1-1 By: Turner of Harris H.B. No. 1494
1-2 (Senate Sponsor - Harris of Dallas)
1-3 (In the Senate - Received from the House May 10, 1993;
1-4 May 11, 1993, read first time and referred to Committee on
1-5 Jurisprudence; May 18, 1993, reported favorably by the following
1-6 vote: Yeas 4, Nays 0; May 18, 1993, sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Henderson x
1-10 Harris of Tarrant x
1-11 Brown x
1-12 Harris of Dallas x
1-13 Luna x
1-14 Parker x
1-15 West x
1-16 A BILL TO BE ENTITLED
1-17 AN ACT
1-18 relating to the organization and operation of nonprofit
1-19 corporations.
1-20 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-21 SECTION 1. Section A, Article 1.02, Texas Non-Profit
1-22 Corporation Act (Article 1396-1.02, Vernon's Texas Civil Statutes),
1-23 is amended by adding Subdivisions (14) and (15) to read as follows:
1-24 (14) "Director" means a member of the board of
1-25 directors of a corporation organized under this Act.
1-26 (15) "Ordinary care" means the care that an ordinarily
1-27 prudent person in a similar position would exercise under similar
1-28 circumstances.
1-29 SECTION 2. The Texas Non-Profit Corporation Act (Article
1-30 1396-1.01 et seq., Vernon's Texas Civil Statutes) is amended by
1-31 adding Article 2.04A to read as follows:
1-32 Art. 2.04A. RESERVED NAME. A. The exclusive right to the
1-33 use of a corporate name may be reserved by:
1-34 (1) a person intending to organize a corporation under
1-35 this Act;
1-36 (2) a domestic corporation intending to change its
1-37 name;
1-38 (3) a foreign corporation intending to apply for a
1-39 certificate of authority to conduct affairs in this State;
1-40 (4) a foreign corporation authorized to conduct
1-41 affairs in this State and intending to change its name; or
1-42 (5) a person intending to organize a foreign
1-43 corporation and intending to have that corporation apply for a
1-44 certificate of authority to conduct affairs in this State.
1-45 B. An application for name reservation or transfer of the
1-46 exclusive use of a specified corporate name is subject to the
1-47 procedures and period prescribed by Article 2.06, Texas Business
1-48 Corporation Act.
1-49 SECTION 3. Article 2.05, Texas Non-Profit Corporation Act
1-50 (Article 1396-2.05, Vernon's Texas Civil Statutes), is amended to
1-51 read as follows:
1-52 Art. 2.05. Registered Office and Registered Agent. <A.>
1-53 Each corporation shall have and continuously maintain in this
1-54 State:
1-55 (1) A registered office which may be, but need not be,
1-56 the same as its principal office.
1-57 (2) A registered agent, which agent may be an
1-58 individual resident in this State whose business office is
1-59 identical with such registered office, or a domestic corporation,
1-60 whether for profit or not for profit, or a foreign corporation,
1-61 whether for profit or not for profit, authorized to transact
1-62 business or to conduct its affairs in this State which has a
1-63 <principal or> business office identical with such registered
1-64 office.
1-65 <B. On or before the 15th day of November, 1961, each not
1-66 for profit corporation organized under the laws of this State prior
1-67 to the effective date of this Act shall designate its registered
1-68 office and appoint its registered agent by filing in the office of
2-1 the Secretary of State a statement setting forth:>
2-2 <(1) The name of the corporation.>
2-3 <(2) The street address of its registered office.>
2-4 <(3) The name of its registered agent.>
2-5 <(4) The street address of its registered agent.>
2-6 <(5) That the street address of its registered office
2-7 and the street address of its registered agent are the same.>
2-8 <(6) That such designation and appointment were
2-9 authorized by resolution duly adopted by its board of directors or,
2-10 if the management of the corporation is vested in its members
2-11 pursuant to Article 2.14C of this Act, by the members.>
2-12 <C. The statement required by this Article shall be executed
2-13 by the corporation by its president or a vice-president, and
2-14 verified by him. The original and a copy of the statement shall be
2-15 delivered to the Secretary of State. If the Secretary of State
2-16 finds that such statement conforms to the provisions of this Act,
2-17 he shall, when all fees have been paid as prescribed by law:>
2-18 <(1) Endorse on the original and the copy the word
2-19 "Filed" and the month, day, and year of the filing thereof.>
2-20 <(2) File the original in his office.>
2-21 <(3) Deliver the copy to the corporation or its
2-22 representative.>
2-23 <D. Upon such filing the designation of the registered
2-24 office and the appointment of the registered agent shall become
2-25 effective.>
2-26 SECTION 4. The Texas Non-Profit Corporation Act (Article
2-27 1396-1.01 et seq., Vernon's Texas Civil Statutes) is amended by
2-28 adding Article 2.06A to read as follows:
2-29 Art. 2.06A. CHANGE OF ADDRESS OF REGISTERED AGENT. A. The
2-30 location of the registered office in this State for a corporation
2-31 may be changed from one address to another by filing in the office
2-32 of the Secretary of State a statement setting forth:
2-33 (1) the name of the corporation represented by the
2-34 registered agent;
2-35 (2) the street address at which the registered agent
2-36 has maintained the registered office for that corporation;
2-37 (3) the new street address at which the registered
2-38 agent will maintain the registered office for that corporation; and
2-39 (4) a statement that notice of the change has been
2-40 given to the corporation in writing at least ten (10) days before
2-41 the date of the filing.
2-42 B. The statement required by this article shall be signed by
2-43 the registered agent or, if the agent is a corporation, by an
2-44 officer of the corporate agent on its behalf. If the registered
2-45 agent is simultaneously filing statements for more than one
2-46 corporation, each statement may contain facsimile signatures in the
2-47 execution. The original and one copy of the statement shall be
2-48 delivered to the Secretary of State. If the Secretary of State
2-49 finds that the statement conforms to this Act, the Secretary of
2-50 State shall:
2-51 (1) endorse on the original and the copy the word
2-52 "Filed," and the month, day, and year of the filing;
2-53 (2) file the original in the Secretary of State's
2-54 office; and
2-55 (3) return the copy to the registered agent.
2-56 C. The registered office of the corporation named in the
2-57 statement shall be changed to the new street address of the
2-58 registered agent on the filing of the statement by the Secretary of
2-59 State.
2-60 SECTION 5. Article 2.09, Texas Non-Profit Corporation Act
2-61 (Article 1396-2.09, Vernon's Texas Civil Statutes), is amended to
2-62 read as follows:
2-63 Art. 2.09. By-Laws. A. The initial by-laws of a
2-64 corporation shall be adopted by its board of directors or, if the
2-65 management of the corporation is vested in its members <pursuant to
2-66 Article 2.14C of this Act>, by the members. <The power to alter,
2-67 amend, or repeal the by-laws or to adopt new by-laws shall be
2-68 vested in the members, if any, but such power may be delegated by
2-69 the members to the board of directors. In the event the
2-70 corporation has no members, the power to alter, amend, or repeal
3-1 the by-laws or to adopt new by-laws shall be vested in the board of
3-2 directors.> The by-laws may contain any provisions for the
3-3 regulation and management of the affairs of the <a> corporation not
3-4 inconsistent with law or <with> the articles of incorporation.
3-5 B. A corporation's board of directors may amend or repeal
3-6 the corporation's by-laws, or adopt new by-laws, unless:
3-7 (1) the articles of incorporation or this Act reserves
3-8 the power exclusively to the members in whole or in part;
3-9 (2) the management of the corporation is vested in its
3-10 members; or
3-11 (3) the members in amending, repealing, or adopting a
3-12 particular by-law expressly provide that the board of directors may
3-13 not amend or repeal that by-law.
3-14 SECTION 6. Section A, Article 2.11, Texas Non-Profit
3-15 Corporation Act (Article 1396-2.11, Vernon's Texas Civil Statutes),
3-16 is amended to read as follows:
3-17 A. In the case of a corporation other than a church, written
3-18 or printed notice stating the place, day, and <or> hour of the
3-19 meeting and, in case of a special meeting, the purpose or purposes
3-20 for which the meeting is called, shall be delivered not less than
3-21 ten (10) nor more than sixty (60) <fifty (50)> days before the date
3-22 of the meeting, either personally, by facsimile transmission, or by
3-23 mail, by or at the direction of the president, or the secretary, or
3-24 the officers or persons calling the meeting, to each member
3-25 entitled to vote at such meeting. If mailed, such notice shall be
3-26 deemed to be delivered when deposited in the United States mail
3-27 addressed to the member at his address as it appears on the records
3-28 of the corporation, with postage thereon paid. If transmitted by
3-29 facsimile, notice is deemed to be delivered on successful
3-30 transmission of the facsimile.
3-31 SECTION 7. The Texas Non-Profit Corporation Act (Article
3-32 1396-1.01 et seq., Vernon's Texas Civil Statutes) is amended by
3-33 adding Articles 2.11A and 2.11B to read as follows:
3-34 Art. 2.11A. RECORD DATE FOR DETERMINING MEMBERS ENTITLED TO
3-35 NOTICE AND VOTE. A. The by-laws of a corporation may fix or
3-36 provide the manner of fixing a date as the record date for
3-37 determining the members entitled to notice of a members' meeting.
3-38 If the by-laws do not fix and do not provide for fixing the record
3-39 date, the board of directors may fix a future date as the record
3-40 date. If a record date is not fixed, members at the close of
3-41 business on the business day preceding the date on which notice is
3-42 given, or if notice is waived, at the close of business on the
3-43 business day preceding the date of the meeting, are entitled to
3-44 notice of the meeting.
3-45 B. The by-laws of a corporation may fix or provide the
3-46 manner of fixing a date as the record date for determining the
3-47 members entitled to vote at a members' meeting. If the by-laws do
3-48 not fix and do not provide for fixing a record date, the board may
3-49 fix a future date as the record date. If a record date is not
3-50 fixed, members on the date of the meeting who are otherwise
3-51 eligible to vote are entitled to vote at the meeting.
3-52 C. The by-laws may fix or provide the manner for fixing a
3-53 date as the record date for the purpose of determining the members
3-54 entitled to exercise any rights regarding any other lawful action.
3-55 If the by-laws do not fix and do not provide for fixing a record
3-56 date, the board of directors may fix in advance a record date. If
3-57 a record date is not fixed, members at the close of business on the
3-58 date on which the board of directors adopts the resolution relating
3-59 to the record date, or the 60th day before the date of the other
3-60 action, whichever is later, are entitled to exercise those rights.
3-61 D. A record date fixed under this section may not be more
3-62 than sixty (60) days before the date of the meeting or action that
3-63 requires the determination of the members.
3-64 E. A determination of members entitled to notice of or to
3-65 vote at a members' meeting is effective for any adjournment of the
3-66 meeting unless the board fixes a new date for determining the right
3-67 to notice or the right to vote. The board must fix a new date for
3-68 determining the right to notice or the right to vote if the meeting
3-69 is adjourned to a date more than ninety (90) days after the record
3-70 date for determining members entitled to notice of the original
4-1 meeting.
4-2 Art. 2.11B. VOTING MEMBERS' LIST FOR MEETING. A. After
4-3 fixing a record date for the notice of a meeting, a corporation
4-4 shall prepare an alphabetical list of the names of all its voting
4-5 members who are entitled to notice of the meeting. The list must
4-6 show the address and number of votes each voting member is entitled
4-7 to cast at the meeting. The corporation shall maintain, through
4-8 the time of the members' meeting, a list of members who are
4-9 entitled to vote at the meeting but are not entitled to notice of
4-10 the meeting. This list shall be prepared on the same basis and be
4-11 part of the list of voting members.
4-12 B. Not later than two (2) business days after the date
4-13 notice is given of a meeting for which a list was prepared, as
4-14 provided by Section A of this article, and continuing through the
4-15 meeting, the list of voting members must be available for
4-16 inspection by any member entitled to vote at the meeting for the
4-17 purpose of communication with other members concerning the meeting
4-18 at the corporation's principal office or at a reasonable place
4-19 identified in the meeting notice in the city where the meeting will
4-20 be held. A voting member or voting member's agent or attorney is
4-21 entitled on written demand to inspect and, subject to the
4-22 limitations of Section B, Article 2.23, of this Act to copy the
4-23 list at a reasonable time and at the member's expense during the
4-24 period it is available for inspection.
4-25 C. The corporation shall make the list of voting members
4-26 available at the meeting, and any voting member or voting member's
4-27 agent or attorney is entitled to inspect the list at any time
4-28 during the meeting or any adjournment.
4-29 SECTION 8. Sections A and B, Article 2.13, Texas Non-Profit
4-30 Corporation Act (Article 1396-2.13, Vernon's Texas Civil Statutes),
4-31 are amended to read as follows:
4-32 A. Each member, regardless of class, shall be entitled to
4-33 one (1) vote on each matter submitted to a vote <at a meeting> of
4-34 the members, except to the extent that the voting rights of members
4-35 of any class or classes are limited, enlarged, or denied by the
4-36 articles of incorporation or the by-laws.
4-37 B. A member may vote in person or, unless the articles of
4-38 incorporation or the by-laws otherwise provide, may vote by proxy
4-39 executed in writing by the member or by his duly authorized
4-40 attorney-in-fact. No proxy shall be valid after eleven (11) months
4-41 from the date of its execution, unless otherwise provided in the
4-42 proxy<; provided, however, proxies executed before and in existence
4-43 on the effective date of this Act shall continue in and have such
4-44 effect as they then have in accordance with whatever may then be
4-45 their terms>. Each proxy shall be revocable unless expressly
4-46 provided therein to be irrevocable, and in no event shall it remain
4-47 irrevocable for more than eleven (11) months. Where directors or
4-48 officers are to be elected by members, the by-laws may provide that
4-49 such elections may be conducted by mail, by facsimile transmission,
4-50 or by any combination of the two.
4-51 SECTION 9. Article 2.14, Texas Non-Profit Corporation Act
4-52 (Article 1396-2.14, Vernon's Texas Civil Statutes), is amended to
4-53 read as follows:
4-54 Art. 2.14. BOARD OF DIRECTORS <OR TRUSTEES>. A. The
4-55 affairs of a corporation shall be managed by a board of directors<,
4-56 or trustees>. Directors <or trustees> need not be residents of
4-57 this State or members of the corporation unless the articles of
4-58 incorporation or the by-laws so require. The articles of
4-59 incorporation or the by-laws may prescribe other qualifications for
4-60 directors <or trustees>.
4-61 B. Boards of directors <or trustees> of religious,
4-62 charitable, educational, or eleemosynary institutions may be
4-63 affiliated with, elected and controlled by a convention, conference
4-64 or association organized under the laws of this State or another
4-65 state, whether incorporated or unincorporated, whose membership is
4-66 composed of representatives, delegates, or messengers from any
4-67 church or other religious association.
4-68 C. The articles of incorporation of a corporation <church>
4-69 may vest the management of the affairs of the corporation in its
4-70 members. If the corporation <church> has a board of directors <or
5-1 similar body>, it may limit the authority of the <such> board of
5-2 directors to whatever extent as may be set forth in the articles of
5-3 incorporation or by-laws. Except for a church organized and
5-4 operating under a congregational system, was incorporated before
5-5 January 1, 1994, and has the management of its affairs vested in
5-6 its members, a <A> corporation <church organized and operating
5-7 under a congregational system and incorporated prior to the
5-8 effective date of this Act> shall be deemed to have vested the
5-9 management of the affairs of the corporation in its board of
5-10 directors <members> in the absence of an express provision to the
5-11 contrary in the articles of incorporation or the by-laws.
5-12 D. The board of directors <In the case of a corporation
5-13 which is a church, the Board> may be designated by any name
5-14 appropriate to the customs, usages, or tenets of the corporation
5-15 <church>.
5-16 E. The board of directors <or trustees> of a <non-profit>
5-17 corporation may be elected (in whole or in part) by one or more
5-18 associations <another non-profit corporation> or corporations,
5-19 organized under the laws of this State or another state <domestic
5-20 or foreign,> if (1) the articles of incorporation or the by-laws
5-21 <bylaws> of the former corporation so provide, and (2) the former
5-22 corporation has no members with voting rights.
5-23 F. The articles of incorporation or the by-laws may provide
5-24 that any one or more persons may be ex-officio members of the board
5-25 of directors. A person designated as an ex-officio member of the
5-26 board of directors is entitled to notice of and to attend meetings
5-27 of the board of directors. The ex-officio member is not entitled
5-28 to vote unless otherwise provided in the articles of incorporation
5-29 or the by-laws. An ex-officio member of the board of directors who
5-30 is not entitled to vote does not have the duties or liabilities of
5-31 a director as provided in this Act.
5-32 SECTION 10. Article 2.15, Texas Non-Profit Corporation Act
5-33 (Article 1396-2.15, Vernon's Texas Civil Statutes), is amended to
5-34 read as follows:
5-35 Art. 2.15. Number, Election, Classification, and Removal of
5-36 Directors. A. The number of directors of a corporation shall be
5-37 not less than three (3). Subject to such limitation, the number of
5-38 directors shall be fixed by, or in the manner provided in, the
5-39 articles of incorporation or the by-laws, except as to the number
5-40 constituting the initial board of directors, which number shall be
5-41 fixed by the articles of incorporation. The number of directors
5-42 may be increased or decreased from time to time by amendment to, or
5-43 in the manner provided in, the articles of incorporation or the
5-44 by-laws, but no decrease shall have the effect of shortening the
5-45 term of any incumbent director. The number of directors may not be
5-46 decreased to fewer than three (3). In the absence of a by-law or a
5-47 provision of the articles of incorporation fixing the number of
5-48 directors or providing for the manner in which the number of
5-49 directors shall be fixed, the number of directors shall be the same
5-50 as the number constituting the initial board of directors as fixed
5-51 by the articles of incorporation.
5-52 B. The directors constituting the initial board of directors
5-53 shall be named in the articles of incorporation and shall hold
5-54 office until the first annual election of directors or for such
5-55 other period as may be specified in the articles of incorporation
5-56 or the by-laws. Thereafter, directors shall be elected, <or>
5-57 appointed, or designated in the manner and for the terms provided
5-58 in the articles of incorporation or the by-laws. If the method of
5-59 election, designation, or appointment is not provided in the
5-60 articles of incorporation or by-laws, the directors, other than the
5-61 initial directors, shall be elected by the board of directors. In
5-62 the absence of a provision in the articles of incorporation or the
5-63 by-laws fixing the term of office, a director shall hold office
5-64 until the next annual election of directors and until his successor
5-65 shall have been elected, <or> appointed, or designated and
5-66 qualified.
5-67 C. Directors may be divided into classes and the terms of
5-68 office of the several classes need not be uniform. Unless removed
5-69 in accordance with the provisions of the articles of incorporation
5-70 or the by-laws, each director shall hold office for the term for
6-1 which he is elected, <or> appointed, or designated and until his
6-2 successor shall have been elected, <or> appointed, or designated
6-3 and qualified.
6-4 D. A director may be removed from office pursuant to any
6-5 procedure therefor provided in the articles of incorporation or
6-6 by-laws. In the absence of a provision providing for removal, a
6-7 director may be removed from office, with or without cause, by the
6-8 persons entitled to elect, designate, or appoint the director. If
6-9 the director was elected to office, removal requires an affirmative
6-10 vote equal to the vote necessary to elect the director.
6-11 SECTION 11. Article 2.20, Texas Non-Profit Corporation Act
6-12 (Article 1396-2.20, Vernon's Texas Civil Statutes), is amended to
6-13 read as follows:
6-14 Art. 2.20. Officers. A. The officers of a corporation
6-15 shall consist of a president and a secretary and may also consist
6-16 of<,> one or more vice-presidents, <a secretary,> a treasurer, and
6-17 such other officers and assistant officers as may be deemed
6-18 necessary, each of whom shall be elected or appointed at such time
6-19 and in such manner and for such terms not exceeding three (3) years
6-20 as may be prescribed in the articles of incorporation or the
6-21 by-laws. In the absence of any such provisions, all officers shall
6-22 be elected or appointed annually by the board of directors, or, if
6-23 the management of the corporation is vested in its members
6-24 <pursuant to Article 2.14C of this Act>, by the members. Any two
6-25 or more offices may be held by the same person, except the offices
6-26 of president and secretary. A committee duly designated may
6-27 perform the functions of any officer and the functions of any two
6-28 or more officers may be performed by a single committee, including
6-29 the functions of both president and secretary.
6-30 B. <The articles of incorporation or the by-laws may provide
6-31 that any one or more officers of the corporation shall be
6-32 ex-officio members of the board of directors.>
6-33 <C.> The officers of a corporation may be designated by such
6-34 other or additional titles as may be provided in the articles of
6-35 incorporation or the by-laws.
6-36 C. <D.> In the case of a corporation which is a church, it
6-37 shall not be necessary that there be officers as provided herein,
6-38 but such duties and responsibilities may be vested in the board of
6-39 directors <trustees> or other designated body in any manner
6-40 provided for in the articles of incorporation or the by-laws.
6-41 D. In the discharge of a duty imposed or power conferred on
6-42 an officer of a corporation, the officer may in good faith and with
6-43 ordinary care rely on information, opinions, reports, or
6-44 statements, including financial statements and other financial
6-45 data, concerning the corporation or another person, that were
6-46 prepared or presented by:
6-47 (1) one or more other officers or employees of the
6-48 corporation, including members of the board of directors;
6-49 (2) legal counsel, public accountants, or other
6-50 persons as to matters the officer reasonably believes are within
6-51 the person's professional or expert competence; or
6-52 (3) in the case of religious corporations, religious
6-53 authorities and ministers, priests, rabbis, or other persons whose
6-54 position or duties in the religious organization the officer
6-55 believes justify reliance and confidence and whom the officer
6-56 believes to be reliable and competent in the matters presented.
6-57 E. An officer is not relying in good faith as required by
6-58 Section D of this article if the officer has knowledge concerning
6-59 the matter in question that makes reliance otherwise permitted by
6-60 Section D of this article unwarranted.
6-61 SECTION 12. Section B, Article 2.23, Texas Non-Profit
6-62 Corporation Act (Article 1396-2.23, Vernon's Texas Civil Statutes),
6-63 is amended to read as follows:
6-64 B. A member of a corporation, on written demand stating the
6-65 purpose of the demand, has the right to examine and copy, in person
6-66 or by agent, accountant, or attorney, at any reasonable time, <All
6-67 books and records of a corporation may be inspected by any member,
6-68 or his agent or attorney,> for any proper purpose, the books and
6-69 records of the corporation relevant to that purpose, at the expense
6-70 of the member <at any reasonable time>.
7-1 SECTION 13. Section B, Article 2.23A, Texas Non-Profit
7-2 Corporation Act (Article 1396-2.23A, Vernon's Texas Civil
7-3 Statutes), is amended to read as follows:
7-4 B. Based on these records, the board of directors <or
7-5 trustees> shall annually prepare or approve a report of the
7-6 financial activity of the corporation for the preceding year. The
7-7 report must conform to accounting standards as promulgated by the
7-8 American Institute of Certified Public Accountants and must include
7-9 a statement of support, revenue, and expenses and changes in fund
7-10 balances, a statement of functional expenses, and balance sheets
7-11 for all funds.
7-12 SECTION 14. Article 2.26, Texas Non-Profit Corporation Act
7-13 (Article 1396-2.26, Vernon's Texas Civil Statutes), is amended to
7-14 read as follows:
7-15 Art. 2.26. LIABILITY OF DIRECTORS IN CERTAIN CASES <AND
7-16 OTHER PERSONS FOR WRONGFUL DISTRIBUTION OF ASSETS>. A. In
7-17 addition to any other liabilities imposed by law upon directors of
7-18 a corporation, the directors who vote for or assent to any
7-19 distribution of assets other than in payment of its debts, when the
7-20 corporation is insolvent or when such distribution would render the
7-21 corporation insolvent, or during the liquidation of the corporation
7-22 without the payment and discharge of or making adequate provisions
7-23 for all known debts, obligations and liabilities of the
7-24 corporation, shall be jointly and severally liable to the
7-25 corporation for the value of such assets which are thus
7-26 distributed, to the extent that such debts, obligations and
7-27 liabilities of the corporation are not thereafter paid and
7-28 discharged.
7-29 B. A director of a corporation who is present at a meeting
7-30 of its board of directors at which action was taken on such
7-31 corporate matter shall be presumed to have assented to such action
7-32 unless his dissent shall be entered in the minutes of the meeting
7-33 or unless he shall file his written dissent to such action with the
7-34 person acting as the secretary of the meeting before the
7-35 adjournment thereof or shall forward such dissent by registered
7-36 mail to the secretary of the corporation immediately after the
7-37 adjournment of the meeting. Such right to dissent shall not apply
7-38 to a director who voted in favor of the action.
7-39 C. A director shall not be liable under Section A of this
7-40 Article if, in voting for or assenting to a distribution, the
7-41 director:
7-42 (1) relied in good faith and with ordinary care on
7-43 information, opinions, reports, or statements, including financial
7-44 statements and other financial data, concerning the corporation or
7-45 another person that were prepared or presented by:
7-46 (a) one or more officers or employees of the
7-47 corporation;
7-48 (b) legal counsel, public accountants, or other
7-49 persons as to matters the director reasonably believes are within
7-50 the person's professional or expert competence; or
7-51 (c) a committee of the board of directors of
7-52 which the director is not a member;
7-53 (2) acting in good faith and with ordinary care,
7-54 considered the assets of the corporation to be at least that of
7-55 their book value; or
7-56 (3) in determining whether the corporation made
7-57 adequate provision for payment, satisfaction, or discharge of all
7-58 of its liabilities and obligations as provided in Article 6.03 of
7-59 this Act, relied in good faith and with ordinary care on financial
7-60 statements of, or other information concerning, a person who was or
7-61 became contractually obligated to pay, satisfy, or discharge some
7-62 or all of those liabilities or obligations <the exercise of
7-63 ordinary care, he relied and acted in good faith upon written
7-64 financial statements of the corporation represented to him to be
7-65 correct by the president or by the officer of such corporation
7-66 having charge of its books of account, or certified by an
7-67 independent public or certified public accountant or firm of such
7-68 accountants fairly to reflect the financial condition of such
7-69 corporation, nor shall he be so liable if, in the exercise of
7-70 ordinary care and good faith, in determining the amount available
8-1 for such distribution, he considered the assets to be of their book
8-2 value>.
8-3 D. A director shall not be liable under this Article if, in
8-4 the exercise of ordinary care, he acted in good faith and in
8-5 reliance upon the written opinion of an attorney for the
8-6 corporation.
8-7 E. A director against whom a claim shall be asserted under
8-8 this Article and who shall be held liable thereon shall be entitled
8-9 to contribution from persons who accepted or received such
8-10 distribution knowing such distribution to have been made in
8-11 violation of this Article, in proportion to the amounts received by
8-12 them respectively.
8-13 SECTION 15. Sections A and C, Article 2.27, Texas Non-Profit
8-14 Corporation Act (Article 1396-2.27, Vernon's Texas Civil Statutes),
8-15 are amended to read as follows:
8-16 A. Notwithstanding any provision in this Act or in the
8-17 articles of incorporation to the contrary (except as provided in
8-18 Section B), the articles of incorporation of each corporation which
8-19 is a private foundation described in Section 509 of the Internal
8-20 Revenue Code of 1986 <1954> shall be deemed to contain the
8-21 following provisions: "The corporation shall make distributions at
8-22 such time and in such manner as not to subject it to tax under
8-23 Section 4942 of the Internal Revenue Code of 1986 <1954>; the
8-24 corporation shall not engage in any act of self-dealing which would
8-25 be subject to tax under Section 4941 of the Code; the corporation
8-26 shall not retain any excess business holdings which would subject
8-27 it to tax under Section 4943 of the Code; the corporation shall
8-28 not make any investments which would subject it to tax under
8-29 Section 4944 of the Code; and the corporation shall not make any
8-30 taxable expenditures which would subject it to tax under Section
8-31 4945 of the Code." With respect to any such corporation organized
8-32 prior to January 1, 1970, this Section A shall apply only for its
8-33 taxable years beginning on or after January 1, 1972.
8-34 C. All references in this Article to "the Code" are to the
8-35 Internal Revenue Code of 1986 <1954>, and all references in this
8-36 Article to specific sections of the Code include corresponding
8-37 provisions of any subsequent Federal tax laws.
8-38 SECTION 16. The Texas Non-Profit Corporation Act (Article
8-39 1396-1.01 et seq., Vernon's Texas Civil Statutes) is amended by
8-40 adding Articles 2.28, 2.29, and 2.30 to read as follows:
8-41 Art. 2.28. GENERAL STANDARDS FOR DIRECTORS. A. A director
8-42 shall discharge the director's duties, including the director's
8-43 duties as a member of a committee, in good faith, with ordinary
8-44 care, and in a manner the director reasonably believes to be in the
8-45 best interest of the corporation.
8-46 B. In the discharge of any duty imposed or power conferred
8-47 on a director, including as a member of a committee, the director
8-48 may in good faith rely on information, opinions, reports, or
8-49 statements, including financial statements and other financial
8-50 data, concerning the corporation or another person that were
8-51 prepared or presented by:
8-52 (1) one or more officers or employees of the
8-53 corporation;
8-54 (2) legal counsel, public accountants, or other
8-55 persons as to matters the director reasonably believes are within
8-56 the person's professional or expert competence;
8-57 (3) a committee of the board of directors of which the
8-58 director is not a member; or
8-59 (4) in the case of religious corporations, religious
8-60 authorities and ministers, priests, rabbis, or other persons whose
8-61 position or duties in the religious organization the director
8-62 believes justify reliance and confidence and whom the director
8-63 believes to be reliable and competent in the matters presented.
8-64 C. A director is not relying in good faith, within the
8-65 meaning of this article, if the director has knowledge concerning a
8-66 matter in question that makes reliance otherwise permitted by this
8-67 article unwarranted.
8-68 D. A director is not liable to the corporation, any member,
8-69 or any other person for any action taken or not taken as a director
8-70 if the director acted in compliance with this article. A person
9-1 seeking to establish liability of a director must prove that the
9-2 director has not acted:
9-3 (1) in good faith;
9-4 (2) with ordinary care; and
9-5 (3) in a manner the director reasonably believes to be
9-6 in the best interest of the corporation.
9-7 E. A director is not deemed to have the duties of a trustee
9-8 of a trust with respect to the corporation or with respect to any
9-9 property held or administered by the corporation, including
9-10 property that may be subject to restrictions imposed by the donor
9-11 or transferor of the property.
9-12 Art. 2.29. DELEGATION OF INVESTMENT AUTHORITY. A. The
9-13 board of directors of a corporation may:
9-14 (1) from time to time contract with investment
9-15 counsel, trust companies, banks, investment advisors, or investment
9-16 managers; and
9-17 (2) confer on those advisors full power and authority
9-18 to:
9-19 (a) purchase or otherwise acquire stocks, bonds,
9-20 securities, and other investments on behalf of the corporation; and
9-21 (b) sell, transfer, or otherwise dispose of any
9-22 of the corporation's assets and properties at a time and for a
9-23 consideration that the advisor deems appropriate.
9-24 B. The board of directors also may:
9-25 (1) confer on an advisor described by Section A of
9-26 this article other powers regarding the corporation's investments
9-27 as the board of directors deems appropriate; and
9-28 (2) authorize the advisor to hold title to any of the
9-29 corporation's assets and properties in its own name for the benefit
9-30 of the corporation or in the name of a nominee for the benefit of
9-31 the corporation.
9-32 C. The board of directors has no liability regarding any
9-33 action taken or omitted by an advisor engaged under this article if
9-34 the board of directors acted in good faith and with ordinary care
9-35 in selecting the advisor. The board of directors may remove or
9-36 replace the advisor, with or without cause, if they deem that
9-37 action appropriate or necessary.
9-38 Art. 2.30. INTERESTED DIRECTORS. A. A contract or
9-39 transaction between a corporation and one or more of its directors,
9-40 officers, or members, or between a corporation and any other
9-41 corporation, partnership, association, or other organization in
9-42 which one or more of its directors, officers, or members are
9-43 directors, officers, or members, or have a financial interest, is
9-44 not void or voidable solely for that reason, solely because the
9-45 director, officer, or member is present at or participates in the
9-46 meeting of the board or committee of the board or of the members
9-47 that authorizes the contract or transaction, or solely because the
9-48 director's, officer's, or member's votes are counted for that
9-49 purpose, if:
9-50 (1) the material facts as to the relationship or
9-51 interest and as to the contract or transaction are disclosed or are
9-52 known to the board of directors, the committee, or the members, and
9-53 the board, committee, or members in good faith and with ordinary
9-54 care authorizes the contract or transaction by the affirmative vote
9-55 of a majority of the disinterested directors or members, even
9-56 though the disinterested directors or members are less than a
9-57 quorum;
9-58 (2) the material facts as to the relationship or
9-59 interest and as to the contract or transaction are disclosed or are
9-60 known to the members entitled to vote on the contract or
9-61 transaction, and the contract or transaction is specifically
9-62 approved in good faith and with ordinary care by vote of the
9-63 disinterested members; or
9-64 (3) the contract or transaction is fair to the
9-65 corporation when it is authorized, approved, or ratified by the
9-66 board of directors, a committee of the board, or the members.
9-67 B. Common or interested directors or members may be counted
9-68 in determining the presence of a quorum at a meeting of the board
9-69 of directors, of a committee, or of the members that authorizes the
9-70 contract or transaction.
10-1 SECTION 17. Sections A and D, Article 3.02, Texas Non-Profit
10-2 Corporation Act (Article 1396-3.02, Vernon's Texas Civil Statutes),
10-3 are amended to read as follows:
10-4 A. The articles of incorporation shall set forth:
10-5 (1) The name of the corporation.
10-6 (2) A statement that the corporation is a non-profit
10-7 corporation.
10-8 (3) The period of duration, which may be perpetual.
10-9 (4) The purpose or purposes for which the corporation
10-10 is organized.
10-11 (5) If the corporation is to have no members, a
10-12 statement to that effect.
10-13 (6) If <the corporation is a church and the>
10-14 management of the <its> affairs of the corporation is to be vested
10-15 in its members <pursuant to Article 2.14C of this Act>, a statement
10-16 to that effect.
10-17 (7) Any provision, not inconsistent with law,
10-18 including any provision which under this Act is required or
10-19 permitted to be set forth in the bylaws, which the incorporators
10-20 elect to set forth in the articles of incorporation for the
10-21 regulation of the internal affairs of the corporation.
10-22 (8) The street address of its initial registered
10-23 office and the name of its initial registered agent at such street
10-24 address.
10-25 (9) The number of directors <or trustees> constituting
10-26 the initial board of directors <or trustees>, and the names and
10-27 addresses of the persons who are to serve as the initial directors
10-28 unless the management of the corporation is vested in its members,
10-29 in which event a statement to that effect shall be set forth <or
10-30 trustees. A church vesting management of its affairs in its
10-31 members pursuant to Article 2.14C of this Act may, in lieu of
10-32 providing for a board of directors or trustees, set forth in the
10-33 articles of incorporation the officers or other body designated
10-34 pursuant to Article 2.20D of this Act>.
10-35 (10) The name and street or post office address of
10-36 each incorporator.
10-37 (11) If the corporation is to be authorized on its
10-38 dissolution to distribute its assets in a manner other than as
10-39 provided by Article 6.02(3) of this Act, a statement describing the
10-40 manner of distribution of the corporation's assets.
10-41 D. Unless the articles of incorporation provide that a
10-42 change in the number of directors <or trustees> shall be made only
10-43 by amendment to the articles of incorporation, a change in the
10-44 number of directors <or trustees> made by amendment to the by-laws
10-45 shall be controlling. In all other cases, whenever a provision of
10-46 the articles of incorporation is inconsistent with a by-law, the
10-47 provision of the articles of incorporation shall be controlling.
10-48 SECTION 18. Sections A and C, Article 3.05, Texas Non-Profit
10-49 Corporation Act (Article 1396-3.05, Vernon's Texas Civil Statutes),
10-50 are amended to read as follows:
10-51 A. After the issuance of the certificate of incorporation,
10-52 an organization meeting of the board of directors named in the
10-53 articles of incorporation shall be held, either within or without
10-54 this State, at the call of <a majority of> the incorporators or the
10-55 call of a majority of the directors named in the articles of
10-56 incorporation, for the purpose of adopting by-laws, electing
10-57 officers, and for such other purposes as may come before the
10-58 meeting. The incorporators or directors calling the meeting shall
10-59 give at least three (3) days' notice thereof by mail to each
10-60 director named in the articles of incorporation, which notice shall
10-61 state the time and place of the meeting.
10-62 C. If the management of a corporation <church> is vested in
10-63 its members <pursuant to Article 2.14C of this Act>, the
10-64 organization meeting shall be held by the members upon the call of
10-65 any <a majority> of the incorporators. The incorporators calling
10-66 the meeting shall (a) give at least three (3) days' notice by mail
10-67 to each member stating the time and place of the meeting, or shall
10-68 (b) make an oral announcement of the time and place of meeting at
10-69 a regularly scheduled worship service prior to such meeting if the
10-70 corporation is a church, or shall (c) give such notice of the
11-1 meeting as may be provided for in the articles of incorporation.
11-2 SECTION 19. Section A, Article 4.02, Texas Non-Profit
11-3 Corporation Act (Article 1396-4.02, Vernon's Texas Civil Statutes),
11-4 is amended to read as follows:
11-5 A. Amendments to the articles of incorporation may be made
11-6 in the following manner:
11-7 (1) Except as provided in Section A(4) of this
11-8 article, where <Where> there are members having voting rights, the
11-9 board of directors shall adopt a resolution setting forth the
11-10 proposed amendment and directing that it be submitted to a vote at
11-11 a meeting of members having voting rights, which may be either an
11-12 annual or a special meeting. Written or printed notice setting
11-13 forth the proposed amendment or a summary of the changes to be
11-14 effected thereby shall be given to each member entitled to vote at
11-15 such meeting within the time and in the manner provided in this Act
11-16 for the giving of notice of meetings of members. The proposed
11-17 amendment shall be adopted upon receiving at least two-thirds of
11-18 the votes which members present at such meeting in person or by
11-19 proxy are entitled to cast, unless any class of members is entitled
11-20 to vote as a class thereon by the terms of the articles of
11-21 incorporation or of the by-laws, in which event the proposed
11-22 amendment shall not be adopted unless it also receives at least
11-23 two-thirds of the votes which the members of each such class who
11-24 are present at such meeting in person or by proxy are entitled to
11-25 cast.
11-26 (2) Where there are no members, <or> no members having
11-27 voting rights, or in the case of an amendment under Section A(4) of
11-28 this article, an amendment shall be adopted at a meeting of the
11-29 board of directors upon receiving the vote of a majority of the
11-30 directors in office.
11-31 (3) Where the management of the affairs of the
11-32 corporation is vested in the members pursuant to Article 2.14C of
11-33 this Act, the proposed amendment shall be submitted to a vote at a
11-34 meeting of members which may be an annual, a regular, or a special
11-35 meeting. Except as otherwise provided in the articles of
11-36 incorporation or the by-laws, notice setting forth the proposed
11-37 amendment or a summary of the changes to be effected thereby shall
11-38 be given to the members within the time and in the manner provided
11-39 in this Act for the giving of notice of meetings of members. The
11-40 proposed amendment shall be adopted upon receiving at least
11-41 two-thirds of the votes of members present at such meeting.
11-42 (4) Unless the articles of incorporation provide
11-43 otherwise, the board of directors of a corporation with members
11-44 having voting rights may adopt one or more of the following
11-45 amendments to the articles of incorporation without member
11-46 approval:
11-47 (a) extend the duration of the corporation if it
11-48 was incorporated when limited duration was required by law;
11-49 (b) delete the names and addresses of the
11-50 initial directors;
11-51 (c) delete the name and address of the initial
11-52 registered agent or registered office, if a statement of change is
11-53 on file with the Secretary of State; or
11-54 (d) change the corporate name by substituting
11-55 the word "corporation," "incorporated," "company," "limited," or
11-56 the abbreviation "corp.," "inc.," "co.," "ltd.," for a similar word
11-57 or abbreviation in the name, or by adding, deleting, or changing a
11-58 geographical attribution to the name.
11-59 SECTION 20. Section A, Article 4.06, Texas Non-Profit
11-60 Corporation Act (Article 1396-4.06, Vernon's Texas Civil Statutes),
11-61 is amended to read as follows:
11-62 A. A corporation may, by following the procedure to amend
11-63 the articles of incorporation provided by this Act, authorize,
11-64 execute and file restated articles of incorporation, except that
11-65 member approval, if the corporation has members with voting rights,
11-66 is not required if no amendments are made. The restated articles
11-67 of incorporation <which> may restate either:
11-68 (1) The entire text of the articles of incorporation
11-69 as amended or supplemented by all certificates of amendment
11-70 previously issued by the Secretary of State; or
12-1 (2) The entire text of the articles of incorporation
12-2 as amended or supplemented by all certificates of amendment
12-3 previously issued by the Secretary of State, and as further amended
12-4 by such restated articles of incorporation.
12-5 SECTION 21. Article 5.05, Texas Non-Profit Corporation Act
12-6 (Article 1396-5.05, Vernon's Texas Civil Statutes), is amended to
12-7 read as follows:
12-8 Art. 5.05. Effective Date of Merger or Consolidation of
12-9 Domestic Corporations. A. Except as provided by Article 10.07 of
12-10 this Act, on <Upon> the issuance of the certificate of merger or
12-11 the certificate of consolidation by the Secretary of State, the
12-12 merger or consolidation of domestic corporations shall be effected.
12-13 SECTION 22. Article 5.08, Texas Non-Profit Corporation Act
12-14 (Article 1396-5.08, Vernon's Texas Civil Statutes), is amended to
12-15 read as follows:
12-16 Art. 5.08. Conveyance by Corporation. A. Any corporation
12-17 may convey land by deed, with or without the seal of the
12-18 corporation, signed by an officer <the president or vice-president>
12-19 or attorney in fact of the corporation when authorized by
12-20 appropriate resolution of the board of directors or members. Such
12-21 deed, when acknowledged by such officer or attorney in fact to be
12-22 the act of the corporation, or proved in the manner prescribed for
12-23 other conveyances of lands, may be recorded in like manner and with
12-24 the same effect as other deeds. Any such deed when recorded, if
12-25 signed by an officer <the president or any vice-president> of the
12-26 corporation, shall constitute prima facie evidence that such
12-27 resolution of the board of directors or members was duly adopted.
12-28 SECTION 23. Article 6.02, Texas Non-Profit Corporation Act
12-29 (Article 1396-6.02, Vernon's Texas Civil Statutes), is amended to
12-30 read as follows:
12-31 Art. 6.02. Application and Distribution of Assets. A. The
12-32 assets of a corporation in the process of dissolution shall be
12-33 applied and distributed as follows:
12-34 (1) All liabilities and obligations of the corporation
12-35 shall be paid, satisfied and discharged; in case its property and
12-36 assets are not sufficient to satisfy or discharge all the
12-37 corporation's liabilities and obligations, the corporation shall
12-38 apply them so far as they will go to the just and equitable payment
12-39 of the liabilities and obligations.
12-40 (2) Assets held by the corporation upon condition
12-41 requiring return, transfer or conveyance, which condition occurs by
12-42 reason of the dissolution, shall be returned, transferred or
12-43 conveyed in accordance with such requirements.
12-44 (3) Unless provided otherwise by a provision of the
12-45 corporation's articles of incorporation <that refers to this
12-46 subsection>, the remaining assets of the corporation shall be
12-47 distributed only for tax exempt purposes to one or more
12-48 organizations which are exempt under Section 501(c)(3), Internal
12-49 Revenue Code of 1986 <1954> (26 U.S.C. Section 501(c)(3)), or its
12-50 successor statute, or which are described in Section 170(c)(1) or
12-51 (2), Internal Revenue Code of 1986 <1954> (26 U.S.C. Section
12-52 170(c)(1) or (2)), or its successor statute, pursuant to a plan of
12-53 distribution adopted as provided in this Act. A district court of
12-54 the county in which the corporation's principal office is located
12-55 shall distribute to one or more organizations exempt under Section
12-56 501(c)(3) or described in Section 170(c)(1) or (2), or their
12-57 successor statutes, the remaining assets of the corporation not
12-58 distributed under the plan of distribution. Any distribution by
12-59 the court shall be made in such manner as, in the judgment of the
12-60 court, will best accomplish the general purposes for which the
12-61 corporation was organized.
12-62 SECTION 24. Article 7.09, Texas Non-Profit Corporation Act
12-63 (Article 1396-7.09, Vernon's Texas Civil Statutes), is amended to
12-64 read as follows:
12-65 Art. 7.09. Decree of Involuntary Dissolution. A. In
12-66 proceedings to liquidate the assets and affairs of a corporation,
12-67 when the costs and expenses of such proceedings and all debts,
12-68 obligations, and liabilities of the corporation shall have been
12-69 paid and discharged, or adequate provision has been made for the
12-70 discharge, and all of its remaining property and assets distributed
13-1 in accordance with the provisions of this Act, or in case its
13-2 property and assets are not sufficient to satisfy and discharge
13-3 such costs, expenses, debts, and obligations, when all the property
13-4 and assets have been applied so far as they will go to their
13-5 payment, the court shall enter a decree dissolving the corporation,
13-6 whereupon the <existence of the> corporation shall cease to exist.
13-7 SECTION 25. Section B, Article 7.11, Texas Non-Profit
13-8 Corporation Act (Article 1396-7.11, Vernon's Texas Civil Statutes),
13-9 is amended to read as follows:
13-10 B. On receipt of satisfactory written <and verified> proof
13-11 of ownership or of right to such fund within seven (7) years from
13-12 the date such fund was so deposited, the State Treasurer shall
13-13 certify such fact to the Comptroller of Public Accounts, who shall
13-14 issue proper warrant therefor drawn on the State Treasurer in favor
13-15 of the person or persons then entitled thereto. If no claimant has
13-16 made satisfactory proof of rights to such fund within seven (7)
13-17 years from the time of such deposit the State Treasurer shall then
13-18 cause to be published in one issue of a newspaper of general
13-19 circulation in Travis County, Texas, a notice of the proposed
13-20 escheat of such fund, giving the name of the creditor, member, or
13-21 other person <or shareholder> apparently entitled thereto, his last
13-22 known address, if any, the amount of the fund so deposited, and the
13-23 name of the dissolved corporation from whose assets such fund was
13-24 derived. If no claimant makes satisfactory proof of right to such
13-25 fund within two months from the time of such publication, the fund
13-26 so unclaimed shall thereupon automatically escheat to and become
13-27 the property of the General Revenue Fund of the State of Texas.
13-28 SECTION 26. Article 7.12, Texas Non-Profit Corporation Act
13-29 (Article 1396-7.12, Vernon's Texas Civil Statutes), is amended to
13-30 read as follows:
13-31 Art. 7.12. Limited Survival After Dissolution. A. A
13-32 dissolved corporation <dissolved (1) by the issuance of a
13-33 certificate of dissolution or other action by the Secretary of
13-34 State, (2) by a decree of a court when the court has not
13-35 liquidated all the assets and business of the corporation as
13-36 provided in this Act, or (3) by expiration of its period of
13-37 duration,> shall continue its corporate existence for a period of
13-38 three (3) years from the date of dissolution, for the following
13-39 purposes:
13-40 (1) prosecuting or defending in its corporate name any
13-41 action or proceeding by or against the corporation;
13-42 (2) permitting the survival of any remedy not
13-43 otherwise barred by limitations available to or against the
13-44 corporation, its officers, directors, members, or creditors, for
13-45 any right or claim existing, or any liability incurred, before the
13-46 dissolution;
13-47 (3) holding title to and liquidating any assets or
13-48 property that remain in the corporation at the time of, or are
13-49 collected by the corporation after, its dissolution, and applying
13-50 or distributing those assets or properties, or the proceeds
13-51 thereof, as provided in Subsection (3) of Section A of Article 6.04
13-52 of this Act; and
13-53 (4) settling any other affairs not completed before
13-54 its dissolution.
13-55 However, such a dissolved corporation may not continue its
13-56 corporate existence for the purpose of continuing the business or
13-57 affairs for which the dissolved corporation was organized, except
13-58 in the case of a corporation whose period of duration has expired
13-59 and that has chosen to revive its existence as provided in this Act
13-60 or a corporation that has been dissolved by the Secretary of State
13-61 pursuant to Section B of Article 7.01 of this Act and that has been
13-62 reinstated pursuant to Section E of Article 7.01 of this Act.
13-63 B. During the three-year period, the members of the board of
13-64 directors of a dissolved corporation <or trustees> serving at the
13-65 time of dissolution or the majority of them then living, however
13-66 reduced in number, or their successors selected by them, shall
13-67 continue to manage the affairs of the dissolved corporation for the
13-68 limited purpose or purposes specified in this Article, and shall
13-69 have the powers necessary to accomplish those purposes, including
13-70 the power to prosecute, pay, compromise, defend, and satisfy any
14-1 action, claim, demand, or judgment by or against the dissolved
14-2 corporation, and to administer, sell, and distribute in final
14-3 liquidation any property or assets still remaining. In the
14-4 exercise of those powers, the directors shall have the same duties
14-5 to the dissolved corporation that they had immediately prior to the
14-6 dissolution of the corporation and shall be liable to the dissolved
14-7 corporation for actions taken by them after the dissolution to the
14-8 same extent that they would have been liable had those actions been
14-9 taken by them prior to the dissolution. Additional directors <or
14-10 trustees> may be elected for purposes of this section in accordance
14-11 with the procedures provided in the bylaws in effect before the
14-12 dissolution.
14-13 C. A corporation is not liable for any claim other than an
14-14 existing claim. An existing claim by or against a dissolved
14-15 corporation is extinguished unless an action or proceeding on the
14-16 existing claim is brought before the third anniversary of the date
14-17 of dissolution. If an action or proceeding on an existing claim by
14-18 or against a dissolved corporation is brought within the period
14-19 provided by this section and the existing claim is not extinguished
14-20 under this article, the dissolved corporation continues to survive:
14-21 (1) for purposes of that action or proceeding until
14-22 all judgments, orders, and decrees in that action or proceeding
14-23 have been fully executed; and
14-24 (2) for purposes of applying or distributing any
14-25 properties or assets of the dissolved corporation as provided in
14-26 Article 6.02 of this Act, until the properties or assets are
14-27 applied or distributed <If after the expiration of the three-year
14-28 period there still remains unresolved any action or proceeding not
14-29 otherwise barred by limitations begun by or against the corporation
14-30 before its dissolution or within three (3) years after the date of
14-31 its dissolution, the corporation shall continue to survive only for
14-32 the purpose of that action or proceeding, until any judgment,
14-33 order, or decree in the action or proceeding is fully executed. If
14-34 at the expiration of the three-year period no action or proceeding
14-35 on any remedy available to or against the corporation, its
14-36 officers, directors, members, or creditors, for any right or claim
14-37 existing, or any liability incurred, before the dissolution shall
14-38 have been brought, then that remedy shall abate>.
14-39 D. A dissolved corporation may give written notice to a
14-40 person having or asserting an existing claim against the dissolved
14-41 corporation to present the existing claim to the dissolved
14-42 corporation in accordance with the notice. The notice must be sent
14-43 by registered or certified mail, return receipt requested, to the
14-44 person having or asserting the existing claim at the person's last
14-45 known address, and must:
14-46 (1) state that the person's claim against the
14-47 dissolved corporation must be presented in writing to the dissolved
14-48 corporation on or before the date stated in the notice, which shall
14-49 be not earlier than 120 days after the date the notice is sent to
14-50 the person;
14-51 (2) state that the written presentation of the claim
14-52 must describe the claim in sufficient detail to reasonably inform
14-53 the dissolved corporation of the identity of the person and to the
14-54 nature and amount of the claim;
14-55 (3) state a mailing address where the written
14-56 presentation of the person's claim against the dissolved
14-57 corporation is to be sent and state that if the written
14-58 presentation of the claim is not received at that address on or
14-59 before the date stated in the notice, the claim will be
14-60 extinguished; and
14-61 (4) be accompanied by a copy of this section.
14-62 E. If a written presentation of a person's claim against the
14-63 dissolved corporation that meets the requirements of Section D of
14-64 this article has been received at the address of the dissolved
14-65 corporation stated in the notice on or before the date stated in
14-66 the notice, the dissolved corporation may give written notice to
14-67 that person that the claim is rejected by the dissolved
14-68 corporation. The notice of rejection must be sent by registered or
14-69 certified mail, return receipt requested, addressed to the person
14-70 at the person's last known address, and must state:
15-1 (1) that the claim is rejected by the dissolved
15-2 corporation;
15-3 (2) that the claim will be extinguished unless an
15-4 action or proceeding on the claim is brought within 180 days after
15-5 the date the notice of rejection was sent to the person and before
15-6 the third anniversary of the date of dissolution; and
15-7 (3) the date the notice of rejection was sent and the
15-8 date of dissolution.
15-9 F. A person's claim against a dissolved corporation is
15-10 extinguished if:
15-11 (1) a written presentation of that claim meeting the
15-12 requirements of this article is not received at the address of the
15-13 dissolved corporation stated in the notice to the person on or
15-14 before the date stated in the notice; or
15-15 (2) an action or proceeding on the claim is not
15-16 brought within 180 days after the date a notice of rejection was
15-17 sent to the person and before the third anniversary of the date of
15-18 dissolution.
15-19 G. A dissolved corporation that was dissolved by the
15-20 expiration of the period of its duration may, during the three-year
15-21 period following the date of dissolution, amend its articles of
15-22 incorporation by following the procedure prescribed in this Act to
15-23 extend or perpetuate its period of existence. That expiration
15-24 shall not of itself create any vested right on the part of any
15-25 member or creditor to prevent such an action. No act or contract
15-26 of a dissolved corporation during a period within which it could
15-27 have extended its existence as permitted by this Article, whether
15-28 or not it has taken action so to extend its existence, shall be in
15-29 any degree invalidated by the expiration of its period of duration.
15-30 H. In this article:
15-31 (1) "Dissolved corporation" means a corporation that
15-32 was dissolved:
15-33 (a) by the issuance of a certificate of
15-34 dissolution or other action by the Secretary of State;
15-35 (b) by a decree of a court when the court has
15-36 not liquidated all the assets and affairs of the corporation as
15-37 provided in this Act; or
15-38 (c) by expiration of its period of duration if
15-39 the corporation has not revived its existence as provided in this
15-40 Act.
15-41 (2) "Claim" means a right to payment, damages, or
15-42 property, whether liquidated or unliquidated, accrued or
15-43 contingent, matured or unmatured.
15-44 (3) "Existing claim" means a claim that existed before
15-45 dissolution and is not otherwise barred by limitations or a
15-46 contractual obligation incurred after dissolution.
15-47 SECTION 27. Section B, Article 8.01, Texas Non-Profit
15-48 Corporation Act (Article 1396-8.01, Vernon's Texas Civil Statutes),
15-49 is amended to read as follows:
15-50 B. Without excluding other activities which may not
15-51 constitute conducting affairs in this State, a foreign corporation
15-52 shall not be considered to be conducting affairs in this State, for
15-53 the purposes of this Act, by reason of carrying on in this State
15-54 any one (1) or more of the following activities:
15-55 (1) Maintaining or defending any action or suit or any
15-56 administration or arbitration proceedings, or affecting the
15-57 settlement thereof or the settlement of claims or disputes to which
15-58 it is a party.
15-59 (2) Holding meetings of its directors or members or
15-60 carrying on other activities concerning its internal affairs.
15-61 (3) Maintaining bank accounts.
15-62 (4) Maintaining offices or agencies for the transfer,
15-63 exchange, and registration of securities issued by it, or
15-64 appointing and maintaining trustees or depositaries with relation
15-65 to its securities.
15-66 (5) Voting the stock of any corporation which it has
15-67 lawfully acquired.
15-68 (6) <(5)> Effecting sales through independent
15-69 contractors.
15-70 (7) Creating as borrower or lender, or acquiring,
16-1 indebtedness or mortgages or other security interests in real or
16-2 personal property <(6) Creating evidence of debt, mortgages, or
16-3 liens on real or personal property>.
16-4 (8) <(7)> Securing or collecting debts due to it or
16-5 enforcing any rights in property securing the same.
16-6 (9) <(8)> Conducting any affairs in interstate
16-7 commerce.
16-8 (10) <(9)> Conducting an isolated transaction
16-9 completed within a period of thirty (30) days and not in the course
16-10 of a number of repeated transactions of like nature.
16-11 (11) <(10)> Exercising the powers of executor or
16-12 administrator of the estate of a non-resident decedent under
16-13 ancillary letters issued by a court of this State, or exercising
16-14 the powers of a trustee under the will of a non-resident decedent,
16-15 or under a trust created by a person, corporation or association,
16-16 non-resident of this State, if the exercise of such powers in such
16-17 case will not involve activities which would be deemed to
16-18 constitute the transacting of business in this State in the case of
16-19 a foreign corporation acting in its own right.
16-20 (12) <(11)> Acquiring, in transactions outside Texas,
16-21 or in interstate commerce, of debts secured by mortgages or liens
16-22 on real or personal property in Texas, collecting or adjusting of
16-23 principal and interest payments thereon, enforcing or adjusting any
16-24 rights and property securing said debts, taking any actions
16-25 necessary to preserve and protect the interest of the mortgagee in
16-26 said security, or any combinations of such transactions.
16-27 (13) <(12)> Investing in or acquiring, in transactions
16-28 outside of Texas, royalties and other non-operating mineral
16-29 interests, and the execution of division orders, contracts of sale
16-30 and other instruments incidental to the ownership of such
16-31 non-operating mineral interests.
16-32 SECTION 28. Section A, Article 8.04, Texas Non-Profit
16-33 Corporation Act (Article 1396-8.04, Vernon's Texas Civil Statutes),
16-34 is amended to read as follows:
16-35 A. A foreign corporation, in order to procure a certificate
16-36 of authority to conduct affairs in this State, shall make
16-37 application therefor to the Secretary of State, which application
16-38 shall set forth:
16-39 (1) The name of the corporation and the state or
16-40 country under the laws of which it is incorporated and, if the
16-41 corporation is required to qualify under a name other than its
16-42 corporate name, the name under which the corporation is to be
16-43 qualified.
16-44 (2) A statement that the corporation is a non-profit
16-45 corporation.
16-46 (3) The date of incorporation and the period of
16-47 duration of the corporation.
16-48 (4) The street address of the principal office of the
16-49 corporation in the state or country under the laws of which it is
16-50 incorporated.
16-51 (5) The street address of the proposed registered
16-52 office of the corporation in this State, and the name of its
16-53 proposed registered agent in this State at such address.
16-54 (6) The purpose or purposes of the corporation which
16-55 it proposes to pursue in conducting its affairs in this State.
16-56 (7) The names and respective addresses of the
16-57 directors and officers of the corporation.
16-58 (8) A statement of whether or not the corporation has
16-59 members.
16-60 (9) Such additional information as may be necessary or
16-61 appropriate in order to enable the Secretary of State to determine
16-62 whether such corporation is entitled to a certificate of authority
16-63 to conduct affairs in this State.
16-64 SECTION 29. Article 8.06, Texas Non-Profit Corporation Act
16-65 (Article 1396-8.06, Vernon's Texas Civil Statutes), is amended to
16-66 read as follows:
16-67 Art. 8.06. Effect of Certificate of Authority. A. Upon the
16-68 issuance of a certificate of authority by the Secretary of State,
16-69 the corporation shall be authorized to conduct affairs in this
16-70 State for those purposes set forth in its application and the
17-1 certificate shall be conclusive evidence of the right of the
17-2 corporation to conduct affairs in this State for that purpose,
17-3 except as against this State in a proceeding to revoke the
17-4 certificate<, subject, however, to the right of this State to
17-5 revoke such authority as provided in this Act>.
17-6 SECTION 30. Section A, Article 8.08, Texas Non-Profit
17-7 Corporation Act (Article 1396-8.08, Vernon's Texas Civil Statutes),
17-8 is amended to read as follows:
17-9 A. A foreign corporation authorized to conduct affairs in
17-10 this state may change its registered office or change its
17-11 registered agent, or both, upon filing in the office of the
17-12 Secretary of State a statement setting forth:
17-13 (1) The name of the corporation.
17-14 (2) The street <post-office> address of its then
17-15 registered office.
17-16 (3) If the street <post-office> address of its
17-17 registered office is to be changed, the street <post-office>
17-18 address to which the registered office is to be changed.
17-19 (4) The name of its then registered agent.
17-20 (5) If its registered agent is to be changed, the name
17-21 of its successor registered agent.
17-22 (6) That the street <post-office> address of its
17-23 registered office and the post-office address of the business
17-24 office of its registered agent, as changed, will be identical.
17-25 (7) That such change was authorized by its Board of
17-26 Directors or by an officer of the corporation so authorized by the
17-27 Board of Directors, or if the management of the corporation is
17-28 vested in its members pursuant to Article 2.14C of this Act, by the
17-29 members.
17-30 SECTION 31. Article 8.12, Texas Non-Profit Corporation Act
17-31 (Article 1396-8.12, Vernon's Texas Civil Statutes), is amended to
17-32 read as follows:
17-33 Art. 8.12. Amended Certificate of Authority. A. If a
17-34 foreign corporation authorized to conduct affairs in this State
17-35 changes its corporate name or desires to pursue in this State
17-36 purposes other than or in addition to the purposes authorized by
17-37 its existing certificate of authority, the corporation shall file
17-38 with the Secretary of State an application for amended certificate
17-39 of authority setting forth the change <A foreign corporation
17-40 authorized to conduct affairs in this State shall procure an
17-41 amended certificate of authority in the event it changes its
17-42 corporate name, or desires to pursue in this State other or
17-43 additional purposes than those set forth in its prior application
17-44 for a certificate of authority, by making application therefor to
17-45 the Secretary of State>.
17-46 B. A foreign corporation may change any other statement on
17-47 its original application for certificate of authority or any
17-48 amendment to that certificate by filing with the Secretary of State
17-49 an application for an amended certificate of authority setting
17-50 forth the change <Any other statement on the original application
17-51 for a certificate of authority may be changed by filing an
17-52 application for an amended certificate of authority setting forth
17-53 the change>.
17-54 C. An application for an amended certificate of authority
17-55 submitted because of a name change must be accompanied by a
17-56 certificate from the proper filing officer in the jurisdiction of
17-57 incorporation evidencing the name change.
17-58 D. The requirements in respect to the form and contents of
17-59 such application, the manner of its execution, the filing of the
17-60 original and a copy of the application with the Secretary of State,
17-61 the issuance of an amended certificate of authority and the effect
17-62 thereof, shall be the same as in the case of an original
17-63 application for a certificate of authority.
17-64 SECTION 32. Section A, Article 8.13, Texas Non-Profit
17-65 Corporation Act (Article 1396-8.13, Vernon's Texas Civil Statutes),
17-66 is amended to read as follows:
17-67 A. A foreign corporation authorized to conduct affairs in
17-68 this State may withdraw from this State upon procuring from the
17-69 Secretary of State a certificate of withdrawal. In order to
17-70 procure such certificate of withdrawal, such foreign corporation
18-1 shall deliver to the Secretary of State an application for
18-2 withdrawal, which shall set forth:
18-3 (1) The name of the corporation and the state or
18-4 country under the laws of which it is incorporated.
18-5 (2) That the corporation is not conducting affairs in
18-6 this State.
18-7 (3) That the corporation surrenders its authority to
18-8 conduct affairs in this State.
18-9 (4) That the corporation revokes the authority of its
18-10 registered agent in this State to accept service of process and
18-11 consents that service of process in any action, suit or proceeding
18-12 based upon any cause of action arising in this State during the
18-13 time the corporation was authorized to conduct affairs in this
18-14 State may thereafter be made on such corporation by service thereof
18-15 on the Secretary of State.
18-16 (5) A street or post office address to which the
18-17 Secretary of State may mail a copy of any process against the
18-18 corporation that may be served on him.
18-19 (6) A statement that all sums due, or accrued, to this
18-20 State have been paid, or that adequate provision has been made for
18-21 the payment thereof.
18-22 (7) A statement that all known creditors or claimants
18-23 have been paid or provided for and that the corporation is not
18-24 involved in or threatened with litigation in any court in this
18-25 State, or that adequate provision has been made for the
18-26 satisfaction of any judgment, order or decree which may be entered
18-27 against it in any pending suits.
18-28 SECTION 33. Section B, Article 8.15, Texas Non-Profit
18-29 Corporation Act (Article 1396-8.15, Vernon's Texas Civil Statutes),
18-30 is amended to read as follows:
18-31 B. The certificate of authority of a foreign corporation to
18-32 conduct affairs in this State <state> may be revoked by order of
18-33 the Secretary of State when it is established that it is in default
18-34 in any of the following particulars:
18-35 (1) The corporation has failed to file any report
18-36 within the time required by law, or has failed to pay any fees,
18-37 franchise taxes, or penalties prescribed by law when the same have
18-38 become due and payable; or
18-39 (2) The corporation has failed to maintain a
18-40 registered agent in this State <state> as required by law; or
18-41 (3) The corporation has changed its corporate name or
18-42 the purposes authorized by its existing certificate of authority
18-43 <its corporate name> and has failed to file with the Secretary of
18-44 State within thirty days after such change <of name> became
18-45 effective, an application for an amended certificate of authority,
18-46 or that the corporation has changed its corporate name and that the
18-47 newly adopted name is not available for use in this State <state>;
18-48 or
18-49 (4) The corporation has failed to pay the filing fee
18-50 for the corporation's certificate of authority, or the fee was paid
18-51 by an instrument that was dishonored when presented by this State
18-52 <the state> for payment.
18-53 SECTION 34. Section A, Article 9.03, Texas Non-Profit
18-54 Corporation Act (Article 1396-9.03, Vernon's Texas Civil Statutes),
18-55 is amended to read as follows:
18-56 A. The Secretary of State shall charge and collect for:
18-57 (1) Filing articles of incorporation and issuing a
18-58 certificate of incorporation, Twenty-five Dollars ($25).
18-59 (2) Filing articles of amendment and issuing a
18-60 certificate of amendment, Twenty-five Dollars ($25).
18-61 (3) Filing articles of merger or consolidation and
18-62 issuing a certificate of merger or consolidation, Fifty Dollars
18-63 ($50).
18-64 (4) Filing a statement of change of address of
18-65 registered office or change of registered agent, or both, Five
18-66 Dollars ($5).
18-67 (5) Filing articles of dissolution, Five Dollars ($5).
18-68 (6) Filing an application of a foreign corporation for
18-69 a certificate of authority to conduct affairs in this state and
18-70 issuing a certificate of authority, Twenty-five Dollars ($25).
19-1 (7) Filing an application of a foreign corporation for
19-2 an amended certificate of authority to conduct affairs in this
19-3 state and issuing an amended certificate of authority, Twenty-five
19-4 Dollars ($25).
19-5 (8) Filing an application for withdrawal of a foreign
19-6 corporation and issuing a certificate of withdrawal, Five Dollars
19-7 ($5).
19-8 (9) Filing any other statement or report of a domestic
19-9 or foreign corporation, Five Dollars ($5).
19-10 (10) Filing restatement of articles of incorporation,
19-11 Fifty Dollars ($50).
19-12 (11) Filing a statement of change of address of
19-13 registered agent, Fifteen Dollars ($15), except that the maximum
19-14 fee for simultaneous filings by a registered agent for more than
19-15 one corporation may not exceed Two Hundred Fifty Dollars ($250).
19-16 SECTION 35. Article 9.10, Texas Non-Profit Corporation Act
19-17 (Article 1396-9.10, Vernon's Texas Civil Statutes), is amended by
19-18 adding Section C to read as follows:
19-19 C. (1) The articles of incorporation may provide that any
19-20 action required by this Act to be taken at a meeting of the members
19-21 or directors of a corporation or any action that may be taken at a
19-22 meeting of the members or directors or of any committee may be
19-23 taken without a meeting if a consent in writing, setting forth the
19-24 action to be taken, is signed by a sufficient number of members,
19-25 directors, or committee members as would be necessary to take that
19-26 action at a meeting at which all of the members, directors, or
19-27 members of the committee were present and voted.
19-28 (2) Each written consent shall bear the date of
19-29 signature of each member, director, or committee member who signs
19-30 the consent. A written consent signed by less than all of the
19-31 members, directors, or committee members is not effective to take
19-32 the action that is the subject of the consent unless, within 60
19-33 days after the date of the earliest dated consent delivered to the
19-34 corporation in the manner required by this article, a consent or
19-35 consents signed by the required number of members, directors, or
19-36 committee members is delivered to the corporation at its registered
19-37 office, registered agent, principal place of business, transfer
19-38 agent, registrar, exchange agent, or an officer or agent of the
19-39 corporation having custody of the books in which proceedings of
19-40 meetings of members, directors, or committees are recorded.
19-41 Delivery shall be by hand or certified or registered mail, return
19-42 receipt requested. Delivery to the corporation's principal place
19-43 of business shall be addressed to the president or principal
19-44 executive officer of the corporation.
19-45 (3) Prompt notice of the taking of any action by
19-46 members, directors, or a committee without a meeting by less than
19-47 unanimous written consent shall be given to all members, directors,
19-48 or committee members who did not consent in writing to the action.
19-49 (4) If any action by members, directors, or a
19-50 committee is taken by written consent signed by less than all of
19-51 the members, directors, or committee members, any articles or
19-52 documents filed with the Secretary of State as a result of the
19-53 taking of the action shall state, in lieu of any statement required
19-54 by this Act concerning any vote of the members or directors, that
19-55 written consent has been given in accordance with the provisions of
19-56 this article and that any written notice required by this article
19-57 has been given.
19-58 (5) A telegram, telex, cablegram, or similar
19-59 transmission by a member, director, or member of a committee or a
19-60 photographic, photostatic, facsimile, or similar reproduction of a
19-61 writing signed by a member, director, or member of a committee
19-62 shall be regarded as signed by the member, director, or member of a
19-63 committee for purposes of this article.
19-64 SECTION 36. Article 10.04, Texas Non-Profit Corporation Act
19-65 (Article 1396-10.04, Vernon's Texas Civil Statutes), is amended to
19-66 read as follows:
19-67 Art. 10.04. To What Corporations This Act Applies; Procedure
19-68 for Adoption of Act by Existing Corporation. A. Except as
19-69 otherwise provided by this article, this Act does not apply to
19-70 domestic corporations organized under any statute other than this
20-1 Act or to any foreign corporations granted authority to conduct
20-2 affairs within this State under any statute other than this Act.
20-3 If any domestic corporation is organized under or is governed by a
20-4 statute that does not contain a provision regarding a matter
20-5 provided for in this Act, or any foreign corporation is granted
20-6 authority to conduct affairs within this State under a statute that
20-7 does not contain a provision regarding a matter provided for in
20-8 this Act in respect of foreign corporations, or if a statute
20-9 specifically provides that the general laws for incorporation or
20-10 for the granting of a certificate of authority to conduct affairs
20-11 in this State supplement the provisions of that statute, the
20-12 provisions of this Act apply only to the extent not inconsistent
20-13 with the provisions of the other statute. <Until September 1,
20-14 1961, this Act shall not apply to any domestic corporation duly
20-15 chartered and existing on the effective date of this Act, or to any
20-16 foreign corporation, unless such domestic corporation shall
20-17 voluntarily elect to adopt the provisions of this Act and shall
20-18 comply with the procedure prescribed by Section B of this Article,
20-19 and unless such foreign corporation shall procure a certificate of
20-20 authority pursuant to Part Eight of this Act.>
20-21 <B. From and after the effective date of this Act and prior
20-22 to September 1, 1961, any domestic corporation duly chartered and
20-23 existing on the effective date of this Act may voluntarily elect to
20-24 adopt the provisions of this Act and may become subject to its
20-25 provisions by taking the following steps:>
20-26 <(1) A resolution reciting that the corporation
20-27 voluntarily adopts this Act shall be adopted by the board of
20-28 directors and/or the members in accordance with the procedure
20-29 prescribed by this Act for the amendment of articles of
20-30 incorporation of such corporation.>
20-31 <(2) Upon adoption of the required resolution or
20-32 resolutions, an instrument shall be executed in duplicate by the
20-33 corporation by its president or a vice-president and by its
20-34 secretary or an assistant secretary, and verified by one of the
20-35 officers signing such statement, which shall set forth:>
20-36 <(a) The name of the corporation.>
20-37 <(b) Each resolution adopted by the corporation.>
20-38 <(c) The date of the adoption of each
20-39 resolution.>
20-40 <(d) The street address of its initial
20-41 registered office and the name of its initial registered agent at
20-42 such address.>
20-43 <(3) Duplicate originals of such document shall be
20-44 delivered to the Secretary of State. If the Secretary of State
20-45 finds that such document conforms to law, he shall, when all fees
20-46 and franchise taxes have been paid as prescribed by law:>
20-47 <(a) Endorse on each of such duplicate originals
20-48 the word "Filed," and the month, day, and year of the filing
20-49 thereof.>
20-50 <(b) File one of such duplicate originals in his
20-51 office.>
20-52 <(c) Deliver the other duplicate original to the
20-53 corporation or its representative.>
20-54 <(4) Upon the filing of such document, all provisions
20-55 of this Act shall thereafter apply to the corporation; provided,
20-56 however, that such delivery to and filing by the Secretary of State
20-57 need not precede action by the directors and/or the members of a
20-58 corporation in connection with amendments to its articles of
20-59 incorporation or its by-laws under this Act so long as (a) such
20-60 amendments do not become effective until after the Secretary of
20-61 State has filed the document whereby such corporation adopts this
20-62 Act and (b) the procedures and requirements of this Act for the
20-63 adoption of such amendments, including requirements as to notice,
20-64 shall have been complied with and satisfied.>
20-65 <C. Except for the exceptions and limitations of Section A
20-66 of this Article, this Act shall apply to all domestic corporations
20-67 organized after the date on which this Act becomes effective and to
20-68 all domestic corporations electing to adopt this Act and
20-69 manifesting their election in the manner provided in Section B of
20-70 this Article, prior to September 1, 1961.>
21-1 <D. From and after September 1, 1961, this Act shall apply
21-2 to all domestic corporations and to all foreign corporations
21-3 conducting or seeking to conduct affairs within this State. Those
21-4 domestic corporations existing at the time that this Act becomes
21-5 effective which have not meanwhile adopted this Act by complying
21-6 with Section B of this Article shall, on September 1, 1961, be
21-7 deemed to have elected to adopt this Act by not voluntarily
21-8 dissolving.>
21-9 <E. No foreign corporation shall conduct affairs in this
21-10 State after September 1, 1961, unless and until it shall have
21-11 procured a certificate of authority in accordance with the
21-12 requirements of Part Eight of this Act. Such certificates may be
21-13 applied for and issued at any time after the effective date of this
21-14 Act and this Act shall thereafter apply to such corporation from
21-15 the date of the issuance of its certificate of authority; provided,
21-16 however, that if such corporation expressly so requests in its
21-17 application, the effective date of its certificate may be delayed
21-18 until September 1, 1961, even though issued prior to such date.>
21-19 B. <F.> In so far as the same are not inconsistent with or
21-20 contrary to any applicable provision of the Insurance Code of
21-21 Texas, or any amendment thereto, the provisions of this Act shall
21-22 apply to and govern burial associations as defined in Article
21-23 14.37, Texas Insurance Code local mutual aid associations,
21-24 statewide mutual assessment corporations, and county mutual
21-25 insurance companies; provided however, (a) that any such mutual
21-26 insurance associations or companies may, upon advance approval of
21-27 the Commissioner of Insurance, pay dividends to its members, and
21-28 (b) that wherever in this Act some duty, responsibility, power,
21-29 authority, or act is vested in, required of, or to be performed by
21-30 the Secretary of State, such is to be vested in, required of, or
21-31 performed by the Commissioner of Insurance in so far as such mutual
21-32 insurance companies or associations are concerned.
21-33 C. <G.> This Act shall not apply to those corporations
21-34 excepted under Article 2.01 B, Subsections (3), (4), and (5) of
21-35 this Act; provided however, that if any of said excepted domestic
21-36 corporations were heretofore or are hereafter organized not for
21-37 profit under special statutes which contain no provisions in regard
21-38 to some of the matters provided for in this Act, or if such special
21-39 statutes specifically applicable provide that the general laws for
21-40 incorporation shall supplement the provisions of such statutes,
21-41 then the provisions of this Act shall apply to the extent that they
21-42 are not inconsistent with the provisions of such special statutes.
21-43 SECTION 37. The Texas Non-Profit Corporation Act (Article
21-44 1396-1.01 et seq., Vernon's Texas Civil Statutes) is amended by
21-45 adding Article 10.07 to read as follows:
21-46 Art. 10.07. DELAYED EFFECTIVENESS OF CERTAIN FILINGS. A.
21-47 In this article the following are permitted acts:
21-48 (1) the incorporation of a corporation under this Act;
21-49 (2) an amendment to a corporation's articles of
21-50 incorporation;
21-51 (3) the restatement of articles of incorporation of a
21-52 corporation;
21-53 (4) a voluntary dissolution;
21-54 (5) the authorization or withdrawal of a foreign
21-55 corporation to conduct affairs in this State;
21-56 (6) an amendment to the certificate of authority of a
21-57 foreign corporation;
21-58 (7) a change in registered office or registered agent;
21-59 (8) a change of address of a registered agent; or
21-60 (9) a merger or consolidation of domestic corporations
21-61 or of domestic and foreign corporations.
21-62 B. A permitted act may be made effective as of a time and
21-63 date after the time and date otherwise provided in this Act or may
21-64 be made effective on the occurrence of events or facts that may
21-65 occur in the future. Those events or facts may include future acts
21-66 of any person or entity, if:
21-67 (1) the articles, statement, application, or other
21-68 filing that is required by this Act to be filed with the Secretary
21-69 of State to make the permitted act effective clearly and expressly
21-70 sets forth, in addition to any other statement or information
22-1 required to be set forth:
22-2 (a) the time and date on which the permitted act
22-3 is to become effective; or
22-4 (b) if the permitted act is to become effective
22-5 on the occurrence of events or facts that may occur in the future,
22-6 the manner in which the events or facts will operate to cause the
22-7 permitted act to become effective;
22-8 (2) in the case of a permitted act that is to become
22-9 effective on the mere passage of time as of a time or date after
22-10 the time and date otherwise provided in this Act, the subsequent
22-11 time and date must not be more than 90 days after the date of the
22-12 filing of the articles, statement, application, or other filing
22-13 that is otherwise required by this Act to be filed with the
22-14 Secretary of State to make effective the permitted act; and
22-15 (3) in the case of a permitted act that is to be made
22-16 effective on the occurrence of events or facts that may occur in
22-17 the future, other than the mere passage of time, a statement that
22-18 all the events or facts on which the effectiveness of the permitted
22-19 act is conditioned have been satisfied or waived and the date on
22-20 which the condition was satisfied or waived must be filed with the
22-21 Secretary of State within 90 days of the date of the filing of the
22-22 articles, statement, application, or other filing that is otherwise
22-23 required by this Act for the permitted act to become effective.
22-24 C. The statement required by Section A(3) of this article
22-25 shall be executed on behalf of each domestic or foreign corporation
22-26 or other entity that was required to execute the articles,
22-27 statement, application, or other filing that is otherwise required
22-28 by this Act to be filed with the Secretary of State to make
22-29 effective the permitted act by an officer or other duly authorized
22-30 representative, including an officer or duly authorized
22-31 representative of any successor domestic or foreign corporation or
22-32 other entity, and an original and copy shall be filed with the
22-33 Secretary of State. If the Secretary of State finds that the
22-34 statement conforms to the provisions of this Act, the Secretary of
22-35 State shall:
22-36 (1) endorse on the original and the copy the word
22-37 "Filed" and the month, day, and year of the filing;
22-38 (2) file the original in the Secretary of State's
22-39 office; and
22-40 (3) return the copy to the filing party or its
22-41 representative.
22-42 D. If any permitted act is to become effective as of a time
22-43 or date after the time and date otherwise provided in this Act, for
22-44 the permitted act to become effective, notwithstanding any other
22-45 provision of this Act to the contrary, the permitted act shall
22-46 become, to the extent permitted by Section A of this article,
22-47 effective as of the subsequent time and date, and any certificate
22-48 issued by the Secretary of State on the filing of the articles,
22-49 statement, application, or other filing that is otherwise required
22-50 by this Act for the permitted act to become effective shall
22-51 expressly state the time and date on which the permitted act is to
22-52 become effective.
22-53 E. If a permitted act is to be made effective on the
22-54 occurrence of events or facts that may occur in the future, other
22-55 than the mere passage of time, and the statement required by
22-56 Section A(3) of this article is filed with the Secretary of State
22-57 within the time prescribed, the permitted act becomes effective as
22-58 of the time and date on which the latest specified event or fact
22-59 occurs or the time and date on which the condition is otherwise
22-60 satisfied or waived. Any certificate issued or notation,
22-61 acknowledgement, or other statement made by the Secretary of State
22-62 on the filing of the articles, statement, application, or other
22-63 filing that is otherwise required by this Act for the permitted act
22-64 to become effective shall state that "The effectiveness of the
22-65 action to which this instrument relates is conditioned on the
22-66 occurrence of certain facts or events described in the filing to
22-67 which this instrument relates" or shall make reference in a manner
22-68 the Secretary of State approves, to the fact that the effectiveness
22-69 of the action is conditioned. The time and date on which a
22-70 condition to the effectiveness of a permitted act is satisfied or
23-1 waived as set forth in a statement filed with the Secretary of
23-2 State pursuant to Section A(3) of this article shall be
23-3 conclusively regarded as the time and date on which the condition
23-4 was satisfied or waived for purposes of this article.
23-5 F. If the effectiveness of any permitted act is conditioned
23-6 on the occurrence of events or facts that may occur in the future,
23-7 other than the mere passage of time, and the statement required by
23-8 Section A(3) of this article is not filed with the Secretary of
23-9 State within the time prescribed, the permitted act is not
23-10 effective unless there is subsequently filed with the Secretary of
23-11 State the articles, statement, application, or other filing
23-12 required by this Act to be filed with the Secretary of State to
23-13 make the permitted act effective.
23-14 SECTION 38. This Act takes effect January 1, 1994.
23-15 SECTION 39. The importance of this legislation and the
23-16 crowded condition of the calendars in both houses create an
23-17 emergency and an imperative public necessity that the
23-18 constitutional rule requiring bills to be read on three several
23-19 days in each house be suspended, and this rule is hereby suspended.
23-20 * * * * *
23-21 Austin,
23-22 Texas
23-23 May 18, 1993
23-24 Hon. Bob Bullock
23-25 President of the Senate
23-26 Sir:
23-27 We, your Committee on Jurisprudence to which was referred H.B.
23-28 No. 1494, have had the same under consideration, and I am
23-29 instructed to report it back to the Senate with the recommendation
23-30 that it do pass and be printed.
23-31 Henderson,
23-32 Chairman
23-33 * * * * *
23-34 WITNESSES
23-35 No witnesses appeared on H.B. No. 1494.