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A BILL TO BE ENTITLED
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AN ACT
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relating to the creation of a low-profit limited liability company. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 1.002, Business Organizations Code, is |
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amended by amending Subdivision (46) and adding Subdivision (50-a) |
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to read as follows: |
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(46) "Limited liability company" means an entity |
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governed as a limited liability company under Title 3 or 7. The term |
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includes a professional limited liability company and a low-profit |
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limited liability company. |
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(50-a) "Low-profit limited liability company" means |
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an entity governed as a limited liability company under Title 3 that |
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meets the requirements of Section 2.013. |
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SECTION 2. Subchapter A, Chapter 2, Business Organizations |
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Code, is amended by adding Section 2.013 to read as follows: |
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Sec. 2.013. PURPOSES OF LOW-PROFIT LIMITED LIABILITY |
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COMPANY. (a) A limited liability company organized as a low-profit |
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limited liability company must be organized and operated for a |
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business purpose that significantly furthers the accomplishment of |
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one or more religious, charitable, scientific, literary, or |
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educational purposes as described by 26 U.S.C. Section |
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170(c)(2)(B). |
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(b) A limited liability company organized as a low-profit |
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limited liability company may not be operated with a significant |
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purpose of producing income or capital appreciation. The |
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production of significant income or capital appreciation by a |
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low-profit limited liability company alone is not conclusive |
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evidence of a significant purpose prohibited by this subsection. |
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(c) A low-profit limited liability company may not be |
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operated to accomplish a political or legislative purpose as |
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described by 26 U.S.C. Section 170(c)(2)(D). |
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(d) A limited liability company that ceases to meet the |
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requirements of this section: |
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(1) may not be designated as a low-profit limited |
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liability company; and |
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(2) must change the company's name in accordance with |
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Section 5.056(a). |
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SECTION 3. Subchapter A, Chapter 3, Business Organizations |
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Code, is amended by adding Section 3.0101 to read as follows: |
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Sec. 3.0101. SUPPLEMENTAL PROVISIONS REQUIRED IN |
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CERTIFICATE OF FORMATION OF LOW-PROFIT LIMITED LIABILITY COMPANY. |
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In addition to the information required by Sections 3.005 and |
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3.010, the certificate of formation of a low-profit limited |
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liability company must state a purpose or purposes for formation |
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that meet the requirements of Section 2.013. |
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SECTION 4. Subchapter B, Chapter 3, Business Organizations |
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Code, is amended by adding Section 3.0612 to read as follows: |
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Sec. 3.0612. SUPPLEMENTAL PROVISIONS FOR RESTATED |
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CERTIFICATE OF FORMATION FOR LIMITED LIABILITY COMPANY TO OPERATE |
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AS LOW-PROFIT LIMITED LIABILITY COMPANY. In addition to the |
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provisions authorized or required by Sections 3.059 and 3.0611, a |
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limited liability company may operate as a low-profit limited |
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liability company if the restated certificate of formation of the |
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limited liability company contains the information required by |
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Section 3.0101. |
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SECTION 5. Section 3.151, Business Organizations Code, is |
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amended by adding Subsection (d) to read as follows: |
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(d) The information kept by a low-profit limited liability |
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company under Subsection (a) must be sufficient to establish that |
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the purposes of the entity meet the requirements of Section 2.013. |
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SECTION 6. Section 3.153, Business Organizations Code, is |
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amended to read as follows: |
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Sec. 3.153. RIGHT OF EXAMINATION BY OWNER OR MEMBER. (a) |
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Each owner or member of a filing entity may examine the books and |
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records of the filing entity maintained under Section 3.151 and |
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other books and records of the filing entity to the extent provided |
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by the governing documents of the entity and the title of this code |
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governing the filing entity. |
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(b) In addition to the requirements of Subsection (a), a |
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private foundation, as defined by 26 U.S.C. Section 509(a), that is |
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an owner or member of a low-profit limited liability company may |
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examine the books and records of the company maintained under |
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Section 3.151 and other books and records of the company, |
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notwithstanding any provision of the governing documents of the |
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company or this code, as necessary for the foundation to determine |
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whether the foundation's operations and investments comply with |
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federal tax laws. |
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SECTION 7. Subchapter B, Chapter 5, Business Organizations |
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Code, is amended by adding Section 5.0561 to read as follows: |
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Sec. 5.0561. NAME OF LOW-PROFIT LIMITED LIABILITY COMPANY. |
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The name of a low-profit limited liability company must contain: |
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(1) the phrase "low-profit limited liability |
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company"; or |
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(2) the abbreviation "L.3.C." |
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SECTION 8. Subchapter B, Chapter 11, Business Organizations |
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Code, is amended by adding Section 11.0561 to read as follows: |
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Sec. 11.0561. SUPPLEMENTAL PROVISIONS FOR LOW-PROFIT |
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LIMITED LIABILITY COMPANY. In addition to the requirements of |
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Section 11.056, the failure of a low-profit limited liability |
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company to meet the requirements of Section 2.013 is an event |
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requiring winding up under Section 11.051(4) unless, not later than |
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the 60th day after the date of that event, the company files a |
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certificate of amendment to change the company's name to conform |
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with the requirements of Section 5.056. |
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SECTION 9. This Act takes effect September 1, 2013. |