|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to business entities and associations. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Section 1.002, Business Organizations Code, is |
|
amended by amending Subdivision (43) and adding Subdivisions (69-a) |
|
and (69-b) to read as follows: |
|
(43) "Jurisdiction of formation" means: |
|
(A) in the case of a domestic filing entity, this |
|
state; |
|
(B) in the case of a foreign [filing] entity for |
|
which a certificate of formation or similar organizational |
|
instrument is filed in connection with its formation, the |
|
jurisdiction in which the entity's certificate of formation or |
|
similar organizational instrument is filed; or |
|
(C) in the case of a [foreign or] domestic |
|
nonfiling entity or a foreign entity for which a certificate of |
|
formation or similar organizational instrument is not filed in |
|
connection with its formation: |
|
(i) the jurisdiction the laws of which are |
|
chosen in the entity's governing documents to govern its internal |
|
affairs if that jurisdiction bears a reasonable relation to the |
|
owners or members or to the [domestic or foreign nonfiling] |
|
entity's business and affairs under the principles of this state |
|
that otherwise would apply to a contract among the owners or |
|
members; or |
|
(ii) if Subparagraph (i) does not apply, |
|
the jurisdiction in which the entity has its chief executive |
|
office. |
|
(69-a) "Period of duration," in reference to when a |
|
domestic entity is required to wind up its business and affairs: |
|
(A) means: |
|
(i) a specified term or period of time, such |
|
as a specified number of months or years; or |
|
(ii) a period that expires as of a specified |
|
time or date; and |
|
(B) does not include: |
|
(i) a period that expires or whose |
|
expiration is made contingent on the occurrence of a future event or |
|
fact, other than the passage of time or the occurrence of a |
|
specified time or date; or |
|
(ii) a period specified to be perpetual. |
|
(69-b) "Person" has the meaning assigned by Section |
|
311.005, Government Code. |
|
SECTION 2. Section 1.006, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 1.006. SYNONYMOUS TERMS. To the extent not |
|
inconsistent with the provisions of the constitution, [and] other |
|
statutes or codes, and governing documents wherein such terms may |
|
be found, and as the context requires, in this code, [or] any other |
|
statute or code of this state, or any governing documents: |
|
(1) a reference to "articles of incorporation," |
|
"articles of organization," "articles of association," |
|
"certificate of limited partnership," and "charter" includes a |
|
"certificate of formation"; |
|
(2) a reference to "authorized capital stock" includes |
|
"authorized shares"; |
|
(3) a reference to "capital stock" includes |
|
"authorized and issued shares," "issued share," and "stated |
|
capital"; |
|
(4) a reference to a "certificate of registration," |
|
"certificate of authority," and "permit to do business" includes |
|
"registration"; |
|
(5) a reference to "stock" and "shares of stock" |
|
includes "shares"; |
|
(6) a reference to "stockholder" includes |
|
"shareholder"; |
|
(7) a reference to "no par stock" includes "shares |
|
without par value"; |
|
(8) a reference to "paid-up capital" includes "stated |
|
capital"; |
|
(9) a reference to "articles of merger" includes a |
|
"certificate of merger"; |
|
(10) a reference to "articles of exchange" includes a |
|
"certificate of exchange"; |
|
(11) a reference to "articles of conversion" includes |
|
a "certificate of conversion"; |
|
(12) a reference to "articles of amendment" includes a |
|
"certificate of amendment"; [and] |
|
(13) a reference to "articles of dissolution" or |
|
"certificate of cancellation" includes a "certificate of |
|
termination"; |
|
(14) a reference to "incorporator" includes an |
|
"organizer"; |
|
(15) a reference to "certificate of authority to |
|
transact business" includes a "registration to transact business"; |
|
(16) a reference to "regulations" in connection with a |
|
limited liability company includes a "company agreement"; and |
|
(17) a reference to "business corporation" includes a |
|
"for-profit corporation." [termination."] |
|
SECTION 3. Sections 1.008(g), (h), and (i), Business |
|
Organizations Code, are amended to read as follows: |
|
(g) The provisions of Chapters 151, 153, and 154 and the |
|
provisions of Title 1 and Chapter 152 to the extent applicable to |
|
limited partnerships may be cited as the "Texas Limited Partnership |
|
Law." |
|
(h) The provisions of Title 5 and the provisions of Title 1 |
|
and Chapters 20 and 21 to the extent applicable to real estate |
|
investment trusts may be cited as the "Texas Real Estate Investment |
|
Trust Law." |
|
(i) The provisions of Chapter 251 and the provisions of |
|
Title 1 and Chapters 20 and 22 to the extent applicable to |
|
cooperative associations may be cited as the "Texas Cooperative |
|
Association Law." |
|
SECTION 4. Section 2.003, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 2.003. GENERAL PROHIBITED PURPOSES. A domestic entity |
|
may not: |
|
(1) engage in a business or activity that: |
|
(A) is expressly unlawful or prohibited by a law |
|
of this state; or |
|
(B) cannot lawfully be engaged in by that entity |
|
under state law; or |
|
[(C) may not be engaged in by an entity without
|
|
first obtaining a license under the laws of this state to engage in
|
|
that business or activity and a license cannot lawfully be granted
|
|
to the entity; or] |
|
(2) operate as a: |
|
(A) bank; |
|
(B) trust company; |
|
(C) savings association; |
|
(D) insurance company; |
|
(E) railroad company; |
|
(F) cemetery organization, except as authorized |
|
by Chapter 711, 712, or 715, Health and Safety Code; or |
|
(G) abstract or title company governed by Title |
|
11, Insurance Code. |
|
SECTION 5. Section 2.007, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 2.007. ADDITIONAL PROHIBITED ACTIVITIES OF FOR-PROFIT |
|
CORPORATION. A for-profit corporation may not: |
|
(1) operate a cooperative association, limited |
|
cooperative association, or labor union; |
|
(2) transact a combination of the businesses of: |
|
(A) raising cattle and owning land for the |
|
raising of cattle, other than operating and owning feedlots and |
|
feeding cattle; and |
|
(B) operating stockyards and slaughtering, |
|
refrigerating, canning, curing, or packing meat; [or] |
|
(3) engage in a combination of: |
|
(A) the petroleum oil producing business in this |
|
state; and |
|
(B) the oil pipeline business in this state other |
|
than through stock ownership in a for-profit corporation engaged in |
|
the oil pipeline business and other than the ownership or operation |
|
of private pipelines in and about the corporation's refineries, |
|
fields, or stations; or |
|
(4) engage in a business or activity that may not be |
|
engaged in by a for-profit corporation without first obtaining a |
|
license under the laws of this state and a license to engage in that |
|
business or activity cannot lawfully be granted to the corporation. |
|
SECTION 6. Section 2.010, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 2.010. PROHIBITED ACTIVITIES OF NONPROFIT |
|
CORPORATION. A nonprofit corporation may not be organized or |
|
registered under this code to conduct its affairs in this state to: |
|
(1) engage in or operate as a group hospital service, |
|
rural credit union, agricultural and livestock pool, mutual loan |
|
corporation, cooperative association under Chapter 251, |
|
cooperative credit association, farmers' cooperative society, |
|
Co-operative Marketing Act corporation, rural electric cooperative |
|
corporation, telephone cooperative corporation, or fraternal |
|
organization operating under the lodge system and incorporated |
|
under Subchapter C, Chapter 23; [or] |
|
(2) engage in water supply or sewer service except as |
|
an entity incorporated under Chapter 67, Water Code; or |
|
(3) engage in a business or activity that may not be |
|
engaged in by a nonprofit corporation without first obtaining a |
|
license under the laws of this state and a license to engage in that |
|
business or activity cannot lawfully be granted to the corporation. |
|
SECTION 7. Section 2.101, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 2.101. GENERAL POWERS. Except as otherwise provided |
|
by this code, a domestic entity has the same powers as an individual |
|
to take action necessary or convenient to carry out its business and |
|
affairs. Except as otherwise provided by this code, the powers of a |
|
domestic entity include the power to: |
|
(1) sue, be sued, and defend suit in the entity's |
|
business name; |
|
(2) have and alter a seal and use the seal or a |
|
facsimile of it by impressing, affixing, or reproducing it; |
|
(3) acquire, receive, own, hold, improve, use, and |
|
deal in and with property or an interest in property; |
|
(4) sell, convey, mortgage, pledge, lease, exchange, |
|
and otherwise dispose of property; |
|
(5) make contracts and guarantees; |
|
(6) incur liabilities, borrow money, issue notes, |
|
bonds, or other obligations, which may be convertible into, or |
|
include the option to purchase, other securities or ownership |
|
interests in the entity, and secure its obligations by mortgaging |
|
or pledging its property, franchises, or income; |
|
(7) lend money, invest its funds, and receive and hold |
|
property as security for repayment [if the loan or assistance
|
|
reasonably may be expected to benefit, directly or indirectly, the
|
|
entity]; |
|
(8) acquire its own bonds, debentures, or other |
|
evidences of indebtedness or obligations; |
|
(9) acquire its own ownership interests, regardless of |
|
whether redeemable, and hold the ownership interests as treasury |
|
ownership interests or cancel or dispose of the ownership |
|
interests; |
|
(10) be a promoter, organizer, owner, partner, member, |
|
associate, or manager of an organization; |
|
(11) acquire, receive, own, hold, vote, use, pledge, |
|
and dispose of ownership interests in or securities issued by |
|
another person; |
|
(12) conduct its business, locate its offices, and |
|
exercise the powers granted by this code to further its purposes, in |
|
or out of this state; |
|
(13) lend money to, and otherwise assist, its |
|
managerial officials, owners, members, or employees as necessary or |
|
appropriate if the loan or assistance reasonably may be expected to |
|
benefit, directly or indirectly, the entity; |
|
(14) elect or appoint officers and agents of the |
|
entity, establish the length of their terms, define their duties, |
|
and fix their compensation; |
|
(15) pay pensions and establish pension plans, pension |
|
trusts, profit-sharing plans, bonus plans, and incentive plans for |
|
managerial officials, owners, members, or employees or former |
|
managerial officials, owners, members, or employees; |
|
(16) indemnify and maintain liability insurance for |
|
managerial officials, owners, members, employees, and agents of the |
|
entity or the entity's affiliate; |
|
(17) adopt and amend governing documents for managing |
|
the affairs of the entity subject to applicable law; |
|
(18) make donations for the public welfare or for a |
|
charitable, scientific, or educational purpose; |
|
(19) voluntarily wind up its business and activities |
|
and terminate its existence; |
|
(20) transact business or take action that will aid |
|
governmental policy; |
|
(21) renounce, in its certificate of formation or by |
|
action of its governing authority, an interest or expectancy of the |
|
entity in, or an interest or expectancy of the entity in being |
|
offered an opportunity to participate in, specified business |
|
opportunities or a specified class or category of business |
|
opportunities presented to the entity or one or more of its |
|
managerial officials or owners; and |
|
(22) take other action necessary or appropriate to |
|
further the purposes of the entity. |
|
SECTION 8. Section 2.104(a), Business Organizations Code, |
|
is amended to read as follows: |
|
(a) In this section, "guaranty" means a guaranty, mortgage, |
|
pledge, security agreement, or other agreement making the domestic |
|
entity or its assets [secondarily] liable for another person's |
|
contract, security, or other obligation. |
|
SECTION 9. Section 3.005(a), Business Organizations Code, |
|
is amended to read as follows: |
|
(a) The certificate of formation must state: |
|
(1) the name of the filing entity being formed; |
|
(2) the type of filing entity being formed; |
|
(3) for filing entities other than limited |
|
partnerships, the purpose or purposes for which the filing entity |
|
is formed, which may be stated to be or include any lawful purpose |
|
for that type of entity; |
|
(4) for filing entities other than limited |
|
partnerships, the period of duration, if the entity is not formed to |
|
exist perpetually and is intended to have a specific period of |
|
duration; |
|
(5) the street address of the initial registered |
|
office of the filing entity and the name of the initial registered |
|
agent of the filing entity at the office; |
|
(6) the name and address of each: |
|
(A) organizer for the filing entity, unless the |
|
entity is formed under a plan of conversion or merger; |
|
(B) general partner, if the filing entity is a |
|
limited partnership; or |
|
(C) trust manager, if the filing entity is a real |
|
estate investment trust; |
|
(7) if the filing entity is formed under a plan of |
|
conversion or merger, a statement to that effect and, if formed |
|
under a plan of conversion, the name, address, date of formation, |
|
prior form of organization, and jurisdiction of formation of the |
|
converting entity; and |
|
(8) any other information required by this code to be |
|
included in the certificate of formation for the filing entity. |
|
SECTION 10. Section 3.007, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 3.007. SUPPLEMENTAL PROVISIONS REQUIRED IN |
|
CERTIFICATE OF FORMATION OF FOR-PROFIT OR PROFESSIONAL |
|
CORPORATION. (a) In addition to the information required by |
|
Section 3.005, the certificate of formation of a for-profit or |
|
professional corporation must state: |
|
(1) the aggregate number of shares the corporation is |
|
authorized to issue; |
|
(2) if the shares the corporation is authorized to |
|
issue consist of one class of shares only, the par value of each |
|
share or a statement that each share is without par value; |
|
(3) if the corporation is to be managed by a board of |
|
directors, the number of directors constituting the initial board |
|
of directors and the name and address of each person who will serve |
|
as director until the first annual meeting of shareholders and |
|
until a successor is elected and qualified; and |
|
(4) if the corporation is to be managed pursuant to a |
|
shareholders' agreement in a manner other than by a board of |
|
directors, the name and address of each person who will perform the |
|
functions required by this code to be performed by the initial board |
|
of directors. |
|
(b) If the shares a for-profit or professional corporation |
|
is authorized to issue consist of more than one class of shares, the |
|
certificate of formation of the [for-profit] corporation must, with |
|
respect to each class, state: |
|
(1) the designation of the class; |
|
(2) the aggregate number of shares in the class; |
|
(3) the par value of each share or a statement that |
|
each share is without par value; |
|
(4) the preferences, limitations, and relative rights |
|
of the shares; and |
|
(5) if the shares in a class the corporation is |
|
authorized to issue consist of more than one series, the following |
|
with respect to each series: |
|
(A) the designation of the series; |
|
(B) the aggregate number of shares in the series; |
|
(C) any preferences, limitations, and relative |
|
rights of the shares to the extent provided in the certificate of |
|
formation; and |
|
(D) any authority vested in the board of |
|
directors to establish the series and set and determine the |
|
preferences, limitations, and relative rights of the series. |
|
(c) If the shareholders of a for-profit or professional |
|
corporation are to have a preemptive right or cumulative voting |
|
right, the certificate of formation of the [for-profit] corporation |
|
must comply with Section 21.203 or 21.360, as appropriate. |
|
SECTION 11. Section 3.008(a), Business Organizations Code, |
|
is amended to read as follows: |
|
(a) In addition to a provision required or permitted to be |
|
stated in the certificate of formation of a for-profit or |
|
professional corporation under Section 3.007, the certificate of |
|
formation of a close corporation, whether original, amended, or |
|
restated, must include the sentence, "This corporation is a close |
|
corporation." |
|
SECTION 12. Section 3.015, Business Organizations Code, is |
|
amended by amending Subsection (a) and adding Subsection (c) to |
|
read as follows: |
|
(a) In addition to containing the information required |
|
under Sections 3.005 and 3.014, the certificate of formation of a |
|
professional association must: |
|
(1) be signed by each member of the association; and |
|
(2) state: |
|
(A) the name and address of each original member |
|
of the association; [and] |
|
(B) whether the association is to be governed by |
|
a board of directors or by an executive committee; and |
|
(C) the name and address of each person serving |
|
as an initial member of the board of directors or executive |
|
committee [that a member of the association may not dissolve the
|
|
association independently of other members] of the association. |
|
(c) If the certificate of formation of a professional |
|
association contains provisions regarding shares in the |
|
association, the certificate of formation must also comply with |
|
Section 3.007. |
|
SECTION 13. The heading to Section 3.060, Business |
|
Organizations Code, is amended to read as follows: |
|
Sec. 3.060. SUPPLEMENTAL PROVISIONS FOR RESTATED |
|
CERTIFICATE OF FORMATION FOR FOR-PROFIT CORPORATION OR |
|
PROFESSIONAL CORPORATION. |
|
SECTION 14. Section 3.060(a), Business Organizations Code, |
|
is amended to read as follows: |
|
(a) In addition to the provisions authorized or required by |
|
Section 3.059, a restated certificate of formation for a for-profit |
|
corporation or professional corporation may update the current |
|
number of directors and the names and addresses of the persons |
|
serving as directors. |
|
SECTION 15. Subchapter B, Chapter 3, Business Organizations |
|
Code, is amended by adding Section 3.0611 to read as follows: |
|
Sec. 3.0611. SUPPLEMENTAL PROVISIONS FOR RESTATED |
|
CERTIFICATE OF FORMATION FOR LIMITED LIABILITY COMPANY. In |
|
addition to the provisions authorized or required by Section 3.059, |
|
a restated certificate of formation for a limited liability company |
|
may: |
|
(1) if the company's certificate of formation states |
|
that the company will have one or more managers, update the names |
|
and addresses of the persons serving as managers; or |
|
(2) if the certificate of formation states that the |
|
company will not have managers, update the names and addresses of |
|
the members of the company. |
|
SECTION 16. Section 4.056(a), Business Organizations Code, |
|
is amended to read as follows: |
|
(a) If the effect of a filing instrument is conditioned on |
|
the occurrence of a future event or fact, other than the passage of |
|
time, and the statement required by Section 4.055 is not filed |
|
before the expiration of the prescribed time, the filing instrument |
|
does not take effect. This section does not preclude the filing of |
|
a subsequent filing instrument required by this code to make the |
|
action [event] or transaction evidenced by the original filing |
|
instrument effective. |
|
SECTION 17. Section 4.151, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 4.151. FILING FEES: ALL ENTITIES. The secretary of |
|
state shall impose the following fees: |
|
(1) for filing a certificate of correction, $15; |
|
(2) for filing an application for reservation or |
|
registration of a name, $40; |
|
(3) for filing a notice of transfer of a name |
|
reservation [or registration], $15; |
|
(4) for filing an application for renewal of |
|
registration of a name, $40; |
|
(5) for filing a certificate of merger or conversion, |
|
other than a filing on behalf of a nonprofit corporation, $300 plus, |
|
with respect to a merger, any fee imposed for filing a certificate |
|
of formation for each newly created filing entity or, with respect |
|
to a conversion, the fee imposed for filing a certificate of |
|
formation for the converted entity; |
|
(6) for filing a certificate of exchange, $300; and |
|
(7) for preclearance of a filing instrument, $50. |
|
SECTION 18. Section 4.152, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 4.152. FILING FEES: FOR-PROFIT CORPORATIONS. For a |
|
filing by or for a for-profit corporation, the secretary of state |
|
shall impose the following fees: |
|
(1) for filing a certificate of formation, $300; |
|
(2) for filing a certificate of amendment, $150; |
|
(3) for filing an application of a foreign corporation |
|
for registration to transact business in this state, $750; |
|
(4) for filing an application of a foreign corporation |
|
for an amended registration to transact business in this state, |
|
$150; |
|
(5) for filing a restated certificate of formation and |
|
accompanying statement, $300; |
|
(6) for filing a statement of change of registered |
|
office, registered agent, or both, $15; |
|
(7) for filing a statement of change of name or address |
|
of a registered agent, $15, except that the maximum fee for |
|
simultaneous filings by a registered agent for more than one |
|
corporation may not exceed $750; |
|
(8) for filing a statement of resolution establishing |
|
one or more series of shares, $15; |
|
(9) for filing a certificate of termination, $40; |
|
(10) for filing a certificate of withdrawal of a |
|
foreign corporation, $15; |
|
(11) for filing a certificate from the home state of a |
|
foreign corporation that the corporation no longer exists in that |
|
state, $15; |
|
(12) for filing a bylaw or agreement restricting |
|
transfer of shares or securities other than as an amendment to the |
|
certificate of formation, $15; |
|
(13) for filing an application for reinstatement of a |
|
certificate of formation or registration as a foreign corporation |
|
following forfeiture under the Tax Code, $75; |
|
(14) for filing an application for reinstatement of a |
|
corporation or registration as a foreign corporation after |
|
involuntary termination [dissolution] or revocation, $75; and |
|
(15) for filing any instrument as provided by this |
|
code for which this section does not expressly provide a fee, $15. |
|
SECTION 19. Section 4.158, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 4.158. FILING FEES: GENERAL PARTNERSHIPS. For a |
|
filing by or for a general partnership, the secretary of state shall |
|
impose the following fees: |
|
(1) for filing a limited liability partnership |
|
application, $200 for each partner; |
|
(2) for filing a limited liability partnership renewal |
|
application, $200 for each partner on the date of renewal; |
|
(3) for filing an application for registration [a
|
|
statement of foreign qualification] by a foreign limited liability |
|
partnership, $200 for each partner in this state, except that the |
|
maximum fee may not exceed $750; |
|
(4) for filing a renewal of registration by a foreign |
|
limited liability partnership, $200 for each partner in this state, |
|
except that the maximum fee may not exceed $750; |
|
(5) for filing a certificate of amendment for a |
|
domestic limited liability partnership, $10, plus $200 for each |
|
partner added by the amendment; |
|
(6) for filing a certificate of amendment for a |
|
foreign limited liability partnership, $10, plus $200 for each |
|
partner in this state added by amendment not to exceed $750; and |
|
(7) for filing any other filing instrument, the filing |
|
fee imposed for a similar instrument under Section 4.155. |
|
SECTION 20. The heading to Section 5.054, Business |
|
Organizations Code, is amended to read as follows: |
|
Sec. 5.054. NAME OF CORPORATION, FOREIGN CORPORATION, [OR] |
|
PROFESSIONAL CORPORATION, OR FOREIGN PROFESSIONAL CORPORATION. |
|
SECTION 21. Section 5.054(c), Business Organizations Code, |
|
is amended to read as follows: |
|
(c) Instead of a word or abbreviation required by Subsection |
|
(a), the name of a professional corporation or foreign professional |
|
corporation may contain the phrase "professional corporation" or an |
|
abbreviation of the phrase. |
|
SECTION 22. Section 5.055, Business Organizations Code, is |
|
amended by amending Subsection (b) and adding Subsection (c) to |
|
read as follows: |
|
(b) The name of a domestic or foreign limited partnership |
|
that is a limited liability limited partnership must also contain[:
|
|
[(1)] the phrase "limited liability partnership" or |
|
["limited liability limited partnership"; or
|
|
[(2)] an abbreviation of that phrase [one of those
|
|
phrases]. |
|
(c) The name of a domestic or foreign limited partnership |
|
that is a limited liability limited partnership complies with the |
|
requirements of Subsections (a) and (b) if the name of the limited |
|
partnership contains the phrase "limited liability limited |
|
partnership" or an abbreviation of that phrase. |
|
SECTION 23. The heading to Section 5.057, Business |
|
Organizations Code, is amended to read as follows: |
|
Sec. 5.057. NAME OF COOPERATIVE ASSOCIATION OR FOREIGN |
|
COOPERATIVE ASSOCIATION. |
|
SECTION 24. Section 5.057(a), Business Organizations Code, |
|
is amended to read as follows: |
|
(a) The name of a cooperative association or foreign |
|
cooperative association must contain: |
|
(1) the word "cooperative"; or |
|
(2) an abbreviation of that word. |
|
SECTION 25. Section 5.058, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 5.058. NAME OF PROFESSIONAL ASSOCIATION OR FOREIGN |
|
PROFESSIONAL ASSOCIATION. The name of a professional association |
|
or foreign professional association must contain: |
|
(1) the word "associated," "associates," or |
|
"association"; |
|
(2) the phrase "professional association"; or |
|
(3) an abbreviation of one of those words or that |
|
phrase. |
|
SECTION 26. Section 5.059, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 5.059. NAME OF PROFESSIONAL LIMITED LIABILITY COMPANY |
|
OR FOREIGN PROFESSIONAL LIMITED LIABILITY COMPANY. (a) The name of |
|
a professional limited liability company or foreign professional |
|
limited liability company must contain: |
|
(1) the phrase "professional limited liability |
|
company"; or |
|
(2) an abbreviation of that phrase. |
|
(b) A professional limited liability company or foreign |
|
professional limited liability company formed before September 1, |
|
1993, the name of which complied with the laws of this state on the |
|
date of formation but does not comply with this section, is not |
|
required to change its name. |
|
SECTION 27. Section 5.060, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 5.060. NAME OF PROFESSIONAL ENTITY OR FOREIGN |
|
PROFESSIONAL ENTITY; CONFLICTS WITH OTHER LAW OR ETHICAL RULE. The |
|
name of a professional entity or foreign professional entity must |
|
not be contrary to a statute or regulation of this state that |
|
governs a person who provides a professional service through the |
|
professional entity or foreign professional entity, including a |
|
rule of professional ethics. |
|
SECTION 28. Section 5.201(b), Business Organizations Code, |
|
is amended to read as follows: |
|
(b) The registered agent: |
|
(1) is an agent of the entity on whom may be served any |
|
process, notice, or demand required or permitted by law to be served |
|
on the entity; |
|
(2) may be: |
|
(A) an individual who is a resident of this |
|
state; or |
|
(B) an organization [a domestic entity or a
|
|
foreign entity] that is registered or authorized to do business in |
|
this state; and |
|
(3) must maintain a business office at the same |
|
address as the entity's registered office. |
|
SECTION 29. The heading to Chapter 6, Business |
|
Organizations Code, is amended to read as follows: |
|
CHAPTER 6. MEETINGS AND VOTING FOR DOMESTIC ENTITIES |
|
SECTION 30. Section 6.051(b), Business Organizations Code, |
|
is amended to read as follows: |
|
(b) Subject to this code and the governing documents of a |
|
domestic entity, notice of a meeting that is: |
|
(1) mailed is considered to be given [delivered] on |
|
the date notice is deposited in the United States mail with postage |
|
paid in an envelope addressed to the person at the person's address |
|
as it appears on the ownership or membership records of the entity; |
|
and |
|
(2) transmitted by facsimile or electronic message is |
|
considered to be given [delivered] when the facsimile or electronic |
|
message is [successfully] transmitted to a facsimile number or an |
|
electronic message address provided by the person, or to which the |
|
person consents, for the purpose of receiving notice. |
|
SECTION 31. Sections 6.053(d) and (e), Business |
|
Organizations Code, are amended to read as follows: |
|
(d) A certificate or other document filed with the filing |
|
officer [secretary of state] as a result of a meeting held or an |
|
action taken by a filing entity without giving notice of the meeting |
|
or action to a person not entitled to notice under this section may |
|
state that notice of the meeting or action was given to each person |
|
entitled to notice. |
|
(e) Notice of a meeting must be given to a person not |
|
entitled to notice of the meeting under this section if the person |
|
delivers to the filing entity a written notice of the person's |
|
address. |
|
SECTION 32. Section 6.101(d), Business Organizations Code, |
|
is amended to read as follows: |
|
(d) If the owners or members of a domestic [an] entity are |
|
not otherwise determined under this section, the record date for |
|
determining the owners or members of a domestic [an] entity is the |
|
date on which: |
|
(1) notice of the meeting is given [mailed] to the |
|
owners or members entitled to notice of the meeting; or |
|
(2) with respect to a distribution, other than a |
|
distribution involving a purchase or redemption by the domestic |
|
entity of any of its own securities, the governing authority adopts |
|
the resolution declaring the distribution. |
|
SECTION 33. Section 6.102, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 6.102. RECORD DATE FOR WRITTEN CONSENT TO ACTION. (a) |
|
Subject to this code and the governing documents of a domestic [an] |
|
entity, the governing authority of the domestic entity may provide |
|
the record date for determining the owners or members of the |
|
domestic entity entitled to written consent to action without a |
|
meeting of the owners or members unless a record date is provided |
|
under Section 6.101 for that action. The record date may not be |
|
earlier than the date the governing authority adopts the resolution |
|
providing for the record date. |
|
(b) Subject to this code and the governing documents of a |
|
domestic [an] entity, the record date for determining the owners or |
|
members of the domestic entity entitled to written consent to |
|
action without a meeting of the owners or members is the date a |
|
signed written consent to action stating the action taken or |
|
proposed to be taken is first delivered to the domestic entity if: |
|
(1) the governing authority of the domestic entity |
|
does not provide a record date under Subsection (a); and |
|
(2) prior action by the governing authority is not |
|
required under this code. |
|
(c) Subject to this code or the governing documents of a |
|
domestic [an] entity, the record date for determining the owners or |
|
members of the domestic entity entitled to written consent to |
|
action without a meeting of the owners or members is at the close of |
|
business on the date the governing authority of the domestic entity |
|
adopts a resolution taking prior action if: |
|
(1) the governing authority does not provide a record |
|
date under Subsection (a); and |
|
(2) prior action by the governing authority is |
|
required by this code. |
|
SECTION 34. Section 6.152(a), Business Organizations Code, |
|
is amended to read as follows: |
|
(a) Except as provided by Subsection (b), an ownership |
|
interest owned by the domestic entity that is the issuer of the |
|
interest, or by its direct or indirect subsidiary, may not be: |
|
(1) directly or indirectly voted at a meeting; or |
|
(2) included in determining at any time the total |
|
number of outstanding ownership interests of the domestic entity. |
|
SECTION 35. Section 6.153, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 6.153. VOTING OF INTERESTS OWNED BY ANOTHER ENTITY. An |
|
ownership interest in a domestic [an] entity owned by another |
|
entity, whether a domestic or foreign entity, may be voted by the |
|
officer, agent, or proxy as authorized by: |
|
(1) the governing documents of the entity that owns |
|
the interest; or |
|
(2) the governing authority of the entity that owns |
|
the interest, if the governing documents do not provide for the |
|
manner of voting. |
|
SECTION 36. Section 6.154(a), Business Organizations Code, |
|
is amended to read as follows: |
|
(a) An administrator, executor, guardian, or conservator of |
|
an estate who holds an ownership interest as part of the estate may |
|
vote the interest, in person or by proxy, without transferring the |
|
interest into the person's name. |
|
SECTION 37. Section 6.204, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 6.204. ADVANCE NOTICE NOT REQUIRED. Any advance |
|
[Advance] notice required by this code for an action to be taken at |
|
a meeting is not required to be given to take the [an] action by |
|
written consent as provided by this subchapter. |
|
SECTION 38. Sections 6.251(a) and (c), Business |
|
Organizations Code, are amended to read as follows: |
|
(a) Except as provided by this code or the governing |
|
documents, any number of owners of a domestic [an] entity may enter |
|
into a written voting trust agreement to confer on a trustee the |
|
right to vote or otherwise represent ownership or membership |
|
interests of the domestic entity. |
|
(c) A copy of a voting trust agreement described by |
|
Subsection (a) shall be deposited with the domestic entity at the |
|
domestic entity's principal executive office or registered office |
|
and is subject to examination by: |
|
(1) an owner, whether in person or by the owner's agent |
|
or attorney, in the same manner as the owner is entitled to examine |
|
the books and records of the domestic entity; and |
|
(2) a holder of a beneficial interest in the voting |
|
trust, whether in person or by the holder's agent or attorney, at |
|
any reasonable time for any proper purpose. |
|
SECTION 39. Sections 6.252(a), (b), and (c), Business |
|
Organizations Code, are amended to read as follows: |
|
(a) Except as provided by this code or the governing |
|
documents, any number of owners of a domestic [an] entity, or any |
|
number of owners of the domestic entity and the domestic entity |
|
itself, may enter into a written voting agreement to provide the |
|
manner of voting of the ownership interests of the domestic entity. |
|
A voting agreement entered into under this subsection is not part of |
|
the governing documents of the domestic entity. |
|
(b) A copy of a voting agreement entered into under |
|
Subsection (a): |
|
(1) shall be deposited with the domestic entity at the |
|
domestic entity's principal executive office or registered office; |
|
and |
|
(2) is subject to examination by an owner, whether in |
|
person or by the owner's agent or attorney, in the same manner as |
|
the owner is entitled to examine the books and records of the |
|
domestic entity. |
|
(c) A voting agreement entered into under Subsection (a) is |
|
specifically enforceable against the holder of an ownership |
|
interest that is the subject of the agreement, and any successor or |
|
transferee of the holder, if: |
|
(1) the voting agreement is noted conspicuously on the |
|
certificate representing the ownership interests; or |
|
(2) a notation of the voting agreement is contained in |
|
a notice sent by or on behalf of the domestic entity in accordance |
|
with Section 3.205, if the ownership interest is not represented by |
|
a certificate. |
|
SECTION 40. Section 8.002(b), Business Organizations Code, |
|
is amended to read as follows: |
|
(b) The governing documents of a general partnership or |
|
limited liability company may adopt provisions of this chapter or |
|
may contain other [enforceable] provisions, which will be |
|
enforceable, relating to: |
|
(1) indemnification; |
|
(2) advancement of expenses; or |
|
(3) insurance or another arrangement to indemnify or |
|
hold harmless a governing person. |
|
SECTION 41. Section 8.103, Business Organizations Code, is |
|
amended by amending Subsection (a) and adding Subsection (d) to |
|
read as follows: |
|
(a) Except as provided by Subsections (b) and (c), the |
|
determinations required under Section 8.101(a) must be made by: |
|
(1) a majority vote of the governing persons who at the |
|
time of the vote are disinterested and independent, regardless of |
|
whether the governing persons who are disinterested and independent |
|
constitute a quorum; |
|
(2) a majority vote of a committee of the governing |
|
authority of the enterprise if the committee: |
|
(A) is designated by a majority vote of the |
|
governing persons who at the time of the vote are disinterested and |
|
independent, regardless of whether the governing persons who are |
|
disinterested and independent constitute a quorum; and |
|
(B) is composed solely of one or more governing |
|
persons who are disinterested and independent; |
|
(3) special legal counsel selected by the governing |
|
authority of the enterprise, or selected by a committee of the |
|
governing authority [board of directors], by vote in accordance |
|
with Subdivision (1) or (2); |
|
(4) the owners or members of the enterprise in a vote |
|
that excludes the ownership or membership interests held by each |
|
governing person who is not disinterested and independent; or |
|
(5) a unanimous vote of the owners or members of the |
|
enterprise. |
|
(d) With respect to a limited partnership, a vote of a |
|
majority-in-interest of the limited partners in a vote that |
|
excludes the interest held by each general partner who is not |
|
disinterested and independent constitutes a determination under |
|
Subsection (a)(4). |
|
SECTION 42. Section 8.104, Business Organizations Code, is |
|
amended by adding Subsection (d) to read as follows: |
|
(d) With respect to a limited partnership, a vote of a |
|
majority-in-interest of the limited partners in a vote that |
|
excludes the interest held by each general partner who is not |
|
disinterested and independent constitutes an authorization under |
|
Subsection (b). |
|
SECTION 43. Section 8.105(b), Business Organizations Code, |
|
is amended to read as follows: |
|
(b) An enterprise shall indemnify [and advance expenses to] |
|
an officer to the same extent that indemnification [or advancement
|
|
of expenses] is required under this chapter for a governing person. |
|
SECTION 44. Section 8.152(b), Business Organizations Code, |
|
is amended to read as follows: |
|
(b) Subject to Subsection (c), the report must be made with |
|
or before: |
|
(1) the notice or waiver of notice of the next meeting |
|
of the owners or members of the enterprise; or |
|
(2) [and before] the next submission to the owners or |
|
members of a consent to action without a meeting. |
|
SECTION 45. Section 9.010, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 9.010. NAME CHANGE OF FOREIGN FILING ENTITY. If a |
|
foreign filing entity authorized to transact business [conduct
|
|
affairs] in this state changes its name to a name that would cause |
|
the entity to be denied an application for registration under this |
|
subchapter, the entity's registration must be suspended. An entity |
|
the registration of which has been suspended under this section may |
|
transact business [conduct affairs] in this state only after the |
|
entity: |
|
(1) changes its name to a name that is available to it |
|
under the laws of this state; or |
|
(2) otherwise complies with this chapter. |
|
SECTION 46. Section 9.054, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 9.054. LATE FILING FEE. (a) The secretary of state |
|
may collect from a foreign filing entity a late filing fee [equal to
|
|
the registration fee for the entity for each year of delinquency] if |
|
the entity has transacted business in this state for more than 90 |
|
days without registering under this chapter. The secretary may |
|
condition the effectiveness of a registration after the 90-day |
|
period on the payment of the late filing fee. |
|
(b) The amount of the late filing fee is an amount equal to |
|
the product of the amount of the registration fee for the foreign |
|
filing entity multiplied by the number of calendar years that the |
|
entity transacted business in this state without being registered. |
|
For purposes of computing the fee, a partial calendar year is |
|
counted as a full calendar year. |
|
SECTION 47. Section 9.101(b), Business Organizations Code, |
|
is amended to read as follows: |
|
(b) The secretary of state may revoke a foreign filing |
|
entity's registration if the secretary of state finds that: |
|
(1) the entity has failed to, and, before the 91st day |
|
after the date notice was mailed, has not corrected the entity's |
|
failure to: |
|
(A) [(1)] file a report within the period |
|
required by law or pay a fee or penalty prescribed by law when due |
|
and payable; |
|
(B) [(2)] maintain a registered agent or |
|
registered office in this state as required by law; or |
|
(C) [(3)] amend its registration when required |
|
by law; or |
|
(2) the entity has failed to, and, before the 16th day |
|
after the date notice was mailed, has not corrected the entity's |
|
failure to [(4)] pay a fee required in connection with the |
|
application for registration [a filing], or payment of the fee was |
|
dishonored when presented by the state for payment. |
|
SECTION 48. Section 9.201, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 9.201. BUSINESS OF FOREIGN ENTITY. (a) Except as |
|
provided by Subsection (b), a [A] foreign entity may not conduct in |
|
this state a business or activity that is not permitted by this code |
|
to be transacted by the domestic entity to which it most closely |
|
corresponds, unless other law of this state authorizes the entity |
|
to conduct the business or activity. |
|
(b) A foreign business trust may engage in a business or |
|
activity permitted by this code to be transacted by a limited |
|
liability company. |
|
SECTION 49. Sections 10.005(b) and (c), Business |
|
Organizations Code, are amended to read as follows: |
|
(b) A domestic entity may, without owner or member approval |
|
and pursuant to a plan of merger, restructure the ownership or |
|
membership structure of that entity to create a holding company |
|
structure under this chapter and the provisions of this code under |
|
which the entity was formed. The approval of the owners or members |
|
of a merging domestic entity that is a party to a merger under a plan |
|
of merger that creates a holding company is not required if: |
|
(1) the holding company is a domestic entity of the |
|
same organizational form as the merging domestic entity; |
|
(2) approval is not otherwise required by the |
|
governing documents of the merging domestic entity; |
|
(3) the merging domestic entity merges with a direct |
|
or indirect wholly owned subsidiary; |
|
(4) after the merger the merging domestic entity or |
|
its successor is a direct or indirect wholly owned subsidiary of a |
|
holding company; |
|
(5) the merging domestic entity and the direct or |
|
indirect wholly owned subsidiary are the only parties to the |
|
merger; |
|
(6) each ownership or membership interest of the |
|
merging domestic entity that is outstanding preceding the merger is |
|
converted in the merger into an ownership or membership interest of |
|
the holding company having the same designations, preferences, |
|
limitations, and relative rights and corresponding obligations in |
|
respect of the ownership or membership interest as the ownership or |
|
membership interest held by the owner or member in the merging |
|
domestic entity; |
|
(7) except as provided by Subsection (c), the |
|
governing documents of the holding company immediately following |
|
the merger contain provisions substantively identical to the |
|
governing documents of the merging domestic entity immediately |
|
preceding the merger; |
|
(8) except as provided by Subsections (c) and (d), the |
|
governing documents of the surviving entity subsidiary immediately |
|
following the merger contain provisions substantively identical to |
|
the governing documents of the merging domestic entity immediately |
|
preceding the merger; |
|
(9) the governing persons of the merging domestic |
|
entity become or remain the governing persons of the holding |
|
company when the merger takes effect; |
|
(10) the owners or members of the merging domestic |
|
entity will not recognize gain or loss for United States federal |
|
income tax purposes, the United States federal tax classification |
|
of the holding company will be the same as that of the merging |
|
domestic entity, and the merger will not result in the loss of any |
|
tax benefit or attribute of the merging domestic entity, each as |
|
determined by the governing authority of the merging domestic |
|
entity; and |
|
(11) the governing authority of the merging domestic |
|
entity adopts a resolution approving the plan of merger. |
|
(c) Subsections (b)(7) and (8) do not require identical |
|
provisions regarding the organizer or organizers, the entity name, |
|
the registered office and agent, the initial governing persons, and |
|
the initial subscribers of ownership or membership interests and |
|
provisions contained in any amendment to the governing documents as |
|
were necessary to effect a change, exchange, reclassification, or |
|
cancellation of ownership or membership interests, if the change, |
|
exchange, reclassification, or cancellation was in effect |
|
preceding the merger. |
|
SECTION 50. Section 10.008(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) When a merger takes effect: |
|
(1) the separate existence of each domestic entity |
|
that is a party to the merger, other than a surviving or new |
|
domestic entity, ceases; |
|
(2) all rights, title, and interests to all real |
|
estate and other property owned by each organization that is a party |
|
to the merger is allocated to and vested, subject to any existing |
|
liens or other encumbrances on the property, in one or more of the |
|
surviving or new organizations as provided in the plan of merger |
|
without: |
|
(A) reversion or impairment; |
|
(B) any further act or deed; or |
|
(C) any transfer or assignment having occurred; |
|
(3) all liabilities and obligations of each |
|
organization that is a party to the merger are allocated to one or |
|
more of the surviving or new organizations in the manner provided by |
|
the plan of merger; |
|
(4) each surviving or new domestic organization to |
|
which a liability or obligation is allocated under the plan of |
|
merger is the primary obligor for the liability or obligation, and, |
|
except as otherwise provided by the plan of merger or by law or |
|
contract, no other party to the merger, other than a surviving |
|
domestic entity or non-code organization liable or otherwise |
|
obligated at the time of the merger, and no other new domestic |
|
entity or non-code organization created under the plan of merger is |
|
liable for the debt or other obligation; |
|
(5) any proceeding pending by or against any domestic |
|
entity or by or against any non-code organization that is a party to |
|
the merger may be continued as if the merger did not occur, or the |
|
surviving or new domestic entity or entities or the surviving or new |
|
non-code organization or non-code organizations to which the |
|
liability, obligation, asset, or right associated with that |
|
proceeding is allocated to and vested in under the plan of merger |
|
may be substituted in the proceeding; |
|
(6) the governing documents of each surviving domestic |
|
entity are amended to the extent provided by the plan of merger; |
|
(7) each new filing entity whose certificate of |
|
formation is included in the plan of merger under this chapter, on |
|
meeting any additional requirements, if any, of this code for its |
|
formation, is formed as a domestic entity under this code as |
|
provided by the plan of merger; |
|
(8) the ownership or membership interests of each |
|
organization that is a party to the merger and that are to be |
|
converted or exchanged, in whole or part, into ownership or |
|
membership interests, obligations, rights to purchase securities, |
|
or other securities of one or more of the surviving or new |
|
organizations, into cash or other property, including ownership or |
|
membership interests, obligations, rights to purchase securities, |
|
or other securities of any organization, or into any combination of |
|
these are converted and exchanged and the former owners or members |
|
who held ownership or membership interests of each domestic entity |
|
that is a party to the merger are entitled only to the rights |
|
provided by the plan of merger or, if applicable, any rights to |
|
receive the fair value for the ownership [or membership] interests |
|
[previously held by them] provided under Subchapter H [this code]; |
|
and |
|
(9) notwithstanding Subdivision (4), the surviving or |
|
new organization named in the plan of merger as primarily obligated |
|
to pay the fair value of an ownership or membership interest under |
|
Section 10.003(2) is the primary obligor for that payment and all |
|
other surviving or new organizations are secondarily liable for |
|
that payment. |
|
SECTION 51. Section 10.055, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 10.055. GENERAL EFFECT OF INTEREST EXCHANGE. When an |
|
interest exchange takes effect: |
|
(1) the ownership or membership interest of each |
|
acquired organization is exchanged as provided in the plan of |
|
exchange, and the former owners or members whose interests are |
|
exchanged under the plan of exchange are entitled only to the rights |
|
provided in the plan [certificate] of exchange or, if applicable, a |
|
right to receive the fair value for the ownership [or membership] |
|
interests provided under Subchapter H; and |
|
(2) the acquiring organization has all rights, title, |
|
and interests with respect to the ownership or membership interest |
|
to be acquired by it subject to the provisions of the plan |
|
[certificate] of exchange. |
|
SECTION 52. Section 10.101(e), Business Organizations |
|
Code, is amended to read as follows: |
|
(e) At the time a conversion takes effect, each owner or |
|
member of the converting entity, other than those who receive |
|
payment of their ownership or membership interest under any |
|
applicable provisions of this code relating to dissent and |
|
appraisal, has, unless otherwise agreed to by that owner or member, |
|
an ownership or membership interest in, and is the owner or member |
|
of, the converted entity. |
|
SECTION 53. Section 10.151(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) If a certificate of merger or exchange is required to be |
|
filed in connection with an interest exchange or a merger, other |
|
than a merger under Section 10.006, the certificate must be signed |
|
on behalf of each domestic entity and non-code organization that is |
|
a party to the merger or exchange by an officer or other authorized |
|
representative and must include: |
|
(1) the plan of merger or exchange or a statement |
|
certifying: |
|
(A) the name and organizational form of each |
|
domestic entity or non-code organization that is a party to the |
|
merger or exchange; |
|
(B) for a merger, the name and organizational |
|
form of each domestic entity or non-code organization that is to be |
|
created by the plan of merger [or exchange]; |
|
(C) the name of the jurisdiction in which each |
|
domestic entity or non-code organization named under Paragraph (A) |
|
or (B) is incorporated or organized; |
|
(D) for a merger, the amendments or changes to |
|
the certificate of formation of each filing entity that is a party |
|
to the merger, or if no amendments are desired to be effected by the |
|
merger, a statement to that effect; |
|
(E) for a merger, that the certificate of |
|
formation of each new filing entity to be created under the plan of |
|
merger [or exchange] is being filed with the certificate of merger |
|
[or exchange]; |
|
(F) that a signed plan of merger or exchange is on |
|
file at the principal place of business of each surviving, |
|
acquiring, or new domestic entity or non-code organization, and the |
|
address of each principal place of business; and |
|
(G) that a copy of the plan of merger or exchange |
|
will be on written request furnished without cost by each |
|
surviving, acquiring, or new domestic entity or non-code |
|
organization to any owner or member of any domestic entity that is a |
|
party to or created by the plan of merger or exchange and, for a |
|
merger with multiple surviving domestic entities or non-code |
|
organizations, to any creditor or obligee of the parties to the |
|
merger at the time of the merger if a liability or obligation is |
|
then outstanding; |
|
(2) if approval of the owners or members of any |
|
domestic entity that was a party to the plan of merger or exchange |
|
is not required by this code, a statement to that effect; and |
|
(3) a statement that the plan of merger or exchange has |
|
been approved as required by the laws of the jurisdiction of |
|
formation of each organization that is a party to the merger or |
|
exchange and by the governing documents of those organizations. |
|
SECTION 54. Section 10.154(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) If a certificate of conversion is required to be filed |
|
in connection with a conversion, the certificate must be signed on |
|
behalf of the converting entity and must include: |
|
(1) the plan of conversion or a statement certifying |
|
the following: |
|
(A) the name, organizational form, and |
|
jurisdiction of formation [organization] of the converting entity; |
|
(B) the name, organizational form, and |
|
jurisdiction of formation of the converted [converting] entity; |
|
(C) that a signed plan of conversion is on file at |
|
the principal place of business of the converting entity, and the |
|
address of the principal place of business; |
|
(D) that a signed plan of conversion will be on |
|
file after the conversion at the principal place of business of the |
|
converted entity, and the address of the principal place of |
|
business; and |
|
(E) that a copy of the plan of conversion will be |
|
on written request furnished without cost by the converting entity |
|
before the conversion or by the converted entity after the |
|
conversion to any owner or member of the converting entity or the |
|
converted entity; and |
|
(2) a statement that the plan of conversion has been |
|
approved as required by the laws of the jurisdiction of formation |
|
and the governing documents of the converting entity. |
|
SECTION 55. Section 10.254(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) Except as otherwise expressly provided by another |
|
statute [law], a person acquiring property described by this |
|
section may not be held responsible or liable for a liability or |
|
obligation of the transferring domestic entity that is not |
|
expressly assumed by the person. |
|
SECTION 56. Section 10.351(c), Business Organizations |
|
Code, is amended to read as follows: |
|
(c) The governing documents of a partnership or a limited |
|
liability company may provide that its owners are entitled to the |
|
rights of dissent and appraisal provided by this subchapter, |
|
subject to any modification to those rights as provided by the |
|
entity's governing documents. |
|
SECTION 57. Section 10.362(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) In computing the fair value of an ownership interest |
|
under this subchapter, consideration must be given to the value of |
|
the domestic entity [organization] as a going concern without |
|
including in the computation of value any control premium, any |
|
minority ownership discount, or any discount for lack of |
|
marketability. If the domestic entity has different classes or |
|
series of ownership interests, the relative rights and preferences |
|
of and limitations placed on the class or series of ownership |
|
interests, other than relative voting rights, held by the |
|
dissenting owner must be taken into account in the computation of |
|
value[:
|
|
[(1) payment for a control premium or minority
|
|
discount other than a discount attributable to the type of
|
|
ownership interests held by the dissenting owner; and
|
|
[(2) limitation placed on the rights and preferences
|
|
of those ownership interests]. |
|
SECTION 58. Section 10.367(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) On termination of the right of dissent under this |
|
section: |
|
(1) the dissenting owner and all persons claiming a |
|
right under the owner are conclusively presumed to have approved |
|
and ratified the action to which the owner dissented and are bound |
|
by that action; |
|
(2) the owner's right to be paid the fair value of the |
|
owner's ownership interests ceases and the owner's status as an |
|
owner of those ownership interests is restored without prejudice to |
|
[in] any interim proceeding if the owner's ownership interests were |
|
not canceled, converted, or exchanged as a result of the action or a |
|
subsequent fundamental business transaction; and |
|
(3) the dissenting owner is entitled to receive |
|
dividends or other distributions made in the interim to owners of |
|
the same class and series of ownership interests held by the owner |
|
as if a demand for the payment of the ownership interests had not |
|
been made under Section 10.356, subject to any change in or |
|
adjustment to ownership interests because of the cancellation or |
|
exchange of the ownership interests after the date a demand under |
|
Section 10.356 was made pursuant to a fundamental business |
|
transaction. |
|
SECTION 59. Section 10.368, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 10.368. EXCLUSIVITY OF REMEDY OF DISSENT AND |
|
APPRAISAL. In the absence of fraud in the transaction, any right of |
|
an owner of an ownership interest to dissent from an action and |
|
obtain the fair value of the ownership interest under this |
|
subchapter is the exclusive remedy for recovery of: |
|
(1) the value of the ownership interest; or |
|
(2) money damages to the owner with respect to the |
|
action [ownership interest; and
|
|
[(2) the owner's right in the organization with
|
|
respect to a fundamental business transaction]. |
|
SECTION 60. Sections 11.001(2) and (6), Business |
|
Organizations Code, are amended to read as follows: |
|
(2) "Event requiring a winding up" or "event requiring |
|
winding up" means an event specified by Section 11.051. |
|
(6) "Voluntary decision to wind up" means the |
|
determination to wind up a domestic entity made by the domestic |
|
entity or the owners, members, or governing authority of the |
|
domestic entity in the manner specified by: |
|
(A) the title of this code governing the domestic |
|
entity; or |
|
(B) if applicable to the domestic entity, Section |
|
11.057(a) or (b) or 11.058(a). |
|
SECTION 61. Section 11.051, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 11.051. EVENT REQUIRING WINDING UP OF DOMESTIC ENTITY. |
|
Winding up of a domestic entity is required on: |
|
(1) the expiration of any [the domestic entity's] |
|
period of duration specified in the domestic entity's governing |
|
documents[, if not perpetual]; |
|
(2) a voluntary decision to wind up the domestic |
|
entity; |
|
(3) an event specified in the governing documents of |
|
the domestic entity requiring the winding up, dissolution, or |
|
termination of the domestic entity, other than an event specified |
|
in another subdivision of this section; |
|
(4) an event specified in other sections of this code |
|
requiring the winding up or termination of the domestic entity, |
|
other than an event specified in another subdivision of this |
|
section; or |
|
(5) a decree by a court requiring the winding up, [or] |
|
dissolution, or termination of the domestic entity, rendered under |
|
this code or other law. |
|
SECTION 62. Section 11.056, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 11.056. SUPPLEMENTAL PROVISIONS FOR [EVENT REQUIRING
|
|
WINDING UP OF] LIMITED LIABILITY COMPANY. (a) The [In addition to
|
|
an event listed under Section 11.051, the] termination of the |
|
continued membership of the last remaining member of a domestic |
|
limited liability company is an event requiring [a] winding up |
|
under Section 11.051(4) unless, not later than the 90th day after |
|
the date of the termination, the legal representative or successor |
|
of the last remaining member agrees: |
|
(1) to continue the company; and |
|
(2) to become a member of the company effective as of |
|
the date of the termination or to designate another person who |
|
agrees to become a member of the company effective as of the date of |
|
the termination. |
|
(b) The event requiring winding up specified in Subsection |
|
(a) may be canceled in accordance with Sections 11.152(a) and |
|
101.552(c). |
|
SECTION 63. Section 11.057, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 11.057. SUPPLEMENTAL PROVISIONS FOR DOMESTIC [EVENTS
|
|
REQUIRING WINDING UP OF] GENERAL PARTNERSHIP. (a) Unless |
|
otherwise provided by the partnership agreement, a voluntary |
|
decision to wind up a domestic general partnership, other than a |
|
partnership described by Subsection (b), requires the express will |
|
of a majority-in-interest of the partners who have not assigned |
|
their interests. A voluntary decision to wind up a partnership |
|
under this subsection may be revoked in accordance with Sections |
|
11.151 and 152.709(e). |
|
(b) Unless otherwise provided by the partnership agreement, |
|
a voluntary decision to wind up a domestic general partnership that |
|
has a period of duration or is for a particular undertaking, or in |
|
which the partnership agreement provides for the winding up of the |
|
partnership on occurrence of a specified event, requires the |
|
express will of all of the partners. A voluntary decision to wind |
|
up a partnership under this subsection may be revoked in accordance |
|
with Sections 11.151 and 152.709(d). |
|
(c) An event requiring the winding up of a domestic general |
|
partnership under Section 11.051(4) includes the following: |
|
(1) in a general partnership for a particular |
|
undertaking, the completion of the undertaking, unless otherwise |
|
provided by the partnership agreement; |
|
(2) [An event requiring winding up of a general
|
|
partnership includes, in addition to any event specified in Section
|
|
11.051, the following:
|
|
[(1) in a general partnership that is not for a
|
|
definite term or for a particular undertaking or in which the
|
|
partnership agreement does not provide for winding up the
|
|
partnership business on a specified event, the express will of a
|
|
majority-in-interest of the partners who have not assigned their
|
|
interests;
|
|
[(2) in a general partnership for a definite term or
|
|
for a particular undertaking, on:
|
|
[(A)the express will of all of the partners; or
|
|
[(B) the expiration of the term or the completion
|
|
of the undertaking, unless otherwise continued under Section
|
|
152.709;
|
|
[(3) in a general partnership in which the partnership
|
|
agreement provides for the winding up of the partnership business
|
|
on a specified event, upon:
|
|
[(A)the express will of all of the partners; or
|
|
[(B) the occurrence of the specified event,
|
|
unless otherwise continued under Section 152.709;
|
|
[(4)] an event that makes it illegal for all or |
|
substantially all of the partnership business to be continued, but |
|
a cure of illegality before the 91st day after the date of notice to |
|
the general partnership of the event is effective retroactively to |
|
the date of the event for purposes of this subsection; and |
|
(3) [(5)] the sale of all or substantially all of the |
|
property of the general partnership outside the ordinary course of |
|
business, unless otherwise provided by the partnership agreement. |
|
(d) In addition to the events specified by Subsection (c), |
|
unless otherwise provided by the partnership agreement, [; and
|
|
[(6)] if a domestic general partnership does [is] not |
|
have a period of duration, is not for a [definite term or a] |
|
particular undertaking, and is not required under its partnership |
|
agreement to wind up [does not provide for a specified event
|
|
requiring a winding up of] the partnership on occurrence of a |
|
specified event, an event requiring [business, a request for] |
|
winding up of the partnership under Section 11.051(4) occurs on the |
|
60th day [business from a partner, other than a partner who has
|
|
agreed not to withdraw.
|
|
[(b) An event described by Subsection (a)(6) requires the
|
|
winding up of a general partnership 60 days] after the date on which |
|
the [general] partnership receives notice of a [the] request for |
|
winding up the partnership from a partner, other than a partner who |
|
has agreed not to withdraw, or [at] a later date as specified by the |
|
request [notice], unless a majority-in-interest of the partners |
|
deny the request for winding up or agree to continue the [general] |
|
partnership. The continuation of the business by the other |
|
partners or by those who habitually acted in the business before the |
|
request, other than the partner making the request, without any |
|
settlement or liquidation of the partnership business, is prima |
|
facie evidence of an agreement to continue the partnership under |
|
this subsection. |
|
(e) An event requiring winding up specified in Subsection |
|
(c)(1), (c)(3), or (d) may be canceled in accordance with Sections |
|
11.152 and 152.709. |
|
SECTION 64. Section 11.058, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 11.058. SUPPLEMENTAL PROVISION FOR [EVENTS REQUIRING
|
|
WINDING UP OF] LIMITED PARTNERSHIP. (a) A voluntary decision to |
|
wind up a domestic limited partnership requires the written consent |
|
of all partners in the limited partnership unless otherwise |
|
provided by the partnership agreement. The voluntary decision to |
|
wind up may be revoked in accordance with Sections 11.151 and |
|
153.501(d). |
|
(b) An [event requiring the winding up of a limited
|
|
partnership includes, in addition to any event specified in Section
|
|
11.051, the following:
|
|
[(1) written consent of all partners to the winding up
|
|
and termination of the limited partnership; and
|
|
[(2)an] event of withdrawal of a general partner of a |
|
domestic limited partnership is an event requiring winding up under |
|
Section 11.051(4) unless otherwise provided by the partnership |
|
agreement. The event requiring winding up specified in this |
|
subsection may be canceled in accordance with Sections 11.152(a) |
|
and 153.501(b). |
|
(c) An event requiring winding up of a limited partnership |
|
under Section 11.051(4) includes when there are no limited partners |
|
in the limited partnership. The event requiring winding up |
|
specified in this subsection may be canceled in accordance with |
|
Sections 11.152(a) and 153.501(e). |
|
SECTION 65. Section 11.059, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 11.059. SUPPLEMENTAL PROVISIONS FOR |
|
CORPORATIONS. For purposes of Section 11.051(3), the event |
|
requiring the winding up, dissolution, or termination of a domestic |
|
corporation must be specified [specific] in: |
|
(1) the certificate of formation of the corporation; |
|
or |
|
(2) a bylaw [bylaws] of the corporation adopted by the |
|
owners or members of the corporation in the same manner as an |
|
amendment to the certificate of formation of the corporation. |
|
SECTION 66. Section 11.104, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 11.104. ACTION BY SECRETARY OF STATE. The secretary of |
|
state shall remove from its active records a domestic filing entity |
|
whose period of duration specified in its certificate of formation |
|
has expired when the secretary of state determines that: |
|
(1) the entity has failed to file a certificate of |
|
termination in accordance with Section 11.101; and |
|
(2) the entity has failed to file an amendment to |
|
extend its period of duration [existence] in accordance with |
|
Section 11.152. |
|
SECTION 67. Section 11.152(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) A domestic entity whose specified period of duration has |
|
expired [to which an event requiring winding up as specified in
|
|
Section 11.051(1) occurs] may cancel that [the] event requiring |
|
winding up by amending its governing documents in the manner |
|
provided by this code, not later than the third anniversary of the |
|
date the period expired [of the event requiring winding up] or an |
|
earlier date prescribed by the title of this code governing the |
|
domestic entity, to extend its [the] period of [its] duration. The |
|
expiration of its [the] period of [its] duration does not by itself |
|
create a vested right on the part of an owner, member, or creditor |
|
of the entity to prevent the extension of that period [its
|
|
existence]. An act undertaken or a contract entered into by the |
|
domestic [a terminated] entity during a period in which the entity |
|
could have extended its period of duration as provided by this |
|
subsection [existence under this section] is not invalidated by the |
|
expiration of that [the] period [of the entity's duration], |
|
regardless of whether the entity has taken any action to extend its |
|
period of duration [existence]. |
|
SECTION 68. Section 11.251(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) The secretary of state may terminate a filing entity's |
|
existence if the secretary finds that: |
|
(1) the entity has failed to, and, before the 91st day |
|
after the date notice was mailed has not corrected the entity's |
|
failure to: |
|
(A) [(1)] file a report within the period |
|
required by law or [to] pay a fee or penalty prescribed by law when |
|
due and payable; or |
|
(B) [(2)] maintain a registered agent or |
|
registered office in this state as required by law; or |
|
(2) the entity has failed to, and, before the 16th day |
|
after the date notice was mailed has not corrected the entity's |
|
failure to, pay a fee required in connection with the filing of its |
|
certificate of formation [(3) pay a fee required in connection with
|
|
a filing], or payment of the fee was dishonored when presented by |
|
the state for payment. |
|
SECTION 69. Section 11.412, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 11.412. DECREE OF INVOLUNTARY TERMINATION. In an |
|
action in which the court has ordered the liquidation of [to
|
|
liquidate] the property and business of a domestic entity in |
|
accordance with other provisions of this code, the court shall |
|
enter a decree terminating the [entity and the] existence of the |
|
entity [shall cease]: |
|
(1) when the costs and expenses of the action and all |
|
obligations and liabilities of the domestic entity have been paid |
|
and discharged or adequately provided for and all of the entity's |
|
remaining property has been distributed to its owners and members; |
|
or |
|
(2) if the entity's property is not sufficient to |
|
discharge the costs and other expenses of the action and all |
|
obligations and liabilities of the entity, when all the property of |
|
the entity has been applied toward their payment. |
|
SECTION 70. Section 12.260, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 12.260. ABATEMENT OF SUIT. An action or cause of |
|
action for a fine, penalty, or forfeiture that this state has or may |
|
have against a filing entity or foreign filing entity does not abate |
|
because the entity winds up [dissolves], voluntarily or otherwise, |
|
or the entity's certificate of formation is terminated or the |
|
entity's registration is revoked. |
|
SECTION 71. Section 21.211(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) Without limiting the general powers granted by |
|
[Notwithstanding] Sections 21.210 and 21.213 to impose and enforce |
|
reasonable restrictions, a restriction placed on the transfer or |
|
registration of transfer of a security of a corporation is valid if |
|
the restriction reasonably: |
|
(1) obligates the holder of the restricted security to |
|
offer a person, including the corporation or other holders of |
|
securities of the corporation, an opportunity to acquire the |
|
restricted security within a reasonable time before the transfer; |
|
(2) obligates the corporation, to the extent provided |
|
by this code, or another person to purchase securities that are the |
|
subject of an agreement relating to the purchase and sale of the |
|
restricted security; |
|
(3) requires the corporation or the holders of a class |
|
of the corporation's securities to consent to a proposed transfer |
|
of the restricted security or to approve the proposed transferee of |
|
the restricted security for the purpose of preventing a violation |
|
of law; |
|
(4) prohibits the transfer of the restricted security |
|
to a designated person or group of persons and the designation is |
|
not manifestly unreasonable; |
|
(5) maintains the status of the corporation as an |
|
electing small business corporation under Subchapter S of the |
|
Internal Revenue Code; |
|
(6) maintains a tax advantage to the corporation; |
|
(7) maintains the status of the corporation as a close |
|
corporation under Subchapter O; |
|
(8) obligates the holder of the restricted securities |
|
to sell or transfer an amount of restricted securities to a person |
|
or group of persons, including the corporation or other holders of |
|
securities of the corporation; or |
|
(9) causes or results in the automatic sale or |
|
transfer of an amount of restricted securities to a person or group |
|
of persons, including the corporation or other holders of |
|
securities of the corporation. |
|
SECTION 72. Section 21.220, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 21.220. PENALTY FOR FAILURE TO PREPARE VOTING |
|
LIST. An officer or agent of a corporation who is in charge of the |
|
corporation's share transfer records and who does not prepare the |
|
list of shareholders [owners], keep the list on file for a 10-day |
|
period, or produce and keep the list available for inspection at the |
|
annual meeting as required by Sections 21.354 and 21.372 is liable |
|
to a shareholder [an owner] who suffers damages because of the |
|
failure for the damage caused by the failure. |
|
SECTION 73. Section 21.221, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 21.221. PENALTY FOR FAILURE TO PROVIDE NOTICE OF |
|
MEETING. If an officer or agent of a corporation is unable to |
|
comply with the duties prescribed by Sections 21.354 and 21.372 |
|
because the officer or agent did not receive notice of a meeting of |
|
shareholders [owners] within a sufficient time before the date of |
|
the meeting, the corporation, rather than the officer or agent, is |
|
liable to a shareholder [an owner] who suffers damages because of |
|
the failure for the extent of the damage caused by the failure. |
|
SECTION 74. Section 21.223(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) A holder of shares, an owner of any beneficial interest |
|
in shares, or a subscriber for shares whose subscription has been |
|
accepted, or any affiliate of such a holder, owner, or subscriber or |
|
of the corporation, may not be held liable to the corporation or its |
|
obligees with respect to: |
|
(1) the shares, other than the obligation to pay to the |
|
corporation the full amount of consideration, fixed in compliance |
|
with Sections 21.157-21.162, for which the shares were or are to be |
|
issued; |
|
(2) any contractual obligation of the corporation or |
|
any matter relating to or arising from the obligation on the basis |
|
that the holder, beneficial owner, subscriber, or affiliate is or |
|
was the alter ego of the corporation or on the basis of actual or |
|
constructive fraud, a sham to perpetrate a fraud, or other similar |
|
theory; or |
|
(3) any obligation of the corporation on the basis of |
|
the failure of the corporation to observe any corporate formality, |
|
including the failure to: |
|
(A) comply with this code or the certificate of |
|
formation [articles of incorporation] or bylaws of the corporation; |
|
or |
|
(B) observe any requirement prescribed by this |
|
code or the certificate of formation [articles of incorporation] or |
|
bylaws of the corporation for acts to be taken by the corporation or |
|
its directors or shareholders. |
|
SECTION 75. Sections 21.364(a) and (b), Business |
|
Organizations Code, are amended to read as follows: |
|
(a) In this section, a "fundamental action" means: |
|
(1) an amendment of a certificate of formation, |
|
including an amendment required for cancellation of an event |
|
requiring winding up in accordance with Section 11.152(b); |
|
(2) a voluntary winding up under Chapter 11; |
|
(3) a revocation of a voluntary decision to wind up |
|
under Section 11.151; |
|
(4) a cancellation of an event requiring winding up |
|
under Section 11.152(a) [11.152]; or |
|
(5) a reinstatement under Section 11.202. |
|
(b) Except as otherwise provided by this code or the |
|
certificate of formation [or bylaws] of a corporation in accordance |
|
with Section 21.365 [21.363], the vote required for approval of a |
|
fundamental action by the shareholders is the affirmative vote of |
|
the holders of at least two-thirds of the outstanding shares |
|
entitled to vote on the fundamental action. |
|
SECTION 76. Section 21.372(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) Not later than the 11th day before the date of each |
|
meeting of the shareholders of a corporation, an officer or agent of |
|
the corporation who is in charge of the corporation's share |
|
transfer [shareholder] records shall prepare an alphabetical list |
|
of the shareholders entitled to vote at the meeting or at any |
|
adjournment of the meeting. The list of shareholders must: |
|
(1) state: |
|
(A) the address of each shareholder; |
|
(B) the type of shares held by each shareholder; |
|
(C) the number of shares held by each |
|
shareholder; and |
|
(D) the number of votes that each shareholder is |
|
entitled to if the number of votes is different from the number of |
|
shares stated under Paragraph (C); and |
|
(2) be kept on file at the registered office or |
|
principal executive office of the corporation for at least 10 days |
|
before the date of the meeting. |
|
SECTION 77. Section 21.408(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) The terms of office of the initial directors |
|
constituting the first class expire at the first annual meeting of |
|
shareholders after the election of those directors. The terms of |
|
office of the initial directors constituting the second class |
|
expire at the second annual meeting of shareholders after election |
|
of those directors. The terms of office of the initial directors |
|
constituting the third class, if any, expire at the third annual |
|
meeting of shareholders after election of those directors. In each |
|
case, the term of office of an initial director is extended until |
|
the director's successor is elected and has qualified. |
|
SECTION 78. Section 21.4091, Business Organizations Code, |
|
is amended to read as follows: |
|
Sec. 21.4091. RESIGNATION OF DIRECTORS. (a) Except as |
|
otherwise provided by the certificate of formation or bylaws, a |
|
director of a corporation may resign at any time by providing |
|
written notice to the corporation. |
|
(b) The director's resignation takes effect on the date the |
|
notice is received by the corporation, unless the notice prescribes |
|
a later effective date or states that the resignation takes effect |
|
on the occurrence of a future event, such as the director's failure |
|
to receive a specified vote for reelection as a director. |
|
(c) If the director's resignation is to take effect on a |
|
later date or on the occurrence of a future event, the resignation |
|
takes effect on the later date or when the event occurs. |
|
(d) The director's resignation is irrevocable when it takes |
|
effect. The director's resignation is revocable before it takes |
|
effect unless the notice of resignation expressly states it is |
|
irrevocable. |
|
SECTION 79. Sections 21.410(a) and (b), Business |
|
Organizations Code, are amended to read as follows: |
|
(a) A vacancy occurring in the initial board of directors |
|
before the issuance of shares may be filled by the affirmative vote |
|
or written consent of the majority of the organizers or by the |
|
affirmative vote of the majority of the remaining directors, even |
|
if [the majority of] the remaining directors constitute |
|
[constitutes] less than a quorum of the board of directors. |
|
(b) Except as provided by Subsection (e), a vacancy |
|
occurring in the board of directors after the issuance of shares may |
|
be filled by election at an annual or special meeting of |
|
shareholders called for that purpose or by the affirmative vote of |
|
the majority of the remaining directors, even if the remaining |
|
[majority of] directors constitute [constitutes] less than a quorum |
|
of the board of directors. |
|
SECTION 80. Section 21.452(e), Business Organizations |
|
Code, is amended to read as follows: |
|
(e) Except as provided by Chapter 10 or Sections 21.457 and |
|
21.459 [21.457-21.459], the shareholders of the corporation shall |
|
approve the plan of merger as provided by this subchapter. |
|
SECTION 81. Section 21.453(e), Business Organizations |
|
Code, is amended to read as follows: |
|
(e) Except as provided by Section 21.457 [Sections
|
|
21.457-21.459], the shareholders of the corporation shall approve |
|
the plan of conversion as provided by this subchapter. |
|
SECTION 82. Section 21.454(e), Business Organizations |
|
Code, is amended to read as follows: |
|
(e) Except as provided by Section 21.457 [Sections
|
|
21.457-21.459], the shareholders of the corporation shall approve |
|
the plan of exchange as provided by this subchapter. |
|
SECTION 83. Section 21.501, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 21.501. APPROVAL OF VOLUNTARY WINDING UP, |
|
REINSTATEMENT, OR REVOCATION OF VOLUNTARY WINDING UP. A |
|
corporation must approve a voluntary winding up in accordance with |
|
Chapter 11, a reinstatement in accordance with Section 11.202, a |
|
cancellation of an event requiring winding up under Section |
|
11.152(a) [11.152], or revocation of a voluntary decision to wind |
|
up in accordance with Section 11.151 by complying with one of the |
|
procedures prescribed by this subchapter. |
|
SECTION 84. Section 21.563(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) [Subject to Subsection (c),] Sections 21.552-21.559 do |
|
not apply to a closely held corporation. |
|
SECTION 85. Section 21.604, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 21.604. BUSINESS COMBINATION. A business combination |
|
is: |
|
(1) a merger, share exchange, or conversion of an |
|
issuing public corporation or a subsidiary with: |
|
(A) an affiliated shareholder; |
|
(B) a foreign or domestic corporation or other |
|
entity that is, or after the merger, share exchange, or conversion |
|
would be, an affiliate or associate of the affiliated shareholder; |
|
or |
|
(C) another domestic or foreign corporation or |
|
other entity, if the merger, share exchange, or conversion is |
|
caused by an affiliated shareholder, or an affiliate or associate |
|
of an affiliated shareholder, and as a result of the merger, share |
|
exchange, or conversion this subchapter does not apply to the |
|
surviving corporation or other entity; |
|
(2) a sale, lease, exchange, mortgage, pledge, |
|
transfer, or other disposition, in one transaction or a series of |
|
transactions, including an allocation of assets under a merger, to |
|
or with the affiliated shareholder, or an affiliate or associate of |
|
the affiliated shareholder, of assets of the issuing public |
|
corporation or a subsidiary that: |
|
(A) has an aggregate market value equal to 10 |
|
percent or more of the aggregate market value of all of the assets, |
|
determined on a consolidated basis, of the issuing public |
|
corporation; |
|
(B) has an aggregate market value equal to 10 |
|
percent or more of the aggregate market value of all of the |
|
outstanding voting shares of the issuing public corporation; or |
|
(C) represents 10 percent or more of the earning |
|
power or net income, determined on a consolidated basis, of the |
|
issuing public corporation; |
|
(3) the issuance or transfer by an issuing public |
|
corporation or a subsidiary to an affiliated shareholder or an |
|
affiliate or associate of the affiliated shareholder, in one |
|
transaction or a series of transactions, of shares of the issuing |
|
public corporation or a subsidiary, except by the exercise of |
|
warrants or rights to purchase shares of the issuing public |
|
corporation offered, or a share dividend paid, pro rata to all |
|
shareholders of the issuing public corporation after the affiliated |
|
shareholder's share acquisition date; |
|
(4) the adoption of a plan or proposal for the |
|
liquidation, winding up, or dissolution of an issuing public |
|
corporation proposed by or under any agreement, arrangement, or |
|
understanding, regardless of whether in writing, with an affiliated |
|
shareholder or an affiliate or associate of the affiliated |
|
shareholder; |
|
(5) a reclassification of securities, including a |
|
reverse share split or a share split-up, share dividend, or other |
|
distribution of shares, a recapitalization of the issuing public |
|
corporation, a merger of the issuing public corporation with a |
|
subsidiary or pursuant to which the assets and liabilities of the |
|
issuing public corporation are allocated among two or more |
|
surviving or new domestic or foreign corporations or other |
|
entities, or any other transaction proposed by or under an |
|
agreement, arrangement, or understanding, regardless of whether in |
|
writing, with an affiliated shareholder or an affiliate or |
|
associate of the affiliated shareholder that has the effect, |
|
directly or indirectly, of increasing the proportionate ownership |
|
percentage of the outstanding shares of a class or series of voting |
|
shares or securities convertible into voting shares of the issuing |
|
public corporation that is beneficially owned by the affiliated |
|
shareholder or an affiliate or associate of the affiliated |
|
shareholder, except as a result of immaterial changes due to |
|
fractional share adjustments; or |
|
(6) the direct or indirect receipt by an affiliated |
|
shareholder or an affiliate or associate of the affiliated |
|
shareholder of the benefit of a loan, advance, guarantee, pledge, |
|
or other financial assistance or a tax credit or other tax advantage |
|
provided by or through the issuing public corporation, except |
|
proportionately as a shareholder of the issuing public corporation. |
|
SECTION 86. Section 21.707, Business Organizations Code, is |
|
amended by amending Subsections (a), (b), (d), and (e) and adding |
|
Subsection (f) to read as follows: |
|
(a) This section applies to an existing corporation that |
|
elected to become a close corporation before the mandatory |
|
application [effective] date of this code and has not terminated |
|
that status. |
|
(b) A close corporation existing before the mandatory |
|
application [effective] date of this code is considered to be a |
|
close corporation under this code. |
|
(d) An agreement among the shareholders of a close |
|
corporation in conformance with former law and Sections |
|
21.714-21.725 before the mandatory application [effective] date of |
|
this code is considered to be a shareholders' agreement. |
|
(e) A certificate representing the shares issued or |
|
delivered by the close corporation after the mandatory application |
|
[effective] date of this code, whether in connection with the |
|
original issue of shares or a transfer of shares, must conform with |
|
Section 21.732. |
|
(f) In this section, "mandatory application date" has the |
|
meaning assigned by Section 401.001. |
|
SECTION 87. Section 22.154, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 22.154. FAILURE TO CALL ANNUAL MEETING. (a) If the |
|
board of directors of a corporation fails to call the annual meeting |
|
of members when required [at the designated time], a member of the |
|
corporation may demand that the meeting be held within a reasonable |
|
time. The demand must be made in writing and sent to an officer of |
|
the corporation by registered mail. |
|
(b) If a required [the] annual meeting is not called before |
|
the 61st day after the date of demand, a member of the corporation |
|
may compel the holding of the meeting by legal action directed |
|
against the board of directors, and each of the extraordinary writs |
|
of common law and of courts of equity are available to the member to |
|
compel the holding of the meeting. Each member has a justiciable |
|
interest sufficient to enable the member to institute and prosecute |
|
the legal proceedings. |
|
(c) Failure to hold a required [the] annual meeting at the |
|
designated time does not result in the winding up and termination of |
|
the corporation. |
|
SECTION 88. Section 22.163(c), Business Organizations |
|
Code, is amended to read as follows: |
|
(c) The record date for the determination of members |
|
entitled [board of directors of a corporation may set a new date for
|
|
determining the right] to notice of or to vote at a meeting is |
|
effective for an [any] adjournment of the [a members'] meeting |
|
unless the board of directors of a corporation sets a new date for |
|
determining the right to notice of or to vote at the adjournment. |
|
[The board shall set a new date if the meeting is adjourned to a date
|
|
more than 90 days after the record date for determining members
|
|
entitled to notice of the original meeting.] |
|
SECTION 89. Section 22.164(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) In this section, "fundamental action" means: |
|
(1) an amendment of a certificate of formation, |
|
including an amendment required for the cancellation of an event |
|
requiring winding up in accordance with Section 11.152(b); |
|
(2) a voluntary winding up under Chapter 11; |
|
(3) a revocation of a voluntary decision to wind up |
|
under Section 11.151; |
|
(4) a cancellation of an event requiring winding up |
|
under Section 11.152(a) [11.152]; |
|
(5) a reinstatement under Section 11.202; |
|
(6) a distribution plan under Section 22.305; |
|
(7) a plan of merger under Subchapter F; |
|
(8) a sale of all or substantially all of the assets of |
|
a corporation under Subchapter F; |
|
(9) a plan of conversion under Subchapter F; or |
|
(10) a plan of exchange under Subchapter F. |
|
SECTION 90. Section 22.220, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 22.220. ACTION WITHOUT MEETING OF DIRECTORS OR |
|
COMMITTEE. (a) The certificate of formation or bylaws of a |
|
corporation may provide that an action required by this chapter to |
|
be taken at a meeting of the corporation's directors or an action |
|
that may be taken at a meeting of the directors or a committee may be |
|
taken without a meeting if a written consent, stating the action to |
|
be taken, is signed by the number of directors or committee members |
|
necessary to take that action at a meeting at which all of the |
|
directors or committee members are present and voting. The consent |
|
must state the date of each director's or committee member's |
|
signature. |
|
(b) [A written consent signed by less than all of the
|
|
directors or committee members is not effective to take the action
|
|
that is the subject of the consent unless, not later than the 60th
|
|
day after the date of the earliest dated consent delivered to the
|
|
corporation in the manner required by this section, a consent or
|
|
consents signed by the required number of directors or committee
|
|
members are delivered to the corporation:
|
|
[(1) at the registered office or principal place of
|
|
business of the corporation; or
|
|
[(2) through the corporation's registered agent,
|
|
transfer agent, registrar, or exchange agent or an officer or agent
|
|
of the corporation having custody of the books in which proceedings
|
|
of meetings of directors or committees are recorded.
|
|
[(c) Delivery under Subsection (b) must be by hand or by
|
|
certified or registered mail, return receipt requested. Delivery
|
|
to the corporation's principal place of business must be addressed
|
|
to the president or principal executive officer of the corporation.
|
|
[(d)] Prompt notice of the taking of an action by directors |
|
or a committee without a meeting by less than unanimous written |
|
consent shall be given to each director or committee member who did |
|
not consent in writing to the action. |
|
SECTION 91. Section 22.222, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 22.222. RELIGIOUS CORPORATION DIRECTOR'S GOOD FAITH |
|
RELIANCE ON CERTAIN INFORMATION. A director of a religious |
|
corporation, in the discharge of a duty imposed or power conferred |
|
on the director, including a duty imposed or power conferred as a |
|
committee member, may rely in good faith on information or on an |
|
opinion, report, or statement, including a financial statement or |
|
other financial data, concerning the corporation or another person |
|
that was prepared or presented by: |
|
(1) a religious authority; or |
|
(2) a minister, priest, rabbi, or other person whose |
|
position or duties in the religious organization [corporation] the |
|
director believes justify reliance and confidence and whom the |
|
director believes to be reliable and competent in the matters |
|
presented. |
|
SECTION 92. Section 22.234, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 22.234. RELIGIOUS CORPORATION OFFICER'S GOOD FAITH |
|
RELIANCE ON CERTAIN INFORMATION. An officer of a religious |
|
corporation, in the discharge of a duty imposed or power conferred |
|
on the officer, may rely in good faith and with ordinary care on |
|
information or on an opinion, report, or statement, including a |
|
financial statement or other financial data, concerning the |
|
corporation or another person that was prepared or presented by: |
|
(1) a religious authority [or another religious
|
|
corporation]; or |
|
(2) a minister, priest, rabbi, or other person whose |
|
position or duties in the [religious authority or] religious |
|
organization [corporation] the officer believes justify reliance |
|
and confidence and whom the officer believes to be reliable and |
|
competent in the matters presented. |
|
SECTION 93. Section 22.301, Business Organizations Code, is |
|
amended to read as follows: |
|
Sec. 22.301. APPROVAL OF VOLUNTARY WINDING UP, |
|
REINSTATEMENT, REVOCATION OF VOLUNTARY WINDING UP, OR DISTRIBUTION |
|
PLAN. A corporation must approve a voluntary winding up in |
|
accordance with Chapter 11, a reinstatement in accordance with |
|
Section 11.202, a cancellation of an event requiring winding up |
|
under Section 11.152(a) [11.152], a revocation of a voluntary |
|
decision to wind up in accordance with Section 11.151, or a |
|
distribution plan in accordance with Section 22.305 by complying |
|
with the procedures prescribed by this subchapter. |
|
SECTION 94. Section 23.053(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) In accordance with Section 3.005(a)(3), the certificate |
|
of formation of a [The] business development corporation must state |
|
that the purposes of the corporation are [be organized] to: |
|
(1) promote, stimulate, develop, and advance the |
|
business prosperity and economic welfare of this state and the |
|
residents of this state; |
|
(2) encourage and assist, through loans, investments, |
|
or other business transactions, new business and industry in this |
|
state; |
|
(3) rehabilitate and assist existing industry in this |
|
state; |
|
(4) stimulate and assist in the expansion of business |
|
activity that will tend to promote the business development and |
|
maintain the economic stability of this state, provide maximum |
|
opportunities for employment, encourage thrift, and improve the |
|
standard of living of the residents of this state; |
|
(5) cooperate and act in conjunction with other public |
|
or private organizations in the promotion and advancement of |
|
industrial, commercial, agricultural, and recreational |
|
developments in this state; and [or] |
|
(6) provide financing for the promotion, development, |
|
and conduct of business activity in this state. |
|
SECTION 95. Section 23.058(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) The organizers [incorporators] of a corporation shall |
|
name the directors constituting the initial board of directors of |
|
the corporation. Directors other than the initial directors shall |
|
be elected at each annual meeting of the corporation. If an annual |
|
meeting is not held at the time designated by the bylaws of the |
|
corporation, the directors shall be elected at a special meeting |
|
held in lieu of the annual meeting. |
|
SECTION 96. Subchapter B, Chapter 101, Business |
|
Organizations Code, is amended by adding Section 101.0515 to read |
|
as follows: |
|
Sec. 101.0515. EXECUTION OF FILINGS. Unless otherwise |
|
provided by this title, a filing instrument of a limited liability |
|
company must be signed by an authorized officer, manager, or member |
|
of the limited liability company. |
|
SECTION 97. Section 101.054(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) Except as provided by this section, the following |
|
provisions may not be waived or modified in the company agreement of |
|
a limited liability company: |
|
(1) this section; |
|
(2) Section 101.101(b), 101.151, 101.206, 101.501, or |
|
101.502; |
|
(3) Chapter 1, if the provision is used to interpret a |
|
provision or define a word or phrase contained in a section listed |
|
in this subsection; |
|
(4) Chapter 2, except that Section 2.104(c)(2), |
|
2.104(c)(3), or 2.113 may be waived or modified in the company |
|
agreement; |
|
(5) Chapter 3, except that Subchapters C and E may be |
|
waived or modified in the company agreement; or |
|
(6) Chapter 4, 5, 7, 10, 11, or 12, other than Section |
|
11.056. |
|
SECTION 98. Section 101.112, Business Organizations Code, |
|
is amended to read as follows: |
|
Sec. 101.112. MEMBER'S [JUDGMENT CREDITOR; CHARGE OF] |
|
MEMBERSHIP INTEREST SUBJECT TO CHARGING ORDER. (a) On application |
|
by a judgment creditor of a member of a limited liability company or |
|
of any other owner of a membership interest in a limited liability |
|
company, a court having jurisdiction may charge the membership |
|
interest of the judgment debtor to satisfy [member or owner, as
|
|
appropriate, with payment of the unsatisfied amount of] the |
|
judgment. |
|
(b) If a court charges a membership interest with payment of |
|
a judgment as provided by Subsection (a), the judgment creditor has |
|
only the right to receive any distribution to which the judgment |
|
debtor would otherwise be entitled in respect [rights of an
|
|
assignee] of the membership interest. |
|
(c) A charging order constitutes a lien on the judgment |
|
debtor's membership interest. |
|
(d) The entry of a charging order is the exclusive remedy by |
|
which a judgment creditor of a member or of any other owner of a |
|
membership interest may satisfy a judgment out of the judgment |
|
debtor's membership interest. |
|
(e) This section may not be construed to deprive a member of |
|
a limited liability company or any other owner of a membership |
|
interest in a limited liability company of the benefit of any |
|
exemption laws applicable to the membership interest of the member |
|
or owner. |
|
(f) A creditor of a member or of any other owner of a |
|
membership interest does not have the right to obtain possession |
|
of, or otherwise exercise legal or equitable remedies with respect |
|
to, the property of the limited liability company. |
|
SECTION 99. Section 101.352(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) If the members of a limited liability company do not |
|
constitute the governing authority of the company, notice of a |
|
meeting of members required by Subsection (a) shall be given by or |
|
at the direction of the governing authority not later than the 10th |
|
day or earlier than the 60th day before the date of the meeting. |
|
Notice of a meeting required under this subsection must state the |
|
business to be transacted at the meeting or the purpose of the |
|
meeting if: |
|
(1) the meeting is a special meeting; or |
|
(2) a purpose of the meeting is to consider a matter |
|
described by Section 101.356. |
|
SECTION 100. Section 101.463(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) [Subject to Subsection (c),] Sections 101.452-101.459 |
|
do not apply to a closely held limited liability company. |
|
SECTION 101. Sections 101.501(a) and (b), Business |
|
Organizations Code, are amended to read as follows: |
|
(a) In addition to the books and records required to be kept |
|
under Section 3.151, a limited liability company shall keep at its |
|
principal office in the United States, or make available to a person |
|
at its principal office in the United States not later than the |
|
fifth day after the date the person submits a written request to |
|
examine the books and records of the company under Section 3.152(a) |
|
or 101.502: |
|
(1) a current list that states: |
|
(A) the percentage or other interest in the |
|
limited liability company owned by each member; and |
|
(B) if one or more classes or groups of |
|
membership interests are established in or under the certificate of |
|
formation or company agreement, the names of the members of each |
|
specified [of each member of a] class or group [of membership
|
|
interests in the company]; |
|
(2) a copy of the company's federal, state, and local |
|
tax information or income tax returns for each of the six preceding |
|
tax years; |
|
(3) a copy of the company's certificate of formation, |
|
including any amendments to or restatements of the certificate of |
|
formation; |
|
(4) if the company agreement is in writing, a copy of |
|
the company agreement, including any amendments to or restatements |
|
of the company agreement; |
|
(5) an executed copy of any powers of attorney; |
|
(6) a copy of any document that establishes a class or |
|
group of members of the company as provided by the company |
|
agreement; and |
|
(7) except as provided by Subsection (b), a written |
|
statement of: |
|
(A) the amount of a cash contribution and a |
|
description and statement of the agreed value of any other |
|
contribution made or agreed to be made by each member; |
|
(B) the dates any additional contributions are to |
|
be made by a member; |
|
(C) any event the occurrence of which requires a |
|
member to make additional contributions; |
|
(D) any event the occurrence of which requires |
|
the winding up of the company; and |
|
(E) the date each member became a member of the |
|
company. |
|
(b) A limited liability company is not required to keep or |
|
make available at its principal office in the United States a |
|
written statement of the information required by Subsection (a)(7) |
|
if that information is stated in a written [the] company agreement. |
|
SECTION 102. Section 101.552, Business Organizations Code, |
|
is amended to read as follows: |
|
Sec. 101.552. APPROVAL OF VOLUNTARY WINDING UP, REVOCATION, |
|
CANCELLATION, OR REINSTATEMENT. (a) A majority vote of all of the |
|
[governing] members of a limited liability company or, if the |
|
limited liability company has no members, a majority vote of all of |
|
the managers of the company is required to approve: |
|
(1) a voluntary winding up of the company under |
|
Chapter 11; |
|
(2) a revocation of a voluntary decision to wind up the |
|
company under Section 11.151; or |
|
(3) [a cancellation of an event requiring the winding
|
|
up of the company under Section 11.152; or
|
|
[(4)] a reinstatement of a terminated company under |
|
Section 11.202. |
|
(b) The consent of all of the members of the limited |
|
liability company is required to approve a cancellation under |
|
Section 11.152 of an event requiring winding up specified in |
|
Section 11.051(1) or (3). |
|
(c) An event requiring winding up specified in Section |
|
11.056 may be canceled in accordance with Section 11.152(a) if the |
|
legal representative or successor of the last remaining member of |
|
the domestic limited liability company agrees to: |
|
(1) cancel the event requiring winding up and continue |
|
the company; and |
|
(2) become a member of the company effective as of the |
|
date of termination of the membership of the last remaining member |
|
of the company, or designate another person who agrees to become a |
|
member of the company effective as of the date of the termination. |
|
SECTION 103. Section 151.001(2), Business Organizations |
|
Code, is amended to read as follows: |
|
(2) "Distribution" means a transfer of property, |
|
including cash, from a partnership to[:
|
|
[(A)] a partner in the partner's capacity as a |
|
partner or the[; or
|
|
[(B)a] partner's transferee. |
|
SECTION 104. Section 152.002(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) A partnership agreement or the partners may not: |
|
(1) unreasonably restrict a partner's right of access |
|
to books and records under Section 152.212; |
|
(2) eliminate the duty of loyalty under Section |
|
152.205, except that the partners by agreement may identify |
|
specific types of activities or categories of activities that do |
|
not violate the duty of loyalty if the types or categories are not |
|
manifestly unreasonable; |
|
(3) eliminate the duty of care under Section 152.206, |
|
except that the partners by agreement may determine the standards |
|
by which the performance of the obligation is to be measured if the |
|
standards are not manifestly unreasonable; |
|
(4) eliminate the obligation of good faith under |
|
Section 152.204(b), except that the partners by agreement may |
|
determine the standards by which the performance of the obligation |
|
is to be measured if the standards are not manifestly unreasonable; |
|
(5) vary the power to withdraw as a partner under |
|
Section 152.501(b)(1), (7), or (8), except for the requirement that |
|
notice be in writing; |
|
(6) vary the right to expel a partner by a court in an |
|
event specified by Section 152.501(b)(5); |
|
(7) restrict rights of a third party under this |
|
chapter or the other partnership provisions, except for a |
|
limitation on an individual partner's liability in a limited |
|
liability partnership as provided by this chapter; |
|
(8) select a governing law not permitted under |
|
Sections 1.103 and 1.002(43)(C); or |
|
(9) except as provided in Subsections (c) and (d), |
|
waive or modify the following provisions of Title 1: |
|
(A) Chapter 1, if the provision is used to |
|
interpret a provision or to define a word or phrase contained in a |
|
section listed in this subsection; |
|
(B) Chapter 2, other than Sections 2.104(c)(2), |
|
2.104(c)(3), and 2.113; |
|
(C) Chapter 3, other than Subchapters C and E of |
|
that chapter; or |
|
(D) Chapters 4, 5, 10, 11, and 12, other than |
|
Sections 11.057(a), (b), (c)(1), (c)(3), and (d) [11.057(a)(1),
|
|
(2), (5), and (6) and 11.057(b)]. |
|
SECTION 105. Section 152.302(c), Business Organizations |
|
Code, is amended to read as follows: |
|
(c) A conveyance of real property by a partner on behalf of |
|
the partnership not otherwise binding on the partnership binds the |
|
partnership if the property has been conveyed by the grantee or a |
|
person claiming through the grantee to [be] a holder for value |
|
without knowledge that the partner exceeded that partner's |
|
authority in making the conveyance. |
|
SECTION 106. Section 152.304(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) Except as provided by Subsection (b) or Section |
|
152.801(a) [152.801(b)], all partners are liable jointly and |
|
severally for a debt or obligation of the partnership unless |
|
otherwise: |
|
(1) agreed by the claimant; or |
|
(2) provided by law. |
|
SECTION 107. Section 152.501(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) An event of withdrawal of a partner occurs on: |
|
(1) receipt by the partnership of notice of the |
|
partner's express will to withdraw as a partner on: |
|
(A) the date on which the notice is received; or |
|
(B) a later date specified by the notice; |
|
(2) an event specified in the partnership agreement as |
|
causing the partner's withdrawal; |
|
(3) the partner's expulsion as provided by the |
|
partnership agreement; |
|
(4) the partner's expulsion by vote of a |
|
majority-in-interest of the other partners if: |
|
(A) it is unlawful to carry on the partnership |
|
business with that partner; |
|
(B) there has been a transfer of all or |
|
substantially all of that partner's partnership interest, other |
|
than: |
|
(i) a transfer for security purposes that |
|
has not been foreclosed; or |
|
(ii) the substitution of a successor |
|
trustee or successor personal representative; |
|
(C) not later than the 90th day after the date on |
|
which the partnership notifies an entity partner, other than a |
|
nonfiling entity or foreign nonfiling entity partner, that it will |
|
be expelled because it has filed a certificate of termination or the |
|
equivalent, its existence has been involuntarily terminated or its |
|
charter has been revoked, or its right to conduct business has been |
|
terminated or suspended by the jurisdiction of its formation, if |
|
the certificate of termination or the equivalent is not revoked or |
|
its existence, charter, or right to conduct business is not |
|
reinstated; or |
|
(D) an event requiring a winding up has occurred |
|
with respect to a nonfiling entity or foreign nonfiling entity that |
|
is a partner; |
|
(5) the partner's expulsion by judicial decree, on |
|
application by the partnership or another partner, if the judicial |
|
decree determines that the partner: |
|
(A) engaged in wrongful conduct that adversely |
|
and materially affected the partnership business; |
|
(B) wilfully or persistently committed a |
|
material breach of: |
|
(i) the partnership agreement; or |
|
(ii) a duty owed to the partnership or the |
|
other partners under Sections 152.204-152.206; or |
|
(C) engaged in conduct relating to the |
|
partnership business that made it not reasonably practicable to |
|
carry on the business in partnership with that partner; |
|
(6) the partner's: |
|
(A) becoming a debtor in bankruptcy; |
|
(B) executing an assignment for the benefit of a |
|
creditor; |
|
(C) seeking, consenting to, or acquiescing in the |
|
appointment of a trustee, receiver, or liquidator of that partner |
|
or of all or substantially all of that partner's property; or |
|
(D) failing, not later than the 90th day after |
|
the appointment, to have vacated or stayed the appointment of a |
|
trustee, receiver, or liquidator of the partner or of all or |
|
substantially all of the partner's property obtained without the |
|
partner's consent or acquiescence, or not later than the 90th day |
|
after the date of expiration of a stay, failing to have the |
|
appointment vacated; |
|
(7) if a partner is an individual: |
|
(A) the partner's death; |
|
(B) the appointment of a guardian or general |
|
conservator for the partner; or |
|
(C) a judicial determination that the partner has |
|
otherwise become incapable of performing the partner's duties under |
|
the partnership agreement; |
|
(8) termination of a partner's existence; |
|
(9) if a partner has transferred all of the partner's |
|
partnership interest, redemption of the transferee's interest |
|
under Section 152.611; or |
|
(10) an agreement to continue the partnership under |
|
Section 11.057(d) [11.057(b)] if the partnership has received a |
|
notice from the partner under Section 11.057(d) [11.057(a)(6)] |
|
requesting that the partnership be wound up[; or
|
|
[(11)a conversion of the partnership if the partner:
|
|
[(A)did not consent to the conversion; and
|
|
[(B) failed to notify the partnership in writing
|
|
of the partner's desire not to withdraw within 60 days after the
|
|
later of:
|
|
[(i) the effective date of the conversion;
|
|
or
|
|
[(ii) the date the partner receives actual
|
|
notice of the conversion]. |
|
SECTION 108. Section 152.503(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) A partner's withdrawal is wrongful only if: |
|
(1) the withdrawal breaches an express provision of |
|
the partnership agreement; |
|
(2) in the case of a partnership that has a period of |
|
duration, is for a [definite term or] particular undertaking, or is |
|
required under its [for which the] partnership agreement to wind up |
|
the partnership [provides for winding up] on occurrence of a |
|
specified event, before the expiration of the period of duration |
|
[term], the completion of the undertaking, or the occurrence of the |
|
event, as appropriate: |
|
(A) the partner withdraws by express will; |
|
(B) the partner withdraws by becoming a debtor in |
|
bankruptcy; or |
|
(C) in the case of a partner that is not an |
|
individual, a trust other than a business trust, or an estate, the |
|
partner is expelled or otherwise withdraws because the partner |
|
wilfully dissolved or terminated; or |
|
(3) the partner is expelled by judicial decree under |
|
Section 152.501(b)(5). |
|
SECTION 109. Section 152.602(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) The redemption price of the partnership interest of a |
|
partner who wrongfully withdraws before the expiration of the |
|
partnership's period of duration [a definite term], the completion |
|
of a particular undertaking, or the occurrence of a specified event |
|
requiring a winding up of partnership business is the lesser of: |
|
(1) the fair value of the withdrawn partner's |
|
partnership interest on the date of withdrawal; or |
|
(2) the amount that the withdrawn partner would have |
|
received if an event requiring a winding up of partnership business |
|
had occurred at the time of the partner's withdrawal. |
|
SECTION 110. Section 152.608(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) A partner who wrongfully withdraws before the |
|
expiration of the partnership's period of duration [a definite
|
|
term], the completion of a particular undertaking, or the |
|
occurrence of a specified event requiring a winding up of |
|
partnership business is not entitled to receive any portion of the |
|
redemption price until the expiration of the period [term], the |
|
completion of the undertaking, or the occurrence of the specified |
|
event, as appropriate, unless the partner establishes to the |
|
satisfaction of a court that earlier payment will not cause undue |
|
hardship to the partnership. |
|
SECTION 111. Section 152.611(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) A partnership must redeem the partnership interest of a |
|
transferee for its fair value if: |
|
(1) the interest was transferred when: |
|
(A) the partnership had a period of duration that |
|
had [was for a definite term] not yet expired; |
|
(B) the partnership was for a particular |
|
undertaking not yet completed; or |
|
(C) the partnership agreement provided for |
|
winding up of the partnership business on a specified event that had |
|
not yet occurred; |
|
(2) the partnership's period of duration [definite
|
|
term of the partnership] has expired, the particular undertaking |
|
has been completed, or the specified event has occurred; and |
|
(3) the transferee makes a written demand for |
|
redemption. |
|
SECTION 112. Section 152.709, Business Organizations Code, |
|
is amended to read as follows: |
|
Sec. 152.709. CANCELLATION OR REVOCATION OF EVENT REQUIRING |
|
WINDING UP; CONTINUATION OF PARTNERSHIP. (a) If a partnership has |
|
a period of duration, is for a particular undertaking, or is |
|
required under its partnership agreement to wind up the partnership |
|
on occurrence of a specified event, all of the partners in the |
|
partnership may cancel under Section 11.152 an event requiring a |
|
winding up specified in Section 11.051(1) or (3), or Section |
|
11.057(c)(1), by agreeing [all the partners in a partnership for a
|
|
definite term or for a particular undertaking or for which the
|
|
partnership agreement provides for winding up on a specified event
|
|
agree] to continue the partnership business notwithstanding the |
|
expiration of the partnership's period of duration [term], the |
|
completion of the undertaking, or the occurrence of the event, as |
|
appropriate, other than the withdrawal of a partner. On reaching |
|
that agreement, the event requiring a winding up is canceled, the |
|
partnership is continued, and the partnership agreement is |
|
considered amended to provide that the expiration, the completion, |
|
or the occurrence of the event did not result in an event requiring |
|
[the] winding up of the partnership [business]. |
|
(b) A continuation of the business for 90 days by the |
|
partners or those who habitually acted in the business during the |
|
partnership's period of duration [term] or the undertaking or |
|
preceding the event, without a settlement or liquidation of the |
|
partnership business and without objection from a partner, is prima |
|
facie evidence of agreement by all partners to continue the |
|
business under Subsection (a). |
|
(c) All of the partners of a partnership, by agreeing to |
|
continue the partnership, may cancel under Section 11.152 an event |
|
requiring winding up specified in Section 11.057(d) that arises |
|
from a request to wind up from a partner. [The continuation of the
|
|
business by the other partners or by those who habitually acted in
|
|
the business before the notice under Section 11.057(b), other than
|
|
the partner giving the notice, without any settlement or
|
|
liquidation of the partnership business, is prima facie evidence of
|
|
an agreement to continue the partnership under Section 11.057(b).] |
|
(d) To approve a revocation under Section 11.151 by a |
|
partnership of a voluntary decision to wind up pursuant to the |
|
express will of all the partners as specified in Section 11.057(b) |
|
[11.057(a)(2) or (3)], prior to completion of the winding up |
|
process, all the partners must agree in writing to revoke the |
|
voluntary decision to wind up and to continue the business of the |
|
partnership. |
|
(e) To approve a revocation under Section 11.151 by a |
|
partnership of a voluntary decision to wind up pursuant to the |
|
express will of a majority-in-interest of the partners as specified |
|
in Section 11.057(a) [11.057(a)(1)], prior to completion of the |
|
winding up process, a majority-in-interest of the partners must |
|
agree in writing to revoke the voluntary decision to wind up and to |
|
continue the business of the partnership. |
|
(f) All of the partners of a partnership, by agreeing to |
|
continue the partnership, may cancel under Section 11.152 an event |
|
requiring winding up specified in Section 11.057(c)(3) that arises |
|
from the sale of all or substantially all of the property of the |
|
partnership. |
|
SECTION 113. Section 152.901(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) A foreign limited liability partnership may not be |
|
denied registration because of a difference between the laws of the |
|
jurisdiction [state] under which the partnership is formed and the |
|
laws of this state. |
|
SECTION 114. Section 152.902, Business Organizations Code, |
|
is amended to read as follows: |
|
Sec. 152.902. NAME. The name of a foreign limited |
|
liability partnership must: |
|
(1) satisfy the requirements of the jurisdiction |
|
[state] of formation; and |
|
(2) comply with Section 5.063. |
|
SECTION 115. The heading to Section 152.905, Business |
|
Organizations Code, is amended to read as follows: |
|
Sec. 152.905. REGISTRATION PROCEDURE [STATEMENT OF FOREIGN
|
|
QUALIFICATION]. |
|
SECTION 116. Sections 152.905(c) and (e), Business |
|
Organizations Code, are amended to read as follows: |
|
(c) A partnership is registered as a foreign limited |
|
liability partnership on: |
|
(1) the date on which a completed initial or renewal |
|
application for registration [statement of foreign qualification] |
|
is filed with the secretary of state in accordance with Chapter 4; |
|
or |
|
(2) a later date specified in the application |
|
[statement]. |
|
(e) The registration of a foreign limited liability |
|
partnership is effective until the first anniversary of the date |
|
after the date of registration or a later effective date, unless the |
|
registration [statement] is: |
|
(1) withdrawn or revoked at an earlier time; or |
|
(2) renewed in accordance with Section 152.908. |
|
SECTION 117. Section 152.908(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) The renewal application must contain: |
|
(1) current information required for an initial |
|
application for registration [statement of qualification]; and |
|
(2) the most recent date of registration of the |
|
partnership. |
|
SECTION 118. The heading to Section 152.910, Business |
|
Organizations Code, is amended to read as follows: |
|
Sec. 152.910. EFFECT OF FAILURE TO REGISTER [QUALIFY]. |
|
SECTION 119. Section 152.914(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) If it appears to the secretary of state that, with |
|
respect to a foreign limited liability partnership, a circumstance |
|
described by Subsection (a) exists, the secretary of state shall |
|
provide notice to the partnership in the same manner and to the same |
|
extent as notice is required to be provided to a foreign filing |
|
entity under Sections 9.101 [9.101(a)] and 9.102 [9.102(a)]. |
|
SECTION 120. Section 153.052(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) A certificate of formation may be amended to state the |
|
name, mailing address, and street address of the business or |
|
residence of each person winding up the limited partnership's |
|
affairs if, after an event requiring the winding up of a limited |
|
partnership but before the limited partnership is reconstituted or |
|
a certificate of termination is filed as provided by Section 11.101 |
|
[153.451]: |
|
(1) the certificate of formation has been amended to |
|
reflect the withdrawal of all general partners; or |
|
(2) a person who is not shown on the certificate of |
|
formation as a general partner is carrying out the winding up of a |
|
limited partnership's affairs. |
|
SECTION 121. Section 153.103, Business Organizations Code, |
|
is amended to read as follows: |
|
Sec. 153.103. ACTIONS NOT CONSTITUTING PARTICIPATION IN |
|
BUSINESS FOR LIABILITY PURPOSES. For purposes of this section and |
|
Sections 153.102, 153.104, and 153.105, a limited partner does not |
|
participate in the control of the business because the limited |
|
partner has or has acted in one or more of the following capacities |
|
or possesses or exercises one or more of the following powers: |
|
(1) acting as: |
|
(A) a contractor for or an agent or employee of |
|
the limited partnership; |
|
(B) a contractor for or an agent or employee of a |
|
general partner; |
|
(C) an officer, director, or stockholder of a |
|
corporate general partner; |
|
(D) a partner of a partnership that is a general |
|
partner of the limited partnership; or |
|
(E) a member or manager of a limited liability |
|
company that is a general partner of the limited partnership; |
|
(2) acting in a capacity similar to that described in |
|
Subdivision (1) with any other person that is a general partner of |
|
the limited partnership; |
|
(3) consulting with or advising a general partner on |
|
any matter, including the business of the limited partnership; |
|
(4) acting as surety, guarantor, or endorser for the |
|
limited partnership, guaranteeing or assuming one or more specific |
|
obligations of the limited partnership, or providing collateral for |
|
borrowings of the limited partnership; |
|
(5) calling, requesting, attending, or participating |
|
in a meeting of the partners or the limited partners; |
|
(6) winding up the business of a limited partnership |
|
under Chapter 11 and Subchapter K of this chapter; |
|
(7) taking an action required or permitted by law to |
|
bring, pursue, settle, or otherwise terminate a derivative action |
|
in the right of the limited partnership; |
|
(8) serving on a committee of the limited partnership |
|
or the limited partners; or |
|
(9) proposing, approving, or disapproving, by vote or |
|
otherwise, one or more of the following matters: |
|
(A) the [dissolution or] winding up or |
|
termination of the limited partnership; |
|
(B) an election to reconstitute the limited |
|
partnership or continue the business of the limited partnership; |
|
(C) the sale, exchange, lease, mortgage, |
|
assignment, pledge, or other transfer of, or granting of a security |
|
interest in, an asset of the limited partnership; |
|
(D) the incurring, renewal, refinancing, or |
|
payment or other discharge of indebtedness by the limited |
|
partnership; |
|
(E) a change in the nature of the business of the |
|
limited partnership; |
|
(F) the admission, removal, or retention of a |
|
general partner; |
|
(G) the admission, removal, or retention of a |
|
limited partner; |
|
(H) a transaction or other matter involving an |
|
actual or potential conflict of interest; |
|
(I) an amendment to the partnership agreement or |
|
certificate of formation; |
|
(J) if the limited partnership is qualified as an |
|
investment company under the federal Investment Company Act of 1940 |
|
(15 U.S.C. Section 80a-1 et seq.), as amended, any matter required |
|
by that Act or the rules and regulations of the Securities and |
|
Exchange Commission under that Act, to be approved by the holders of |
|
beneficial interests in an investment company, including: |
|
(i) electing directors or trustees of the |
|
investment company; |
|
(ii) approving or terminating an investment |
|
advisory or underwriting contract; |
|
(iii) approving an auditor; and |
|
(iv) acting on another matter that that Act |
|
requires to be approved by the holders of beneficial interests in |
|
the investment company; |
|
(K) indemnification of a general partner under |
|
Chapter 8 or otherwise; |
|
(L) any other matter stated in the partnership |
|
agreement; |
|
(M) the exercising of a right or power granted or |
|
permitted to limited partners under this code and not specifically |
|
enumerated in this section; or |
|
(N) the merger or conversion of a limited |
|
partnership. |
|
SECTION 122. Section 153.155(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) A person ceases to be a general partner of a limited |
|
partnership on the occurrence of one or more of the following events |
|
of withdrawal: |
|
(1) the general partner withdraws as a general partner |
|
from the limited partnership as provided by Subsection (b); |
|
(2) the general partner ceases to be a general partner |
|
of the limited partnership as provided by Section 153.252(b); |
|
(3) the general partner is removed as a general |
|
partner in accordance with the partnership agreement; |
|
(4) unless otherwise provided by a written partnership |
|
agreement, or with the written consent of all partners, the general |
|
partner: |
|
(A) makes a general assignment for the benefit of |
|
creditors; |
|
(B) files a voluntary bankruptcy petition; |
|
(C) becomes the subject of an order for relief or |
|
is declared insolvent in a federal or state bankruptcy or |
|
insolvency proceeding; |
|
(D) files a petition or answer seeking for the |
|
general partner a reorganization, arrangement, composition, |
|
readjustment, liquidation, winding up, termination, dissolution, |
|
or similar relief under law; |
|
(E) files a pleading admitting or failing to |
|
contest the material allegations of a petition filed against the |
|
general partner in a proceeding of the type described by Paragraphs |
|
(A)-(D); or |
|
(F) seeks, consents to, or acquiesces in the |
|
appointment of a trustee, receiver, or liquidator of the general |
|
partner or of all or a substantial part of the general partner's |
|
properties; |
|
(5) unless otherwise provided by a written partnership |
|
agreement or with the written consent of all partners, the |
|
expiration of: |
|
(A) 120 days after the date of the commencement |
|
of a proceeding against the general partner seeking reorganization, |
|
arrangement, composition, readjustment, liquidation, dissolution, |
|
or similar relief under law if the proceeding has not been |
|
previously dismissed; |
|
(B) 90 days after the date of the appointment, |
|
without the general partner's consent, of a trustee, receiver, or |
|
liquidator of the general partner or of all or a substantial part of |
|
the general partner's properties if the appointment has not |
|
previously been vacated or stayed; or |
|
(C) 90 days after the date of expiration of a |
|
stay, if the appointment has not previously been vacated; |
|
(6) the death of a general partner; |
|
(7) a court adjudicating a general partner who is an |
|
individual mentally incompetent to manage the general partner's |
|
person or property; |
|
(8) unless otherwise provided by a written partnership |
|
agreement or with the written consent of all partners, the |
|
commencement of winding up activities intended to conclude in the |
|
termination of a trust that is a general partner, but not merely the |
|
substitution of a new trustee; |
|
(9) unless otherwise provided by a written partnership |
|
agreement or with the written consent of all partners, the |
|
commencement of winding up activities of a separate partnership |
|
that is a general partner; |
|
(10) unless otherwise provided by a written |
|
partnership agreement or with the written consent of all partners, |
|
the: |
|
(A) filing of a certificate of termination or its |
|
equivalent for an entity, other than a nonfiling entity or a foreign |
|
nonfiling entity, that is a general partner; or |
|
(B) termination or revocation of the certificate |
|
of formation or its equivalent of an entity, other than a nonfiling |
|
entity or a foreign nonfiling entity, that is a general partner and |
|
the expiration of 90 days after the date of notice to the entity of |
|
termination or revocation without a reinstatement of its |
|
certificate of formation or its equivalent; or |
|
(11) the distribution by the fiduciary of an estate |
|
that is a general partner of the estate's entire interest in the |
|
limited partnership. |
|
SECTION 123. Section 153.157, Business Organizations Code, |
|
is amended to read as follows: |
|
Sec. 153.157. WITHDRAWAL OF GENERAL PARTNER IN VIOLATION OF |
|
PARTNERSHIP AGREEMENT. Unless otherwise provided by the |
|
partnership agreement, a withdrawal by a general partner of a |
|
partnership having a period of duration [for a definite term] or for |
|
a particular undertaking before the expiration of that period |
|
[term] or completion of that undertaking is a breach of the |
|
partnership agreement. |
|
SECTION 124. Section 153.251(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) Except as otherwise provided by the partnership |
|
agreement, an assignment of a partnership interest: |
|
(1) does not require the winding up of [dissolve] a |
|
limited partnership; |
|
(2) does not entitle the assignee to become, or to |
|
exercise rights or powers of, a partner; and |
|
(3) entitles the assignee to be allocated income, |
|
gain, loss, deduction, credit, or similar items and to receive |
|
distributions to which the assignor was entitled to the extent |
|
those items are assigned. |
|
SECTION 125. Section 153.256, Business Organizations Code, |
|
is amended to read as follows: |
|
Sec. 153.256. PARTNER'S PARTNERSHIP INTEREST SUBJECT TO |
|
CHARGING ORDER [CHARGE IN PAYMENT OF JUDGMENT CREDITOR]. (a) On |
|
application [to a court] by a judgment creditor of a partner or of |
|
any other owner of a partnership interest, a [the] court having |
|
jurisdiction may[:
|
|
[(1)] charge the partnership interest of the judgment |
|
debtor to satisfy the judgment [partner or other owner with payment
|
|
of the unsatisfied amount of the judgment, with interest;
|
|
[(2) appoint a receiver for the debtor partner's share
|
|
of the partnership's profits and other money payable or that
|
|
becomes payable to the debtor partner with respect to the limited
|
|
partnership; and
|
|
[(3) make other orders, directions, and inquiries that
|
|
the circumstances of the case require]. |
|
(b) To the extent that the partnership interest is charged |
|
in the manner provided by Subsection (a), the judgment creditor has |
|
only the right to receive any distribution to which the judgment |
|
debtor would otherwise be entitled in respect [rights of an
|
|
assignee] of the partnership interest. |
|
(c) A charging order constitutes a lien on the judgment |
|
debtor's [The] partnership interest [charged may be:
|
|
[(1)redeemed at any time before foreclosure; or
|
|
[(2) in case of a sale directed by the court, and
|
|
without constituting an event requiring winding up, purchased:
|
|
[(A) by one or more of the general partners with
|
|
separate property of any general partner; or
|
|
[(B) with respect to partnership property, by one
|
|
or more of the general partners whose interests are not charged, on
|
|
the consent of all general partners whose interests are not charged
|
|
and a majority in interest of the limited partners, excluding
|
|
limited partnership interests held by a general partner whose
|
|
interest is charged]. |
|
(d) The entry of a charging order is the [remedies provided
|
|
by Subsection (a) are] exclusive remedy by which a judgment |
|
creditor of a partner or of any other owner of a partnership |
|
interest may satisfy a judgment out of the judgment debtor's |
|
partnership interest [of other remedies that may exist, including
|
|
remedies under laws of this state applicable to partnerships
|
|
without limited partners]. |
|
(e) This section does not deprive a partner or other owner |
|
of a partnership interest of a right under exemption laws with |
|
respect to the judgment debtor's partnership interest. |
|
(f) A creditor of a partner or of any other owner of a |
|
partnership interest does not have the right to obtain possession |
|
of, or otherwise exercise legal or equitable remedies with respect |
|
to, the property of the limited partnership. |
|
SECTION 126. Section 153.501, Business Organizations Code, |
|
is amended to read as follows: |
|
Sec. 153.501. CANCELLATION OR REVOCATION OF EVENT REQUIRING |
|
WINDING UP; CONTINUATION OF BUSINESS [WITHOUT WINDING UP]. (a) |
|
The limited partnership may cancel under Section 11.152 an event |
|
requiring winding up arising from the expiration of its period of |
|
duration as specified in Section 11.051(1) or from the occurrence |
|
of an event specified in its governing documents as specified in |
|
Section 11.051(3) [11.051(1) or (3)] if, not later than the 90th day |
|
after the event, all remaining partners, or another group or |
|
percentage of partners as specified by the partnership agreement, |
|
agree in writing to continue the business of the limited |
|
partnership. |
|
(b) The limited partnership may cancel under Section 11.152 |
|
[revoke] an event requiring winding up arising from an event of |
|
withdrawal of a general partner as specified in Section 11.058(b) |
|
[11.058(2)] if: |
|
(1) there remains at least one general partner and the |
|
partnership agreement permits the business of the limited |
|
partnership to be carried on by the remaining general partners and |
|
those remaining general partners carry on the business; or |
|
(2) not later than one year after the event, all |
|
remaining partners, or another group or percentage of partners |
|
specified in the partnership agreement: |
|
(A) agree in writing to continue the business of |
|
the limited partnership in writing; and |
|
(B) to the extent that they desire or if there are |
|
no remaining general partners, agree to the appointment of one or |
|
more new general partners. |
|
(c) The appointment of one or more new general partners |
|
under Subsection (b)(2)(B) is effective from the date of |
|
withdrawal. |
|
(d) To approve a revocation under Section 11.151 by a |
|
limited partnership of a voluntary decision to wind up as specified |
|
in Section 11.058(a) [11.058(1)], prior to filing the certificate |
|
of termination required by Section 11.101 [153.451], all remaining |
|
partners, or another group or percentage of partners as specified |
|
by the partnership agreement, must agree in writing to revoke the |
|
voluntary decision to wind up and continue the business of the |
|
limited partnership. |
|
(e) The limited partnership may cancel under Section 11.152 |
|
an event requiring winding up arising when there are no limited |
|
partners in the limited partnership, as specified in Section |
|
11.058(c), if, not later than the first anniversary of the date of |
|
the event requiring winding up: |
|
(1) the legal representative or successor of the last |
|
remaining limited partner and all of the general partners agree to: |
|
(A) continue the business of the limited |
|
partnership; and |
|
(B) admit the legal representative or successor |
|
of the last remaining limited partner, or the person's nominee or |
|
designee, to the limited partnership as a limited partner, |
|
effective as of the date the event that caused the last remaining |
|
limited partner to cease to be a limited partner occurred; or |
|
(2) a limited partner is admitted to the limited |
|
partnership in the manner provided by the partnership agreement, |
|
effective as of the date the event that caused the last remaining |
|
limited partner to cease to be a limited partner occurred. |
|
SECTION 127. Section 153.503(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) After the occurrence of an event requiring [the] winding |
|
up of a limited partnership and until the filing of a certificate of |
|
termination as provided by Section 11.101 [Sections 153.451 and
|
|
153.452], unless a written partnership agreement provides |
|
otherwise, a person winding up the limited partnership's business |
|
in the name of and on behalf of the limited partnership may take the |
|
actions specified in Sections 11.052 and 11.053. |
|
SECTION 128. Subchapter K, Chapter 153, Business |
|
Organizations Code, is amended by adding Section 153.505 to read as |
|
follows: |
|
Sec. 153.505. APPROVAL OF REINSTATEMENT. To approve a |
|
reinstatement of a limited partnership under Section 11.202, all of |
|
the remaining partners, or another group or percentage of partners |
|
as specified by the partnership agreement, must agree in writing to |
|
reinstate and continue the business of the limited partnership. |
|
SECTION 129. Section 153.551(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) A domestic limited partnership shall maintain the |
|
following records in its principal office in the United States or |
|
make the records available in that office not later than the fifth |
|
day after the date on which a written request under Section |
|
153.552(a) is received: |
|
(1) a current list that states: |
|
(A) the name and mailing address of each partner, |
|
separately identifying in alphabetical order the general partners |
|
and the limited partners; |
|
(B) the last known street address of the business |
|
or residence of each general partner; |
|
(C) the percentage or other interest in the |
|
partnership owned by each partner; and |
|
(D) if one or more classes or groups are |
|
established under the partnership agreement, the names of the |
|
partners who are members of each specified class or group; |
|
(2) a copy of: |
|
(A) the limited partnership's federal, state, |
|
and local information or income tax returns for each of the |
|
partnership's six most recent tax years; |
|
(B) the partnership agreement and certificate of |
|
formation; and |
|
(C) all amendments or restatements; |
|
(3) copies of any document that creates, in the manner |
|
provided by the partnership agreement, classes or groups of |
|
partners; |
|
(4) an executed copy of any powers of attorney under |
|
which the partnership agreement, certificate of formation, and all |
|
amendments or restatements to the agreement and certificate have |
|
been executed; |
|
(5) unless contained in the written partnership |
|
agreement, a written statement of: |
|
(A) the amount of the cash contribution and a |
|
description and statement of the agreed value of any other |
|
contribution made by each partner; |
|
(B) the amount of the cash contribution and a |
|
description and statement of the agreed value of any other |
|
contribution that the partner has agreed to make in the future as an |
|
additional contribution; |
|
(C) the date on which additional contributions |
|
are to be made or the date of events requiring additional |
|
contributions to be made; |
|
(D) the events requiring the winding up of the |
|
limited partnership [to be dissolved and its affairs wound up]; and |
|
(E) the date on which each partner in the limited |
|
partnership became a partner; and |
|
(6) books and records of the accounts of the limited |
|
partnership. |
|
SECTION 130. The heading to Section 153.553, Business |
|
Organizations Code, is amended to read as follows: |
|
Sec. 153.553. EXECUTION OF [CERTAIN] FILINGS. |
|
SECTION 131. Section 153.553, Business Organizations Code, |
|
is amended by amending Subsection (a) and adding Subsection (a-1) |
|
to read as follows: |
|
(a) Except as provided by Subsection (a-1), a filing |
|
instrument [Each certificate] required by this code to be filed by a |
|
limited partnership with the secretary of state must be signed by at |
|
least one general partner. |
|
(a-1) The following certificates shall be executed as |
|
follows: |
|
(1) an initial certificate of formation must be signed |
|
as provided in Section 3.004(b)(1)[, except for an initial
|
|
certificate of formation signed by a person under Section
|
|
153.106(1)]; |
|
(2) a certificate of amendment or restated certificate |
|
of formation must be signed by at least one general partner and by |
|
each other general partner designated in the certificate of |
|
amendment as a new general partner, unless signed and filed by a |
|
person under Section 153.052(b) or (c), [153.052(c), or
|
|
153.106(1),] but the certificate of amendment need not be signed by |
|
a withdrawing general partner; |
|
(3) a certificate of termination must be signed by all |
|
general partners participating in the winding up of the limited |
|
partnership's business or, if no general partners are winding up |
|
the limited partnership's business, by all nonpartner liquidators |
|
or, if the limited partners are winding up the limited |
|
partnership's business, by a majority-in-interest of the limited |
|
partners; |
|
(4) a certificate of merger, conversion, or exchange |
|
filed on behalf of a domestic limited partnership must be signed as |
|
provided by Chapter 10; and |
|
(5) a certificate filed under Subchapter G, Chapter |
|
10, [Section 10.251] must be signed by the person designated by the |
|
court[; and
|
|
[(6) a certificate of correction must be signed by at
|
|
least one general partner]. |
|
SECTION 132. Section 200.261(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) In this section, a "fundamental action" means: |
|
(1) an amendment of a certificate of formation, |
|
including an amendment required for cancellation of an event |
|
requiring winding up in accordance with Section 11.152(b); |
|
(2) a voluntary winding up under Chapter 11; |
|
(3) a revocation of a voluntary decision to wind up |
|
under Section 11.151; |
|
(4) a cancellation of an event requiring winding up |
|
under Section 11.152(a) [11.152]; or |
|
(5) a reinstatement under Section 11.202. |
|
SECTION 133. Section 251.403, Business Organizations Code, |
|
is amended to read as follows: |
|
Sec. 251.403. DISTRIBUTION OF ASSETS. Subject to Sections |
|
11.052 and 11.053(a), the trustees designated under Section 251.401 |
|
shall distribute the cooperative association's assets in the |
|
following order: |
|
(1) by returning the par value of the investors' |
|
capital to investors; |
|
(2) by returning the amounts paid on subscriptions to |
|
subscribers for invested capital; |
|
(3) by returning the amount of patronage dividends |
|
credited to patrons' accounts to the patrons; |
|
(4) by returning to members their membership capital; |
|
and |
|
(5) by distributing any surplus in the manner provided |
|
by the certificate of formation: |
|
(A) among the patrons who have been members or |
|
subscribers of the cooperative association during the six years |
|
preceding the date of termination [dissolution], on the basis of |
|
patronage during that period; |
|
(B) as a gift to any cooperative association or |
|
other nonprofit enterprise designated in the certificate of |
|
formation; or |
|
(C) by a combination of both methods of |
|
distribution. |
|
SECTION 134. Section 301.001(c), Business Organizations |
|
Code, is amended to read as follows: |
|
(c) This title does not apply to a partnership, including a |
|
[partnerships or] limited liability partnership [partnerships]. |
|
SECTION 135. Section 301.003(3), Business Organizations |
|
Code, is amended to read as follows: |
|
(3) "Professional corporation" means a corporation |
|
that is: |
|
(A) formed for the purpose of providing a |
|
professional service, other than the practice of medicine by |
|
physicians, surgeons, or other doctors of medicine, that by law a |
|
corporation governed by Title 2 is prohibited from rendering; and |
|
(B) governed as a professional entity under this |
|
title. |
|
SECTION 136. Section 301.006(b), Business Organizations |
|
Code, is amended to read as follows: |
|
(b) A professional entity or foreign professional entity, |
|
other than a professional association or foreign professional |
|
association, may provide a professional service in this state only |
|
through owners, managerial officials, employees, or agents, each of |
|
whom is an authorized person. |
|
SECTION 137. Section 303.006, Business Organizations Code, |
|
is amended to read as follows: |
|
Sec. 303.006. EXECUTION OF CERTIFICATE OF TERMINATION |
|
[WINDING UP AND TERMINATION OF PROFESSIONAL CORPORATION]. (a) |
|
Except as provided by Subsection (b), a certificate of termination |
|
filed in accordance with Chapter 11 must be executed by an officer |
|
of the professional corporation on behalf of the corporation. |
|
(b) If a professional corporation does not have any living |
|
officer, the certificate of termination must be executed by a |
|
director of the corporation. If the professional corporation does |
|
not have any living director, the certificate of termination must |
|
be executed by the legal representative of the last living |
|
director [A shareholder of a professional corporation may not wind
|
|
up the affairs of and terminate the corporation independently of
|
|
other shareholders] of the corporation. |
|
SECTION 138. Section 402.001(a), Business Organizations |
|
Code, is amended to read as follows: |
|
(a) On or after the effective date of this code, this code |
|
applies to: |
|
(1) a domestic entity formed on or after the effective |
|
date of this code; |
|
(2) a domestic entity that is a converted entity |
|
resulting from a conversion that takes effect on or after the |
|
effective date of this code; |
|
(3) a foreign filing entity, or other foreign entity, |
|
that is not registered with the secretary of state to transact |
|
business in this state before the effective date of this code; and |
|
(4) [(3)] a foreign nonfiling entity, including a |
|
foreign limited liability partnership. |
|
SECTION 139. Section 402.003, Business Organizations Code, |
|
is amended to read as follows: |
|
Sec. 402.003. EARLY ADOPTION OF CODE BY EXISTING DOMESTIC |
|
ENTITY. [(a)] A domestic entity formed before the effective date |
|
of this code may voluntarily elect to adopt and become subject to |
|
this code by: |
|
(1) adopting the code by complying with the procedures |
|
for approval, under prior law and [to amend] its governing |
|
documents, of an amendment to: |
|
(A) its articles of incorporation, with respect |
|
to a corporation or cooperative association; |
|
(B) its regulations, with respect to a limited |
|
liability company; |
|
(C) its articles of association, with respect to |
|
a professional association; |
|
(D) its declaration of trust, with respect to a |
|
real estate investment trust; |
|
(E) its partnership agreement, with respect to a |
|
partnership; or |
|
(F) its primary governing document, with respect |
|
to another type of domestic entity; |
|
(2) if any of its governing documents, including its |
|
certificate of formation, do not comply with this code, complying |
|
with the procedures, under prior law and [adopt this code and, if
|
|
necessary, to cause] its governing documents, to amend the |
|
noncomplying governing documents to comply with this code, |
|
including filing with the filing officer in accordance with Chapter |
|
4 a certificate of amendment to cause its certificate of formation |
|
to comply with this code; and |
|
(3) [(2)] if the domestic entity is a filing entity, |
|
filing with the filing officer [secretary of state] in accordance |
|
with Chapter 4[:
|
|
[(A)] a statement that the filing entity is |
|
electing to adopt this code[; and
|
|
[(B) if necessary, a certificate of amendment
|
|
that would cause its certificate of formation to comply with this
|
|
code.
|
|
[(b) If amendments to the governing documents of a domestic
|
|
entity that are necessary to conform the governing documents to
|
|
this code would not require, under prior law, the vote or consent of
|
|
the owners or members of the entity, this code and any amendment to
|
|
the governing documents required by this section may be adopted by
|
|
the governing authority only in the manner provided for an
|
|
amendment of the particular governing document]. |
|
SECTION 140. Article 2.32, Texas Business Corporation Act, |
|
is amended by amending Section A and adding Section E to read as |
|
follows: |
|
A. The board of directors of a corporation shall consist of |
|
one or more members. The number of directors shall be fixed by, or |
|
in the manner provided in, the articles of incorporation or the |
|
bylaws, except as to the number constituting the initial board of |
|
directors, which number shall be fixed by the articles of |
|
incorporation. The number of directors may be increased or |
|
decreased from time to time by amendment to, or in the manner |
|
provided in, the articles of incorporation or the bylaws, but no |
|
decrease shall have the effect of shortening the term of any |
|
incumbent director. In the absence of a bylaw or a provision of the |
|
articles of incorporation fixing the number of directors or |
|
providing for the manner in which the number of directors shall be |
|
fixed, the number of directors shall be the same as the number |
|
constituting the initial board of directors as fixed by the |
|
articles of incorporation. The names and addresses of the members |
|
of the initial board of directors shall be stated in the articles of |
|
incorporation. [Unless otherwise provided by the articles of
|
|
incorporation or the bylaws, a director may resign at any time by
|
|
giving notice in writing or by electronic transmission to the
|
|
corporation.] Absent resignation or removal in accordance with the |
|
provisions of the bylaws or the articles of incorporation, such |
|
persons shall hold office until the first annual meeting of |
|
shareholders, and until their successors shall have been elected |
|
and qualified. At the first annual meeting of shareholders and at |
|
each annual meeting thereafter, the holders of shares entitled to |
|
vote in the election of directors shall elect directors to hold |
|
office until the next succeeding annual meeting, except in case of |
|
the classification of directors as permitted by this Act. |
|
E. Unless otherwise provided by the articles of |
|
incorporation or the bylaws, a director may resign at any time by |
|
giving notice in writing or by electronic transmission to the |
|
corporation. The director's resignation takes effect on the date |
|
the notice is received by the corporation, unless the notice |
|
prescribes a later effective date or states that the resignation |
|
takes effect on the occurrence of a future event, such as the |
|
director's failure to receive a specified vote for reelection as a |
|
director. If the director's resignation is to take effect on a |
|
later date or on the occurrence of a future event, the resignation |
|
takes effect on the later date or when the event occurs. The |
|
director's resignation is irrevocable when it takes effect. The |
|
director's resignation is revocable before it takes effect unless |
|
the notice of resignation expressly states that it is irrevocable. |
|
SECTION 141. Section A, Article 5.12, Texas Business |
|
Corporation Act, is amended to read as follows: |
|
A. Any shareholder of any domestic corporation who has the |
|
right to dissent from any of the corporate actions referred to in |
|
Article 5.11 of this Act may exercise that right to dissent only by |
|
complying with the following procedures: |
|
(1)(a) With respect to proposed corporate action that |
|
is submitted to a vote of shareholders at a meeting, the shareholder |
|
shall file with the corporation, prior to the meeting, a written |
|
objection to the action, setting out that the shareholder's right |
|
to dissent will be exercised if the action is effective and giving |
|
the shareholder's address, to which notice thereof shall be |
|
delivered or mailed in that event. If the action is effected and |
|
the shareholder shall not have voted in favor of the action, the |
|
corporation, in the case of action other than a merger, or the |
|
surviving or new corporation (foreign or domestic) or other entity |
|
that is liable to discharge the shareholder's right of dissent, in |
|
the case of a merger, shall, within ten (10) days after the action |
|
is effected, deliver or mail to the shareholder written notice that |
|
the action has been effected, and the shareholder may, within ten |
|
(10) days from the delivery or mailing of the notice, make written |
|
demand on the existing, surviving, or new corporation (foreign or |
|
domestic) or other entity, as the case may be, for payment of the |
|
fair value of the shareholder's shares. The fair value of the |
|
shares shall be the value thereof as of the day immediately |
|
preceding the meeting, excluding any appreciation or depreciation |
|
in anticipation of the proposed action. In computing the fair value |
|
of the shares under this article, consideration must be given to the |
|
value of the corporation as a going concern without including in the |
|
computation of value any [payment for a] control premium, any [or] |
|
minority discount, or any discount for lack of marketability. If |
|
the corporation has different classes or series of shares, the |
|
relative rights and preferences of and limitations placed on the |
|
class or series of shares, other than relative voting rights, held |
|
by the dissenting shareholder must be taken into account in the |
|
computation of value [other than a discount attributable to the
|
|
type of share held by the dissenting shareholder and any limitation
|
|
placed on the rights and preference of those shares]. The demand |
|
shall state the number and class of the shares owned by the |
|
shareholder and the fair value of the shares as estimated by the |
|
shareholder. Any shareholder failing to make demand within the ten |
|
(10) day period shall be bound by the action. |
|
(b) With respect to proposed corporate action |
|
that is approved pursuant to Section A of Article 9.10 of this Act, |
|
the corporation, in the case of action other than a merger, and the |
|
surviving or new corporation (foreign or domestic) or other entity |
|
that is liable to discharge the shareholder's right of dissent, in |
|
the case of a merger, shall, within ten (10) days after the date the |
|
action is effected, mail to each shareholder of record as of the |
|
effective date of the action notice of the fact and date of the |
|
action and that the shareholder may exercise the shareholder's |
|
right to dissent from the action. The notice shall be accompanied |
|
by a copy of this Article and any articles or documents filed by the |
|
corporation with the Secretary of State to effect the action. If |
|
the shareholder shall not have consented to the taking of the |
|
action, the shareholder may, within twenty (20) days after the |
|
mailing of the notice, make written demand on the existing, |
|
surviving, or new corporation (foreign or domestic) or other |
|
entity, as the case may be, for payment of the fair value of the |
|
shareholder's shares. The fair value of the shares shall be the |
|
value thereof as of the date the written consent authorizing the |
|
action was delivered to the corporation pursuant to Section A of |
|
Article 9.10 of this Act, excluding any appreciation or |
|
depreciation in anticipation of the action. The demand shall state |
|
the number and class of shares owned by the dissenting shareholder |
|
and the fair value of the shares as estimated by the shareholder. |
|
Any shareholder failing to make demand within the twenty (20) day |
|
period shall be bound by the action. |
|
(2) Within twenty (20) days after receipt by the |
|
existing, surviving, or new corporation (foreign or domestic) or |
|
other entity, as the case may be, of a demand for payment made by a |
|
dissenting shareholder in accordance with Subsection (1) of this |
|
Section, the corporation (foreign or domestic) or other entity |
|
shall deliver or mail to the shareholder a written notice that shall |
|
either set out that the corporation (foreign or domestic) or other |
|
entity accepts the amount claimed in the demand and agrees to pay |
|
that amount within ninety (90) days after the date on which the |
|
action was effected, and, in the case of shares represented by |
|
certificates, upon the surrender of the certificates duly endorsed, |
|
or shall contain an estimate by the corporation (foreign or |
|
domestic) or other entity of the fair value of the shares, together |
|
with an offer to pay the amount of that estimate within ninety (90) |
|
days after the date on which the action was effected, upon receipt |
|
of notice within sixty (60) days after that date from the |
|
shareholder that the shareholder agrees to accept that amount and, |
|
in the case of shares represented by certificates, upon the |
|
surrender of the certificates duly endorsed. |
|
(3) If, within sixty (60) days after the date on which |
|
the corporate action was effected, the value of the shares is agreed |
|
upon between the shareholder and the existing, surviving, or new |
|
corporation (foreign or domestic) or other entity, as the case may |
|
be, payment for the shares shall be made within ninety (90) days |
|
after the date on which the action was effected and, in the case of |
|
shares represented by certificates, upon surrender of the |
|
certificates duly endorsed. Upon payment of the agreed value, the |
|
shareholder shall cease to have any interest in the shares or in the |
|
corporation. |
|
SECTION 142. Article 4.06, Texas Limited Liability Company |
|
Act (Article 1528n, Vernon's Texas Civil Statutes), is amended to |
|
read as follows: |
|
Art. 4.06. RIGHTS OF JUDGMENT CREDITOR. A. On application |
|
[to a court of competent jurisdiction] by a judgment creditor of a |
|
member or of any other owner of a membership interest, the court may |
|
charge the membership interest of the judgment debtor to satisfy |
|
[member or other owner with payment of the unsatisfied amount of] |
|
the judgment. To [Except as otherwise provided in the regulations
|
|
to] the extent that the membership interest is charged in this |
|
manner, the judgment creditor has only the right to receive any |
|
distribution to which the judgment debtor would otherwise have been |
|
entitled in respect [rights of an assignee] of the membership |
|
interest. |
|
B. A charging order constitutes a lien on the judgment |
|
debtor's membership interest. |
|
C. The entry of a charging order is the exclusive remedy by |
|
which a judgment creditor of a member or of any other owner of a |
|
membership interest may satisfy a judgment out of the judgment |
|
debtor's membership interest. |
|
D. This Section does not deprive any member or other owner |
|
of a membership interest of the benefit of any exemption laws |
|
applicable to the judgment debtor's [that member's] membership |
|
interest. |
|
E. A creditor of a member or of any other owner of a |
|
membership interest does not have the right to obtain possession |
|
of, or otherwise exercise legal or equitable remedies with respect |
|
to, the property of the limited liability company. |
|
SECTION 143. Section 7.03, Texas Revised Limited |
|
Partnership Act (Article 6132a-1, Vernon's Texas Civil Statutes), |
|
is amended to read as follows: |
|
Sec. 7.03. RIGHTS OF JUDGMENT CREDITOR. (a) On |
|
application [to a court of competent jurisdiction] by a judgment |
|
creditor of a partner or of any other owner of a partnership |
|
interest, the court may charge the partnership interest of the |
|
judgment debtor to satisfy the judgment [partner or other owner
|
|
with payment of the unsatisfied amount of the judgment, with
|
|
interest, may then or later appoint a receiver of the debtor
|
|
partner's share of the partnership's profits and of any other money
|
|
payable or that becomes payable to the debtor partner with respect
|
|
to the partnership, and may make all other orders, directions, and
|
|
inquiries that the circumstances of the case require]. To the |
|
extent that the partnership interest is charged in this manner, the |
|
judgment creditor has only the right to receive any distribution to |
|
which the judgment debtor would otherwise have been entitled in |
|
respect [rights of an assignee] of the partnership interest. |
|
(b) A charging order constitutes a lien on the judgment |
|
debtor's [The] partnership interest [charged may be redeemed at any
|
|
time before foreclosure or, in case of a sale directed by the court,
|
|
may be purchased without a dissolution being caused:
|
|
[(1) with separate property of any general partner, by
|
|
any one or more of the general partners; or
|
|
[(2) with respect to partnership property, by any one
|
|
or more of the general partners whose interests are not charged, on
|
|
the consent of all general partners whose interests are not charged
|
|
and a majority in interest of the limited partners, excluding
|
|
limited partnership interests held by any general partner whose
|
|
interest is charged]. |
|
(c) The entry of a charging order is the [remedies provided
|
|
by Subsection (a) of this section are] exclusive remedy by which a |
|
judgment creditor of a partner or of any other owner of a |
|
partnership interest may satisfy a judgment out of the judgment |
|
debtor's partnership interest [of others that may exist, including
|
|
remedies under laws of this state applicable to partnerships
|
|
without limited partners]. |
|
(d) This section does not deprive any partner or other owner |
|
of a partnership interest of the benefit of any exemption laws |
|
applicable to the judgment debtor's [that partner's] partnership |
|
interest. |
|
(e) A creditor of a partner or of any other owner of a |
|
partnership interest does not have the right to obtain possession |
|
of, or otherwise exercise legal or equitable remedies with respect |
|
to, the property of the limited partnership. |
|
SECTION 144. The following are repealed: |
|
(1) Section 22.306, Business Organizations Code; |
|
(2) Section 152.501(c), Business Organizations Code; |
|
and |
|
(3) Subchapter J, Chapter 153, Business Organizations |
|
Code. |
|
SECTION 145. The changes in law made by this Act to Sections |
|
101.112 and 153.256, Business Organizations Code, Article 4.06, |
|
Texas Limited Liability Company Act (Article 1528n, Vernon's Texas |
|
Civil Statutes), and Section 7.03, Texas Revised Limited |
|
Partnership Act (Article 6132a-1, Vernon's Texas Civil Statutes), |
|
apply only to the rights of a judgment creditor of a judgment |
|
rendered on or after September 1, 2007. The rights of a judgment |
|
creditor of a judgment rendered before that date are governed by the |
|
law in effect when the judgment was rendered, and the former law is |
|
continued in effect for that purpose. |
|
SECTION 146. This Act takes effect September 1, 2007. |