104-18 delivered to such shareholder upon the surrender of such
104-19 shareholder's shares pursuant to the terms and conditions of the
104-20 merger, with the following procedure <shall be followed>:
104-21 (1) Such shareholder shall within twenty (20) days
104-22 after the mailing of the notice and copy of the articles of merger
104-23 make written demand on the surviving corporation, domestic or
104-24 foreign, for payment of the fair value of his shares. The fair
104-25 value of the <such> shares shall be the value thereof as of the day
104-26 before the effective date of the merger, excluding any appreciation
104-27 or depreciation in anticipation of such <proposed> act. The <Such>
105-1 demand shall state the number and class of the shares owned by the
105-2 dissenting shareholder and the fair value of such shares as
105-3 estimated by him. Any shareholder failing to make demand within
105-4 the twenty (20) day period shall be bound by the <such> corporate
105-5 action.
105-6 (2) Within ten (10) days after receipt by the
105-7 surviving corporation of a demand for payment by the dissenting
105-8 shareholder of the fair value of his shares <made by such
105-9 dissenting shareholder> in accordance with Subsection (1) of this
105-10 section, the <hereof, such> corporation (foreign or domestic) shall
105-11 deliver or mail to the <such> dissenting shareholder a written
105-12 notice which shall either set out that the corporation (foreign or
105-13 domestic) accepts the amount claimed in the <such> demand and
105-14 agrees to pay such amount within ninety (90) days after the date on
105-15 which the <such> corporate action was effected and, in the case of
105-16 shares represented by certificates, upon the surrender of the
105-17 shares certificates duly endorsed, or shall contain an estimate by
105-18 the corporation of the fair value of such shares, together with an
105-19 offer to pay the amount of that <such> estimate within ninety (90)
105-20 days after the date on which such corporate <corporation> action
105-21 was effected, upon receipt of notice within sixty (60) days after
105-22 that <such> date from the <such> shareholder that the shareholder
105-23 <he> agrees to accept that <such> amount and, in the case of shares
105-24 represented by certificates, upon the surrender of the shares
105-25 certificates duly endorsed.
105-26 (3) If, within sixty (60) days after the date on which
105-27 the <such> corporate action was effected, the value of the <such>
106-1 shares is agreed upon between the dissenting shareholder and the
106-2 surviving corporation (foreign or domestic), payment for the shares
106-3 <therefor> shall be made within ninety (90) days after the date on
106-4 which the <such> corporate action was effected and, in the case of
106-5 shares represented by certificates, upon surrender of his
106-6 certificate or certificates representing such shares. Upon payment
106-7 of the agreed value, the dissenting shareholder shall cease to have
106-8 any interest in such shares or in the corporation.
106-9 (4) If, within <such period of> sixty (60) days after
106-10 the date on which such corporate action was effected, the
106-11 shareholder and the surviving corporation (foreign or domestic) do
106-12 not so agree, then the dissenting shareholder or the corporation
106-13 (foreign or domestic) may, within sixty (60) days after the
106-14 expiration of the sixty (60) day period, file a petition in any
106-15 court of competent jurisdiction in the county in which the
106-16 principal office of the corporation is located, asking for a
106-17 finding and determination of the fair value of the shareholder's
106-18 <such> shares as provided in Section B of Article 5.12 of this Act
106-19 and thereupon the parties shall have the rights and duties and
106-20 follow the procedure set forth in Sections B to D inclusive of
106-21 Article 5.12 <and set forth in Article 5.13>.
106-22 (5) In the absence of fraud in the transaction, the
106-23 remedy provided by this Article to a shareholder objecting to the
106-24 <such> corporate action is the exclusive remedy for the recovery of
106-25 the value of his shares or money damages to the <such> shareholder
106-26 with respect to the <such> corporate action. If<; and if> the
106-27 surviving corporation (foreign or domestic) complies with the
107-1 requirements of this Article, any such shareholder who fails to
107-2 comply with the requirements of this Article shall not be entitled
107-3 to bring suit for the recovery of the value of his shares or money
107-4 damages to such shareholder with respect to such corporate action.
107-5 F. Dissenting shareholders. If a plan of merger is required
107-6 by Section A of this Article to be adopted in the manner required
107-7 by Article 5.03 of this Act, the provisions of Articles 5.11 and<,>
107-8 5.12<, and 5.13> of this Act shall apply to the rights of the
107-9 shareholders of the parent corporation to dissent from such merger.
107-10 Except as otherwise provided in this Article, the provisions of
107-11 Articles 5.11 and<,> 5.12 <and 5.13> of this Act shall not be
107-12 applicable to a merger effected under the provisions of this
107-13 Article. The provisions of Article 5.13 of this Act shall be
107-14 applicable to any merger effected under the provisions of this
107-15 Article to the extent provided in Article 5.13 of this Act.
107-16 SECTION 2.19. Sections D and F, Article 7.12, Texas Business
107-17 Corporation Act, are amended to read as follows:
107-18 D. A dissolved corporation may give written notice to a
107-19 person having or asserting an existing claim against the dissolved
107-20 corporation to present such existing claim to the dissolved
107-21 corporation in accordance with the notice. The notice shall be
107-22 sent by registered or certified mail, return receipt requested, to
107-23 the person having or asserting the existing claim at such person's
107-24 last known address, and the notice shall:
107-25 (1) state that such person's <such> claim against the
107-26 dissolved corporation must be presented in writing to the dissolved
107-27 corporation on or before the date stated in the notice, which shall
108-1 be not earlier than 120 days after the date the notice is sent to
108-2 such person;
108-3 (2) state that the written presentation of the claim
108-4 must describe such claim in sufficient detail to reasonably inform
108-5 the dissolved corporation of the identity of such person and of the
108-6 nature and amount of the claim;
108-7 (3) state a mailing address where the written
108-8 presentation of the person's claim against the dissolved
108-9 corporation is to be sent; <and>
108-10 (4) state that if the written presentation of the
108-11 claim is not received at such address on or before the date stated
108-12 in the notice, the claim will be extinguished; and
108-13 (5) be accompanied by a copy of this Section D.
108-14 If a written presentation of such person's claim against the
108-15 dissolved corporation that meets the requirements of this section
108-16 is received at the address of the dissolved corporation stated in
108-17 the notice on or before the date stated in the notice, the
108-18 dissolved corporation may thereafter give written notice to such
108-19 person that such claim is rejected by the dissolved corporation.
108-20 The notice shall be sent by registered or certified mail, return
108-21 receipt requested, addressed to such person at such person's last
108-22 known address, and the notice shall state:
108-23 (1) that such claim is rejected by the dissolved
108-24 corporation;
108-25 (2) that such claim will be extinguished unless
108-26 an action or proceeding on such claim is brought within 180 days
108-27 after the date such notice of rejection was sent to such person and
109-1 before the expiration of the three-year period following the date
109-2 of dissolution; and
109-3 (3) the date such notice of rejection was sent
109-4 and the date of dissolution.
109-5 Such person's claim against the dissolved corporation shall
109-6 be extinguished if (a) a written presentation of that claim meeting
109-7 the requirements of this section is not received at the address of
109-8 the dissolved corporation stated in the notice to such person on or
109-9 before the date stated in the notice or (b) an action or proceeding
109-10 on such claim is not brought within 180 days after the date a
109-11 notice of rejection was sent to such person and before the
109-12 expiration of the three-year period following the date of
109-13 dissolution.
109-14 F. In this Article:
109-15 (1) The term "dissolved corporation" means a
109-16 corporation (a) that was voluntarily dissolved by the issuance of a
109-17 certificate of dissolution by the Secretary of State and was not
109-18 issued a certificate of revocation of dissolution pursuant to
109-19 Section C of Article 6.05 of this Act, (b) that was involuntarily
109-20 dissolved by the Secretary of State and was not reinstated pursuant
109-21 to Section E of Article 7.01 of this Act, (c) that was dissolved by
109-22 decree of a court when the court has not liquidated all the assets
109-23 and business of the corporation as provided in this Act, <or> (d)
109-24 that was dissolved by the expiration of its period of duration and
109-25 has not revived its existence as provided in this Act, or (e) whose
109-26 charter was forfeited pursuant to the Tax Code, unless the
109-27 forfeiture has been set aside.
110-1 (2) The term "claim" means a right to payment,
110-2 damages, or property, whether liquidated or unliquidated, accrued
110-3 or contingent, matured or unmatured.
110-4 (3) The term "existing claim" means a claim that
110-5 existed before dissolution and is not otherwise barred by
110-6 limitations or a contractual obligation incurred after dissolution.
110-7 SECTION 2.20. Section A, Article 8.14, Texas Business
110-8 Corporation Act, is amended to read as follows:
110-9 A. A foreign corporation authorized to transact business in
110-10 this state may withdraw from this state upon procuring from the
110-11 Secretary of State a certificate of withdrawal. In order to
110-12 procure such certificate of withdrawal, such foreign corporation
110-13 shall deliver to the Secretary of State an application for
110-14 withdrawal, which shall set forth:
110-15 (1) The name of the corporation and the state or
110-16 country under the laws of which it is incorporated;
110-17 (2) That the corporation is not transacting business
110-18 in this state;
110-19 (3) That the corporation surrenders its authority to
110-20 transact business in this state;
110-21 (4) That the corporation revokes the authority of its
110-22 registered agent in this state to accept service of process and
110-23 consents that service of process in any action, suit, or proceeding
110-24 based upon any cause of action arising in this state during the
110-25 time the corporation was authorized to transact business in this
110-26 state may thereafter be made on such corporation by service thereof
110-27 on the Secretary of State;
111-1 (5) A post office address to which the Secretary of
111-2 State may mail a copy of any process against the corporation that
111-3 may be served on him;
111-4 (6) A statement that all sums due, or accrued, to this
111-5 state have been paid, or that adequate provision has been made for
111-6 the payment thereof; and
111-7 (7) A statement that all known creditors or claimants
111-8 have been paid or provided for <and that the corporation is not
111-9 involved in or threatened with litigation in any court in this
111-10 state>.
111-11 SECTION 2.21. Section A, Article 10.03, Texas Business
111-12 Corporation Act, is amended to read as follows:
111-13 A. The effectiveness of (i) the incorporation of a
111-14 corporation under this Act, (ii) an amendment to a corporation's
111-15 articles of incorporation, including an amendment effected pursuant
111-16 to a statement of resolution establishing a series of shares, (iii)
111-17 the restatement of articles of incorporation of a corporation, (iv)
111-18 a merger or share exchange, (v) a cancellation of redeemable or
111-19 reacquired shares or a reduction in stated capital, (vi) a
111-20 voluntary dissolution, (vii) the authorization or withdrawal of a
111-21 foreign corporation to transact business in this State, (viii) an
111-22 amendment to the certificate of authority of a foreign corporation,
111-23 (ix) a bylaw or agreement restricting the transfer of shares or
111-24 securities of a corporation pursuant to this Act, (x) a change in
111-25 registered office or registered agent, or (xi) a change of address
111-26 of a registered agent (each such act or document being a "Permitted
111-27 Act") may be made effective as of a time and date after the time
112-1 and date otherwise provided in this Act or may be made effective
112-2 upon the occurrence of events or facts that may occur in the
112-3 future, which events or facts may include future acts of any person
112-4 or entity, if:
112-5 (1) the articles, statement, application, <(i)> or
112-6 other filing that is required by this Act to be filed with the
112-7 Secretary of State to make effective such Permitted Act clearly and
112-8 expressly set forth, in addition to any other statement or
112-9 information required to be set forth therein, (i) the time and date
112-10 on which such Permitted Act is to become effective or (ii) if such
112-11 Permitted Act is to become effective upon the occurrence of events
112-12 or facts that may occur in the future, (a) the manner in which such
112-13 events or facts shall operate to cause such Permitted Act to become
112-14 effective and (b) the date of the 90th day after the date of the
112-15 filing of such articles, statement, application or other filing;
112-16 (2) in the case of a Permitted Act that is to become
112-17 effective as of a time or date after the time and date otherwise
112-18 provided in this Act, (i) such subsequent time and date is not more
112-19 than 90 days after the date of the filing of the articles,
112-20 statement, application, or other filing that is otherwise required
112-21 by this Act to be filed with the Secretary of State to make
112-22 effective such Permitted Act and (ii) the time on which the
112-23 Permitted Act is to become effective is not midnight or 12:00 p.m.;
112-24 and
112-25 (3) in the case of a Permitted Act that is to be made
112-26 effective upon the occurrence of events or facts that may occur in
112-27 the future, other than the mere passage of time, a statement that
113-1 all such events or facts upon which the effectiveness of such
113-2 Permitted Act is conditioned have been satisfied or waived, and of
113-3 the date on which such condition was satisfied or waived, is filed
113-4 with the Secretary of State within 90 days of the date of the
113-5 filing of the articles, statement, application or other filing that
113-6 is otherwise required by this Act for such Permitted Act to become
113-7 effective.
113-8 SECTION 2.22. Section 8(E), Texas Professional Association
113-9 Act (Article 1528f, Vernon's Texas Civil Statutes), is amended to
113-10 read as follows:
113-11 (E) Execution. The articles of association shall be signed
113-12 <and verified> by each of the members.
113-13 SECTION 2.23. Section 15, Texas Professional Association Act
113-14 (Article 1528f, Vernon's Texas Civil Statutes), is amended to read
113-15 as follows:
113-16 Sec. 15. Articles of Amendment. The articles <Articles> of
113-17 amendment shall be executed on behalf of <by> the association by an
113-18 officer <by its president or a vice-president and by its secretary
113-19 or an assistant secretary, and certified by one of the officers
113-20 signing such articles,> and shall set forth:
113-21 (1) The name and address of the association;
113-22 (2) If the amendment alters any provision of the
113-23 original or amended articles of association, an identification by
113-24 reference or description of the altered provision and a statement
113-25 of its text as it is amended to read. If the amendment is an
113-26 addition to the original or amended articles of association, a
113-27 statement of that fact and the full text of each provision added;
114-1 (3) The date of the adoption of the amendment; and
114-2 (4) A statement that the amendment was adopted in
114-3 accordance with the procedure for amendment stated in the articles
114-4 of association, or, if none is stated therein, a statement that the
114-5 amendment was adopted by two-thirds vote of its members.
114-6 SECTION 2.24. Section 18, Texas Professional Association Act
114-7 (Article 1528f, Vernon's Texas Civil Statutes), is amended to read
114-8 as follows:
114-9 Sec. 18. Articles of Dissolution. The articles of
114-10 dissolution shall be executed on behalf of <by> the association by
114-11 an officer <its president or a vice-president and by its secretary
114-12 or an assistant secretary, and verified by one of the officers
114-13 signing such articles>. If there are no living officers of the
114-14 association, the articles shall be executed by the legal
114-15 representative of the last surviving officer. The articles of
114-16 dissolution shall set forth:
114-17 (1) The name and address of the association;
114-18 (2) The names and respective addresses of its
114-19 officers;
114-20 (3) The names and respective addresses of the members
114-21 of its Board of Directors or Executive Committee; and
114-22 (4) A statement that the association is dissolving in
114-23 accordance with its articles of association or, if there is no
114-24 dissolution provision in the articles, by two-thirds vote of its
114-25 members.
114-26 SECTION 2.25. The Texas Professional Association Act
114-27 (Article 1528f, Vernon's Texas Civil Statutes) is amended by adding
115-1 Section 26 to read as follows:
115-2 Sec. 26. PENALTY FOR SIGNING FALSE DOCUMENT. (A) A person
115-3 commits an offense if the person signs a document the person knows
115-4 is false in any material respect with intent that the document be
115-5 delivered on behalf of a professional association to the Secretary
115-6 of State for filing.
115-7 (B) An offense under this section is a Class A misdemeanor.
115-8 SECTION 2.26. The change in law made by Section 2.05 of this
115-9 Act, amending Sections A and B, Article 2.21, Texas Business
115-10 Corporation Act, applies to the liability of a shareholder,
115-11 beneficial interest owner, or subscriber for a contractual
115-12 obligation of a corporation entered into before, on, or after the
115-13 effective date of this Act unless the liability has been finally
115-14 adjudicated by a court of competent jurisdiction before the
115-15 effective date of this Act.
115-16 SECTION 2.27. Section 21, Texas Professional Association Act
115-17 (Article 1528f, Vernon's Texas Civil Statutes), is amended to read
115-18 as follows:
115-19 Sec. 21. ANNUAL STATEMENT. A professional association shall
115-20 in June of each year file with the Secretary of State a statement
115-21 showing the name and address of the association; the names and
115-22 addresses of all members of the association, and all officers and
115-23 all members of the Board of Directors or Executive Committee; and
115-24 shall state <certify> that all members are licensed to perform the
115-25 type of professional service for which the association is formed.
115-26 The statement shall be on such form as the Secretary of State shall
115-27 prescribe and furnish. It shall be executed on behalf of the
116-1 association by an officer <signed by the president or a
116-2 vice-president and by the secretary or an assistant secretary of
116-3 the association, and verified by one of the officers signing the
116-4 statement>.
116-5 ARTICLE 3. EFFECTIVE DATE; EMERGENCY
116-6 SECTION 3.01. This Act takes effect September 1, 1993.
116-7 SECTION 3.02. The importance of this legislation and the
116-8 crowded condition of the calendars in both houses create an
116-9 emergency and an imperative public necessity that the
116-10 constitutional rule requiring bills to be read on three several
116-11 days in each house be suspended, and this rule is hereby suspended.