By: Harris, O.H. "Ike" S.B. No. 732
73R2318 LJD-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the organization and operation of certain business
1-3 organizations that provide for limited liability; providing
1-4 penalties.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 ARTICLE 1. LIMITED LIABILITY COMPANIES
1-7 SECTION 1.01. Subsection (9), Section A, Article 1.02, Texas
1-8 Limited Liability Company Act (Article 1528n, Vernon's Texas Civil
1-9 Statutes), is amended to read as follows:
1-10 (9) "Foreign Limited Liability Company" means an
1-11 entity formed under the laws of a jurisdiction other than this
1-12 state (a) that is characterized as a limited liability company by
1-13 such laws or (b) although not so characterized by such laws, that
1-14 elects to procure a certificate of authority pursuant to Article
1-15 7.01 of this act, that is formed under laws which provide
1-16 <provides> that some or all of the persons entitled to receive a
1-17 distribution of the assets thereof upon the entity's dissolution or
1-18 otherwise or to exercise voting rights with respect to an interest
1-19 in the entity shall not be liable for the debts, obligations or
1-20 liabilities of the entity and which is not eligible to become
1-21 authorized to <qualify to> do business in this state under any
1-22 other statute.
1-23 SECTION 1.02. Section A, Article 2.03, Texas Limited
1-24 Liability Company Act (Article 1528n, Vernon's Texas Civil
2-1 Statutes), is amended to read as follows:
2-2 A. The limited liability company name shall conform to the
2-3 following requirements:
2-4 (1) It shall either contain the words <word> "Limited
2-5 Liability Company" or "Limited Company" or the abbreviations
2-6 <abbreviation "Ltd." or> "L.L.C.," "LLC," "LC," or "L.C." and shall
2-7 contain such additional words as may be required by law. The word
2-8 "Limited" may be abbreviated as "Ltd." or "LTD" and the word
2-9 "Company" may be abbreviated as "Co." However, a limited liability
2-10 company formed before September 1, 1993, that complied with this
2-11 Section on the date of formation, but does not comply with this
2-12 Section as revised, is not required to change its name.
2-13 (2) It shall not contain any word or phrase which
2-14 indicates or implies that it is organized for any purpose other
2-15 than one or more of the purposes contained in its articles of
2-16 organization.
2-17 (3) It shall not be the same as, or deceptively
2-18 similar to, the name of any domestic limited liability company,
2-19 corporation or limited partnership existing under the laws of this
2-20 state, or the name of any foreign limited liability company,
2-21 corporation or limited partnership authorized to transact business
2-22 in this state, or a name the exclusive right to which is, at the
2-23 time, reserved in the manner provided in this Act or any other
2-24 statute providing for reservation of names by a corporation or
2-25 limited partnership, or the name of a limited liability company,
2-26 corporation or limited partnership which has in effect a
2-27 registration of its company name as provided in this act or any
3-1 other applicable law provided that a name may be similar if written
3-2 consent is obtained from the existing limited liability company,
3-3 corporation or limited partnership having the name deemed to be
3-4 similar or the person for whom the name deemed to be similar is
3-5 reserved in the office of the Secretary of State.
3-6 SECTION 1.03. Section A, Article 2.08, Texas Limited
3-7 Liability Company Act (Article 1528n, Vernon's Texas Civil
3-8 Statutes), is amended to read as follows:
3-9 A. The managers, if any, and the registered agent shall be
3-10 agents of a limited liability company or foreign limited liability
3-11 company upon whom any process, notice, or demand required or
3-12 permitted by law to be served upon the limited liability company or
3-13 foreign limited liability company may be served.
3-14 SECTION 1.04. Article 2.09, Texas Limited Liability Company
3-15 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
3-16 read as follows:
3-17 Art. 2.09. Regulations of limited liability company.
3-18 A. The power to adopt, alter, amend, or repeal the regulations of
3-19 a limited liability company shall be vested in the members of the
3-20 company unless vested in whole or part in the manager or managers
3-21 of the company by the articles of organization or regulations.
3-22 Regulations adopted by the members or by the managers may be
3-23 repealed or altered; new regulations may be adopted by the members;
3-24 and regulations may provide that they may not, in whole or
3-25 specified part, be altered, amended, or repealed by the managers.
3-26 The regulations may contain any provisions for the regulation and
3-27 management of the affairs of the limited liability company not
4-1 inconsistent with law or the articles of organization. Unless
4-2 otherwise provided in the articles of organization, the <The>
4-3 initial regulations of the limited liability company shall be
4-4 adopted by the manager or managers named in the articles of
4-5 organization, if any, or by the member or members named in the
4-6 articles of organization, if any. Any provision of this Act
4-7 subject to variation or modification by the regulations of a
4-8 limited liability company is also subject to variation or
4-9 modification by the articles of organization of the limited
4-10 liability company.
4-11 SECTION 1.05. Article 2.11, Texas Limited Liability Company
4-12 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
4-13 read as follows:
4-14 Art. 2.11. Limited liability company property. A. Real or
4-15 personal property owned or purchased by a limited liability company
4-16 may <shall> be held and owned, and conveyance may <shall> be made,
4-17 in the name of the limited liability company. Instruments and
4-18 documents providing for the acquisition, mortgage, or disposition
4-19 of the property of the limited liability company shall be valid and
4-20 binding upon the company, if they are executed by one or more
4-21 persons as provided in Article 2.21 of this Act <the preceding
4-22 Article>.
4-23 SECTION 1.06. Article 2.12, Texas Limited Liability Company
4-24 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
4-25 read as follows:
4-26 Art. 2.12. Managers. A. Except and to the extent the
4-27 articles of organization or the regulations shall reserve
5-1 management of the limited liability company <the same> to the
5-2 members in whole or in part, and subject to provisions in the
5-3 articles of organization, the regulations, or this Act restricting
5-4 or enlarging the powers, rights, and duties of any manager or group
5-5 or class of managers, the powers of a limited liability company
5-6 shall be exercised by or under the authority of, and the business
5-7 and affairs of a limited liability company shall be managed under
5-8 the direction of, the manager or managers of the limited liability
5-9 company. If management of the limited liability company is fully
5-10 reserved to the members, the limited liability company need not
5-11 have managers. Managers need not be residents of this State or
5-12 members of the limited liability company unless the regulations so
5-13 require. The regulations may prescribe other qualifications for
5-14 managers. If the management of the limited liability company is
5-15 reserved in whole or in part to the members, Articles 2.17, 2.18,
5-16 2.19, and 2.20 of this Act apply to the members who manage the
5-17 limited liability company to the same extent as those articles
5-18 would otherwise apply to managers of a limited liability company.
5-19 SECTION 1.07. Article 2.13, Texas Limited Liability Company
5-20 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
5-21 read as follows:
5-22 Art. 2.13. Number and election of managers. A. The
5-23 managers of a limited liability company, if any, shall consist of
5-24 one or more persons. The number of managers shall be fixed by, or
5-25 in the manner provided in, the regulations, except as to the number
5-26 constituting the initial managers, which number shall be fixed by
5-27 the articles of organization. The number of managers may be
6-1 increased or decreased from time to time by amendment to, or in the
6-2 manner provided in, the regulations, but no decrease shall have the
6-3 effect of shortening the term of any incumbent manager. In the
6-4 absence of a regulation fixing the number of managers or providing
6-5 for the manner in which the number of managers shall be fixed, the
6-6 number of managers shall be the same as the number constituting the
6-7 initial managers. The names and addresses of the initial managers,
6-8 if any, shall be stated in the articles of organization. Unless
6-9 otherwise provided in the regulations or in any resolution of the
6-10 managers or members appointing that manager in accordance with
6-11 <removed in accordance with the provisions of> the regulations or
6-12 articles of organization, each manager <such persons> shall hold
6-13 office for the term for which elected, if any term is specified,
6-14 and until that manager's successor has been elected, or until that
6-15 manager's earlier death, resignation, or removal. The regulations
6-16 may provide for the time or times at which the members entitled to
6-17 vote in the election of managers shall elect managers and the term
6-18 for which the managers shall hold office <until the first annual
6-19 meeting of members, and until their successors shall have been
6-20 elected and qualified. At the first annual meeting of members and
6-21 at each annual meeting thereafter, the holders of membership
6-22 interests entitled to vote in the election of managers shall elect
6-23 managers to hold office until the next succeeding annual meeting,
6-24 except in case of the classification of managers as permitted by
6-25 this Act>. The regulations may provide that <the holders of> any
6-26 class or group of members <series of membership interests> shall be
6-27 entitled to elect one or more managers, who shall hold office for
7-1 such terms as shall be stated in the regulations. <Unless removed
7-2 in accordance with provisions of the regulations, each manager
7-3 shall hold office for the term for which elected and until a
7-4 successor shall have been duly elected and qualified.> The
7-5 regulations may provide that at any meeting of members called
7-6 expressly for that purpose any managers may be removed, with or
7-7 without cause, as provided therein; however, if<. Whenever the
7-8 holders of> any class or group <series> of members is <shares are>
7-9 entitled to elect one or more managers by the provisions of the
7-10 regulations, only the members <holders of membership interests> of
7-11 that class or group <series> shall be entitled to vote for or
7-12 against the removal of any managers elected by the members
7-13 <holders> of that class or group <series>.
7-14 SECTION 1.08. Article 2.14, Texas Limited Liability Company
7-15 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
7-16 read as follows:
7-17 Art. 2.14. Classification of managers. A. The regulations
7-18 may provide that the managers shall be divided into more than one
7-19 class <either two or three classes>, each class to be the number
7-20 specified in the regulations <as nearly equal in number as
7-21 possible>, the terms <of office> of managers of each <the first>
7-22 class to expire in the order provided in the regulations and at the
7-23 meetings of the members at which the regulations provide that
7-24 managers are to be elected <at the first annual meeting of members
7-25 after their election, that of the second class to expire at the
7-26 second annual meeting after their election, and that of the third
7-27 class, if any, to expire at the third annual meeting after their
8-1 election>. If the regulations provide for the classification of
8-2 managers, (1) the whole number of managers of the limited liability
8-3 company need not be elected annually or at any regularly scheduled
8-4 meeting of the members, and (2) <at each annual meeting> after such
8-5 classification, at each meeting at which the regulations provide
8-6 that managers are to be elected, the number of managers equal to
8-7 the number of the class whose term expires at the time of such
8-8 meeting shall be elected to hold office until the next succeeding
8-9 meeting at which the regulations provide that the successors to the
8-10 managers are to be elected. A classification of managers adopted
8-11 after the last meeting of members at which managers were elected
8-12 may not be effective before the next meeting of members at which
8-13 managers are elected unless the classification is effected by an
8-14 amendment to the regulations adopted by the members <the second
8-15 succeeding annual meeting, if there be two classes, or until the
8-16 third succeeding annual meeting, if there be three classes>.
8-17 SECTION 1.09. Section A, Article 2.18, Texas Limited
8-18 Liability Company Act (Article 1528n, Vernon's Texas Civil
8-19 Statutes), is amended to read as follows:
8-20 A. If the regulations so provide, the managers, by
8-21 resolution, may designate from among the managers one or more
8-22 committees, each of which shall be comprised of one or more of the
8-23 managers, and may designate one or more of the managers as
8-24 alternate members of any committee, who may, subject to any
8-25 limitations imposed by the managers, replace absent or disqualified
8-26 managers at any meeting of that committee. Any such committee, to
8-27 the extent provided in such resolution or in the regulations, shall
9-1 have and may exercise all of the authority of the managers, subject
9-2 to the limitations set forth in Sections B and C of this Article.
9-3 Unless the resolution designating a particular committee, the
9-4 articles of organization, or the regulations expressly so provides,
9-5 a committee of the managers does not have the authority to
9-6 authorize or make a distribution of limited liability company cash
9-7 or property to the members or to authorize the issuance of
9-8 interests in the limited liability company.
9-9 SECTION 1.10. Article 2.21, Texas Limited Liability Company
9-10 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
9-11 read as follows:
9-12 Art. 2.21. DESIGNATION OF OFFICERS; AUTHORITY AND APPARENT
9-13 AUTHORITY OF OFFICERS, AGENTS, MANAGERS, AND MEMBERS <POWERS OF
9-14 MANAGERS AND OFFICERS>. A. One or more persons, who may or may
9-15 not be managers or members, may be designated as officers of the
9-16 limited liability company by the manager or managers, if management
9-17 is vested in one or more managers, or by the member or members, if
9-18 management of the limited liability company is reserved to the
9-19 members <The managers may designate one or more persons as officers
9-20 of the limited liability company who are not managers. Every
9-21 manager and officer is an agent of the limited liability company
9-22 for the purpose of its business and the act of a manager or
9-23 officer, including the execution in the name of the limited
9-24 liability company of any instrument for apparently carrying on in
9-25 the usual way the business of the limited liability company, binds
9-26 the limited liability company unless the manager or officer so
9-27 acting otherwise lacks the authority to act for the limited
10-1 liability company and the person with whom the manager or officer
10-2 is dealing has knowledge of the fact that the manager or officer
10-3 has no such authority>.
10-4 B. All officers, agents, managers, and members of the
10-5 limited liability company, as among themselves and the limited
10-6 liability company, have authority and perform duties in the
10-7 management of the limited liability company as may be provided in
10-8 the regulations or as may be determined by resolution of the
10-9 manager or managers, if management is vested in one or more
10-10 managers, or of the member or members, if management is reserved to
10-11 the members, in each case not inconsistent with the regulations or
10-12 the articles of organization.
10-13 C. Except as otherwise provided in this Article, the
10-14 following are agents of a limited liability company for the purpose
10-15 of its business:
10-16 (1) any one or more officers or other agents of a
10-17 limited liability company who are vested with actual or apparent
10-18 authority;
10-19 (2) each manager, to the extent that management of the
10-20 limited liability company is vested in that manager; and
10-21 (3) each member, to the extent that management of the
10-22 limited liability company has been reserved to that member.
10-23 D. An act, including the execution in the name of the
10-24 limited liability company of any instrument, for the purpose of
10-25 apparently carrying on in the usual way the business of the limited
10-26 liability company by any of the persons described in Section C of
10-27 this Article binds the limited liability company unless:
11-1 (1) the officer, agent, manager, or member so acting
11-2 otherwise lacks the authority to act for the limited liability
11-3 company; and
11-4 (2) the person with whom the officer, agent, manager,
11-5 or member is dealing has knowledge of the fact that the officer,
11-6 agent, manager, or member does not have that authority.
11-7 SECTION 1.11. Part Two, Texas Limited Liability Company Act
11-8 (Article 1528n, Vernon's Texas Civil Statutes), is amended by
11-9 adding Article 2.23 to read as follows:
11-10 Art. 2.23. VOTING, QUORUM, AND ACTION. A. Except as
11-11 otherwise provided in this Article, in the articles of
11-12 organization, or in the regulations, a majority of the members,
11-13 managers, or members of any committee of the managers constitutes a
11-14 quorum for the transaction of business at any meeting of the
11-15 members, the managers, or the committee. An act of a majority of
11-16 the members entitled to vote, of the managers, or of the members of
11-17 a committee who are present at a meeting of the members, the
11-18 managers, or the committee at which a quorum is present is the act
11-19 of the members, the managers, or the committee.
11-20 B. (1) Unless otherwise provided by the articles of
11-21 organization or the regulations, any act required or permitted to
11-22 be taken at any meeting of the members, the managers, or any
11-23 committee may be taken without a meeting, without prior notice, and
11-24 without a vote if a consent or consents in writing, setting forth
11-25 the action so taken, is signed by the members, managers, or
11-26 committee members, as the case may be, having not fewer than the
11-27 minimum number of votes that would be necessary to take the action
12-1 at a meeting at which all members, managers, or committee members,
12-2 as the case may be, entitled to vote on the action were present and
12-3 voted.
12-4 (2) Unless otherwise provided in the regulations, a
12-5 telegram, telex, cablegram, or similar transmission by a person, or
12-6 a photographic, photostatic, facsimile, or similar reproduction of
12-7 a writing signed by a person, shall be regarded as signed by that
12-8 person for the purposes of this Article.
12-9 C. Subject to the provisions required or permitted by this
12-10 Act, unless otherwise provided in the articles of organization or
12-11 the regulations, members, managers, or members of any committee may
12-12 participate in and hold a meeting of the members, managers, or
12-13 committee by means of conference telephone or similar
12-14 communications equipment by means of which all persons
12-15 participating in the meeting may hear each other. Participation in
12-16 a meeting pursuant to this Section constitutes presence in person
12-17 at the meeting except where a person participates in the meeting
12-18 for the express purpose of objecting to the transaction of any
12-19 business on the ground that the meeting is not lawfully called or
12-20 convened.
12-21 D. Except as provided in the articles of organization or the
12-22 regulations, the affirmative vote, approval, or consent of a
12-23 majority of all the members is required to:
12-24 (1) amend the articles of organization or regulations;
12-25 (2) change the status of the limited liability company
12-26 from one in which management is reserved to the members to one in
12-27 which management is vested in one or more managers, or vice versa;
13-1 (3) issue any additional membership interests in the
13-2 limited liability company subsequent to the issuance of membership
13-3 interests to the initial members of the limited liability company;
13-4 (4) approve any merger, consolidation, share or
13-5 interest exchange, or other transaction authorized by or subject to
13-6 the provisions of Part Ten of this Act;
13-7 (5) voluntarily cause the dissolution of the limited
13-8 liability company;
13-9 (6) authorize any transaction, agreement, or action on
13-10 behalf of the limited liability company that is unrelated to its
13-11 purpose as set forth in the regulations or articles of organization
13-12 or that otherwise contravenes the regulations; or
13-13 (7) authorize any act that would make it impossible to
13-14 carry on the ordinary business of the limited liability company.
13-15 E. Except as provided in the regulations, the affirmative
13-16 vote, approval, or consent of a majority of all of the managers, if
13-17 management of the limited liability company is vested in one or
13-18 more managers, or of the members, if management of the limited
13-19 liability company is reserved to the members, is required to take
13-20 any action, other than an action listed in Section D of this
13-21 Article, that is not apparently for the carrying on of the business
13-22 of the limited liability company in the usual way.
13-23 F. Except as otherwise provided in the articles of
13-24 organization or the regulations, for purposes of this Act, a
13-25 "majority" of the members, managers, or any committee of the
13-26 managers means more than one-half, by number, of all the members,
13-27 managers, or members of the committee, as the case may be.
14-1 SECTION 1.12. Section A, Article 3.02, Texas Limited
14-2 Liability Company Act (Article 1528n, Vernon's Texas Civil
14-3 Statutes), is amended to read as follows:
14-4 A. The initial Articles of Organization shall set forth:
14-5 (1) The name of the limited liability company;
14-6 (2) The period of duration, which may be perpetual
14-7 <not exceed 30 years from the date of filing with the Secretary of
14-8 State>;
14-9 (3) The purpose for which the limited liability
14-10 company is organized which may be stated to be, or to include, the
14-11 transaction of any or all lawful business for which limited
14-12 liability companies may be organized under this Act;
14-13 (4) The address of its initial registered office
14-14 <principal place of business in the state> and the name <and
14-15 address> of its initial registered agent at that address <in the
14-16 state>;
14-17 (5) If the limited liability company is to have <be
14-18 managed by> a manager or managers, a statement to that effect <that
14-19 the company is to be managed by a manager or managers> and the
14-20 names and addresses of the initial manager or <such> managers <who
14-21 are to serve as managers until the first annual meeting of members
14-22 or until their successors are duly elected>. If the <management of
14-23 a> limited liability company will not have managers, a statement to
14-24 that effect and <is reserved to the members,> the name and
14-25 addresses of the initial members;<.>
14-26 (6) The name and address of each organizer;
14-27 (7) Any provision required by Part Eleven of this Act,
15-1 if the limited liability company is a professional limited
15-2 liability company; and
15-3 (8) Any other provisions, not inconsistent with law,
15-4 which the members elect to set out in the articles of organization
15-5 for the regulation of the internal affairs of the limited liability
15-6 company, including any provisions which under this Act are
15-7 <required or> permitted to be set out in the regulations of the
15-8 limited liability company.
15-9 SECTION 1.13. Section B, Article 3.06, Texas Limited
15-10 Liability Company Act (Article 1528n, Vernon's Texas Civil
15-11 Statutes), is amended to read as follows:
15-12 B. The articles of amendment shall set forth:
15-13 (1) The name of the limited liability company.
15-14 (2) If the amendment alters any provision of the
15-15 original or amended articles of organization an identification by
15-16 reference or description of the altered provision and a statement
15-17 of its text as it is amended to read. If the amendment is an
15-18 addition to the original or amended articles of organization a
15-19 statement of that fact and the text of each provision added.
15-20 (3) A statement that the amendment was approved in
15-21 accordance with Section D of Article 2.23 of this Act or as
15-22 otherwise provided in the articles of organization or regulations
15-23 and the date of the approval.
15-24 SECTION 1.14. Part Three, Texas Limited Liability Company
15-25 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended by
15-26 adding Article 3.09 to read as follows:
15-27 Art. 3.09. RESTATED ARTICLES OF ORGANIZATION. A. By
16-1 following the procedure to amend the articles of organization
16-2 provided by this Act, a limited liability company may authorize,
16-3 execute, and file restated articles of organization that restate
16-4 the entire text of the articles of organization, as amended or
16-5 supplemented by:
16-6 (1) all certificates of amendment previously issued by
16-7 the Secretary of State; or
16-8 (2) all certificates of amendment previously issued by
16-9 the Secretary of State and by further amendments included in the
16-10 restated articles of organization.
16-11 Unless otherwise provided by the articles of organization or
16-12 the regulations, member approval is not required if further
16-13 amendment is not made by the restated articles of organization.
16-14 B. Restated articles of organization that restate the entire
16-15 articles of organization as amended and supplemented by all
16-16 certificates of amendment previously issued by the Secretary of
16-17 State, without making a further amendment, must contain an
16-18 introductory paragraph stating that the instrument accurately
16-19 copies the articles of organization and all amendments to the
16-20 articles of organization that are in effect to date and that the
16-21 instrument does not contain any other change in a provision of the
16-22 articles of organization or a previous amendment, other than:
16-23 (1) the insertion of the current number of managers,
16-24 if any, and the names and addresses of the persons then serving as
16-25 managers, if any, in lieu of similar information concerning the
16-26 initial managers; and
16-27 (2) the omission of the name and address of each
17-1 organizer.
17-2 C. An instrument containing restated articles of
17-3 organization that restate the entire articles of organization as
17-4 amended and supplemented by all certificates of amendment
17-5 previously issued by the Secretary of State and as further amended
17-6 by the restated articles of organization must:
17-7 (1) state that each amendment made by the restated
17-8 articles of organization has been effected in conformity with this
17-9 Act;
17-10 (2) include the statements required by this Act to be
17-11 contained in articles of amendment; and
17-12 (3) state that the instrument accurately copies the
17-13 articles of organization and all amendments that are in effect to
17-14 date and as further amended by the restated articles of
17-15 organization and that the instrument does not contain any other
17-16 change in a provision of the articles of organization or the
17-17 previous amendments, other than:
17-18 (a) the insertion of the current number of
17-19 managers, if any, and the names and addresses of the persons then
17-20 serving as managers, if any, in lieu of similar information
17-21 concerning the initial managers; and
17-22 (b) the omission of the name and address of each
17-23 organizer.
17-24 D. Restated articles of organization must be executed on
17-25 behalf of the limited liability company by an authorized manager or
17-26 member unless capital has not been paid into the limited liability
17-27 company and the restated articles of organization have been adopted
18-1 by the organizer, in which case the restated articles of
18-2 organization may be executed on behalf of the limited liability
18-3 company by the organizer. The original and a copy of the restated
18-4 articles of organization shall be delivered to the Secretary of
18-5 State. If the Secretary of State finds that the restated articles
18-6 of organization conform to law, and the appropriate filing fee is
18-7 paid as required by law, the Secretary of State shall:
18-8 (1) endorse on the original and the copy the word
18-9 "Filed" and the month, day, and year of filing;
18-10 (2) file the original in the Secretary of State's
18-11 office; and
18-12 (3) issue a restated certificate of organization and
18-13 affix the copy to the restated certificate of organization.
18-14 E. The restated certificate of organization, together with
18-15 the copy of the restated articles of organization affixed to the
18-16 restated certificate of organization by the Secretary of State,
18-17 shall be delivered to the limited liability company or its
18-18 representative.
18-19 F. On issuance of a restated certificate of organization by
18-20 the Secretary of State, the original articles of organization and
18-21 all amendments to the original articles are superseded, and the
18-22 restated articles of organization are the articles of organization
18-23 of the limited liability company.
18-24 SECTION 1.15. Section A, Article 4.01, Texas Limited
18-25 Liability Company Act (Article 1528n, Vernon's Texas Civil
18-26 Statutes), is amended to read as follows:
18-27 A. A limited liability company may have one or more members.
19-1 In connection with the formation of a limited liability company, a
19-2 person acquiring an interest as a member becomes a member on the
19-3 latter of:
19-4 (1) the date of formation of the limited liability
19-5 company; or
19-6 (2) the date stated in the records of the limited
19-7 liability company as the date that the person becomes a member or,
19-8 if no date is stated in those records, on the date that the
19-9 person's admission is first reflected in the records of the limited
19-10 liability company.
19-11 SECTION 1.16. Article 4.05, Texas Limited Liability Company
19-12 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended by
19-13 amending Section A and adding Section C to read as follows:
19-14 A. Unless otherwise provided by the regulations:
19-15 (1) a membership interest is assignable in whole or in
19-16 part;
19-17 (2) an assignment of a membership interest does not of
19-18 itself dissolve the limited liability company or entitle the
19-19 assignee to participate in the management and affairs of the
19-20 limited liability company or to become<,> or <to> exercise any
19-21 rights <or powers> of<,> a member;
19-22 (3) an assignment entitles the assignee to be
19-23 allocated income, gain, loss, deduction, credit, or similar items,
19-24 and to receive distributions, to which the assignor was entitled,
19-25 to the extent those items are assigned, and, for any proper
19-26 purpose, to require reasonable information or account of
19-27 transactions of the limited liability company and to make
20-1 reasonable inspection of the books and records of the limited
20-2 liability company; and
20-3 (4) until the assignee becomes a member, the assignor
20-4 member continues to be a member and to have the power to exercise
20-5 any rights or powers of a member, except to the extent those rights
20-6 or powers are assigned.
20-7 C. Until an assignee of the interest of a member in a
20-8 limited liability company is admitted as a member, the assignee
20-9 does not have liability as a member solely as a result of the
20-10 assignment.
20-11 SECTION 1.17. Section B, Article 5.02, Texas Limited
20-12 Liability Company Act (Article 1528n, Vernon's Texas Civil
20-13 Statutes), is amended to read as follows:
20-14 B. Except as otherwise provided by the articles of
20-15 organization or regulations, a member or the member's legal
20-16 representative or successor is obligated to the limited liability
20-17 company to perform an enforceable promise to make a contribution to
20-18 or otherwise pay cash or transfer property to a limited liability
20-19 company, notwithstanding the member's death, disability, or other
20-20 change in circumstances. If a member or a member's legal
20-21 representative or successor does not make a contribution or other
20-22 payment of cash or transfer of property required by the enforceable
20-23 promise, whether as a contribution or with respect to a
20-24 contribution previously made, that member or the member's legal
20-25 representative or successor is obligated, at the option of the
20-26 limited liability company, to pay to the limited liability company
20-27 an amount of cash equal to that portion of the agreed value, as
21-1 stated in the regulations or in the limited liability company
21-2 records required to be kept under Article 2.22 of this Act <act>,
21-3 of the contribution represented by the amount of cash that has not
21-4 been paid or the value of the property that has not been
21-5 transferred.
21-6 SECTION 1.18. Part Five, Texas Limited Liability Company Act
21-7 (Article 1528n, Vernon's Texas Civil Statutes), is amended by
21-8 adding Article 5.02-1 to read as follows:
21-9 Art. 5.02-1. ALLOCATION OF PROFITS AND LOSSES. A. The
21-10 profits and losses of a limited liability company shall be
21-11 allocated among the members and among classes of members in the
21-12 manner provided in the regulations. If the regulations do not
21-13 otherwise provide, the profits and losses shall be allocated in
21-14 accordance with the then current percentage or other interest in
21-15 the limited liability company of the members stated in limited
21-16 liability company records of the kind described in Section A of
21-17 Article 2.22 of this Act.
21-18 SECTION 1.19. Article 5.05, Texas Limited Liability Company
21-19 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
21-20 read as follows:
21-21 Art. 5.05. WITHDRAWAL OR EXPULSION <RESIGNATION> OF MEMBER.
21-22 A. A member may withdraw or be expelled from a limited liability
21-23 company at the time or on the occurrence of events specified in the
21-24 regulations.
21-25 SECTION 1.20. Article 6.01, Texas Limited Liability Company
21-26 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
21-27 read as follows:
22-1 Art. 6.01. DISSOLUTION. A. Except as provided by Section B
22-2 of this Article, a <A> limited liability company shall be dissolved
22-3 on the first of the following to occur:
22-4 (1) <When> the period fixed for the duration of the
22-5 limited liability company expires;<.>
22-6 (2) <On> the occurrence of events specified in the
22-7 articles of organization or regulations to cause dissolution;<.>
22-8 (3) the action of the members to dissolve the limited
22-9 liability company; <Written consent of all members to dissolution.>
22-10 (4) if no capital has been paid into the limited
22-11 liability company, the act of the organizer or the managers of the
22-12 limited company to dissolve the limited liability company;
22-13 (5) except <Except> as otherwise provided in the
22-14 regulations, upon the death, <retirement, resignation,> expulsion,
22-15 withdrawal pursuant to or as provided in the articles of
22-16 organization or regulations, bankruptcy, or dissolution of a member
22-17 or the occurrence of any other event which terminates the continued
22-18 membership of a member in the limited liability company<, unless
22-19 there is at least one remaining member and the business of the
22-20 limited liability company is continued by the consent of the number
22-21 of members or class thereof stated in the articles of organization
22-22 or regulations of the limited liability company or if not so
22-23 stated, by all remaining members.>; or
22-24 (6) entry <(5) Entry> of a decree of judicial
22-25 dissolution under Section 6.02 of this Act.
22-26 B. A limited liability company is not dissolved if an event
22-27 of dissolution described by Subsection (1), (2), or (5) of Section
23-1 A of this Article occurs, there is at least one remaining member,
23-2 and the business of the limited liability company is continued by
23-3 the vote of the members or class as stated in the articles of
23-4 organization or regulations of the limited liability company, or if
23-5 not so stated, by all remaining members. Unless otherwise provided
23-6 in the articles of organization or in the regulations, an election
23-7 to continue the business of the limited liability company must be
23-8 made within 90 days after the date of the occurrence of the event
23-9 of dissolution. If an election to continue the business of the
23-10 limited liability company is made following the termination of the
23-11 period fixed for the duration of the limited liability company or
23-12 the occurrence of events specified in the articles of organization
23-13 to cause dissolution, the election is not effective unless an
23-14 appropriate amendment is made by the limited liability company to
23-15 its articles of organization during the three-year period following
23-16 the date of the event of dissolution, extending the period fixed
23-17 for the duration of the limited liability company or deleting the
23-18 event specified in the articles of organization that caused the
23-19 dissolution, as applicable.
23-20 SECTION 1.21. Article 6.03, Texas Limited Liability Company
23-21 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
23-22 read as follows:
23-23 Art. 6.03. WINDING UP. A. On the dissolution of a limited
23-24 liability company, the limited liability company's affairs shall be
23-25 wound up as soon as reasonably practicable. The winding up shall
23-26 be accomplished by the managers or members or by any other person
23-27 or persons desginated by the articles of organization, by the
24-1 regulations, or by resolution of the managers or members. In
24-2 addition, a court of competent jurisdiction, on cause shown, may
24-3 wind up the limited liability company's affairs on application of
24-4 any member or the member's legal representative or assignee and, in
24-5 connection with the winding up, may appoint a person to carry out
24-6 the liquidation and may make all other orders, directions, and
24-7 inquiries that the circumstances require.
24-8 SECTION 1.22. Article 6.05, Texas Limited Liability Company
24-9 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
24-10 read as follows:
24-11 Art. 6.05. Procedure before filing articles of dissolution.
24-12 A. Before filing articles of dissolution:
24-13 (1) The limited liability company shall cease to carry
24-14 on its business, except insofar as may be necessary for the winding
24-15 up thereof.
24-16 (2) The limited liability company shall cause written
24-17 notice by registered or certified mail of its intention to dissolve
24-18 to be mailed to each known creditor of and claimant against the
24-19 limited liability company.
24-20 (3) The limited liability company shall proceed to
24-21 collect its assets, convey and dispose of such of its properties as
24-22 are not to be distributed in kind to its members, pay, satisfy or
24-23 discharge its liabilities and obligations, or make adequate
24-24 provisions for payment and discharge thereof, and do all other acts
24-25 required to liquidate its business and affairs; in case its
24-26 property and assets are not sufficient to satisfy or discharge all
24-27 the limited liability company's liabilities and obligations, the
25-1 limited liability company shall apply them so far as they will go
25-2 to the just and equitable payment of the liabilities and
25-3 obligations. After paying or discharging all of its obligations,
25-4 or making adequate provisions for payment and discharge thereof,
25-5 the limited liability company shall then distribute the remainder
25-6 of its assets, either in cash or in kind, among its members
25-7 <shareholders> according to their respective rights and interest.
25-8 (4) The limited liability company, at any time during
25-9 the liquidation of its business and affairs, may make application
25-10 to any district court of this state in the county in which the
25-11 registered office of the limited liability company is situated to
25-12 have the liquidation continued under the supervision of such court
25-13 as provided in this Act.
25-14 SECTION 1.23. Article 6.07, Texas Limited Liability Company
25-15 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
25-16 read as follows:
25-17 Art. 6.07. Articles of dissolution. A. If voluntary
25-18 dissolution proceedings have not been revoked, then, when all
25-19 liabilities and obligations of the limited liability company have
25-20 been paid or discharged, or adequate provision has been made
25-21 therefor <thereof>, or in case its property and assets are not
25-22 sufficient to satisfy and discharge all the limited liability
25-23 company's liabilities and obligations, then when all the property
25-24 and assets have been applied so far as they will go to the just and
25-25 equitable payment of the limited liability company's liabilities
25-26 and obligations, and all of the remaining property and assets of
25-27 the limited liability have been distributed to its members
26-1 according to their respective rights and interest, articles of
26-2 dissolution shall be executed on behalf of the limited liability
26-3 company by a manager or authorized member, or in the case of a
26-4 dissolution by action of the organizer of the limited liability
26-5 company, by the organizer, which shall set forth:
26-6 (1) The name of the limited liability company.
26-7 (2) The names and respective addresses of its
26-8 managers, if any.
26-9 (3) That all debts, obligations, and liabilities of
26-10 the limited liability company have been paid or discharged or that
26-11 adequate provision has been made therefor, or, in case the limited
26-12 liability company's property and assets were not sufficient to
26-13 satisfy and discharge all its debts, liabilities, and obligations,
26-14 that all property and assets have been applied so far as they will
26-15 go to the payment thereof in a just and equitable manner and that
26-16 no property or assets remain available for distribution among its
26-17 members, or, that the limited liability company has not acquired
26-18 any debts, obligations, or liabilities.
26-19 (4) That all remaining property and assets of the
26-20 limited liability company have been distributed among its members
26-21 in accordance with their respective rights and interest or that no
26-22 property remained for distribution to members after applying it as
26-23 far as it would go to the just and equitable payment of the debts,
26-24 liabilities, and obligations of the limited liability company, or
26-25 that the limited liability company has not acquired any property or
26-26 assets and therefore distributions to members were not required.
26-27 (5) If capital has not been paid into the limited
27-1 liability company, a copy of the resolution to dissolve, together
27-2 with a statement that the resolution was adopted by the act of the
27-3 organizer or the managers of the limited liability company and of
27-4 the date of adoption <There are no suits pending against the
27-5 limited liability company in any court, or that adequate provisions
27-6 have been made for satisfaction of any judgment, order, or decree
27-7 which may be entered against it in any pending suit>.
27-8 (6) If the limited liability company elected to
27-9 dissolve by action <written consent> of its <all> members, a<:>
27-10 <(a) A> copy of the resolution <written consent>
27-11 to dissolve, together with <and> a statement that the resolution
27-12 was adopted in accordance with Section D, Article 2.23, of this Act
27-13 or as otherwise provided in the articles of incorporation or the
27-14 regulations and the date of adoption <such written consent has been
27-15 signed by all members of the limited liability company or signed in
27-16 their names by their attorneys thereunto duly authorized>.
27-17 SECTION 1.24. Article 7.03, Texas Limited Liability Company
27-18 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
27-19 read as follows:
27-20 Art. 7.03. Limited Liability Company Name of Foreign Limited
27-21 Liability Company. A. No certificate of authority shall be issued
27-22 to a foreign limited liability company unless the limited liability
27-23 company name of such limited liability company:
27-24 (1) Shall contain the word "Limited Liability Company"
27-25 or "Limited Company" or the abbreviations "L.L.C.," "LLC," "LC,"
27-26 <"Ltd."> or "L.C." and shall contain such additional words as may
27-27 be required by law. The word "Limited" may be abbreviated as
28-1 "Ltd." or "LTD" and the word "Company" may be abbreviated as "Co."
28-2 However, a foreign limited liability company that procured a
28-3 certificate of authority to transact business in this state before
28-4 September 1, 1993, and that complied with this Section on the date
28-5 of procuring the certificate, but does not comply with this Section
28-6 as revised, is not required to change its name.
28-7 (2) Shall not contain any word or phrase which
28-8 indicates or implies that it is organized for any purpose other
28-9 than one or more of the purposes contained in its articles of
28-10 organization.
28-11 (3) Shall not be the same as, or deceptively similar
28-12 to, the name of any domestic limited liability company, corporation
28-13 or limited partnership existing under the laws of this state or of
28-14 any foreign limited liability company, corporation or limited
28-15 partnership authorized to transact business in this state, or a
28-16 name the exclusive right to which is, at the time, reserved or
28-17 registered in the manner provided in this Act or any other statute
28-18 relating to corporations, partnerships, or other business entities;
28-19 provided that a name may be similar if written consent is obtained
28-20 from the existing limited liability company, corporation or limited
28-21 partnership having the name deemed to be similar or the person, or
28-22 limited liability company, for whom the name deemed to be similar
28-23 is reserved or registered in the office of the Secretary of State.
28-24 A certificate of authority shall be issued as provided in this Act
28-25 to any foreign limited liability company having a name the same as,
28-26 deceptively similar to, or, if no consent is given, similar to the
28-27 name of any limited liability company existing under the laws of
29-1 this state or of any foreign limited liability company authorized
29-2 to transact business in this state, or a name the exclusive right
29-3 to which is, at the time, reserved or registered, provided such
29-4 foreign limited liability company qualifies and does business under
29-5 a name that meets the requirements of this article. The foreign
29-6 limited liability company shall set forth in the application for a
29-7 certificate of authority the name under which it is qualifying and
29-8 shall file an assumed name certificate as required by law.
29-9 SECTION 1.25. Article 8.12, Texas Limited Liability Company
29-10 Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to
29-11 read as follows:
29-12 Art. 8.12. Applicability of other statutes. A. Subject to
29-13 Section C of this Article, Articles 2.07, 4.14, and 5.14 and Part
29-14 Seven of the TBCA apply to a limited liability company and its
29-15 members, managers, and officers.
29-16 B. Subject to Section C of this Article, Articles 2.03
29-17 through 2.06, 2.09, 2.09A, and 7.01 through 7.07, Texas
29-18 Miscellaneous Corporation Laws Act (Article 1302-1.01 et seq.,
29-19 Vernon's Texas Civil Statutes), as amended, apply to a limited
29-20 liability company and its members, managers, and officers.
29-21 C. For purposes of the application of the articles of the
29-22 TBCA and the Texas Miscellaneous Corporation Laws Act as provided
29-23 by Sections A and B of this Article, as context requires:
29-24 (1) a reference to a corporation includes a limited
29-25 liability company;
29-26 (2) a reference to a share includes a membership
29-27 interest;
30-1 (3) a reference to a shareholder includes a member;
30-2 (4) a reference to a director includes a manager;
30-3 (5) a reference to articles of incorporation includes
30-4 articles of organization; and
30-5 (6) a reference to bylaws includes regulations. <To
30-6 the extent this Act contains no provision with respect to one of
30-7 the matters provided for in the TBCA or the Texas Miscellaneous
30-8 Corporation Laws Act as such acts shall be amended from time to
30-9 time, the provisions of the TBCA and the Texas Miscellaneous
30-10 Corporation Laws Act shall supplement the provisions of this Act to
30-11 the extent they are not inconsistent with the provisions of this
30-12 Act. Without limiting the generality of the foregoing, Article 5
30-13 of the TBCA shall supplement the provisions of this Act and a
30-14 limited liability company shall be an "other entity" as that term
30-15 is defined in the TBCA and Article 7.06 of the Texas Miscellaneous
30-16 Corporation Laws Act shall be applicable to limited liability
30-17 company managers to the same extent as to directors.>
30-18 SECTION 1.26. Section A, Article 9.01, Texas Limited
30-19 Liability Company Act (Article 1528n, Vernon's Texas Civil
30-20 Statutes), is amended to read as follows:
30-21 A. The Secretary of State is authorized and required to
30-22 collect for the use of the State the following fees:
30-23 (1) Filing articles of organization of a domestic
30-24 limited liability company and issuing the certificate of
30-25 organization, Two Hundred Dollars ($200.00).
30-26 (2) Filing articles of amendment of a domestic limited
30-27 liability company and issuing the certificate of amendment, One
31-1 Hundred Dollars ($100.00).
31-2 (3) Filing articles of merger involving one or more
31-3 <a> domestic or foreign limited liability companies: <company,>
31-4 (a) Two Hundred Dollars ($200.00), if another
31-5 type of domestic entity is not a party to the merger; or
31-6 (b) the greater of Two Hundred Dollars ($200.00)
31-7 or the highest filing fee for articles of merger under the
31-8 applicable Texas statute under which the other domestic entity or
31-9 entities are incorporated or organized, if another type of domestic
31-10 entity is party to the merger.
31-11 (4) Filing an application of a foreign limited
31-12 liability company for certificate of authority to transact business
31-13 in this state and issuing such a certificate of authority, Five
31-14 Hundred Dollars ($500.00).
31-15 (5) Filing an application of a foreign limited
31-16 liability company for an amended certificate of authority to
31-17 transact business in this state and issuing such an amended
31-18 certificate of authority, One Hundred Dollars ($100.00).
31-19 (6) Filing restated articles of organization of a
31-20 domestic limited liability company, Two Hundred Dollars ($200.00).
31-21 (7) Filing application for reservations of a limited
31-22 liability company name and issuing certificate thereof, Twenty-Five
31-23 Dollars ($25.00).
31-24 (8) Filing notice of transfer of reserved limited
31-25 liability company name and issuing a certificate therefor, Ten
31-26 Dollars ($10.00).
31-27 (9) Filing statement of change of registered office or
32-1 registered agent, or both, Ten Dollars ($10.00).
32-2 (10) Filing statement of change of address of
32-3 registered agent, Ten Dollars ($10.00); provided, however, that the
32-4 maximum fee for simultaneous filings by a registered agent for more
32-5 than one limited liability company shall not exceed Five Hundred
32-6 Dollars ($500.00).
32-7 (11) Filing articles of dissolution and issuing
32-8 certificate therefor, Twenty-Five Dollars ($25.00).
32-9 (12) Filing application for withdrawal and issuing
32-10 certificate therefor, Ten Dollars ($10.00).
32-11 (13) Filing certificate from home state that foreign
32-12 limited liability company is no longer existent in said state, Ten
32-13 Dollars ($10.00).
32-14 (14) Maintaining the record of service of any process,
32-15 notice or demand upon the Secretary of State as agent for foreign
32-16 and domestic limited liability companies, Twenty-Five Dollars
32-17 ($25.00).
32-18 (15) Filing any instrument pursuant to this act not
32-19 expressly provided for above, Ten Dollars ($10.00).
32-20 SECTION 1.27. Part Nine, Texas Limited Liability Company Act
32-21 (Article 1528n, Vernon's Texas Civil Statutes), is amended by
32-22 adding Article 9.03 to read as follows:
32-23 Art. 9.03. DELAYED EFFECTIVENESS OF CERTAIN FILINGS. A.
32-24 (1) For purposes of this Article, "permitted act" means a filing
32-25 with the Secretary of State under this Act for:
32-26 (a) the articles of organization of a limited
32-27 liability company under this Act;
33-1 (b) an amendment to or restatement of the
33-2 articles of organization;
33-3 (c) a merger;
33-4 (d) the application of a foreign limited
33-5 partnership to procure a certificate of authority to transact
33-6 business in this state or to withdraw from doing business in this
33-7 state;
33-8 (e) an amendment to the certificate of authority
33-9 of a foreign limited liability company to transact business in this
33-10 state; or
33-11 (f) a change in registered office or registered
33-12 agent.
33-13 (2) A permitted act may be made effective as of a time
33-14 and date after the time and date otherwise provided in this Act or
33-15 may be made effective on the occurrence of events or facts that may
33-16 occur in the future. Those events or facts may include future acts
33-17 of any person if the articles of organization, articles of
33-18 amendment or restatement, articles of merger, application, or other
33-19 document required by this Act to be filed with the Secretary of
33-20 State to make the permitted act effective clearly and expressly
33-21 states, in addition to any other statement or information required:
33-22 (a) a time and date certain on which the
33-23 permitted act is to become effective; or
33-24 (b) if the permitted act is to become effective
33-25 on the occurrence of events or facts that may occur in the future:
33-26 (i) the manner in which the events or
33-27 facts cause the permitted act to become effective; and
34-1 (ii) the date of the 90th day after the
34-2 date of the filing of the articles of organization, articles of
34-3 amendment or restatement, articles of merger, application, or other
34-4 document.
34-5 (3) A permitted act becoming effective as of a time or
34-6 date certain that is after the time and date otherwise provided in
34-7 this Act must specify a subsequent effective time and date that is
34-8 not more than 90 days after the date of the filing of the articles
34-9 of organization, articles of amendment or restatement, articles of
34-10 merger, application, or other document required by this Act. The
34-11 time certain on which the permitted act is to become effective may
34-12 not be midnight or 12 p.m.
34-13 (4) Within 90 days after the date of filing of the
34-14 articles of organization, articles of amendment or restatement,
34-15 articles of merger, application, or other document for a permitted
34-16 act becoming effective on the occurrence of events or facts that
34-17 may occur in the future, other than the mere passage of time, a
34-18 statement must be filed with the Secretary of State confirming that
34-19 all the events or facts on which the effectiveness of the permitted
34-20 act is conditioned have been satisfied or waived and the date on
34-21 which the condition was satisfied or waived.
34-22 B. A statement required by Section A of this Article must be
34-23 executed on behalf of each domestic or foreign limited liability
34-24 company or other person required to execute the articles of
34-25 organization, articles of amendment or restatement, articles of
34-26 merger, application, or other document required by this Act to be
34-27 filed with the Secretary of State to make the permitted act
35-1 effective by a member, manager, officer, or other duly authorized
35-2 representative, including a member, manager, officer, or duly
35-3 authorized representative of any successor domestic or foreign
35-4 limited liability company or other entity. An original and a copy
35-5 of the statement must be filed with the Secretary of State.
35-6 C. Notwithstanding any other provision of this Act to the
35-7 contrary, a permitted act that is to become effective as of a time
35-8 or date after the time and date otherwise provided in this Act, to
35-9 the extent permitted by this Article, shall become effective as of
35-10 the subsequent time and date. Any certificate issued by the
35-11 Secretary of State on the filing of the articles of organization,
35-12 articles of amendment or restatement, articles of merger,
35-13 application, or other document otherwise required by this Act for
35-14 the permitted act to become effective shall expressly set forth the
35-15 time and date on which the permitted act is to become effective.
35-16 D. (1) A permitted act to be made effective on the
35-17 occurrence of events or facts that may occur in the future, other
35-18 than the mere passage of time, and for which the statement required
35-19 by Subsection (4) of Section A of this Article is filed with the
35-20 Secretary of State within the prescribed time becomes effective as
35-21 of the time and date on which the latest specified event or fact
35-22 occurred or the time and date on which the condition is otherwise
35-23 satisfied or waived. Any certificate issued or notation,
35-24 acknowledgment, or other statement made by the Secretary of State
35-25 on the filing of the articles of organization, articles of
35-26 amendment or restatement, articles of merger, application, or other
35-27 document otherwise required by this Act for the permitted act to
36-1 become effective must:
36-2 (a) state that "The effectiveness of the action
36-3 to which this instrument relates is conditioned on the occurrence
36-4 of certain facts or events described in the filing to which this
36-5 instrument relates"; or
36-6 (b) make reference in any manner approved by the
36-7 Secretary of State to the fact that the effectiveness of the action
36-8 is so conditioned.
36-9 (2) The time and date on which a condition to the
36-10 effectiveness of a permitted act is satisfied or waived as set
36-11 forth in a statement filed with the Secretary of State pursuant to
36-12 Subsection (4) of Section A of this Article shall be conclusively
36-13 regarded as the time and date on which the condition was satisfied
36-14 or waived for purposes of this section.
36-15 E. If the effectiveness of any permitted act is conditioned
36-16 on the occurrence of events or facts that may occur in the future,
36-17 other than the mere passage of time, and the statement required by
36-18 Subsection (4) of Section A of this Article is not filed with the
36-19 Secretary of State within the prescribed time, the permitted act
36-20 does not become effective unless there is subsequently filed with
36-21 the Secretary of State the articles of organization, articles of
36-22 amendment or restatement, articles of merger, application, or other
36-23 document required by this Act to be filed with the Secretary of
36-24 State to make the permitted act effective.
36-25 F. If articles of organization, articles of amendment or
36-26 restatement, articles of merger, an application, or any other
36-27 document permitted to be filed pursuant to this Act with the
37-1 Secretary of State have been filed but the event or transaction
37-2 evidenced by the filing has not become effective, the filing may be
37-3 abandoned in accordance with the agreement of the parties to the
37-4 filing by filing a certificate of abandonment with the Secretary of
37-5 State before the effectiveness of the event or transaction in
37-6 accordance with the terms of the document so filed. The
37-7 certificate of abandonment must be signed on behalf of each
37-8 domestic or foreign limited liability company or other entity that
37-9 is a party to the event or transaction by a member, manager,
37-10 officer, or other authorized representative and must state the
37-11 nature of the filing to be abandoned, the date of the filing to be
37-12 abandoned, the parties to the filing to be abandoned, and that the
37-13 event or transaction has been abandoned in accordance with the
37-14 agreement of the parties. On the filing of the statement of
37-15 abandonment with the Secretary of State, the event or transaction
37-16 evidenced by the original filing shall be considered abandoned and
37-17 may not become effective.
37-18 SECTION 1.28. The Texas Limited Liability Company Act
37-19 (Article 1528n, Vernon's Texas Civil Statutes) is amended by adding
37-20 Parts Ten and Eleven to read as follows:
37-21 PART TEN
37-22 Art. 10.01. MERGER. A. A domestic limited liability
37-23 company may adopt a plan of merger and one or more domestic limited
37-24 liability companies may merge with one or more domestic or foreign
37-25 limited liability companies or other entities if:
37-26 (1) each constituent entity enters into a written plan
37-27 of merger containing the provisions set forth in Article 10.02 of
38-1 this Act for which:
38-2 (a) approval exists by all domestic limited
38-3 liability companies by the vote of a majority of their respective
38-4 members, unless the respective regulations or articles of
38-5 organization of each limited liability company provide otherwise;
38-6 and
38-7 (b) if one or more foreign limited liability
38-8 companies or other entities is a party to the merger or is to be
38-9 created by the terms of the plan of merger:
38-10 (i) the merger is permitted by the laws
38-11 under which each foreign limited liability company and each other
38-12 entity that is a party to the merger is formed or organized or by
38-13 the organizational documents or other constituent documents of the
38-14 foreign limited liability company or other entity that are not
38-15 inconsistent with those laws; and
38-16 (ii) each foreign limited liability
38-17 company or other entity that is a party to the merger complies with
38-18 those laws or documents in effecting the merger; and
38-19 (2) a member of a domestic limited liability company
38-20 that is a party to the merger, as a result of the merger, will not
38-21 become personally liable for the liabilities or obligations of any
38-22 other person unless the member consents to becoming personally
38-23 liable by action taken in connection with the specific plan of
38-24 merger approved by the domestic limited liability company.
38-25 Art. 10.02. PLAN OF MERGER. A. A plan of merger must
38-26 include:
38-27 (1) the name and state of domicile of each domestic or
39-1 foreign limited liability company or other entity that is a party
39-2 to the merger;
39-3 (2) the name of each domestic or foreign limited
39-4 liability company or other entity, if any, that will survive the
39-5 merger, which may be one or more of the domestic or foreign limited
39-6 companies or other entities party to the merger;
39-7 (3) the name and state of domicile of each new
39-8 domestic or foreign limited liability company or other entity, if
39-9 any, that may be created by the terms of the plan of merger;
39-10 (4) the terms and conditions of the merger, including,
39-11 if more than one domestic or foreign limited liability company or
39-12 other entity is to survive or to be created by the terms of the
39-13 plan of merger, the manner and basis of allocating and vesting:
39-14 (a) real estate and other property of each
39-15 domestic or foreign limited liability company and of each other
39-16 entity that is a party to the merger among one or more of the
39-17 surviving or new domestic or foreign limited liability companies
39-18 and other entities; and
39-19 (b) all liabilities and obligations of each
39-20 domestic or foreign limited liability company and other entity that
39-21 is a party to the merger among one or more of the surviving or new
39-22 domestic or foreign limited liability companies and other entities
39-23 or making adequate provision for the payment and discharge of the
39-24 liabilities and obligations;
39-25 (5) the manner and basis of converting any of the
39-26 limited liability company interests or other evidences of ownership
39-27 of each domestic or foreign limited liability company or other
40-1 entity that is a party to the merger into:
40-2 (a) limited liability company interests, shares,
40-3 obligations, evidences of ownership, rights to purchase securities,
40-4 or other securities of one or more of the surviving or new domestic
40-5 or foreign limited liability company or other entities;
40-6 (b) cash or other property, including shares,
40-7 obligations, evidences of ownership, rights to purchase securities,
40-8 or other securities of any other person or entity; or
40-9 (c) any combination of the items described in
40-10 Subdivisions (a) and (b) of this Subsection;
40-11 (6) the articles of organization of any new domestic
40-12 limited liability company to be created by the terms of the plan of
40-13 merger; and
40-14 (7) the articles of organization or other
40-15 organizational documents of each other entity that is a party to
40-16 the merger and that is to be created by the terms of the plan of
40-17 merger.
40-18 B. The plan of merger may include:
40-19 (1) any amendments to the articles of organization or
40-20 regulations of any surviving domestic limited liability company or
40-21 to the organizational documents or other constituent documents of
40-22 any other surviving entity; and
40-23 (2) any other provision relating to the merger.
40-24 Art. 10.03. ARTICLES OF MERGER. A. After a plan of merger
40-25 has been approved by each of the limited liability companies or
40-26 other entities that is a party to the plan of merger, articles of
40-27 merger shall be executed on behalf of each domestic limited
41-1 liability company that is a party to the plan of merger by at least
41-2 one member, manager, officer, or other agent or representative of
41-3 the limited liability company who is authorized to execute articles
41-4 of merger by the articles of organization or regulations or shall
41-5 be approved by authorizing resolutions adopted by the act of the
41-6 members. At least one authorized representative of each other
41-7 foreign limited liability company or other entity that is a party
41-8 to the plan of merger shall also execute the articles of merger.
41-9 The articles of merger must include:
41-10 (1) the plan of merger; and
41-11 (2) as to each domestic or foreign limited liability
41-12 company or other entity that is a party to the plan of merger, a
41-13 statement that the plan of merger was authorized by all action
41-14 required by the laws under which it was formed or organized or by
41-15 its constituent documents.
41-16 B. The original of the articles of merger and a number of
41-17 copies equal to the number of surviving and new domestic or foreign
41-18 limited liability companies and other entities that are a party to
41-19 the plan of merger or that will be created by its terms shall be
41-20 delivered to the Secretary of State. Unless the Secretary of State
41-21 finds that the articles of merger do not conform to law, on receipt
41-22 of all applicable filing fees and franchise taxes, if any, required
41-23 by law, the Secretary of State shall:
41-24 (1) certify that the articles of merger have been
41-25 filed in the Secretary of State's office by endorsing on the
41-26 original the word "Filed" and the date of the filing;
41-27 (2) file and index the endorsed articles of merger;
42-1 and
42-2 (3) issue a certificate of merger, together with a
42-3 copy of the articles affixed to the certificate, to each surviving
42-4 or new domestic or foreign limited liability company or other
42-5 entity that is a party to the plan of merger or that is created by
42-6 the merger, or to its respective representatives.
42-7 C. Except as provided by Article 9.03 of this Act, the
42-8 merger is effective on the issuance of the certificate of merger by
42-9 the Secretary of State.
42-10 Art. 10.04. EFFECT OF MERGER. A. When a merger takes
42-11 effect:
42-12 (1) the separate existence of every domestic or
42-13 foreign limited liability company or other entity that is a party
42-14 to the merger, except any surviving or new domestic or foreign
42-15 limited liability company or other entity, ceases;
42-16 (2) all rights, title, and interests to all real
42-17 estate and other property owned by each domestic or foreign limited
42-18 liability company and by each other entity that is a party to the
42-19 merger shall be allocated to and vested in one or more of the
42-20 surviving or resulting entities as provided in the plan of merger
42-21 without reversion or impairment, without further act or deed, and
42-22 without any transfer or assignment having occurred, but subject to
42-23 any existing liens or other encumbrances on the property;
42-24 (3) all liabilities and obligations of each domestic
42-25 or foreign limited liability company and each other entity that is
42-26 a party to the merger shall be allocated to one or more of the
42-27 surviving or new domestic or foreign limited liability companies
43-1 and other entities in the manner provided by the plan of merger,
43-2 and each surviving or new domestic or foreign limited liability
43-3 company or other entity to which a liability or obligation has been
43-4 allocated under the plan of merger becomes the primary obligor for
43-5 the liability or obligation, and, except as otherwise provided by
43-6 the plan of merger, law, or contract, a party to the merger other
43-7 than a surviving domestic or foreign limited liability company or
43-8 other entity liable at the time of the merger or another new
43-9 domestic or foreign limited liability company or other entity
43-10 created is not liable for the liability or obligation;
43-11 (4) a proceeding pending by or against a domestic or
43-12 foreign limited liability company or another entity that is a party
43-13 to the merger may be continued as if the merger did not occur, or
43-14 the surviving or new domestic or foreign limited liability company
43-15 or limited liability companies or the surviving or new other entity
43-16 or other entities the liability, obligation, asset, or right
43-17 associated with the proceeding is allocated to and vested in under
43-18 the plan of merger may be substituted in the proceeding;
43-19 (5) the articles of organization and regulations of
43-20 each surviving domestic limited liability company and the
43-21 organizational documents and other constituent documents of each
43-22 surviving foreign limited liability company and other entity shall
43-23 be amended to the extent provided in the plan of merger;
43-24 (6) each new domestic limited liability company, the
43-25 articles of organization of which are included in the plan of
43-26 merger under Article 10.02 of this Act, shall be formed as a
43-27 limited liability company under this Act, and each other entity to
44-1 be formed or organized under the laws of this state, the
44-2 organizational documents of which are included in the plan of
44-3 merger, on an executed copy of the certificate of merger being
44-4 delivered to or filed with any required governmental entity with
44-5 which organizational documents of the other entity are required to
44-6 be delivered or filed and on meeting additional requirements, if
44-7 any, of law for its formation or organization, shall be formed or
44-8 organized as provided in the plan of merger;
44-9 (7) the limited liability company interests of each
44-10 domestic or foreign limited liability company and the interests,
44-11 shares, or evidences of ownership in each other entity that is a
44-12 party to the merger that are to be converted or exchanged, in whole
44-13 or in part, into limited liability company interests, shares,
44-14 obligations, evidences of ownership, rights to purchase securities,
44-15 or other securities of one or more of the surviving or new domestic
44-16 or foreign limited liability companies or other entities, into cash
44-17 or other property, including shares, obligations, evidences of
44-18 ownership, rights to purchase securities, or other securities of
44-19 any other person or entity, or into a combination of those items,
44-20 shall be so converted and exchanged, and the former members of each
44-21 domestic limited liability company that is a party to the merger
44-22 shall be entitled only to the rights provided in the plan of
44-23 merger; and
44-24 (8) if the plan of merger does not provide for the
44-25 allocation and vesting of the right, title, and interest in a
44-26 particular item of real estate or other property or for the
44-27 allocation of a liability or obligation of a party to the merger,
45-1 the item of real estate or other property shall be owned in
45-2 undivided interests by, or the liability or obligation shall be a
45-3 joint and several liability and obligation of, each of the
45-4 surviving and new domestic and foreign limited liability companies
45-5 and other entities, pro rata to the total number of surviving and
45-6 new domestic and foreign limited liability companies and other
45-7 entities resulting from the merger.
45-8 Art. 10.05. MERGER INVOLVING SUBSIDIARY ENTITIES.
45-9 A. (1) This article applies to a merger if:
45-10 (a) at least 90 per cent of the outstanding
45-11 membership interests, shares of stock, or other ownership interests
45-12 of one or more domestic or foreign limited liability companies or
45-13 other entities is owned by another domestic or foreign limited
45-14 liability company or other entity;
45-15 (b) at least one of the parent or subsidiary
45-16 entities is a domestic limited liability company; and
45-17 (c) for each parent or subsidiary entity that is
45-18 not a domestic limited liability company:
45-19 (i) the merger of the entity with or into
45-20 a domestic limited liability company is permitted by the laws under
45-21 which that entity is formed or organized or by the organizational
45-22 documents or other constituent documents of the entity that are not
45-23 inconsistent with those laws; and
45-24 (ii) the entity complies with those laws
45-25 or documents in effectuating the merger.
45-26 (2) A parent entity described in Subsection (1) of
45-27 this Section having at least 90 percent ownership may:
46-1 (a) merge the other entity or entities into
46-2 itself;
46-3 (b) merge itself into the other entity or
46-4 entities; or
46-5 (c) merge any one or more of the entities,
46-6 including itself, into one or more of the other entities.
46-7 (3) If the parent entity having at least 90 percent
46-8 ownership is a surviving entity in the merger, the parent entity
46-9 must execute and file articles of merger as provided by Section B
46-10 of this Article. If the parent entity having at least 90 percent
46-11 ownership is not a surviving entity in the merger, the parent
46-12 entity must:
46-13 (a) adopt a plan of merger in the manner
46-14 required by Article 10.01 of this Act, except that an action under
46-15 Article 10.01 is not required by the entity or entities whose
46-16 membership interests, shares of stock, or other ownership interests
46-17 are so owned; and
46-18 (b) execute and file articles of merger as
46-19 provided by Section B of this Article.
46-20 B. The articles of merger must be signed on behalf of the
46-21 parent entity by a member, manager, officer, or other agent or
46-22 representative authorized by (i) the organizational or other
46-23 constituent documents of the parent entity, or (ii) resolutions
46-24 adopted by the parent entity in accordance with the laws of its
46-25 jurisdiction of organization or formation and the documents. The
46-26 articles of merger must include:
46-27 (1) the name of the parent entity and the name of each
47-1 respective subsidiary entity;
47-2 (2) for each entity listed in Subsection (1) of this
47-3 Section, the type of entity and the respective jurisdiction under
47-4 which the entity is formed or organized;
47-5 (3) the total number or percentage of membership
47-6 interests, shares, or other ownership interests in each subsidiary
47-7 entity, identified by class, series, or group, and the number or
47-8 percentage of membership interests, shares, or other ownership
47-9 interests in each class, series, or group owned by the parent
47-10 entity;
47-11 (4) a copy of the resolution of merger adopted by the
47-12 parent entity in accordance with the laws of its jurisdiction of
47-13 organization or formation and its organizational or other
47-14 constituent documents, together with a statement that the
47-15 resolution was so adopted and the date of adoption;
47-16 (5) if the parent entity does not own all of the
47-17 outstanding membership interest, shares, or other ownership
47-18 interests of each subsidiary entity party to the merger, the
47-19 resolution described in Subsection (4) of this Section must state
47-20 the terms and conditions of the merger, including the securities,
47-21 cash, or other property to be used, paid, or delivered by the
47-22 surviving corporation on surrender of each membership interest,
47-23 share, or other ownership interest of the subsidiary entity or
47-24 entities not owned by the parent entity;
47-25 (6) if the surviving entity is a foreign limited
47-26 liability company or other entity, the address, including street
47-27 number, if any, of its registered or principal office in the
48-1 jurisdiction under whose laws it is governed; and
48-2 (7) if a plan of merger is required by Section A of
48-3 this Article to be adopted in the manner required by Article 10.01
48-4 of this Act, the information required by Section A of Article 10.03
48-5 of this Act.
48-6 C. The articles of merger shall be filed as provided by
48-7 Section B of Article 10.03 of this Act, become effective as
48-8 provided by Section C of Article 10.03 of this Act, and have the
48-9 effect stated in Article 10.04 of this Act.
48-10 Art. 10.06. INTEREST EXCHANGE. A. One or more domestic or
48-11 foreign limited liability companies or other entities may adopt a
48-12 plan of exchange by which an entity acquires all of the outstanding
48-13 limited liability company interests of one or more domestic limited
48-14 liability companies or all of the outstanding interests, stock,
48-15 partnership interests, or other ownership interests in one or more
48-16 other entities in exchange for cash or securities of the acquiring
48-17 entity if:
48-18 (1) each domestic limited liability company, the
48-19 interests of which are to be acquired under the plan of exchange,
48-20 approves the plan of exchange by majority vote or consent of its
48-21 members or in a manner prescribed in its regulations; and
48-22 (2) each acquiring domestic or foreign limited
48-23 liability company or other entity takes all action that may be
48-24 required by the laws of the state or country under which it was
48-25 formed and as required by its constituent documents to effect the
48-26 exchange.
48-27 B. A filing with the Secretary of State is not necessary to
49-1 evidence or effect the interest exchange with respect to a domestic
49-2 limited liability company that is a party to the interest exchange.
49-3 When an interest exchange takes effect as provided in the plan of
49-4 exchange:
49-5 (1) the limited liability company interests of each
49-6 domestic limited liability company that are to be acquired under
49-7 the plan of exchange are considered exchanged as provided in the
49-8 plan of exchange;
49-9 (2) the former holders of the limited liability
49-10 company interests exchanged under the plan of exchange are entitled
49-11 only to the exchange rights provided in the plan of exchange; and
49-12 (3) the acquiring domestic or foreign limited
49-13 liability company or other entity or entities are entitled to all
49-14 rights, title, and interests with respect to the interests so
49-15 acquired and exchanged, subject to the provisions in the plan of
49-16 exchange.
49-17 Art. 10.07. DEFINITION OF "OTHER ENTITY." A. For purposes
49-18 of this Part, "other entity" means any entity, whether organized
49-19 for profit or not, that is a corporation, limited partnership,
49-20 general partnership, joint venture, joint stock company,
49-21 cooperative, association, bank, insurance company, or other legal
49-22 entity organized under the laws of this state or any other state or
49-23 country to the extent the laws or the constituent documents of that
49-24 entity, not inconsistent with law, permit that entity to enter into
49-25 a merger or interest exchange as permitted by this Part.
49-26 PART ELEVEN
49-27 Art. 11.01. PROFESSIONAL LIMITED LIABILITY COMPANIES
50-1 AUTHORIZED; DEFINITIONS. A. (1) One or more persons may organize
50-2 a professional limited liability company by filing articles of
50-3 organization with the Secretary of State in accordance with Part
50-4 Three of this Act. In addition to other provisions required or
50-5 permitted by law, the articles of organization of a professional
50-6 limited liability company must include a statement:
50-7 (a) that the limited liability company is a
50-8 professional limited liability company; and
50-9 (b) describing the one specific kind of
50-10 professional service to be rendered by the limited liability
50-11 company.
50-12 (2) A professional limited liability company may be
50-13 organized under this Act only for the purpose of rendering one
50-14 specific type of professional service and ancillary services. A
50-15 professional limited liability company organized under this Act may
50-16 not render more than one kind of professional service.
50-17 B. In this Act:
50-18 (1) "Professional service" means any type of personal
50-19 service that requires as a condition precedent to the rendering of
50-20 the service the obtaining of a license, permit, certificate of
50-21 registration, or other legal authorization, including the personal
50-22 service rendered by an architect, attorney-at-law, certified public
50-23 accountant, dentist, doctor, physician, public accountant, surgeon,
50-24 or veterinarian.
50-25 (2) "Professional limited liability company" means a
50-26 limited liability company that is organized under this Act for the
50-27 sole and specific purpose of rendering professional service and
51-1 that has as its members only individuals licensed or otherwise
51-2 authorized within this state to render the same professional
51-3 service as the limited liability company.
51-4 Art. 11.02. NAME. A. A professional limited liability
51-5 company may adopt a name not contrary to the law or ethics
51-6 regulating the practice of the professional service rendered
51-7 through the professional limited liability company. The name of
51-8 the limited liability company must contain the words "Professional
51-9 Limited Liability Company" or the abbreviations "P.L.L.C." or
51-10 "PLLC" and must contain other words as may be required by law. A
51-11 limited liability company formed before September 1, 1993, that
51-12 complied with Section A of Article 2.03 of this Act or with Section
51-13 A of Article 7.03 of this Act on the date of formation, but does
51-14 not comply with this Article, is not required to change its name.
51-15 Art. 11.03. RESTRICTIONS ON MEMBERS, MANAGERS, AND OFFICERS.
51-16 A. A person who is not licensed or otherwise authorized to render
51-17 the professional service of the professional limited liability
51-18 company may not be a member, manager, or officer of the
51-19 professional limited liability company. A membership interest in
51-20 the professional limited liability company may not be transferred
51-21 to a person who is not licensed or otherwise authorized to render
51-22 the professional service of the professional limited liability
51-23 company.
51-24 B. If a member, manager, or officer of a professional
51-25 limited liability company, or an agent or employee of the company
51-26 who has been rendering professional service for or with the company
51-27 of the same type for which the professional limited liability
52-1 company was organized to render, becomes legally disqualified to
52-2 render the professional service, the person shall sever all
52-3 employment with the professional limited liability company and
52-4 immediately terminate all financial interest in the company. The
52-5 professional limited liability company shall purchase or cause to
52-6 be purchased from the person all membership interests owned by the
52-7 person in the professional limited liability company, at a price
52-8 and on terms as may be provided in the articles of organization,
52-9 the regulations, or any applicable agreement among the members and
52-10 the professional limited liability company. If the person is the
52-11 sole member of the professional limited liability company, the
52-12 person may continue to act as member, manager, or officer only for
52-13 the purposes of winding up the affairs of the professional limited
52-14 liability company and effecting its dissolution, including selling
52-15 the assets of or outstanding membership interests in the
52-16 professional limited liability company, but not including rendering
52-17 professional service.
52-18 C. If a person who is not licensed or authorized to render
52-19 the professional service that a professional limited liability
52-20 company was organized to render succeeds to the interest of a
52-21 member of the professional limited liability company, the person
52-22 holding the interest shall immediately terminate all financial
52-23 interest in the professional limited liability company, and the
52-24 professional limited liability company shall purchase or cause to
52-25 be purchased from the person all membership interests owned by the
52-26 person in the professional limited liability company, at a price
52-27 and on terms as may be provided in the articles of organization,
53-1 the regulations, or any applicable agreement among the members and
53-2 the professional limited liability company. If the person
53-3 succeeded to all of the membership interests in the professional
53-4 limited liability company, the person may continue to act as
53-5 member, manager, or officer only for the purposes of winding up the
53-6 affairs of the professional limited liability company and effecting
53-7 its dissolution, including selling the assets of or the outstanding
53-8 membership interests in the professional limited liability company,
53-9 but not including rendering professional service.
53-10 Art. 11.04. RENDERING OF PROFESSIONAL SERVICES. A. A
53-11 professional limited liability company may render professional
53-12 service in this state only through:
53-13 (1) an individual member, manager, officer, employee,
53-14 or agent who is licensed to render the professional service in this
53-15 state; or
53-16 (2) an agent of the professional limited liability
53-17 company that is a professional limited liability company,
53-18 professional corporation, or professional association that is
53-19 authorized in this state to render the professional service of the
53-20 professional limited liability company and that renders the
53-21 professional service only through a licensed individual member,
53-22 manager, officer, or employee.
53-23 B. This Article does not prohibit employment by a
53-24 professional limited liability company of clerks, secretaries,
53-25 bookkeepers, technicians, nurses, assistants, and other individuals
53-26 who are not usually and ordinarily considered by custom and
53-27 practice to be rendering professional service for which a license
54-1 or other legal authorization is required. A person may not, under
54-2 the guise of employment, practice a profession in this state unless
54-3 licensed or otherwise legally authorized to practice that
54-4 profession under the laws of this state.
54-5 Art. 11.05. PROFESSIONAL RELATIONSHIPS NOT AFFECTED. A.
54-6 Notwithstanding anything contained in Article 4.03 of this Act to
54-7 the contrary, this Act does not alter or affect the professional
54-8 relationship between a person rendering professional service and a
54-9 person receiving the service, and a confidential relationship
54-10 enjoyed in this state between those persons remains unchanged.
54-11 This Act does not remove or diminish any rights at law that a
54-12 person receiving professional service has against a person
54-13 rendering the service for an error, an omission, negligence,
54-14 incompetence, or malfeasance. A limited liability company, but not
54-15 the other individual members, managers, or officers, is jointly and
54-16 severally liable with a member, manager, officer, employee, or
54-17 agent rendering professional service for an error, omission,
54-18 negligence, incompetence, or malfeasance on the part of the member,
54-19 manager, officer, employee, or agent when the member, manager,
54-20 officer, employee, or agent is rendering professional service in
54-21 the course of employment for the limited liability company.
54-22 Art. 11.06. EXEMPTION FROM SECURITIES LAWS. A. The sale,
54-23 issuance, or offering of membership interests of a professional
54-24 limited liability company to persons permitted by this Part to own
54-25 the membership interests is exempt from all laws of this state,
54-26 other than this Act, that provide for supervision, registration, or
54-27 regulation in connection with the sale, issuance, or offering of
55-1 securities. The sale, issuance, or offering of membership
55-2 interests to those persons is legal without any action or approval
55-3 on the part of any official or state regulatory agency authorized
55-4 to license, regulate, or supervise the sale, issuance, or offering
55-5 of securities.
55-6 Art. 11.07. FOREIGN PROFESSIONAL LIMITED LIABILITY
55-7 COMPANIES. A. A foreign professional limited liability company
55-8 may apply for a certificate of authority to perform professional
55-9 service in this state by filing an application in accordance with
55-10 Part Seven of this Act. The Secretary of State may not issue the
55-11 certificate unless the name of the limited liability company or the
55-12 name the limited liability company elects in this state meets the
55-13 requirements of Article 11.02 of this Act. A member, manager,
55-14 officer, employee, or agent of the limited liability company who
55-15 renders professional service in this state on behalf of the limited
55-16 liability company must be licensed or otherwise authorized to
55-17 render that professional service in this state.
55-18 B. A certificate may not be issued to a limited liability
55-19 company under this Article unless the application for the
55-20 certificate includes a statement that the jurisdiction in which the
55-21 limited liability company is organized would permit reciprocal
55-22 admission of the limited liability company if it were organized in
55-23 this state.
55-24 SECTION 1.29. Section 36.02, Business & Commerce Code, is
55-25 amended to read as follows:
55-26 Sec. 36.02. DEFINITIONS. In this chapter, unless the
55-27 context otherwise requires:
56-1 (1) "Partnership" means a joint venture or<,> general
56-2 partnership other than a limited partnership or a registered
56-3 limited liability<, or limited> partnership.
56-4 (2) "Company" means a real estate investment trust,
56-5 joint-stock company, or any other business, professional, or other
56-6 association or legal entity that is not incorporated other than a
56-7 partnership, limited partnership, limited liability company, or
56-8 registered limited liability partnership.
56-9 (3) "Corporation" means a domestic or foreign
56-10 corporation, professional corporation, professional association,
56-11 other corporation, or any other business, professional, or other
56-12 association or legal entity that is incorporated.
56-13 (4) "Person" includes an individual, partnership,
56-14 limited partnership, limited liability company, registered limited
56-15 liability partnership, company, or corporation.
56-16 (5) "Representative" means a trustee, administrator,
56-17 executor, independent executor, guardian, conservator, trustee in
56-18 bankruptcy, receiver, or any other person appointed by a court or
56-19 by trust or will to have custody of, take possession of, have title
56-20 to, or otherwise be empowered to control the person or property of
56-21 any person.
56-22 (6) "Estate" means the property of any person which is
56-23 administered by a representative.
56-24 (7) "Assumed name" means:
56-25 (A) in the case of an individual, a name that
56-26 does not include the surname of the individual;
56-27 (B) in the case of a <joint venture or general>
57-1 partnership, a name that does not include the surname or other
57-2 legal name of each joint venturer or general partner;
57-3 (C) in the case of an individual<, joint
57-4 venture,> or a <general> partnership, a name, including a surname,
57-5 that suggests the existence of additional owners by including words
57-6 such as "Company," "& Company," "& Son," "& Sons," "& Associates,"
57-7 "Brothers," and the like, but not words that merely describe the
57-8 business or professional service being conducted or rendered;
57-9 (D) in the case of a limited partnership, any
57-10 name other than the name stated in its certificate of limited
57-11 partnership;
57-12 (E) in the case of a company, any name used by
57-13 the company; <and>
57-14 (F) in the case of a corporation, any name other
57-15 than the name stated in its articles of incorporation or
57-16 association or comparable document;
57-17 (G) in the case of a registered limited
57-18 liability partnership, any name other than the name stated in its
57-19 application filed with the office of the Secretary of State or
57-20 comparable document; and
57-21 (H) in the case of a limited liability company,
57-22 any name other than the name stated in its articles of organization
57-23 or comparable document.
57-24 (8) "Registrant" means any person that has filed, or
57-25 on whose behalf there has been filed, an assumed name certificate
57-26 under the provisions of this chapter or other law.
57-27 (9) "Office" means, in the case of any person that is
58-1 not an individual or that is a corporation which is not required to
58-2 or does not maintain a registered office in this state, the
58-3 principal office of such person and also its principal place of
58-4 business if not the same as its principal office. In the case of a
58-5 corporation, limited partnership, registered limited liability
58-6 partnership, or limited liability company which is required to
58-7 maintain a registered office in this state, "office" means the
58-8 registered office and also its principal office if not the same as
58-9 its registered office.
58-10 (10) "Address" means a post office address and also
58-11 the street address if not the same as the post office address.
58-12 SECTION 1.30. Section 36.10, Business & Commerce Code, is
58-13 amended by amending the section heading and Subsection (a) to read
58-14 as follows:
58-15 Sec. 36.10. FOR UNINCORPORATED BUSINESS OR PROFESSION OTHER
58-16 THAN A LIMITED PARTNERSHIP, REGISTERED LIMITED LIABILITY
58-17 PARTNERSHIP, OR LIMITED LIABILITY COMPANY. (a) Any person who
58-18 regularly conducts business or renders professional services other
58-19 than as a corporation, limited partnership, registered limited
58-20 liability partnership, or limited liability company in this state
58-21 under an assumed name shall file in the office of the county clerk
58-22 in each county in which such person has or will maintain business
58-23 or professional premises or, if no business or professional
58-24 premises are or will be maintained in any county, in each county
58-25 where such person conducts business or renders a professional
58-26 service, a certificate setting forth:
58-27 (1) the assumed name under which such business or
59-1 professional service is or is to be conducted or rendered;
59-2 (2) if the registrant is:
59-3 (A) an individual, his full name and residence
59-4 address;
59-5 (B) a partnership, (i) the venture or
59-6 partnership name, (ii) the venture or partnership office address,
59-7 and (iii) the full name of each joint venturer or general partner
59-8 and his residence address if he is an individual or its office
59-9 address if not an individual;
59-10 (C) an estate, (i) the name of the estate, (ii)
59-11 the estate's office address, if any, and (iii) the full name of
59-12 each representative of the estate and his residence address if he
59-13 is an individual or its office address if not an individual;
59-14 (D) a real estate investment trust, (i) the name
59-15 of the trust, (ii) the address of the trust, (iii) the full name of
59-16 each trustee manager and his residence address if he is an
59-17 individual and its office address if not an individual; or
59-18 (E) a company other than a real estate
59-19 investment trust, or a corporation, (i) the name of the company or
59-20 corporation, (ii) the state, country, or other jurisdiction under
59-21 the laws of which it was organized, incorporated, or associated,
59-22 and (iii) its office address;
59-23 (3) the period, not to exceed 10 years, during which
59-24 the assumed name will be used; and
59-25 (4) a statement specifying that the business or
59-26 professional service that is or is to be conducted or rendered in
59-27 the county under such assumed name is being or will be conducted or
60-1 rendered as a proprietorship, sole practitioner, <joint venture,
60-2 general> partnership, <limited partnership,> real estate investment
60-3 trust, joint-stock company, or some other form of unincorporated
60-4 business or professional association or entity, other than a
60-5 limited partnership, limited liability company, or registered
60-6 limited liability partnership, as the case may be.
60-7 SECTION 1.31. Section 36.11, Business & Commerce Code, is
60-8 amended to read as follows:
60-9 Sec. 36.11. FOR INCORPORATED BUSINESS OR PROFESSION, LIMITED
60-10 PARTNERSHIP, REGISTERED LIMITED LIABILITY PARTNERSHIP, OR LIMITED
60-11 LIABILITY COMPANY. (a) Any corporation, limited partnership,
60-12 registered limited liability partnership, or limited liability
60-13 company which regularly conducts business or renders professional
60-14 services in this state under an assumed name, or which may be
60-15 required by law to use an assumed name in this state to conduct
60-16 such business or render such services, shall file in the office of
60-17 the Secretary of State and, (1) if such corporation, limited
60-18 partnership, registered limited liability partnership, or limited
60-19 liability company is required to maintain a registered office in
60-20 this state, in the office of the county clerk of the county in
60-21 which such registered office is located and of the county in which
60-22 its principal office is located if within this state and not the
60-23 same county where the registered office is located; or (2) if such
60-24 corporation, limited partnership, registered limited liability
60-25 partnership, or limited liability company is not required to or
60-26 does not maintain a registered office in this state, in the office
60-27 of the county clerk of the county in which its office within this
61-1 state is located or if the corporation, limited partnership,
61-2 registered limited liability partnership, or limited liability
61-3 company is not incorporated, organized, or associated under the
61-4 laws of this state, in the office of the county clerk of the county
61-5 in which its principal place of business in this state is located
61-6 if not the same as its office, a certificate setting forth:
61-7 (1) the assumed name under which such business or
61-8 professional service is or is to be conducted or rendered;
61-9 (2) the name of the corporation, limited partnership,
61-10 registered limited liability partnership, or limited liability
61-11 company as stated in its articles of incorporation, <or>
61-12 association, or organization or in its certificate of limited
61-13 partnership or application filed with the office of the Secretary
61-14 of State, or other comparable document;
61-15 (3) the state, country, or other jurisdiction under
61-16 the laws of which it was incorporated, organized, or associated and
61-17 address of its registered or similar office in that state, country,
61-18 or jurisdiction;
61-19 (4) the period, not to exceed 10 years, during which
61-20 the assumed name will be used;
61-21 (5) a statement specifying that the entity
61-22 <corporation> is a business corporation, nonprofit corporation,
61-23 professional corporation, professional association, or other type
61-24 of corporation, limited partnership, registered limited liability
61-25 partnership, limited liability company, or some other type of
61-26 incorporated business, professional or other association, or legal
61-27 entity;
62-1 (6) if the corporation, limited partnership,
62-2 registered limited liability partnership, or limited liability
62-3 company is required to maintain a registered office in this state,
62-4 (A) the address of such registered office and the name of its
62-5 registered agent at such address, and (B) the address of its
62-6 principal office if not the same as that of its registered office
62-7 in this state;
62-8 (7) if the corporation, limited partnership,
62-9 registered limited liability partnership, or limited liability
62-10 company is not required to or does not maintain a registered office
62-11 in this state, its office address in this state and if the
62-12 corporation, limited partnership, registered limited liability
62-13 partnership, or limited liability company is not incorporated,
62-14 organized, or associated under the laws of this state, the address
62-15 of its place of business in this state and its office address
62-16 elsewhere, if any; and
62-17 (8) the county or counties within the state where
62-18 business or professional services are being or are to be conducted
62-19 or rendered under such assumed name.
62-20 (b) A certificate filed under Subsection (a) of this section
62-21 shall be executed and duly acknowledged by an officer, general
62-22 partner, member, manager, representative, or attorney in fact for
62-23 the corporation, limited partnership, registered limited liability
62-24 partnership, or limited liability company. A certificate executed
62-25 and acknowledged by an attorney in fact shall include a statement
62-26 that the attorney in fact has been duly authorized in writing by
62-27 his principal to execute and acknowledge the same.
63-1 (c) Nothing in this chapter shall require a corporation,
63-2 limited partnership, registered limited liability partnership, or
63-3 limited liability company or its shareholders, associates,
63-4 partners, or members to file an assumed business or professional
63-5 name certificate in order to conduct business or render a
63-6 professional service within this state under the name of the
63-7 corporation, limited partnership, registered limited liability
63-8 partnership, or limited liability company as stated in its articles
63-9 of incorporation, association, or organization, certificate of
63-10 limited partnership, application filed with the office of the
63-11 Secretary of State, or other comparable document.
63-12 (d) Notwithstanding Subsections (a)-(c) of this section, a
63-13 limited partnership, registered limited liability partnership, or
63-14 limited liability company that filed a certificate in compliance
63-15 with Section 36.10 of this chapter before September 1, 1993, is not
63-16 required to file a new certificate that complies with this section
63-17 until the earlier of:
63-18 (1) the expiration of the period specified in the
63-19 existing certificate during which the assumed name will be used; or
63-20 (2) a material change occurs in the information set
63-21 forth in the existing certificate.
63-22 SECTION 1.32. The following articles or sections of the
63-23 Texas Limited Liability Company Act (Article 1528n, Vernon's Texas
63-24 Civil Statutes) are repealed:
63-25 (1) Article 2.10;
63-26 (2) Article 2.16; and
63-27 (3) Sections B, C, and D, Article 4.02.
64-1 ARTICLE 2. BUSINESS CORPORATIONS; PROFESSIONAL ASSOCIATIONS
64-2 SECTION 2.01. Article 1.02, Texas Business Corporation Act,
64-3 is amended by amending Section A and adding Section C to read as
64-4 follows:
64-5 A. As used in this Act, unless the context otherwise
64-6 requires, the term:
64-7 (1) "Articles of incorporation" means the original or
64-8 restated articles of incorporation and all amendments thereto.
64-9 (2) "Authorized shares" means the shares of all
64-10 classes which the corporation is authorized to issue.
64-11 (3) "Cancel" means to restore issued shares to the
64-12 status of authorized but unissued shares.
64-13 (4) "Certificated shares" means shares represented by
64-14 instruments in bearer or registered form.
64-15 (5) "Conspicuous" or "conspicuously," when prescribed
64-16 for information appearing on a certificate for shares or other
64-17 securities, means the location of such information or use of type
64-18 of sufficient size, color, or character that a reasonable person
64-19 against whom such information may operate should notice it. For
64-20 example, a printed or typed statement in capitals, or boldface or
64-21 underlined type, or in type that is larger than or that contrasts
64-22 in color with that used for other statements on the same
64-23 certificate, is "conspicuous."
64-24 (6) "Consuming assets corporation" means a corporation
64-25 which is engaged in the business of exploiting assets subject to
64-26 depletion or amortization and which elects to state in its articles
64-27 of incorporation that it is a consuming assets corporation and
65-1 includes as a part of its official corporate name the phrase "a
65-2 consuming assets corporation," giving such phrase equal prominence
65-3 with the rest of the corporate name on its financial statements and
65-4 certificates representing shares. All its certificates
65-5 representing shares shall also contain a further sentence: "This
65-6 corporation is permitted by law to pay dividends out of reserves
65-7 which may impair its stated capital."
65-8 (7) "Corporation" or "domestic corporation" means a
65-9 corporation for profit subject to the provisions of this Act,
65-10 except a foreign corporation.
65-11 (8) "Distribution" means a transfer of money or other
65-12 property (except its own shares or rights to acquire its own
65-13 shares), or issuance of indebtedness, by a corporation to its
65-14 shareholders in the form of:
65-15 (a) a dividend on any class or series of the
65-16 corporation's outstanding shares;
65-17 (b) a purchase, <or> redemption, or other
65-18 acquisition by the corporation, directly or indirectly, of any of
65-19 its own shares; or
65-20 (c) a payment by the corporation in liquidation
65-21 of all or a portion of its assets.
65-22 (9) "Foreign corporation" means a corporation for
65-23 profit organized under laws other than the laws of this State.
65-24 (10) "Insolvency" means inability of a corporation to
65-25 pay its debts as they become due in the usual course of its
65-26 business.
65-27 (11) "Investment Company Act" means the Investment
66-1 Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.);
66-2 (12) "Merger" means (a) the division of a domestic
66-3 corporation into two or more new domestic corporations or into a
66-4 surviving corporation and one or more new domestic or foreign
66-5 corporations or other entities, or (b) the combination of one or
66-6 more domestic corporations with one or more domestic or foreign
66-7 corporations or other entities resulting in (i) one or more
66-8 surviving domestic or foreign corporations or other entities, (ii)
66-9 the creation of one or more new domestic or foreign corporations or
66-10 other entities, or (iii) one or more surviving domestic or foreign
66-11 corporations or other entities and the creation of one or more new
66-12 domestic or foreign corporations or other entities.
66-13 (13) <(12)> "Net assets" means the amount by which the
66-14 total assets of a corporation exceed the total debts of the
66-15 corporation.
66-16 (14) <(13)> "Other entity" means any entity, whether
66-17 organized for profit or not, that is a corporation (other than a
66-18 domestic or foreign corporation), limited or general partnership,
66-19 joint venture, joint stock company, cooperative, association, bank,
66-20 insurance company or other legal entity organized pursuant to the
66-21 laws of this state or any other state or country to the extent such
66-22 laws or the constituent documents of that entity, not inconsistent
66-23 with such laws, permit that entity to enter into a merger or share
66-24 exchange as permitted by Article 5.03 of this Act.
66-25 (15) <(14)> "Share dividend" means a dividend by a
66-26 corporation that is payable in its own authorized but unissued
66-27 shares or in treasury shares.
67-1 (16) <(15)> "Shareholder" or "holder of shares" means
67-2 the person in whose name shares issued by a corporation are
67-3 registered at the relevant time in the share transfer records
67-4 maintained by the corporation pursuant to Article 2.44 of this Act.
67-5 (17) <(16)> "Shares" means the units into which the
67-6 proprietary interests in a corporation are divided, whether
67-7 certificated or uncertificated shares.
67-8 (18) <(17)> "Stated capital" means, at any particular
67-9 time, the sum of:
67-10 (a) the par value of all shares of the
67-11 corporation having a par value that have been issued;
67-12 (b) the consideration fixed by the corporation
67-13 in the manner provided by Article 2.15 of this Act for all shares
67-14 of the corporation without par value that have been issued, except
67-15 such part of the consideration that is actually received therefor
67-16 (which part must be less than all of that consideration) that the
67-17 board by resolution adopted no later than sixty (60) days after the
67-18 issuance of those shares may have allocated to surplus; and
67-19 (c) such amounts not included in paragraphs (a)
67-20 and (b) of this subsection as have been transferred to stated
67-21 capital of the corporation, whether upon the payment of a share
67-22 dividend or upon adoption by the board of directors of a resolution
67-23 directing that all or part of surplus be transferred to stated
67-24 capital, minus all reductions from such sum as have been effected
67-25 in a manner permitted by law.
67-26 (19) <(18)> "Subscriber" means the offeror in a
67-27 subscription.
68-1 (20) <(19)> "Subscription" means a memorandum in
68-2 writing, executed before or after incorporation, wherein an offer
68-3 is made to purchase and pay for a specified number of theretofore
68-4 unissued shares of a corporation.
68-5 (21) <(20)> "Surplus" means the excess of the net
68-6 assets of a corporation over its stated capital.
68-7 (22) <(21)> "Treasury shares" means shares of a
68-8 corporation which have been issued, have been subsequently acquired
68-9 by and belong to the corporation, and have not been canceled and
68-10 restored to the status of authorized but unissued shares. Treasury
68-11 shares shall be deemed to be "issued" shares but not "outstanding"
68-12 shares, and shall not be included in the total assets of a
68-13 corporation for purposes of determining its "net assets."
68-14 (23) <(22)> "Uncertificated shares" means shares not
68-15 represented by instruments and the transfers of which are
68-16 registered upon books maintained for that purpose by or on behalf
68-17 of the issuing corporation.
68-18 C. A reference in this Act to another statute is a reference
68-19 to that statute as amended.
68-20 SECTION 2.02. Section A, Article 2.02, Texas Business
68-21 Corporation Act, is amended to read as follows:
68-22 A. Subject to the provisions of Sections B and C of this
68-23 Article, each corporation shall have power:
68-24 (1) To have perpetual succession by its corporate name
68-25 unless a limited period of duration is stated in its articles of
68-26 incorporation. Notwithstanding the articles of incorporation, the
68-27 period of duration for any corporation incorporated before
69-1 September 6, 1955, is perpetual if all fees and franchise taxes
69-2 have been paid as provided by law.
69-3 (2) To sue and be sued, complain and defend, in its
69-4 corporate name.
69-5 (3) To have a corporate seal which may be altered at
69-6 pleasure, and to use the same by causing it, or a facsimile
69-7 thereof, to be impressed on, affixed to, or in any manner
69-8 reproduced upon, instruments of any nature required to be executed
69-9 by its proper officers.
69-10 (4) To purchase, receive, lease, or otherwise acquire,
69-11 own, hold, improve, use and otherwise deal in and with, real or
69-12 personal property, or any interest therein, wherever situated, as
69-13 the purposes of the corporation shall require.
69-14 (5) To sell, convey, mortgage, pledge, lease,
69-15 exchange, transfer and otherwise dispose of all or any part of its
69-16 property and assets.
69-17 (6) To lend money to, and otherwise assist, its
69-18 employees, officers, and directors if such a loan or assistance
69-19 reasonably may be expected to benefit, directly or indirectly, the
69-20 lending or assisting corporation.
69-21 (7) To purchase, receive, subscribe for, or otherwise
69-22 acquire, own, hold, vote, use, employ, mortgage, lend, pledge, sell
69-23 or otherwise dispose of, and otherwise use and deal in and with,
69-24 shares or other interests in, or obligations of, other domestic or
69-25 foreign corporations, associations, partnerships, or individuals,
69-26 or direct or indirect obligations of the United States or of any
69-27 other government, state, territory, government district, or
70-1 municipality, or of any instrumentality thereof.
70-2 (8) To purchase or otherwise acquire its own bonds,
70-3 debentures, or other evidences of its indebtedness or obligations;
70-4 to purchase or otherwise acquire its own unredeemable shares and
70-5 hold those acquired shares as treasury shares or cancel or
70-6 otherwise dispose of those acquired shares; and to redeem or
70-7 purchase shares made redeemable by the provisions of its articles
70-8 of incorporation.
70-9 (9) To make contracts and incur liabilities, borrow
70-10 money at such rates of interest as the corporation may determine,
70-11 issue its notes, bonds, and other obligations, and secure any of
70-12 its obligations by mortgage or pledge of all or any of its
70-13 property, franchises, and income.
70-14 (10) To lend money for its corporate purposes, invest
70-15 and reinvest its funds, and take and hold real and personal
70-16 property as security for the payment of funds so loaned or
70-17 invested.
70-18 (11) To conduct its business, carry on its operations,
70-19 and have offices and exercise the powers granted by this Act,
70-20 within or without this State.
70-21 (12) To elect or appoint officers and agents of the
70-22 corporation for such period of time as the corporation may
70-23 determine, and define their duties and fix their compensation.
70-24 (13) To make and alter bylaws, not inconsistent with
70-25 its articles of incorporation or with the laws of this State, for
70-26 the administration and regulation of the affairs of the
70-27 corporation.
71-1 (14) To make donations for the public welfare or for
71-2 charitable, scientific, or educational purposes.
71-3 (15) To transact any lawful business which the board
71-4 of directors shall find will be in aid of government policy.
71-5 (16) To indemnify directors, officers, employees, and
71-6 agents of the corporation and to purchase and maintain liability
71-7 insurance for those persons.
71-8 (17) To pay pensions and establish pension plans,
71-9 pension trusts, profit sharing plans, stock bonus plans, and other
71-10 incentive plans for any or all of, or any class<,> or classes of,
71-11 <its officers and employees, or> its directors, officers, or <its>
71-12 employees.
71-13 (18) To be an organizer, partner, member, associate,
71-14 or manager of any partnership, joint venture, or other enterprise,
71-15 and to the extent permitted in any other jurisdiction to be an
71-16 incorporator of any other corporation of any type or kind.
71-17 (19) To cease its corporate activities and terminate
71-18 its existence by voluntary dissolution.
71-19 (20) Whether included in the foregoing or not, to have
71-20 and exercise all powers necessary or appropriate to effect any or
71-21 all of the purposes for which the corporation is organized.
71-22 SECTION 2.03. Section B, Article 2.05, Texas Business
71-23 Corporation Act, is amended to read as follows:
71-24 B. Any domestic or foreign corporation having authority to
71-25 transact business in this State<,> may do so under an assumed
71-26 name<,> by filing an assumed name certificate in the manner
71-27 prescribed by law. The assumed name may, but is not required to,
72-1 comply with the requirements of Section A(1) of this Article.
72-2 SECTION 2.04. Article 2.12, Texas Business Corporation Act,
72-3 is amended by amending Section A and adding Section C to read as
72-4 follows:
72-5 A. Each corporation may issue the number of shares stated in
72-6 its articles of incorporation. Such shares may be divided into one
72-7 or more classes, any or all of which classes may consist of shares
72-8 with par value or shares without par value, as shall be stated in
72-9 the articles of incorporation. Any such class of shares may be
72-10 divided into one or more series, as shall be stated in the articles
72-11 of incorporation. All shares of the same class shall be of the
72-12 same par value or be without par value. Unless the shares of a
72-13 class have been divided into series, all shares of the same class
72-14 shall be identical in all respects. If the shares of a class have
72-15 been divided into series, shares of the same class may vary between
72-16 series, but all shares of the same series shall be identical in all
72-17 respects. Any such class or series of shares shall be so
72-18 designated as to distinguish the shares of that class or series
72-19 from the shares of all other classes and series. Any such class or
72-20 series shall have such designations, preferences, limitations, and
72-21 relative rights, including voting rights, as shall be stated in the
72-22 articles of incorporation. The articles of incorporation may limit
72-23 or deny the voting rights of, or provide special voting rights for,
72-24 the shares of any class or series to the extent that such
72-25 limitation, denial, or provision is not inconsistent with the
72-26 provisions of this Act. Any of the designations, preferences,
72-27 limitations, and <or> relative rights, including voting rights, of
73-1 any class or series of shares may be made dependent upon facts
73-2 ascertainable outside the articles of incorporation, which facts
73-3 may include future acts of the corporation, provided that the
73-4 manner in which such facts shall operate upon the designations,
73-5 preferences, limitations, and relative rights, including voting
73-6 rights, of such class or series of shares is clearly and expressly
73-7 set forth in the articles of incorporation.
73-8 C. (1) The board of directors of a corporation registered
73-9 as an open-end company under the Investment Company Act may:
73-10 (a) establish classes of shares and series of
73-11 unissued shares of any class by fixing and determining the
73-12 designations, preferences, limitations, and relative rights,
73-13 including voting rights, of the shares of any class or series so
73-14 established to the same extent that the designations, preferences,
73-15 limitations, and relative rights could be stated if fully set forth
73-16 in the articles of incorporation; and
73-17 (b) increase or decrease the aggregate number of
73-18 shares or the number of shares of, or eliminate and remove from the
73-19 articles of incorporation, a class or series of shares that the
73-20 corporation has authority to issue, unless a provision has been
73-21 included in the articles of incorporation of the corporation after
73-22 September 1, 1993, expressly prohibiting those actions by the board
73-23 of directors. The board of directors may not:
73-24 (i) decrease the number of shares within a
73-25 class or series to less than the number of shares of that class or
73-26 series that are then outstanding; or
73-27 (ii) eliminate or remove from the articles
74-1 of incorporation any reference to any class or series of which
74-2 shares are then outstanding.
74-3 To establish a class or series, the board of directors shall
74-4 adopt a resolution setting forth the designation of the class or
74-5 series and fixing and determining the designations, preferences,
74-6 limitations, and relative rights, including voting rights, of the
74-7 class or series. In order to increase or decrease the number of
74-8 shares of, or eliminate and remove from the articles of
74-9 incorporation any reference to, a class or series of shares, the
74-10 board of directors shall adopt a resolution fixing and determining
74-11 the new number of shares of each class or series in which the
74-12 number of shares is increased or decreased or eliminating the class
74-13 or series and removing references to the class or series from the
74-14 articles of incorporation. The shares of any eliminated series
74-15 shall resume the status of authorized but unissued shares of the
74-16 class of shares from which the series was established unless
74-17 otherwise provided in the resolution or the articles of
74-18 incorporation.
74-19 (2) Before the first issuance of any shares of a class
74-20 or series established or increased or decreased by resolution
74-21 adopted by the board of directors under Subsection (1) of this
74-22 section, and in order to eliminate from the articles of
74-23 incorporation a class or series of shares and all references to the
74-24 class or series contained in the articles, the corporation shall
74-25 file with the Secretary of State a statement setting forth:
74-26 (a) the name of the corporation;
74-27 (b) if the statement relates to the
75-1 establishment of a class or series of shares, a copy of the
75-2 resolution establishing and designating the class or series and
75-3 fixing and determining the preferences, limitations, and relative
75-4 rights of the class or series;
75-5 (c) if the statement relates to an increase or
75-6 decrease in the number of shares of any class or series, a copy of
75-7 the resolution fixing and determining the new number of shares of
75-8 each class or series in which the number of shares is increased or
75-9 decreased;
75-10 (d) if the statement relates to the elimination
75-11 of a class or series of shares and to the removal of all references
75-12 to the class or series from the articles of incorporation, a copy
75-13 of the resolution eliminating the class or series and removing all
75-14 references to the class or series from the articles of
75-15 incorporation;
75-16 (e) the date of adoption of the resolution; and
75-17 (f) that the resolution was duly adopted by all
75-18 necessary action on the part of the corporation.
75-19 (3) The statement shall be executed on behalf of the
75-20 corporation by an officer. The original and a copy of the
75-21 statement shall be delivered to the Secretary of State. If the
75-22 Secretary of State finds that the statement conforms to law, when
75-23 the appropriate filing fee is paid as provided by law, the
75-24 Secretary of State shall:
75-25 (a) endorse on the original and the copy the
75-26 word "Filed," and the month, day, and year of the filing of the
75-27 statement;
76-1 (b) file the original in the Secretary of
76-2 State's office; and
76-3 (c) return the copy to the corporation or its
76-4 representative.
76-5 (4) On the filing of a statement by the Secretary of
76-6 State, the resolution establishing and designating the class or
76-7 series and fixing and determining the preferences, limitations, and
76-8 relative rights of the class or series, the resolution fixing the
76-9 new number of shares of each class or series in which the number of
76-10 shares is increased or decreased, or the resolution eliminating a
76-11 class or series and all references to the class or series from the
76-12 articles of incorporation, as appropriate, becomes an amendment of
76-13 the articles of incorporation. An amendment of the articles of
76-14 incorporation effected as provided by this Article is not subject
76-15 to the procedure to amend the articles contained in Article 4.02 of
76-16 this Act.
76-17 SECTION 2.05. Sections A and B, Article 2.21, Texas Business
76-18 Corporation Act, are amended to read as follows:
76-19 A. A holder of shares, an owner of any beneficial interest
76-20 in shares, or a subscriber for shares whose subscription has been
76-21 accepted shall be under no obligation to the corporation or to its
76-22 obligees with respect to:
76-23 (1) such shares other than the obligation to pay to
76-24 the corporation the full amount of the consideration, fixed in
76-25 compliance with Article 2.15 of this Act, for which such shares
76-26 were or are to be issued;
76-27 (2) any contractual obligation of the corporation on
77-1 the basis that the holder, owner, or subscriber is or was the alter
77-2 ego of the corporation, or on the basis of actual fraud or
77-3 constructive fraud, <or> a sham to perpetrate a fraud, or other
77-4 similar theory, unless the obligee demonstrates that the holder,
77-5 owner, or subscriber caused the corporation to be used for the
77-6 purpose of perpetrating and did perpetrate an actual fraud on the
77-7 obligee primarily for the direct personal benefit of the holder,
77-8 owner, or subscriber; or
77-9 (3) any contractual obligation of the corporation on
77-10 the basis of the failure of the corporation to observe any
77-11 corporate formality, including without limitation: (a) the failure
77-12 to comply with any requirement of this Act or of the articles of
77-13 incorporation or bylaws of the corporation; or (b) the failure to
77-14 observe any requirement prescribed by this Act or by the articles
77-15 of incorporation or bylaws for acts to be taken by the corporation,
77-16 its board of directors, or its shareholders.
77-17 B. The liability of a holder, owner, or subscriber of shares
77-18 of a corporation for an obligation that is limited by Section A of
77-19 this article is exclusive and preempts any other liability imposed
77-20 on a holder, owner, or subscriber of shares of a corporation for
77-21 that obligation under common law or otherwise, except that nothing
77-22 <Nothing> contained in this article shall limit the obligation of a
77-23 holder, owner, or subscriber to an obligee of the corporation when:
77-24 (1) the holder, owner, or subscriber has expressly
77-25 assumed, guaranteed, or agreed to be personally liable to the
77-26 obligee for the obligation; or
77-27 (2) the holder, owner, or subscriber is otherwise
78-1 liable to the obligee for the obligation under this Act or another
78-2 applicable statute.
78-3 SECTION 2.06. Article 2.24, Texas Business Corporation Act,
78-4 is amended by adding Section D to read as follows:
78-5 D. If the articles of incorporation or bylaws of a
78-6 corporation registered under the Investment Company Act so provide,
78-7 the corporation is not required to hold an annual meeting of
78-8 shareholders or elect directors in any year that the election of
78-9 directors is not required to be acted on under the Investment
78-10 Company Act. If the corporation is required by the Investment
78-11 Company Act to hold a meeting of shareholders to elect directors,
78-12 the meeting shall be designated as the annual meeting of
78-13 shareholders for that year.
78-14 SECTION 2.07. Sections A and C, Article 2.27, Texas Business
78-15 Corporation Act, are amended to read as follows:
78-16 A. The officer or agent having charge of the share <stock>
78-17 transfer records <books> for shares of a corporation shall make, at
78-18 least ten (10) days before each meeting of shareholders, a complete
78-19 list of the shareholders entitled to vote at such meeting or any
78-20 adjournment thereof, arranged in alphabetical order, with the
78-21 address of and the number of shares held by each, which list, for a
78-22 period of ten (10) days prior to such meeting, shall be kept on
78-23 file at the registered office or principal place of business of the
78-24 corporation and shall be subject to inspection by any shareholder
78-25 at any time during usual business hours. Such list shall also be
78-26 produced and kept open at the time and place of the meeting and
78-27 shall be subject to the inspection of any shareholder during the
79-1 whole time of the meeting. The original share <stock> transfer
79-2 records <books> shall be prima-facie evidence as to who are the
79-3 shareholders entitled to examine such list or transfer records
79-4 <books> or to vote at any meeting of shareholders.
79-5 C. An officer or agent having charge of the share <stock>
79-6 transfer records <books> who shall fail to prepare the list of
79-7 shareholders or keep the same on file for a period of ten (10)
79-8 days, or produce and keep it open for inspection at the meeting, as
79-9 provided in this Article, shall be liable to any shareholder
79-10 suffering damage on account of such failure, to the extent of such
79-11 damage. In the event that such officer or agent does not receive
79-12 notice of a meeting of shareholders sufficiently in advance of the
79-13 date of such meeting reasonably to enable him to comply with the
79-14 duties prescribed by this Article, the corporation, but not such
79-15 officer or agent, shall be liable to any shareholder suffering
79-16 damage on account of such failure, to the extent of such damage.
79-17 SECTION 2.08. Article 2.32, Texas Business Corporation Act,
79-18 is amended by adding Section B to read as follows:
79-19 B. Notwithstanding Section A of this Article, a director of
79-20 a corporation registered under the Investment Company Act, unless
79-21 removed in accordance with the provisions of the articles of
79-22 incorporation or bylaws, holds office for the term for which the
79-23 director is elected and until the director's successor has been
79-24 elected and qualified.
79-25 SECTION 2.09. Article 2.34, Texas Business Corporation Act,
79-26 is amended to read as follows:
79-27 Art. 2.34. Vacancies. A. Any vacancy occurring in the
80-1 initial board of directors before the issuance of shares may be
80-2 filled by the affirmative vote or written consent of a majority of
80-3 the incorporators or by the affirmative vote of a majority of the
80-4 remaining directors though less than a quorum of the board of
80-5 directors. A director elected to fill a vacancy shall be elected
80-6 for the unexpired term of the director's predecessor in office.
80-7 B. Any vacancy occurring in the board of directors after the
80-8 issuance of shares may be filled in accordance with Section D <C>
80-9 of this article or may be filled by the affirmative vote of a
80-10 majority of the remaining directors though less than a quorum of
80-11 the board of directors. A director elected to fill a vacancy shall
80-12 be elected for the unexpired term of his predecessor in office.
80-13 C <B>. A directorship to be filled by reason of an increase
80-14 in the number of directors may be filled in accordance with Section
80-15 D <C> of this article or may be filled by the board of directors
80-16 for a term of office continuing only until the next election of one
80-17 or more directors by the shareholders; provided that the board of
80-18 directors may not fill more than two such directorships during the
80-19 period between any two successive annual meetings of shareholders.
80-20 D <C>. Any vacancy occurring in the board of directors or
80-21 any directorship to be filled by reason of an increase in the
80-22 number of directors may be filled by election at an annual or
80-23 special meeting of shareholders called for that purpose.
80-24 E <D>. Notwithstanding Sections <A,> B, <and> C, and D of
80-25 this article, whenever the holders of any class or series of shares
80-26 or group of classes or series of shares are entitled to elect one
80-27 or more directors by the provisions of the articles of
81-1 incorporation, any vacancies in such directorships and any newly
81-2 created directorships of such class or series to be filled by
81-3 reason of an increase in the number of such directors may be filled
81-4 by the affirmative vote of a majority of the directors elected by
81-5 such class or series, or by such group, then in office, or by a
81-6 sole remaining director so elected, or by the vote of the holders
81-7 of the outstanding shares of such class or series or of such group,
81-8 and such directorships shall not in any case be filled by the vote
81-9 of the remaining directors or the holders of the outstanding shares
81-10 as a whole unless otherwise provided in the articles of
81-11 incorporation.
81-12 SECTION 2.10. Section C, Article 2.41, Texas Business
81-13 Corporation Act, is amended to read as follows:
81-14 C. A director shall not be liable under Subsection (1) of
81-15 Section A of this Article if, in voting for or assenting to the
81-16 distribution, the director:
81-17 (1) relied in good faith and with ordinary care upon
81-18 the statements, valuations, or information referred to in Article
81-19 2.38-3 of this Act, or upon other information, opinions, reports,
81-20 or statements, including financial statements and other financial
81-21 data, concerning the corporation or another person, that were
81-22 prepared or presented by:
81-23 (a) one or more officers or employees of the
81-24 corporation;
81-25 (b) legal counsel, public accountants,
81-26 investment bankers, or other persons as to matters the director
81-27 reasonably believes are within the person's professional or expert
82-1 competence; or
82-2 (c) a committee of the board of directors of
82-3 which the director is not a member;
82-4 (2) acting in good faith and with ordinary care,
82-5 considered the assets of the corporation to be at least of their
82-6 book value; or
82-7 (3) in determining whether the corporation made
82-8 adequate provision for payment, satisfaction or discharge of all of
82-9 its liabilities and obligations as provided in Articles <Article>
82-10 6.04 and 7.12 of this Act, relied in good faith and with ordinary
82-11 care upon financial statements of, or other information concerning,
82-12 any person who was or became contractually obligated to pay,
82-13 satisfy, or discharge some or all of those liabilities or
82-14 obligations.
82-15 SECTION 2.11. Sections B-F, Article 2.44, Texas Business
82-16 Corporation Act, are amended to read as follows:
82-17 B. A director may examine the corporation's books and
82-18 records of account, share transfer records, corporate minutes and
82-19 any other corporate books and records for any purpose reasonably
82-20 related to the director's service as a director. A court of
82-21 competent jurisdiction may compel a corporation to open its books
82-22 and records of account, share transfer records, corporate minutes
82-23 or any other corporate books and records to permit the director to
82-24 inspect the books or records and make copies or extracts from the
82-25 books or records on a showing by a director that:
82-26 (1) he is a director;
82-27 (2) he demanded to inspect the corporate books and
83-1 records;
83-2 (3) his purpose for inspecting the corporate books and
83-3 records was reasonably related to his service as a director; and
83-4 (4) his right of access to the books and records was
83-5 refused by the corporation.
83-6 The court may also award the director attorneys' fees and any other
83-7 relief that the court deems just and proper.
83-8 C. Any person who shall have been a shareholder for at least
83-9 six (6) months immediately preceding his demand, or shall be the
83-10 holder of at least five per cent (5%) of all the outstanding shares
83-11 of a corporation, upon written demand stating the purpose thereof,
83-12 shall have the right to examine, in person or by agent, accountant,
83-13 or attorney, at any reasonable time or times, for any proper
83-14 purpose, its relevant books and records of account, minutes, and
83-15 share transfer records, and to make extracts therefrom.
83-16 D <C>. Any corporation which shall refuse to allow any such
83-17 shareholder or his agent, accountant or attorney, so to examine and
83-18 make extracts from its books and records of account, minutes, and
83-19 share transfer records, for any proper purpose, shall be liable to
83-20 such shareholder for all costs and expenses, including attorneys'
83-21 fees, incurred in enforcing his rights under this Article in
83-22 addition to any other damages or remedy afforded him by law. It
83-23 shall be a defense to any action for penalties under this section
83-24 that the person suing therefor has within two (2) years sold or
83-25 offered for sale any list of shareholders or of holders of voting
83-26 trust certificates for shares of such corporation or any other
83-27 corporation or has aided or abetted any person in procuring any
84-1 list of shareholders or of holders of voting trust certificates for
84-2 any such purpose, or has improperly used any information secured
84-3 through any prior examination of the books and records of account,
84-4 minutes, or share transfer records of such corporation or any other
84-5 corporation, or was not acting in good faith or for a proper
84-6 purpose in making his demand.
84-7 E <D>. Nothing herein contained shall impair the power of
84-8 any court of competent jurisdiction, upon proof of proper purpose
84-9 by a beneficial or record holder of shares, irrespective of the
84-10 period of time during which such holder shall have been a
84-11 beneficial or record holder and irrespective of the number of
84-12 shares held by him, to compel the production for examination by
84-13 such holder of the books and records of account, minutes, and share
84-14 transfer records of a corporation.
84-15 F <E>. Upon the written request of any shareholder of a
84-16 corporation, the corporation shall mail to such shareholder its
84-17 annual statements for its last fiscal year showing in reasonable
84-18 detail its assets and liabilities and the results of its operations
84-19 and the most recent interim statements, if any, which have been
84-20 filed in a public record or otherwise published. The corporation
84-21 shall be allowed a reasonable time to prepare such annual
84-22 statements.
84-23 G <F>. A holder of a beneficial interest in a voting trust
84-24 entered into pursuant to Article 2.30 of this Act shall be regarded
84-25 as a holder of the shares represented by such beneficial interest
84-26 for the purposes of this Article.
84-27 SECTION 2.12. Article 4.14, Texas Business Corporation Act,
85-1 is amended to read as follows:
85-2 Art. 4.14. REORGANIZATION UNDER A FEDERAL STATUTE <Amendment
85-3 of Articles, Merger, Share Exchange, and Dissolution Pursuant to
85-4 Federal Reorganization Proceedings>. A. Authorization.
85-5 Notwithstanding any other provision of this Act to the contrary, a
85-6 trustee appointed for a corporation being reorganized under a
85-7 federal statute, the designated officers of the corporation, or any
85-8 other individual or individuals designated by the court to act on
85-9 behalf of the corporation <a corporation being reorganized under a
85-10 federal statute> may do any of the following without action by or
85-11 notice to its board of directors or shareholders in order to carry
85-12 out a plan of reorganization ordered or decreed by a court of
85-13 competent jurisdiction under the federal statute:
85-14 (1) amend or restate its articles of incorporation if
85-15 the articles after amendment or restatement contain only provisions
85-16 required or permitted in articles;
85-17 (2) merge or engage in a share exchange with one or
85-18 more domestic or foreign corporations or other entities pursuant to
85-19 a plan of merger or exchange having such terms and provisions as
85-20 required or permitted by Articles <Article> 5.01 and 5.02 of this
85-21 Act;
85-22 (3) change the location of its registered office,
85-23 change its registered agent, and remove or appoint any agent to
85-24 receive service of process;
85-25 (4) alter, amend, or repeal its bylaws;
85-26 (5) constitute or reconstitute and classify or
85-27 reclassify its board of directors, and name, constitute, or appoint
86-1 directors and officers in place of or in addition to all or some of
86-2 the officers or directors then in place;
86-3 (6) sell, lease, exchange or otherwise dispose of all,
86-4 or substantially all, of its property and assets; <or>
86-5 (7) authorize and fix the terms, manner, and
86-6 conditions of the issuance of bonds, debentures, or other
86-7 obligations, whether or not convertible into shares of any class or
86-8 bearing warrants or other evidences of optional rights to purchase
86-9 or subscribe for any shares of any class; or
86-10 (8) <(4)> dissolve.
86-11 Actions taken under Subsection (4) or (5) of this section are
86-12 effective on entry of the order or decree approving the plan of
86-13 reorganization or on another effective date as may be specified,
86-14 without further action of the corporation, as and to the extent set
86-15 forth in the plan of reorganization or the order or decree
86-16 approving the plan of reorganization.
86-17 B. Authority to Sign Documents. A trustee appointed for a
86-18 corporation being reorganized under a federal statute, the
86-19 designated officers of the corporation, or any other <The>
86-20 individual or individuals designated by the court may sign on
86-21 behalf of a corporation that is being reorganized:
86-22 (1) articles of amendment or restated articles of
86-23 incorporation setting forth:
86-24 (a) the name of the corporation;
86-25 (b) the text of each amendment or the
86-26 restatement approved by the court;
86-27 (c) the date of the court's order or decree
87-1 approving the articles of amendment or restatement;
87-2 (d) the court, file name, and case number of the
87-3 reorganization case <proceeding> in which the order or decree was
87-4 entered; and
87-5 (e) a statement that the court had jurisdiction
87-6 of the case <proceeding> under federal statute; or
87-7 (2) articles of merger or exchange setting forth:
87-8 (a) the name of the corporation;
87-9 (b) the text of the part of the plan of
87-10 reorganization that contains the plan of merger or exchange
87-11 approved by the court, which shall include the information required
87-12 by Article 5.04A or 5.16B of this Act, as applicable, but need not
87-13 include the resolution of the board of directors referred to in
87-14 Article 5.16B(3) of this Act;
87-15 (c) the date of the court's order or decree
87-16 approving the plan of merger or consolidation;
87-17 (d) the court, file name, and case number of the
87-18 reorganization case <proceeding> in which the order or decree was
87-19 entered; and
87-20 (e) a statement that the court had jurisdiction
87-21 of the case <proceeding> under federal statute; or
87-22 (3) articles of dissolution setting forth:
87-23 (a) the name of the corporation;
87-24 (b) the information required by Articles
87-25 <Article> 6.06A(1)(2) and (3) of this Act;
87-26 (c) the date of the court's order or decree
87-27 approving the articles of dissolution;
88-1 (d) that the debts, obligations and liabilities
88-2 of the corporation have been paid or discharged as provided in the
88-3 plan of reorganization and that the remaining property and assets
88-4 of the corporation have been distributed as provided in the plan of
88-5 reorganization;
88-6 (e) the court, file name, and case number of the
88-7 reorganization case <proceeding> in which the order or decree was
88-8 entered; and
88-9 (f) a statement that the court had jurisdiction
88-10 of the case <proceeding> under federal statute; or
88-11 (4) a statement of change of registered office or
88-12 registered agent, or both, setting forth:
88-13 (a) the name of the corporation;
88-14 (b) the information required by Article 2.10A of
88-15 this Act, as applicable, but not the information included in the
88-16 statement referred to in Article 2.10A(7) of this Act;
88-17 (c) the date of the court's order or decree
88-18 approving the statement of change of registered office or
88-19 registered agent, or both;
88-20 (d) the court, file name, and case number of the
88-21 reorganization case in which the order or decree was entered; and
88-22 (e) a statement that the court had jurisdiction
88-23 of the case under federal statute.
88-24 C. Procedure for Merger or Share Exchange. When a domestic
88-25 or foreign corporation or other entity that is not being
88-26 reorganized merges or engages in a share exchange with a
88-27 corporation that is being reorganized pursuant to a plan of
89-1 reorganization:
89-2 (1) Articles 5.01, 5.02, 5.03, 5.11, 5.12, and 5.13 of
89-3 this Act shall apply to the domestic or foreign corporation or
89-4 other entity that is not being reorganized to the same extent they
89-5 would apply if it were merging or engaging in a share exchange with
89-6 a corporation that is not being reorganized;
89-7 (2) Article 5.06 of this Act shall apply to the
89-8 domestic or foreign corporation or other entity that is not being
89-9 reorganized to the same extent it would apply if that domestic or
89-10 foreign corporation or other entity were merging or engaging in a
89-11 share exchange with a corporation that is not being reorganized,
89-12 except as otherwise provided in the plan of reorganization ordered
89-13 or decreed by a court of competent jurisdiction under the federal
89-14 statute;
89-15 (3) Article 5.16E of this Act shall apply to a
89-16 subsidiary corporation that is not being reorganized to the same
89-17 extent it would apply if that corporation were merging with a
89-18 parent corporation that is not being reorganized;
89-19 (4) Upon the receipt of all required authorization for
89-20 all action required by this Act for each corporation that is a
89-21 party to the plan of merger or exchange that is not being
89-22 reorganized and all action by each corporation, foreign
89-23 corporation, or other entity that is a party to the plan of merger
89-24 or exchange required by the laws under which it is incorporated or
89-25 organized and its constituent documents, articles of merger or
89-26 exchange shall be signed by each domestic or foreign corporation or
89-27 other entity that is a party to the merger or exchange other than
90-1 the corporation that is being reorganized as provided in Article
90-2 5.04 of this Act and on behalf of the corporation that is being
90-3 reorganized by the persons specified in Section B of this Article;
90-4 <and>
90-5 (5) The articles of merger or exchange shall set forth
90-6 the information required in Section B(2) of this Article;<.>
90-7 (6) <D. Filing.> The articles of merger or exchange
90-8 shall be filed with the Secretary of State in the manner and with
90-9 such number of copies as is provided in Article 5.04B of this Act;
90-10 and<.>
90-11 (7) <E. Effect.> Upon the issuance of the certificate
90-12 of merger or share exchange by the Secretary of State as provided
90-13 in Article 5.04 of this Act, the merger or share exchange shall
90-14 become effective with the same effect as if it had been adopted by
90-15 unanimous action of the directors and shareholders of the
90-16 corporation being reorganized. The effectiveness of the merger or
90-17 share exchange shall be determined as provided in Article 5.05 of
90-18 this Act.
90-19 D <F>. Dissenters' Rights. Shareholders of a corporation
90-20 being reorganized under a federal statute do not have a right to
90-21 dissent under Article 5.11 or 5.16E of this Act, except as the plan
90-22 of reorganization may provide.
90-23 E <G>. When Applicable. This Article shall not apply after
90-24 the entry of a final decree in the reorganization case <proceeding>
90-25 even though the court may retain jurisdiction of the case
90-26 <proceeding> for limited purposes unrelated to consummation of the
90-27 plan of reorganization.
91-1 F <H>. Nonexclusivity. This Article shall not preclude
91-2 other changes in a corporation or its securities by a plan of
91-3 reorganization ordered or decreed by a court of competent
91-4 jurisdiction under federal statute.
91-5 SECTION 2.13. Sections A, B, and G, Article 5.03, Texas
91-6 Business Corporation Act, are amended to read as follows:
91-7 A. Except as provided by Section G of this Article, after
91-8 <After> acting on a plan of merger or exchange in the manner
91-9 prescribed by Subsection (1) of Section B of this Article, the
91-10 board of directors of each domestic corporation that is a party to
91-11 the merger, and the board of directors of each domestic corporation
91-12 whose shares are to be acquired in the share exchange, shall submit
91-13 the plan of merger <(except as provided in Section G of this
91-14 Article)> or exchange for approval by its shareholders.
91-15 B. Except as provided by Section G of this Article, for
91-16 <For> a plan of merger or exchange to be approved:
91-17 (1) the board of directors of the corporation may
91-18 adopt a resolution recommending that the plan of merger or exchange
91-19 be approved by the shareholders of the corporation, unless the
91-20 board of directors determines that for any reason it should not
91-21 make that recommendation, in which case the board of directors may
91-22 adopt a resolution directing that the plan of merger or exchange be
91-23 submitted to shareholders for approval without recommendation and,
91-24 in connection with the submission, communicate the basis for its
91-25 determination that the plan be submitted to shareholders without
91-26 any recommendation; and
91-27 (2) <except as provided in Section G of this Article,>
92-1 the shareholders entitled to vote on the plan of merger or exchange
92-2 must approve the plan.
92-3 G. Unless the articles of incorporation otherwise require,
92-4 approval by the shareholders of a corporation on a plan of merger
92-5 shall not be required and the provisions of Sections A, B, C, D, E,
92-6 and F of this Article do not apply if:
92-7 (1) the corporation is the sole surviving corporation
92-8 in the merger;
92-9 (2) the articles of incorporation of the corporation
92-10 will not differ from its articles of incorporation before the
92-11 merger;
92-12 (3) each shareholder of the corporation whose shares
92-13 were outstanding immediately before the effective date of the
92-14 merger will hold the same number of shares, with identical
92-15 designations, preferences, limitations, and relative rights,
92-16 immediately after the effective date of the merger;
92-17 (4) the voting power of the number of voting shares
92-18 outstanding immediately after the merger, plus the voting power of
92-19 the number of voting shares issuable as a result of the merger
92-20 (either by the conversion of securities issued pursuant to the
92-21 merger or the exercise of rights to purchase securities issued
92-22 pursuant to the merger), will not exceed by more than 20 percent
92-23 the voting power of the total number of voting shares of the
92-24 corporation outstanding immediately before the merger;
92-25 (5) the number of participating shares outstanding
92-26 immediately after the merger, plus the number of participating
92-27 shares issuable as a result of the merger (either by the conversion
93-1 of securities issued pursuant to the merger or the exercise of
93-2 rights to purchase securities issued pursuant to the merger), will
93-3 not exceed by more than 20 percent the total number of
93-4 participating shares of the corporation outstanding immediately
93-5 before the merger; and
93-6 (6) the board of directors of the corporation adopts a
93-7 resolution approving the plan of merger.
93-8 SECTION 2.14. Section B, Article 5.09, Texas Business
93-9 Corporation Act, is amended to read as follows:
93-10 B. A transaction referred to in this Article and in Article
93-11 5.10 of this Act shall be in the usual and regular course of
93-12 business if the corporation shall, directly or indirectly, either
93-13 continue to engage in one or more businesses or apply a portion of
93-14 the consideration received in connection with the transaction to
93-15 the conduct of a business in which it engages following the
93-16 transaction.
93-17 SECTION 2.15. Section A, Article 5.10, Texas Business
93-18 Corporation Act, is amended to read as follows:
93-19 A. A sale, lease, exchange, or other disposition (not
93-20 including any pledge, mortgage, deed of trust or trust indenture
93-21 unless otherwise provided in the articles of incorporation) of all,
93-22 or substantially all, the property and assets, with or without the
93-23 good will of a corporation, if not made in the usual and regular
93-24 course of its business, may be made upon such terms and conditions
93-25 and for such consideration, which may consist in whole or in part
93-26 of money or property, real or personal, including shares of any
93-27 corporation, domestic or foreign, as may be authorized in the
94-1 following manner:
94-2 (1) The board of directors may adopt a resolution
94-3 recommending that such sale, lease, exchange, or other disposition
94-4 be approved by shareholders of the corporation, unless the board of
94-5 directors determines that for any reason it should not make the
94-6 recommendation in which case the board of directors may adopt a
94-7 resolution directing that such sale, lease, exchange, or other
94-8 disposition be submitted to shareholders without recommendation
94-9 and, in connection with the submission, communicate the basis for
94-10 its determination that the sale, lease, exchange or other
94-11 disposition be submitted without recommendation.
94-12 (2) The board of directors may submit the proposed
94-13 sale, lease, exchange or other disposition for authorization by the
94-14 corporation's shareholders at a meeting of shareholders, which may
94-15 be either an annual or a special meeting.
94-16 (3) Written or printed notice shall be given to each
94-17 shareholder of record entitled to vote at such meeting within the
94-18 time and in the manner provided for in this Act for the giving of
94-19 notice of meetings of shareholders, and, whether the meeting be an
94-20 annual or a special meeting shall state that the purpose, or one of
94-21 the purposes, of such meeting is to consider the proposed sale,
94-22 lease, exchange, or other disposition.
94-23 (4) At such meeting, the shareholders may authorize
94-24 such sale, lease, exchange or other disposition and may fix, or may
94-25 authorize the board of directors to fix, any or all of the terms
94-26 and conditions thereof and the consideration to be received by the
94-27 corporation therefor. Such authorization shall require the
95-1 affirmative vote of the holders of at least two-thirds of the
95-2 outstanding shares of the corporation entitled to vote thereon,
95-3 unless any class or series of shares of the corporation is entitled
95-4 to vote as a class thereon, in which event the vote required for
95-5 authorization by the shareholders shall be the affirmative vote of
95-6 the holders of at least two-thirds of the outstanding shares within
95-7 each such class or series entitled to vote thereon as a class and
95-8 at least two-thirds of the outstanding shares otherwise entitled to
95-9 vote thereon. Shares entitled to vote as a class shall be entitled
95-10 to vote only as a class unless otherwise entitled to vote on each
95-11 matter submitted to the shareholders generally or provided in the
95-12 articles of incorporation.
95-13 SECTION 2.16. Sections A and D, Article 5.12, Texas Business
95-14 Corporation Act, are amended to read as follows:
95-15 A. Any shareholder of any domestic corporation who has the
95-16 right to dissent from any of the corporate actions referred to in
95-17 Article 5.11 of this Act may exercise that right to dissent only by
95-18 complying with the following procedures:
95-19 (1)(a) With respect to proposed corporate action that
95-20 is submitted to a vote of shareholders at a meeting, the
95-21 shareholder shall file with the corporation, prior to the meeting,
95-22 a written objection to the action, setting out that the
95-23 shareholder's right to dissent will be exercised if the action is
95-24 effective and giving the shareholder's address, to which notice
95-25 thereof shall be delivered or mailed in that event. If the action
95-26 is effected and the shareholder shall not have voted in favor of
95-27 the action, the corporation, in the case of action other than a
96-1 merger, or the surviving or new corporation (foreign or domestic)
96-2 or other entity that is liable to discharge the shareholder's right
96-3 of dissent, in the case of a merger, shall, within ten (10) days
96-4 after the action is effected, deliver or mail to the shareholder
96-5 written notice that the action has been effected, and the
96-6 shareholder may, within ten (10) days from the delivery or mailing
96-7 of the notice, make written demand on the existing, surviving, or
96-8 new corporation (foreign or domestic) or other entity, as the case
96-9 may be, for payment of the fair value of the shareholder's shares.
96-10 The fair value of the shares shall be the value thereof as of the
96-11 day immediately preceding the meeting, excluding any appreciation
96-12 or depreciation in anticipation of the proposed action. The demand
96-13 shall state the number and class of the shares owned by the
96-14 shareholder and the fair value of the shares as estimated by the
96-15 shareholder. Any shareholder failing to make demand within the ten
96-16 (10) day period shall be bound by the action.
96-17 (b) With respect to proposed corporate action
96-18 that is approved pursuant to Section A of Article 9.10 of this Act,
96-19 the corporation, in the case of action other than a merger, and the
96-20 surviving or new corporation (foreign or domestic) or other entity
96-21 that is liable to discharge the shareholder's right of dissent, in
96-22 the case of a merger, shall, within ten (10) days after the date
96-23 the action is effected, mail to each shareholder of record as of
96-24 the effective date of the action notice of the fact and date of the
96-25 action and that the shareholder may exercise the shareholder's
96-26 right to dissent from the action. The notice shall be accompanied
96-27 by a copy of this Article and any articles or documents filed by
97-1 the corporation with the Secretary of State to effect the action.
97-2 If the shareholder shall not have consented to the taking of the
97-3 action, the shareholder may, within twenty (20) days after the
97-4 mailing of the notice, make written demand on the existing,
97-5 surviving, or new corporation (foreign or domestic) or other
97-6 entity, as the case may be, for payment of the fair value of the
97-7 shareholder's shares. The fair value of the shares shall be the
97-8 value thereof as of the date the written consent authorizing the
97-9 action was delivered to the corporation pursuant to Section A of
97-10 Article 9.10 of this Act, excluding any appreciation or
97-11 depreciation in anticipation of the <proposed> action. The demand
97-12 shall state the number and class of shares owned by the dissenting
97-13 shareholder and the fair value of the shares as estimated by the
97-14 shareholder. Any shareholder failing to make demand within the
97-15 twenty (20) day period shall be bound by the action.
97-16 (2) Within twenty (20) days after receipt by the
97-17 existing, surviving, or new corporation (foreign or domestic) or
97-18 other entity, as the case may be, of a demand for payment made by a
97-19 dissenting shareholder in accordance with Subsection (1) of this
97-20 Section, the corporation (foreign or domestic) or other entity
97-21 shall deliver or mail to the shareholder a written notice that
97-22 shall either set out that the corporation (foreign or domestic) or
97-23 other entity accepts the amount claimed in the demand and agrees to
97-24 pay that amount within ninety (90) days after the date on which the
97-25 action was effected, and, in the case of shares represented by
97-26 certificates, upon the surrender of the certificates duly endorsed,
97-27 or shall contain an estimate by the corporation (foreign or
98-1 domestic) or other entity of the fair value of the shares, together
98-2 with an offer to pay the amount of that estimate within ninety (90)
98-3 days after the date on which the action was effected, upon receipt
98-4 of notice within sixty (60) days after that date from the
98-5 shareholder that the shareholder agrees to accept that amount and,
98-6 in the case of shares represented by certificates, upon the
98-7 surrender of the certificates duly endorsed.
98-8 (3) If, within sixty (60) days after the date on which
98-9 the corporate action was effected, the value of the shares is
98-10 agreed upon between the shareholder and the existing, surviving, or
98-11 new corporation (foreign or domestic) or other entity, as the case
98-12 may be, payment for the shares shall be made within ninety (90)
98-13 days after the date on which the action was effected and, in the
98-14 case of shares represented by certificates, upon surrender of the
98-15 certificates duly endorsed. Upon payment of the agreed value, the
98-16 shareholder shall cease to have any interest in the shares or in
98-17 the corporation.
98-18 D. The appraisers shall determine the fair value of the
98-19 shares of the shareholders adjudged by the court to be entitled to
98-20 payment for their shares and shall file their report of that value
98-21 in the office of the clerk of the court. Notice of the filing of
98-22 the report shall be given by the clerk to the parties in interest.
98-23 The report shall be subject to exceptions to be heard before the
98-24 court both upon the law and the facts. The court shall by its
98-25 judgment determine the fair value of the shares of the shareholders
98-26 entitled to payment for their shares and shall direct the payment
98-27 of that value by the existing, surviving, or new corporation
99-1 (foreign or domestic) or other entity, together with interest
99-2 thereon, beginning 91 days after the date on which the applicable
99-3 corporate action from which the shareholder elected to dissent was
99-4 effected to the date of such judgment, to the shareholders entitled
99-5 to payment. The judgment shall be payable to the holders of
99-6 uncertificated shares immediately but to the holders of shares
99-7 represented by certificates only upon, and simultaneously with, the
99-8 surrender to the existing, surviving, or new corporation (foreign
99-9 or domestic) or other entity, as the case may be, of duly endorsed
99-10 certificates for those shares. Upon payment of the judgment, the
99-11 dissenting shareholders shall cease to have any interest in those
99-12 shares or in the corporation. The court shall allow the appraisers
99-13 a reasonable fee as court costs, and all court costs shall be
99-14 allotted between the parties in the manner that the court
99-15 determines to be fair and equitable.
99-16 SECTION 2.17. Article 5.13, Texas Business Corporation Act,
99-17 is amended to read as follows:
99-18 Art. 5.13. Provisions Affecting Remedies of Dissenting
99-19 Shareholders. A. Any shareholder who has demanded payment for his
99-20 shares in accordance with either Article 5.12 or 5.16 of this Act
99-21 shall not thereafter be entitled to vote or exercise any other
99-22 rights of a shareholder except the right to receive payment for his
99-23 shares pursuant to the provisions of those articles <said Article
99-24 5.12> and the right to maintain an appropriate action to obtain
99-25 relief on the ground that the corporate action would be or was
99-26 fraudulent, and the respective shares for which payment has been
99-27 demanded shall not thereafter be considered outstanding for the
100-1 purposes of any subsequent vote of shareholders.
100-2 B. Upon receiving a demand for payment from any dissenting
100-3 shareholder, the corporation shall make an appropriate notation
100-4 thereof in its shareholder records. Within twenty (20) days after
100-5 demanding payment for his shares in accordance with either Article
100-6 5.12 or 5.16 of this Act, each holder of certificates representing
100-7 shares so demanding payment shall submit such certificates to the
100-8 corporation for notation thereon that such demand has been made.
100-9 The failure of holders of certificated shares to do so shall, at
100-10 the option of the corporation, terminate such shareholder's rights
100-11 under Articles <Article> 5.12 and 5.16 of this Act unless a court
100-12 of competent jurisdiction for good and sufficient cause shown shall
100-13 otherwise direct. If uncertificated shares for which payment has
100-14 been demanded or shares represented by a certificate on which
100-15 notation has been so made shall be transferred, any new certificate
100-16 issued therefor shall bear similar notation together with the name
100-17 of the original dissenting holder of such shares and a transferee
100-18 of such shares shall acquire by such transfer no rights in the
100-19 corporation other than those which the original dissenting
100-20 shareholder had after making demand for payment of the fair value
100-21 thereof.
100-22 C. Any shareholder who has demanded payment for his shares
100-23 in accordance with either Article 5.12 or 5.16 of this Act may
100-24 withdraw such demand at any time before payment for his shares or
100-25 before any petition has been filed pursuant to Article 5.12 or 5.16
100-26 of this Act asking for a finding and determination of the fair
100-27 value of such shares, but no such demand may be withdrawn after
101-1 such payment has been made or, unless the corporation shall consent
101-2 thereto, after any such petition has been filed. If, however, such
101-3 demand shall be withdrawn as hereinbefore provided, or if pursuant
101-4 to Section B of this Article the corporation shall terminate the
101-5 shareholder's rights under Article 5.12 or 5.16 of this Act, as the
101-6 case may be, or if no petition asking for a finding and
101-7 determination of fair value of such shares by a court shall have
101-8 been filed within the time provided in Article 5.12 or 5.16 of this
101-9 Act, as the case may be, or if after the hearing of a petition
101-10 filed pursuant to Article 5.12 or 5.16, the court shall determine
101-11 that such shareholder is not entitled to the relief provided by
101-12 those articles <Article 5.12>, then, in any such case, such
101-13 shareholder and all persons claiming under him shall be
101-14 conclusively presumed to have approved and ratified the corporate
101-15 action from which he dissented and shall be bound thereby, the
101-16 right of such shareholder to be paid the fair value of his shares
101-17 shall cease, and his status as a shareholder shall be restored
101-18 without prejudice to any corporate proceedings which may have been
101-19 taken during the interim, and such shareholder shall be entitled to
101-20 receive any dividends or other distributions made to shareholders
101-21 in the interim.
101-22 SECTION 2.18. Sections B, E, and F, Article 5.16, Texas
101-23 Business Corporation Act, are amended to read as follows:
101-24 B. Signature of articles; contents. The articles of merger
101-25 shall be signed on behalf of the parent corporation by an officer
101-26 and shall set forth:
101-27 (1) The name of the parent corporation, and the name
102-1 or names of the subsidiary corporations and the respective
102-2 jurisdiction under which each such corporation is organized.
102-3 (2) The number of outstanding shares of each class of
102-4 each subsidiary corporation and the number of such shares of each
102-5 class owned by the parent corporation.
102-6 (3) A copy of the resolution adopted by the board of
102-7 directors of the parent corporation to so merge and the date of the
102-8 adoption thereof. If the parent corporation does not own all the
102-9 outstanding shares of each class of each subsidiary corporation
102-10 that is a party to the merger, the resolution shall state the terms
102-11 and conditions of the merger, including the <securities,> cash or
102-12 other property, including shares, obligations, evidences of
102-13 ownership, rights to purchase securities, or other securities of
102-14 any person or entity or any combination of the shares, obligations,
102-15 evidences of ownership, rights, or other securities, to be used,
102-16 paid or delivered by the surviving corporation upon surrender of
102-17 each share of the subsidiary corporation or corporations not owned
102-18 by the parent corporation.
102-19 (4) If the surviving corporation is a foreign
102-20 corporation, the address, including street number if any, of its
102-21 registered or principal office in the jurisdiction under whose laws
102-22 it is governed. If the surviving corporation is a foreign
102-23 corporation, on the merger taking effect the surviving foreign
102-24 corporation is deemed to (a) appoint the Secretary of State of this
102-25 state as its agent for service of process to enforce an obligation
102-26 or the rights of dissenting shareholders of each domestic
102-27 corporation that is a party to the merger, and (b) agree that it
103-1 will promptly pay to the dissenting shareholders of each domestic
103-2 corporation that is a party to the merger the amount, if any, to
103-3 which they are entitled under this Article <It shall comply also
103-4 with the provisions of Section D of Article 5.01 of this Act>.
103-5 (5) If a plan of merger is required by Section A of
103-6 this Article to be adopted in the manner required by Article 5.03
103-7 of this Act, the information required by Section A of Article 5.04
103-8 of this Act.
103-9 E. Remedy of minority shareholders. In the event all of the
103-10 shares of a subsidiary domestic corporation that is a party to a
103-11 merger effected under this Article are not owned by the parent
103-12 corporation immediately prior to the merger, the surviving
103-13 corporation (foreign or domestic) shall, within ten (10) days after
103-14 the effective date of the merger, mail to each shareholder of
103-15 record of each subsidiary domestic corporation a copy of the
103-16 articles of merger and notify the shareholder <him> that the merger
103-17 has become effective. Any <In case any> such shareholder who holds
103-18 shares of a class or series that would have been entitled to vote
103-19 on the merger if it had been effected pursuant to Article 5.03 of
103-20 this Act shall have the right <and who elects> to dissent from the
103-21 merger and demand payment of the fair value for his shares in lieu
103-22 of the <securities,> cash or other property to be used, paid or
103-23 delivered to such shareholder upon the surrender of such
103-24 shareholder's shares pursuant to the terms and conditions of the
103-25 merger, with the following procedure <shall be followed>:
103-26 (1) Such shareholder shall within twenty (20) days
103-27 after the mailing of the notice and copy of the articles of merger
104-1 make written demand on the surviving corporation, domestic or
104-2 foreign, for payment of the fair value of his shares. The fair
104-3 value of the <such> shares shall be the value thereof as of the day
104-4 before the effective date of the merger, excluding any appreciation
104-5 or depreciation in anticipation of such <proposed> act. The <Such>
104-6 demand shall state the number and class of the shares owned by the
104-7 dissenting shareholder and the fair value of such shares as
104-8 estimated by him. Any shareholder failing to make demand within
104-9 the twenty (20) day period shall be bound by the <such> corporate
104-10 action.
104-11 (2) Within ten (10) days after receipt by the
104-12 surviving corporation of a demand for payment by the dissenting
104-13 shareholder of the fair value of his shares <made by such
104-14 dissenting shareholder> in accordance with Subsection (1) of this
104-15 section, the <hereof, such> corporation (foreign or domestic) shall
104-16 deliver or mail to the <such> dissenting shareholder a written
104-17 notice which shall either set out that the corporation (foreign or
104-18 domestic) accepts the amount claimed in the <such> demand and
104-19 agrees to pay such amount within ninety (90) days after the date on
104-20 which the <such> corporate action was effected and, in the case of
104-21 shares represented by certificates, upon the surrender of the
104-22 shares certificates duly endorsed, or shall contain an estimate by
104-23 the corporation of the fair value of such shares, together with an
104-24 offer to pay the amount of that <such> estimate within ninety (90)
104-25 days after the date on which such corporate <corporation> action
104-26 was effected, upon receipt of notice within sixty (60) days after
104-27 that <such> date from the <such> shareholder that the shareholder
105-1 <he> agrees to accept that <such> amount and, in the case of shares
105-2 represented by certificates, upon the surrender of the shares
105-3 certificates duly endorsed.
105-4 (3) If, within sixty (60) days after the date on which
105-5 the <such> corporate action was effected, the value of the <such>
105-6 shares is agreed upon between the dissenting shareholder and the
105-7 surviving corporation (foreign or domestic), payment for the shares
105-8 <therefor> shall be made within ninety (90) days after the date on
105-9 which the <such> corporate action was effected and, in the case of
105-10 shares represented by certificates, upon surrender of his
105-11 certificate or certificates representing such shares. Upon payment
105-12 of the agreed value, the dissenting shareholder shall cease to have
105-13 any interest in such shares or in the corporation.
105-14 (4) If, within <such period of> sixty (60) days after
105-15 the date on which such corporate action was effected, the
105-16 shareholder and the surviving corporation (foreign or domestic) do
105-17 not so agree, then the dissenting shareholder or the corporation
105-18 (foreign or domestic) may, within sixty (60) days after the
105-19 expiration of the sixty (60) day period, file a petition in any
105-20 court of competent jurisdiction in the county in which the
105-21 principal office of the corporation is located, asking for a
105-22 finding and determination of the fair value of the shareholder's
105-23 <such> shares as provided in Section B of Article 5.12 of this Act
105-24 and thereupon the parties shall have the rights and duties and
105-25 follow the procedure set forth in Sections B to D inclusive of
105-26 Article 5.12 <and set forth in Article 5.13>.
105-27 (5) In the absence of fraud in the transaction, the
106-1 remedy provided by this Article to a shareholder objecting to the
106-2 <such> corporate action is the exclusive remedy for the recovery of
106-3 the value of his shares or money damages to the <such> shareholder
106-4 with respect to the <such> corporate action. If<; and if> the
106-5 surviving corporation (foreign or domestic) complies with the
106-6 requirements of this Article, any such shareholder who fails to
106-7 comply with the requirements of this Article shall not be entitled
106-8 to bring suit for the recovery of the value of his shares or money
106-9 damages to such shareholder with respect to such corporate action.
106-10 F. Dissenting shareholders. If a plan of merger is required
106-11 by Section A of this Article to be adopted in the manner required
106-12 by Article 5.03 of this Act, the provisions of Articles 5.11 and<,>
106-13 5.12<, and 5.13> of this Act shall apply to the rights of the
106-14 shareholders of the parent corporation to dissent from such merger.
106-15 Except as otherwise provided in this Article, the provisions of
106-16 Articles 5.11 and<,> 5.12 <and 5.13> of this Act shall not be
106-17 applicable to a merger effected under the provisions of this
106-18 Article. The provisions of Article 5.13 of this Act shall be
106-19 applicable to any merger effected under the provisions of this
106-20 Article to the extent provided in Article 5.13 of this Act.
106-21 SECTION 2.19. Sections D and F, Article 7.12, Texas Business
106-22 Corporation Act, are amended to read as follows:
106-23 D. A dissolved corporation may give written notice to a
106-24 person having or asserting an existing claim against the dissolved
106-25 corporation to present such existing claim to the dissolved
106-26 corporation in accordance with the notice. The notice shall be
106-27 sent by registered or certified mail, return receipt requested, to
107-1 the person having or asserting the existing claim at such person's
107-2 last known address, and the notice shall:
107-3 (1) state that such person's <such> claim against the
107-4 dissolved corporation must be presented in writing to the dissolved
107-5 corporation on or before the date stated in the notice, which shall
107-6 be not earlier than 120 days after the date the notice is sent to
107-7 such person;
107-8 (2) state that the written presentation of the claim
107-9 must describe such claim in sufficient detail to reasonably inform
107-10 the dissolved corporation of the identity of such person and of the
107-11 nature and amount of the claim;
107-12 (3) state a mailing address where the written
107-13 presentation of the person's claim against the dissolved
107-14 corporation is to be sent; <and>
107-15 (4) state that if the written presentation of the
107-16 claim is not received at such address on or before the date stated
107-17 in the notice, the claim will be extinguished; and
107-18 (5) be accompanied by a copy of this Section D.
107-19 If a written presentation of such person's claim against the
107-20 dissolved corporation that meets the requirements of this section
107-21 is received at the address of the dissolved corporation stated in
107-22 the notice on or before the date stated in the notice, the
107-23 dissolved corporation may thereafter give written notice to such
107-24 person that such claim is rejected by the dissolved corporation.
107-25 The notice shall be sent by registered or certified mail, return
107-26 receipt requested, addressed to such person at such person's last
107-27 known address, and the notice shall state:
108-1 (1) that such claim is rejected by the dissolved
108-2 corporation;
108-3 (2) that such claim will be extinguished unless
108-4 an action or proceeding on such claim is brought within 180 days
108-5 after the date such notice of rejection was sent to such person and
108-6 before the expiration of the three-year period following the date
108-7 of dissolution; and
108-8 (3) the date such notice of rejection was sent
108-9 and the date of dissolution.
108-10 Such person's claim against the dissolved corporation shall
108-11 be extinguished if (a) a written presentation of that claim meeting
108-12 the requirements of this section is not received at the address of
108-13 the dissolved corporation stated in the notice to such person on or
108-14 before the date stated in the notice or (b) an action or proceeding
108-15 on such claim is not brought within 180 days after the date a
108-16 notice of rejection was sent to such person and before the
108-17 expiration of the three-year period following the date of
108-18 dissolution.
108-19 F. In this Article:
108-20 (1) The term "dissolved corporation" means a
108-21 corporation (a) that was voluntarily dissolved by the issuance of a
108-22 certificate of dissolution by the Secretary of State and was not
108-23 issued a certificate of revocation of dissolution pursuant to
108-24 Section C of Article 6.05 of this Act, (b) that was involuntarily
108-25 dissolved by the Secretary of State and was not reinstated pursuant
108-26 to Section E of Article 7.01 of this Act, (c) that was dissolved by
108-27 decree of a court when the court has not liquidated all the assets
109-1 and business of the corporation as provided in this Act, <or> (d)
109-2 that was dissolved by the expiration of its period of duration and
109-3 has not revived its existence as provided in this Act, or (e) whose
109-4 charter was forfeited pursuant to the Tax Code, unless the
109-5 forfeiture has been set aside.
109-6 (2) The term "claim" means a right to payment,
109-7 damages, or property, whether liquidated or unliquidated, accrued
109-8 or contingent, matured or unmatured.
109-9 (3) The term "existing claim" means a claim that
109-10 existed before dissolution and is not otherwise barred by
109-11 limitations or a contractual obligation incurred after dissolution.
109-12 SECTION 2.20. Section A, Article 8.14, Texas Business
109-13 Corporation Act, is amended to read as follows:
109-14 A. A foreign corporation authorized to transact business in
109-15 this state may withdraw from this state upon procuring from the
109-16 Secretary of State a certificate of withdrawal. In order to
109-17 procure such certificate of withdrawal, such foreign corporation
109-18 shall deliver to the Secretary of State an application for
109-19 withdrawal, which shall set forth:
109-20 (1) The name of the corporation and the state or
109-21 country under the laws of which it is incorporated;
109-22 (2) That the corporation is not transacting business
109-23 in this state;
109-24 (3) That the corporation surrenders its authority to
109-25 transact business in this state;
109-26 (4) That the corporation revokes the authority of its
109-27 registered agent in this state to accept service of process and
110-1 consents that service of process in any action, suit, or proceeding
110-2 based upon any cause of action arising in this state during the
110-3 time the corporation was authorized to transact business in this
110-4 state may thereafter be made on such corporation by service thereof
110-5 on the Secretary of State;
110-6 (5) A post office address to which the Secretary of
110-7 State may mail a copy of any process against the corporation that
110-8 may be served on him;
110-9 (6) A statement that all sums due, or accrued, to this
110-10 state have been paid, or that adequate provision has been made for
110-11 the payment thereof; and
110-12 (7) A statement that all known creditors or claimants
110-13 have been paid or provided for <and that the corporation is not
110-14 involved in or threatened with litigation in any court in this
110-15 state>.
110-16 SECTION 2.21. Section A, Article 10.03, Texas Business
110-17 Corporation Act, is amended to read as follows:
110-18 A. The effectiveness of (i) the incorporation of a
110-19 corporation under this Act, (ii) an amendment to a corporation's
110-20 articles of incorporation, including an amendment effected pursuant
110-21 to a statement of resolution establishing a series of shares, (iii)
110-22 the restatement of articles of incorporation of a corporation, (iv)
110-23 a merger or share exchange, (v) a cancellation of redeemable or
110-24 reacquired shares or a reduction in stated capital, (vi) a
110-25 voluntary dissolution, (vii) the authorization or withdrawal of a
110-26 foreign corporation to transact business in this State, (viii) an
110-27 amendment to the certificate of authority of a foreign corporation,
111-1 (ix) a bylaw or agreement restricting the transfer of shares or
111-2 securities of a corporation pursuant to this Act, (x) a change in
111-3 registered office or registered agent, or (xi) a change of address
111-4 of a registered agent (each such act or document being a "Permitted
111-5 Act") may be made effective as of a time and date after the time
111-6 and date otherwise provided in this Act or may be made effective
111-7 upon the occurrence of events or facts that may occur in the
111-8 future, which events or facts may include future acts of any person
111-9 or entity, if:
111-10 (1) the articles, statement, application, <(i)> or
111-11 other filing that is required by this Act to be filed with the
111-12 Secretary of State to make effective such Permitted Act clearly and
111-13 expressly set forth, in addition to any other statement or
111-14 information required to be set forth therein, (i) the time and date
111-15 on which such Permitted Act is to become effective or (ii) if such
111-16 Permitted Act is to become effective upon the occurrence of events
111-17 or facts that may occur in the future, (a) the manner in which such
111-18 events or facts shall operate to cause such Permitted Act to become
111-19 effective and (b) the date of the 90th day after the date of the
111-20 filing of such articles, statement, application or other filing;
111-21 (2) in the case of a Permitted Act that is to become
111-22 effective as of a time or date after the time and date otherwise
111-23 provided in this Act, (i) such subsequent time and date is not more
111-24 than 90 days after the date of the filing of the articles,
111-25 statement, application, or other filing that is otherwise required
111-26 by this Act to be filed with the Secretary of State to make
111-27 effective such Permitted Act and (ii) the time on which the
112-1 Permitted Act is to become effective is not midnight or 12:00 p.m.;
112-2 and
112-3 (3) in the case of a Permitted Act that is to be made
112-4 effective upon the occurrence of events or facts that may occur in
112-5 the future, other than the mere passage of time, a statement that
112-6 all such events or facts upon which the effectiveness of such
112-7 Permitted Act is conditioned have been satisfied or waived, and of
112-8 the date on which such condition was satisfied or waived, is filed
112-9 with the Secretary of State within 90 days of the date of the
112-10 filing of the articles, statement, application or other filing that
112-11 is otherwise required by this Act for such Permitted Act to become
112-12 effective.
112-13 SECTION 2.22. Section 8(E), Texas Professional Association
112-14 Act (Article 1528f, Vernon's Texas Civil Statutes), is amended to
112-15 read as follows:
112-16 (E) Execution. The articles of association shall be signed
112-17 <and verified> by each of the members.
112-18 SECTION 2.23. Section 15, Texas Professional Association Act
112-19 (Article 1528f, Vernon's Texas Civil Statutes), is amended to read
112-20 as follows:
112-21 Sec. 15. Articles of Amendment. The articles <Articles> of
112-22 amendment shall be executed on behalf of <by> the association by an
112-23 officer <by its president or a vice-president and by its secretary
112-24 or an assistant secretary, and certified by one of the officers
112-25 signing such articles,> and shall set forth:
112-26 (1) The name and address of the association;
112-27 (2) If the amendment alters any provision of the
113-1 original or amended articles of association, an identification by
113-2 reference or description of the altered provision and a statement
113-3 of its text as it is amended to read. If the amendment is an
113-4 addition to the original or amended articles of association, a
113-5 statement of that fact and the full text of each provision added;
113-6 (3) The date of the adoption of the amendment; and
113-7 (4) A statement that the amendment was adopted in
113-8 accordance with the procedure for amendment stated in the articles
113-9 of association, or, if none is stated therein, a statement that the
113-10 amendment was adopted by two-thirds vote of its members.
113-11 SECTION 2.24. Section 18, Texas Professional Association Act
113-12 (Article 1528f, Vernon's Texas Civil Statutes), is amended to read
113-13 as follows:
113-14 Sec. 18. Articles of Dissolution. The articles of
113-15 dissolution shall be executed on behalf of <by> the association by
113-16 an officer <its president or a vice-president and by its secretary
113-17 or an assistant secretary, and verified by one of the officers
113-18 signing such articles>. If there are no living officers of the
113-19 association, the articles shall be executed by the legal
113-20 representative of the last surviving officer. The articles of
113-21 dissolution shall set forth:
113-22 (1) The name and address of the association;
113-23 (2) The names and respective addresses of its
113-24 officers;
113-25 (3) The names and respective addresses of the members
113-26 of its Board of Directors or Executive Committee; and
113-27 (4) A statement that the association is dissolving in
114-1 accordance with its articles of association or, if there is no
114-2 dissolution provision in the articles, by two-thirds vote of its
114-3 members.
114-4 SECTION 2.25. The Texas Professional Association Act
114-5 (Article 1528f, Vernon's Texas Civil Statutes), is amended by
114-6 adding Section 26 to read as follows:
114-7 Sec. 26. PENALTY FOR SIGNING FALSE DOCUMENT. (A) A person
114-8 commits an offense if the person signs a document the person knows
114-9 is false in any material respect with intent that the document be
114-10 delivered on behalf of a professional association to the Secretary
114-11 of State for filing.
114-12 (B) An offense under this section is a Class A misdemeanor.
114-13 SECTION 2.26. The change in law made by Section 2.05 of this
114-14 Act, amending Sections A and B, Article 2.21, Texas Business
114-15 Corporation Act, applies to the liability of a shareholder,
114-16 beneficial interest owner, or subscriber for a contractual
114-17 obligation of a corporation entered into before, on, or after the
114-18 effective date of this Act unless the liability has been finally
114-19 adjudicated by a court of competent jurisdiction before the
114-20 effective date of this Act.
114-21 ARTICLE 3. EFFECTIVE DATE; EMERGENCY
114-22 SECTION 3.01. This Act takes effect September 1, 1993.
114-23 SECTION 3.02. The importance of this legislation and the
114-24 crowded condition of the calendars in both houses create an
114-25 emergency and an imperative public necessity that the
114-26 constitutional rule requiring bills to be read on three several
114-27 days in each house be suspended, and this rule is hereby suspended.