80R7510 CLG-F

By: Fraser S.B. No. 854

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 22.153(a), Business Organizations Code, is amended to read as follows:

(a) Except as provided by Subsection (b) or in the certificate of formation, a corporation having members entitled to vote at an election of directors shall hold an annual meeting of the members at a time that is stated in or determined in accordance with the corporation's bylaws.

SECTION 88. 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 89. 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 90. 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 91. 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 92. 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 93. 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 94. 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 95. 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 96. 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 97. 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 98. 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 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 153.501, 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 126. 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 127. 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 128. 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 129. The heading to Section 153.553, Business Organizations Code, is amended to read as follows:

Sec. 153.553. EXECUTION OF [CERTAIN] FILINGS.

SECTION 130. 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 131. 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 132. 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 133. 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 134. 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 135. 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 136. 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 137. 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 138. 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 139. 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 140. 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 141. 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 142. This Act takes effect September 1, 2007.