S.B. No. 860
 
 
 
 
AN ACT
  relating to corporations and fundamental business transactions.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1.002, Business Organizations Code, is
  amended by adding Subdivision (63-a) to read as follows:
               (63-a) "Owner liability" means personal liability for a
  liability or other obligation of an organization that is imposed on
  a person:
                     (A)  by statute solely because of the person's
  status as an owner or member of the organization; or
                     (B)  by a governing document of an organization
  under a provision of this code or the law of the organization's
  jurisdiction of formation that authorizes the governing document to
  make one or more specified owners or members of the organization
  liable in their capacity as owners or members for all or specified
  liabilities or other obligations of the organization.
         SECTION 2.  Section 3.054, Business Organizations Code, is
  amended to read as follows:
         Sec. 3.054.  EXECUTION OF CERTIFICATE OF AMENDMENT OF
  FOR-PROFIT CORPORATION.  Except as provided by Title 2 or this
  section, an [An] officer shall sign the certificate of amendment on
  behalf of the for-profit corporation.  If shares of the for-profit
  corporation have not been issued and the certificate of amendment
  is adopted by the board of directors, one or more [a majority] of
  the directors may sign the certificate of amendment on behalf of the
  for-profit corporation.
         SECTION 3.  Section 3.060(b), Business Organizations Code,
  is amended to read as follows:
         (b)  Except as provided by Title 2 or this subsection, an
  [An] officer shall sign the restated certificate of formation on
  behalf of the corporation.  If shares of the corporation have not
  been issued and the restated certificate of formation is adopted by
  the board of directors, one or more [the majority] of the directors
  may sign the restated certificate of formation on behalf of the
  corporation.
         SECTION 4.  Section 3.201(b), Business Organizations Code,
  is amended to read as follows:
         (b)  The ownership interests in a for-profit corporation,
  real estate investment trust, or professional corporation must be
  certificated, except to the extent a [unless the] governing
  document [documents] of the entity or a resolution adopted by the
  governing authority of the entity provides that some or all of the
  classes or series of [states that] the ownership interests are
  uncertificated or that some or all of the ownership interests in any
  class or series of the ownership interests are uncertificated.  The
  entity may have outstanding both certificated and uncertificated
  ownership interests of the same class or series.  If a domestic
  entity changes the form of its ownership interests from
  certificated to uncertificated, a certificated ownership interest
  subject to the change becomes an uncertificated ownership interest
  only after the certificate is surrendered to the domestic entity.
         SECTION 5.  Section 10.001(e), Business Organizations Code,
  is amended to read as follows:
         (e)  A domestic entity may not merge under this subchapter if
  an owner or member of that entity that is a party to the merger will,
  as a result of the merger, become subject to owner liability
  [personally liable], without that owner's or member's consent, for
  a liability or other obligation of any other person.
         SECTION 6.  Section 10.002, Business Organizations Code, is
  amended by amending Subsection (a) and adding Subsection (d) to
  read as follows:
         (a)  A plan of merger must be in writing and must include:
               (1)  the name of each organization that is a party to
  the merger;
               (2)  the name of each organization that will survive
  the merger;
               (3)  the name of each new organization that is to be
  created by the plan of merger;
               (4)  a description of the organizational form of each
  organization that is a party to the merger or that is to be created
  by the plan of merger and its jurisdiction of formation;
               (5)  the manner and basis, including use of a formula,
  of converting or exchanging any of the ownership or membership
  interests of each organization that is a party to the merger into:
                     (A)  ownership interests, membership interests,
  obligations, rights to purchase securities, or other securities of
  one or more of the surviving or new organizations;
                     (B)  cash;
                     (C)  other property, including ownership
  interests, membership interests, obligations, rights to purchase
  securities, or other securities of any other person or entity; or
                     (D)  any combination of the items described by
  Paragraphs (A)-(C);
               (6)  the identification of any of the ownership or
  membership interests of an organization that is a party to the
  merger that are:
                     (A)  to be canceled rather than converted or
  exchanged; or
                     (B)  to remain outstanding rather than converted
  or exchanged if the organization survives the merger;
               (7)  the certificate of formation of each new domestic
  filing entity to be created by the plan of merger;
               (8)  the governing documents of each new domestic
  nonfiling entity to be created by the plan of merger; and
               (9)  the governing documents of each non-code
  organization that:
                     (A)  is to survive the merger or to be created by
  the plan of merger; and
                     (B)  is an entity that is not:
                           (i)  organized under the laws of any state or
  the United States; or
                           (ii)  required to file its certificate of
  formation or similar document under which the entity is organized
  with the appropriate governmental authority.
         (d)  Any of the terms of the plan of merger may be made
  dependent on facts ascertainable outside of the plan if the manner
  in which those facts will operate on the terms of the merger is
  clearly and expressly stated in the plan.  In this subsection,
  "facts" includes the occurrence of any event, including a
  determination or action by any person.
         SECTION 7.  Section 10.004, Business Organizations Code, is
  amended to read as follows:
         Sec. 10.004.  PLAN OF MERGER:  PERMISSIVE PROVISIONS.  A plan
  of merger may include:
               (1)  amendments to, restatements of, or amendments and
  restatements of the governing documents of any surviving
  organization, including a certificate of amendment, a restated
  certificate of formation without amendment, or a restated
  certificate of formation containing amendments;
               (2)  provisions relating to an interest exchange,
  including a plan of exchange; and
               (3)  any other provisions relating to the merger that
  are not required by this chapter.
         SECTION 8.  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, restated, or amended and restated to the extent
  provided by the plan of merger, and a certificate of amendment, a
  restated certificate of formation without amendment, or a restated
  certificate of formation containing amendments of a surviving
  filing entity shall have the effect stated in Section 3.063;
               (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, or that are to be canceled or remain outstanding, are
  converted, exchanged, [or] canceled, or remain outstanding as
  provided in the plan of merger, 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 interests provided under Subchapter H; 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 9.  Section 10.051(f), Business Organizations Code,
  is amended to read as follows:
         (f)  A plan of exchange may not be effected if any owner or
  member of a domestic entity that is a party to the interest exchange
  will, as a result of the interest exchange, become subject to owner
  liability [personally liable], without the consent of the owner or
  member, for the liabilities or obligations of any other person or
  organization.
         SECTION 10.  Section 10.052, Business Organizations Code, is
  amended by amending Subsection (a) and adding Subsection (c) to
  read as follows:
         (a)  A plan of exchange must be in writing and must include:
               (1)  the name of each domestic entity the ownership or
  membership interests of which are to be acquired;
               (2)  the name of each acquiring organization;
               (3)  if there is more than one acquiring organization,
  the ownership or membership interests to be acquired by each
  organization;
               (4)  the terms and conditions of the exchange; and
               (5)  the manner and basis, including use of a formula,
  of exchanging the ownership or membership interests to be acquired
  for:
                     (A)  ownership or membership interests,
  obligations, rights to purchase securities, or other securities of
  one or more of the acquiring organizations that is a party to the
  plan of exchange;
                     (B)  cash;
                     (C)  other property, including ownership or
  membership interests, obligations, rights to purchase securities,
  or other securities of any other person or entity; or
                     (D)  any combination of those items.
         (c)  Any of the terms of the plan of exchange may be made
  dependent on facts ascertainable outside of the plan if the manner
  in which those facts will operate on the terms of the interest
  exchange is clearly and expressly stated in the plan.  In this
  subsection, "facts" includes the occurrence of any event, including
  a determination or action by any person.
         SECTION 11.  Section 10.101(f), Business Organizations
  Code, is amended to read as follows:
         (f)  A domestic entity may not convert under this section if
  an owner or member of the domestic entity, as a result of the
  conversion, becomes subject to owner liability [personally
  liable], without the consent of the owner or member, for a liability
  or other obligation of the converted entity.
         SECTION 12.  Section 10.103, Business Organizations Code, is
  amended by amending Subsection (a) and adding Subsection (c) to
  read as follows:
         (a)  A plan of conversion must be in writing and must
  include:
               (1)  the name of the converting entity;
               (2)  the name of the converted entity;
               (3)  a statement that the converting entity is
  continuing its existence in the organizational form of the
  converted entity;
               (4)  a statement of the type of entity that the
  converted entity is to be and the converted entity's jurisdiction
  of formation;
               (5)  if Sections 10.1025 and 10.109 do not apply, the
  manner and basis, including use of a formula, of converting the
  ownership or membership interests of the converting entity into
  ownership or membership interests of the converted entity;
               (6)  any certificate of formation required to be filed
  under this code if the converted entity is a filing entity;
               (7)  the certificate of formation or similar
  organizational document of the converted entity if the converted
  entity is not a filing entity; and
               (8)  if Sections 10.1025 and 10.109 apply, a statement
  that the converting entity is electing to continue its existence in
  its current organizational form and jurisdiction of formation after
  the conversion takes effect.
         (c)  Any of the terms of the plan of conversion may be made
  dependent on facts ascertainable outside of the plan if the manner
  in which those facts will operate on the terms of the conversion is
  clearly and expressly stated in the plan.  In this subsection,
  "facts" includes the occurrence of any event, including a
  determination or action by any person.
         SECTION 13.  Section 10.151, Business Organizations Code, is
  amended by amending Subsection (b) and adding Subsection (d) 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;
                     (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 any [each] filing entity that is a
  party to the merger, or a statement that amendments or changes are
  being made to the certificate of formation of any filing entity that
  is a party to the merger as set forth in a restated certificate of
  formation containing amendments or a certificate of amendment
  attached to the certificate of merger under Subsection (d) [if no
  amendments are desired to be effected by the merger, a statement to
  that effect];
                     (E)  for a merger, if no amendments or changes to
  the certificate of formation of a filing entity are made under
  Paragraph (D), a statement to that effect, which may also refer to a
  restated certificate of formation attached to the certificate of
  merger under Subsection (d);
                     (F)  for a merger, that the certificate of
  formation of each new filing entity to be created under the plan of
  merger is being filed with the certificate of merger;
                     (G) [(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
                     (H) [(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.
         (d)  As provided by Subsections (b)(1)(D) and (E), a
  certificate of merger filed under this section may include as an
  attachment a certificate of amendment, a restated certificate of
  formation without amendment, or a restated certificate of formation
  containing amendments for any filing entity that is a party to the
  merger.
         SECTION 14.  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 of the converting entity;
                     (B)  the name, organizational form, and
  jurisdiction of formation of the converted 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 15.  Sections 10.354(a) and (c), Business
  Organizations Code, are amended to read as follows:
         (a)  Subject to Subsection (b), an owner of an ownership
  interest in a domestic entity subject to dissenters' rights is
  entitled to:
               (1)  dissent from:
                     (A)  a plan of merger to which the domestic entity
  is a party if owner approval is required by this code and the owner
  owns in the domestic entity an ownership interest that was entitled
  to vote on the plan of merger;
                     (B)  a sale of all or substantially all of the
  assets of the domestic entity if owner approval is required by this
  code and the owner owns in the domestic entity an ownership interest
  that was entitled to vote on the sale;
                     (C)  a plan of exchange in which the ownership
  interest of the owner is to be acquired;
                     (D)  a plan of conversion in which the domestic
  entity is the converting entity if owner approval is required by
  this code and the owner owns in the domestic entity an ownership
  interest that was entitled to vote on the plan of conversion; [or]
                     (E)  a merger effected under Section 10.006 in
  which:
                           (i)  the owner is entitled to vote on the
  merger; or
                           (ii)  the ownership interest of the owner is
  converted or exchanged; or
                     (F)  a merger effected under Section 21.459(c) in
  which the shares of the shareholders are converted or exchanged;
  and
               (2)  subject to compliance with the procedures set
  forth in this subchapter, obtain the fair value of that ownership
  interest through an appraisal.
         (c)  Subsection (b) shall not apply either to a domestic
  entity that is a subsidiary with respect to a merger under Section
  10.006 or to a corporation with respect to a merger under Section
  21.459(c).
         SECTION 16.  Section 10.355, Business Organizations Code, is
  amended by adding Subsections (b-1) and (f) and amending
  Subsections (c) and (d) to read as follows:
         (b-1)  If a corporation effects a merger under Section
  21.459(c), the responsible organization shall notify the
  shareholders of that corporation who have a right to dissent to the
  plan of merger under Section 10.354 of their rights under this
  subchapter not later than the 10th day after the effective date of
  the merger. Notice required under this subsection that is given to
  shareholders before the effective date of the merger may, but is not
  required to, contain a statement of the merger's effective date. If
  the notice is not given to the shareholders until on or after the
  effective date of the merger, the notice must contain a statement of
  the merger's effective date.
         (c)  A notice required to be provided under Subsection (a),
  [or] (b), or (b-1) must:
               (1)  be accompanied by a copy of this subchapter; and
               (2)  advise the owner of the location of the
  responsible organization's principal executive offices to which a
  notice required under Section 10.356(b)(1) or a demand under
  Section 10.356(b)(3), or both, [(3)] may be provided.
         (d)  In addition to the requirements prescribed by
  Subsection (c), a notice required to be provided:
               (1)  under Subsection (a)(1) must accompany the notice
  of the meeting to consider the action;
               (2)  [, and a notice required] under Subsection (a)(2)
  must be provided to:
                     (A) [(1)]  each owner who consents in writing to
  the action before the owner delivers the written consent; and
                     (B) [(2)]  each owner who is entitled to vote on
  the action and does not consent in writing to the action before the
  11th day after the date the action takes effect; and
               (3)  under Subsection (b-1) must be provided:
                     (A)  if given before the consummation of the
  tender or exchange offer described by Section 21.459(c)(2), to each
  shareholder to whom that offer is made; or
                     (B)  if given after the consummation of the tender
  or exchange offer described by Section 21.459(c)(2), to each
  shareholder who did not tender the shareholder's shares in that
  offer.
         (f)  If the notice given under Subsection (b-1) did not
  include a statement of the effective date of the merger, the
  responsible organization shall, not later than the 10th day after
  the effective date, give a second notice to the shareholders
  notifying them of the merger's effective date.  If the second notice
  is given after the later of the date on which the tender or exchange
  offer described by Section 21.459(c)(2) is consummated or the 20th
  day after the date notice under Subsection (b-1) is given, then the
  second notice is required to be given to only those shareholders who
  have made a demand under Section 10.356(b)(3).
         SECTION 17.  Section 10.356(b), Business Organizations
  Code, is amended to read as follows:
         (b)  To perfect the owner's rights of dissent and appraisal
  under Section 10.354, an owner:
               (1)  if the proposed action is to be submitted to a vote
  of the owners at a meeting, must give to the domestic entity a
  written notice of objection to the action that:
                     (A)  is addressed to the entity's president and
  secretary;
                     (B)  states that the owner's right to dissent will
  be exercised if the action takes effect;
                     (C)  provides an address to which notice of
  effectiveness of the action should be delivered or mailed; and
                     (D)  is delivered to the entity's principal
  executive offices before the meeting;
               (2)  with respect to the ownership interest for which
  the rights of dissent and appraisal are sought:
                     (A)  must vote against the action if the owner is
  entitled to vote on the action and the action is approved at a
  meeting of the owners; and
                     (B)  may not consent to the action if the action is
  approved by written consent; and
               (3)  must give to the responsible organization a demand
  in writing that:
                     (A)  is addressed to the president and secretary
  of the responsible organization;
                     (B)  demands payment of the fair value of the
  ownership interests for which the rights of dissent and appraisal
  are sought;
                     (C)  provides to the responsible organization an
  address to which a notice relating to the dissent and appraisal
  procedures under this subchapter may be sent;
                     (D)  states the number and class of the ownership
  interests of the domestic entity owned by the owner and the fair
  value of the ownership interests as estimated by the owner; and
                     (E)  is delivered to the responsible organization
  at its principal executive offices at the following time:
                           (i)  not later than the 20th day after the
  date the responsible organization sends to the owner the notice
  required by Section 10.355(e) that the action has taken effect, if
  the action was approved by a vote of the owners at a meeting;
                           (ii)  not later than the 20th day after the
  date the responsible organization sends to the owner the notice
  required by Section 10.355(d)(2) that the action has taken effect,
  if the action was approved by the written consent of the owners;
  [or]
                           (iii)  not later than the 20th day after the
  date the responsible organization sends to the owner a notice that
  the merger was effected, if the action is a merger effected under
  Section 10.006; or
                           (iv)  not later than the 20th day after the
  date the responsible organization gives to the shareholder the
  notice required by Section 10.355(b-1) or the date of the
  consummation of the tender or exchange offer described by Section
  21.459(c)(2), whichever is later, if the action is a merger
  effected under Section 21.459(c).
         SECTION 18.  Section 11.001(3), Business Organizations
  Code, is amended to read as follows:
               (3)  "Existing claim" with respect to an entity means:
                     (A)  a claim [against the entity] that existed
  before the entity's termination and is not barred by limitations;
  or
                     (B)  a contractual obligation incurred after
  termination.
         SECTION 19.  Section 20.001, Business Organizations Code, is
  amended to read as follows:
         Sec. 20.001.  SIGNATURE REQUIREMENTS FOR FILING INSTRUMENTS
  [REQUIREMENT THAT FILING INSTRUMENT BE SIGNED BY OFFICER].  
  (a)  Unless otherwise provided by Section 3.054 or 3.060(b) or this
  title, a filing instrument of a corporation must be signed by an
  officer of the corporation.
         (b)  A certificate of termination, a certificate of
  reinstatement, a certificate of amendment to cancel an event
  requiring winding up, or a restated certificate of formation that
  contains an amendment to cancel an event requiring winding up may be
  signed by:
               (1)  one of the organizers if the winding up, the
  reinstatement, or the cancellation of an event requiring winding up
  was authorized by the organizers under Section 21.502(2) or
  22.302(1)(B); or
               (2)  one of the directors if the winding up, the
  reinstatement, or the cancellation of an event requiring winding up
  was authorized by the board of directors under Section 21.502(2) or
  22.302(1)(B).
         SECTION 20.  Section 21.052, Business Organizations Code, is
  amended by adding Subsection (d) to read as follows:
         (d)  This section does not affect:
               (1)  the authority of the shareholders of a corporation
  to consent in writing to the cancellation of an event requiring
  winding up in accordance with Section 21.502(1); or
               (2)  the authority of the organizers of a corporation
  to adopt a resolution to cancel an event requiring winding up in
  accordance with Section 21.502(2).
         SECTION 21.  Section 21.053, Business Organizations Code, is
  amended by amending Subsection (a) and adding Subsection (c) to
  read as follows:
         (a)  If a corporation does not have any issued and
  outstanding shares, or in the case of an amendment under Subsection
  (b) or (c), the board of directors may adopt a proposed amendment to
  the corporation's certificate of formation by resolution without
  shareholder approval.
         (c)  Notwithstanding Section 21.054 and except as otherwise
  provided by the certificate of formation, the board of directors of
  a corporation that has outstanding shares may, without shareholder
  approval, adopt an amendment to the corporation's certificate of
  formation to change the word or abbreviation in its corporate name
  as required by Section 5.054(a) to be a different word or
  abbreviation required by that section.
         SECTION 22.  Section 21.056(a), Business Organizations
  Code, is amended to read as follows:
         (a)  A corporation may adopt a restated certificate of
  formation as provided by Subchapter B, Chapter 3, by following the
  same procedures to amend its certificate of formation under
  Sections 21.052-21.055, except that:
               (1)  shareholder approval is not required if an
  amendment is not adopted; and
               (2)  the shareholders of a corporation may consent in
  writing, or the organizers of a corporation may adopt a resolution,
  to authorize a restated certificate of formation that contains an
  amendment to cancel an event requiring winding up in accordance
  with Section 21.502(1) or (2).
         SECTION 23.  Section 21.102, Business Organizations Code, is
  amended to read as follows:
         Sec. 21.102.  TERM OF AGREEMENT.  Any limit on the term or
  duration of a shareholders' agreement under this subchapter must be
  set forth in the agreement.  A shareholders' agreement under this
  subchapter that was in effect before September 1, 2015, remains in
  effect for 10 years, unless the agreement provides otherwise.  [A
  shareholders' agreement under this subchapter is valid for 10
  years, unless the agreement provides otherwise.]
         SECTION 24.  Section 21.160, Business Organizations Code, is
  amended by adding Subsection (d) to read as follows:
         (d)  The amount of the consideration to be received for
  shares may be determined in accordance with Subsection (a) by the
  approval of a formula to determine that amount.
         SECTION 25.  Section 21.371, Business Organizations Code, is
  amended to read as follows:
         Sec. 21.371.  PROCEDURES IN BYLAWS RELATING TO PROXIES.  
  (a)  A corporation may establish in the corporation's bylaws
  procedures consistent with this code for determining the validity
  of proxies and determining whether shares that are held of record by
  a bank, broker, or other nominee are represented at a meeting of
  shareholders.  The procedures may incorporate rules of and
  determinations made by a stock exchange or self-regulatory
  organization regulating the corporation or that bank, broker, or
  other nominee.
         (b)  The bylaws may contain one or both of the following:
               (1)  a provision requiring that, when soliciting
  proxies or consents with respect to an election of directors, the
  corporation include in both its proxy statement and any form of its
  proxy or consent, in addition to individuals nominated by the board
  of directors, one or more individuals nominated by a shareholder,
  subject to any procedures or conditions as may be provided in the
  bylaws; and
               (2)  a provision requiring that the corporation
  reimburse expenses incurred by a shareholder in soliciting proxies
  or consents with respect to an election of directors so long as the
  provision does not apply to any election for which the record date
  precedes the adoption of the bylaw provision, but subject to any
  procedures or conditions as may be provided in the bylaws.
         SECTION 26.  Section 21.459, Business Organizations Code, is
  amended by adding Subsections (c), (d), and (e) to read as follows:
         (c)  This subsection applies only to a corporation that is a
  party to the merger and whose shares are, immediately before the
  date its board of directors approves the plan of merger, either
  listed on a national securities exchange or held of record by at
  least 2,000 shareholders.  Unless required by the corporation's
  certificate of formation, a plan of merger is not required to be
  approved by the shareholders of the corporation if:
               (1)  the plan of merger expressly:
                     (A)  permits or requires the merger to be effected
  under this subsection; and
                     (B)  provides that any merger effected under this
  subsection shall be effected as soon as practicable following the
  consummation of the offer described by Subdivision (2);
               (2)  an organization consummates a tender or exchange
  offer for all of the outstanding shares of the corporation on the
  terms provided in the plan of merger that, absent this subsection,
  would be entitled to vote on the approval of the plan of merger,
  except that the offer may exclude shares of the corporation owned at
  the time of the commencement of the offer by:
                     (A)  the corporation;
                     (B)  the organization making the offer;
                     (C)  any person who owns, directly or indirectly,
  all of the ownership interests in the organization making the
  offer; or
                     (D)  any direct or indirect wholly owned
  subsidiary of a person described by Paragraph (A), (B), or (C);
               (3)  shares that are irrevocably accepted for purchase
  or exchange pursuant to the consummation of the offer described by
  Subdivision (2) and that are received by the depository before the
  expiration of the offer in addition to the shares that are otherwise
  owned by the consummating organization equal at least the
  percentage of the shares, and of each class or series of those
  shares, of the corporation that, absent this subsection, would be
  required to approve the plan of merger by:
                     (A)  Section 21.457 and, if applicable, Section
  21.458; and
                     (B)  the certificate of formation of the
  corporation;
               (4)  the organization consummating the offer described
  by Subdivision (2) merges with or into the corporation pursuant to
  the plan of merger; and
               (5)  each outstanding share of each class or series of
  the corporation that is the subject of and not irrevocably accepted
  for purchase or exchange in the offer described by Subdivision (2)
  is to be converted or exchanged in the merger into, or into the
  right to receive, the same amount and kind of consideration, as
  described by Section 10.002(a)(5), as to be paid or delivered for
  shares of such class or series of the corporation irrevocably
  accepted for purchase or exchange in the offer.
         (d)  In Subsection (c) and this subsection and, as
  applicable, in Sections 10.355(d)(3)(B), 10.355(f), and
  10.356(b)(3)(E)(iv):
               (1)  "Consummates," "consummation," or "consummating"
  means irrevocably accepts for purchase or exchange shares tendered
  pursuant to a tender or exchange offer.
               (2)  "Depository" means an agent appointed to
  facilitate consummation of the offer described by Subsection
  (c)(2).
         (e)  For purposes of Subsection (c)(3), "received," with
  respect to shares, means:
               (1)  physical receipt of a certificate representing
  shares, in the case of certificated shares; and
               (2)  transfer into the depository's account or an
  agent's message being received by the depository, in the case of
  uncertificated shares.
         SECTION 27.  Section 22.109(a), Business Organizations
  Code, is amended to read as follows:
         (a)  A [The board of directors of a] corporation may adopt a
  restated certificate of formation as provided by Subchapter B,
  Chapter 3, by following the same procedure to amend its [the
  corporation's] certificate of formation provided by Sections
  22.104-22.107, except that:
               (1)  member approval is required only if the restated
  certificate of formation contains an amendment; and
               (2)  the members may consent in writing, or the
  organizers of a corporation may adopt a resolution, to authorize a
  restated certificate of formation that contains an amendment to
  cancel an event requiring winding up in accordance with Section
  22.302(1)(B) or 22.302(2), as applicable.
         SECTION 28.  Section 22.164, Business Organizations Code, is
  amended by amending Subsection (b) and adding Subsection (d) to
  read as follows:
         (b)  Except as otherwise provided by Subsection (c) or (d) or
  the certificate of formation in accordance with Section 22.162, the
  vote required for approval of a fundamental action is:
               (1)  at least two-thirds of the votes that members
  present in person or by proxy are entitled to cast at the meeting at
  which the action is submitted for a vote, if the corporation has
  members with voting rights;
               (2)  at least two-thirds of the votes of members
  present at the meeting at which the action is submitted for a vote,
  if the management of the affairs of the corporation is vested in the
  corporation's members under Section 22.202; or
               (3)  the affirmative vote of the majority of the
  directors in office, if the corporation has no members or has no
  members with voting rights.
         (d)  If the corporation has no members or has no members with
  voting rights and the corporation does not hold any assets and has
  not solicited any assets or otherwise engaged in activities, the
  vote required for approval of a fundamental action consisting of an
  amendment to the certificate of formation to cancel an event
  requiring winding up or any of the actions described by Subsections
  (a)(2) through (a)(6) is the affirmative vote of a majority of the
  organizers or a majority of the directors in office.
         SECTION 29.  Section 22.302, Business Organizations Code, is
  amended to read as follows:
         Sec. 22.302.  CERTAIN PROCEDURES FOR APPROVAL. To approve a
  voluntary winding up, a reinstatement, a cancellation of an event
  requiring winding up, a revocation of a voluntary decision to wind
  up, or a distribution plan, a corporation must follow the following
  procedures:
               (1)  if the corporation has no members or has no members
  with voting rights and the corporation:
                     (A)  holds any assets or has solicited any assets
  or otherwise engaged in activities, the corporation's board of
  directors must adopt a resolution to wind up, to reinstate, to
  cancel the event requiring winding up, to revoke a voluntary
  decision to wind up, or to effect the distribution plan by the vote
  of directors required by Section 22.164(b)(3) [22.164]; or
                     (B)  does not hold any assets and has not
  solicited any assets or otherwise engaged in activities, a majority
  of the organizers or the board of directors of the corporation must
  adopt a resolution to wind up, to reinstate, to cancel an event
  requiring winding up, to revoke a voluntary decision to wind up, or
  to effect the distribution plan by the vote required by Section
  22.164(d);
               (2)  if the management of the affairs of the
  corporation is vested in the corporation's members under Section
  22.202, the winding up, reinstatement, cancellation of event
  requiring winding up, revocation of voluntary decision to wind up,
  or distribution plan:
                     (A)  must be submitted to a vote at an annual,
  regular, or special meeting of members; and
                     (B)  must be approved by the members by the vote
  required by Section 22.164(b)(2) [22.164]; or
               (3)  if the corporation has members with voting rights:
                     (A)  the corporation's board of directors must
  approve a resolution:
                           (i)  recommending the winding up,
  reinstatement, cancellation of event requiring winding up,
  revocation of a voluntary decision to wind up, or distribution
  plan; and
                           (ii)  directing that the winding up,
  reinstatement, cancellation of event requiring winding up,
  revocation of a voluntary decision to wind up, or distribution plan
  of the corporation be submitted to a vote at an annual or special
  meeting of members; and
                     (B)  the members must approve the action described
  by Paragraph (A) in accordance with Section 22.303.
         SECTION 30.  Chapter 21, Business Organizations Code, is
  amended by adding Subchapter R to read as follows:
  SUBCHAPTER R.  RATIFICATION OF DEFECTIVE CORPORATE ACTS OR SHARES;
  PROCEEDINGS
         Sec. 21.901.  DEFINITIONS. In this subchapter:
               (1)  "Corporate statute," with respect to an action or
  filing, means this code, the former Texas Business Corporation Act,
  or any predecessor statute of this state that governed the action or
  the filing.
               (2)  "Defective corporate act" means:
                     (A)  an overissue;
                     (B)  an election or appointment of directors that
  is void or voidable due to a failure of authorization; or
                     (C)  any act or transaction purportedly taken by
  or on behalf of the corporation that is, and at the time the act or
  transaction was purportedly taken would have been, within the power
  of a corporation to take under the corporate statute, but is void or
  voidable due to a failure of authorization.
               (3)  "District court" means a district court in:
                     (A)  the county in which the corporation's
  principal office in this state is located; or
                     (B)  the county in which the corporation's
  registered office in this state is located, if the corporation does
  not have a principal office in this state.
               (4)  "Failure of authorization" means the failure to
  authorize or effect an act or transaction in compliance with the
  provisions of the corporate statute, the governing documents of the
  corporation, or any plan or agreement to which the corporation is a
  party, if and to the extent the failure would render the act or
  transaction void or voidable.
               (5)  "Overissue" means the purported issuance of:
                     (A)  shares of a class or series in excess of the
  number of shares of that class or series that the corporation has
  the power to issue under the corporate statute at the time of
  issuance; or
                     (B)  shares of any class or series that are not at
  the time authorized for issuance by the governing documents of the
  corporation.
               (6)  "Putative shares" means the shares of any class or
  series of the corporation, including shares issued on exercise of
  options, rights, warrants, or other securities convertible into
  shares of the corporation, or interests with respect to the shares
  that were created or issued pursuant to a defective corporate act,
  that:
                     (A)  would constitute valid shares, if not for a
  failure of authorization; or
                     (B)  cannot be determined by the board of
  directors to be valid shares.
               (7)  "Time of the defective corporate act" means the
  date and time the defective corporate act was purported to have been
  taken.
               (8)  "Validation effective time" or "effective time of
  the validation," with respect to any defective corporate act
  ratified under this subchapter, means the later of:
                     (A)  the time at which the resolution submitted to
  the shareholders for adoption under Section 21.905 is adopted by
  the shareholders or, if no shareholder approval is required for
  adoption, the time at which the notice required by Section 21.911 is
  given; or
                     (B)  the time at which any certificate of
  validation filed under Section 21.908 takes effect in accordance
  with Chapter 4.
               (9)  "Valid shares" means the shares of any class or
  series of the corporation that have been authorized and validly
  issued in accordance with the corporate statute.
         Sec. 21.902.  RATIFICATION OF DEFECTIVE CORPORATE ACT AND
  PUTATIVE SHARES. Subject to Section 21.909 or 21.910, a defective
  corporate act or putative shares are not void or voidable solely as
  a result of a failure of authorization if the act or shares are:
               (1)  ratified in accordance with this subchapter; or
               (2)  validated by the district court in a proceeding
  brought under Section 21.914.
         Sec. 21.903.  RATIFICATION OF DEFECTIVE CORPORATE ACT;
  ADOPTION OF RESOLUTION.  (a)  To ratify a defective corporate act,
  the board of directors of the corporation shall adopt a resolution
  stating:
               (1)  the defective corporate act to be ratified;
               (2)  the time of the defective corporate act;
               (3)  if the defective corporate act involved the
  issuance of putative shares, the number and type of putative shares
  issued and the date or dates on which the putative shares were
  purportedly issued;
               (4)  the nature of the failure of authorization with
  respect to the defective corporate act to be ratified; and
               (5)  that the board of directors approves the
  ratification of the defective corporate act.
         (b)  The resolution may also state that, notwithstanding the
  adoption of the resolution by the shareholders, the board of
  directors may, at any time before the validation effective time,
  abandon the resolution without further shareholder action.
         Sec. 21.904.  QUORUM AND VOTING REQUIREMENTS FOR ADOPTION OF
  RESOLUTION.  (a)  The quorum and voting requirements applicable to
  the adoption of a resolution under Section 21.903 are the same as
  the quorum and voting requirements applicable at the time of the
  adoption of a resolution for the type of defective corporate act
  proposed to be ratified.
         (b)  Notwithstanding Subsection (a) and except as provided
  by Subsection (c), if in order for a quorum to be present or to
  approve the defective corporate act, the presence or approval of a
  larger number or portion of directors or of specified directors
  would have been required by the governing documents of the
  corporation, any plan or agreement to which the corporation was a
  party, or any provision of the corporate statute, each as in effect
  at the time of the defective corporate act, then the presence or
  approval of the larger number or portion of such directors or of
  such specified directors must be required for a quorum to be present
  or to adopt the resolution, as applicable.
         (c)  The presence or approval of any director elected,
  appointed, or nominated by holders of any class or series of which
  no shares are then outstanding, or by any person that is no longer a
  shareholder, shall not be required for a quorum to be present or to
  adopt the resolution.
         Sec. 21.905.  SHAREHOLDER ADOPTION OF RESOLUTION REQUIRED.  
  The resolution adopted under Section 21.903 must be submitted to
  shareholders for adoption as provided by Sections 21.906 and
  21.907, unless:
               (1)  no other provision of the corporate statute, no
  provision of the corporation's governing documents, and no
  provision of any plan or agreement to which the corporation is a
  party would have required shareholder approval of the defective
  corporate act to be ratified, either at the time of the act or at the
  time when the resolution required by Section 21.903 is adopted; and
               (2)  the defective corporate act to be ratified did not
  result from a failure to comply with Subchapter M.
         Sec. 21.906.  NOTICE REQUIREMENTS FOR RESOLUTION SUBMITTED
  FOR SHAREHOLDER APPROVAL.  (a)  If Section 21.905 requires that the
  resolution be submitted to the shareholders for approval, notice of
  the time, place, if any, and purpose of the meeting shall be given
  at least 20 days before the date of the meeting to each holder of
  valid shares and putative shares, whether voting or nonvoting, at
  the address of the holder as it appears or most recently appeared,
  as appropriate, on the corporation's records.
         (b)  Notice under this section shall be given to each holder
  of record of valid shares and putative shares, regardless of
  whether the shares are voting or nonvoting, as of the time of the
  defective corporate act, except that notice is not required to be
  given to a holder whose identity or address cannot be ascertained
  from the corporation's records.
         (c)  The notice must contain:
               (1)  a copy of the resolution; and
               (2)  a statement that the following must be brought not
  later than the 120th day of the validation effective time:
                     (A)  any claim that the defective corporate act or
  putative shares ratified under this subchapter are void or voidable
  due to the identified failure of authorization; or
                     (B)  any claim that the district court, in its
  discretion, should declare that a ratification made in accordance
  with this subchapter not take effect or that it take effect only on
  certain conditions.
         Sec. 21.907.  SHAREHOLDER MEETING; QUORUM AND VOTING.  
  (a)  At the shareholder meeting, the quorum and voting requirements
  applicable to the adoption of the resolution under Section 21.905
  shall be the same as the quorum and voting requirements applicable
  at the time of such adoption by the shareholders for the type of
  defective corporate act to be ratified, except as provided by this
  section.
         (b)  If the presence or approval of a larger number or
  portion of shares or of any class or series of shares or of
  specified shareholders would have been required for a quorum to be
  present or to approve the defective corporate act, as applicable,
  by the corporation's governing documents, any plan or agreement to
  which the corporation was a party, or any provision of the corporate
  statute, each as in effect at the time of the defective corporate
  act, then the presence or approval of the larger number or portion
  of shares or of the class or series of shares or of such specified
  shareholders shall be required for a quorum to be present or to
  adopt the resolution, as applicable, except that the presence or
  approval of shares of any class or series of which no shares are
  then outstanding, or of any person that is no longer a shareholder,
  shall not be required.
         (c)  The adoption of a resolution to ratify the election of a
  director requires the affirmative vote of the majority of shares
  present at the meeting and entitled to vote on the election of the
  director, unless the governing documents of the corporation then in
  effect or in effect at the time of the defective election require or
  required a larger number or portion of shares to elect the director,
  in which case the affirmative vote of the larger number or portion
  of shares is required to ratify the election of the director.
         (d)  If a failure of authorization results from the failure
  to comply with Subchapter M, the ratification of the defective
  corporate act requires the vote set forth by Section 21.606(2),
  regardless of whether that vote would have otherwise been required.
         Sec. 21.908.  CERTIFICATE OF VALIDATION.  (a)  If the
  defective corporate act ratified under this subchapter would have
  required under any other provision of the corporate statute the
  filing of a filing instrument or other document with the filing
  officer, the corporation, instead of filing the filing instrument
  or other document otherwise required by this code, shall file a
  certificate of validation in accordance with Chapter 4, regardless
  of whether a filing instrument or other document was previously
  filed with respect to the defective corporate act.
         (b)  The certificate of validation must set forth:
               (1)  a copy of the resolution adopted in accordance
  with Sections 21.903 and 21.904, the date of adoption of the
  resolution by the board of directors and, if applicable, the date of
  adoption by the shareholders, and a statement that the resolution
  was adopted in accordance with this subchapter;
               (2)  if a filing instrument or document was previously
  filed with a filing officer under the corporate statute in respect
  of the defective corporate act, the title and date of filing of the
  prior filing instrument or document and any articles or certificate
  of correction to the filing instrument; and
               (3)  the provisions that would be required under any
  other section of this code to be included in the filing instrument
  that otherwise would have been required to be filed with respect to
  the defective corporate act under this code.
         Sec. 21.909.  ADOPTION OF RESOLUTION; EFFECT ON DEFECTIVE
  CORPORATE ACT.  On or after the validation effective time, unless
  determined otherwise in an action brought under Section 21.914,
  each defective corporate act set forth in the resolution adopted
  under Sections 21.903 and 21.904 may not be considered void or
  voidable as a result of a failure of authorization identified in the
  resolution, and the effect shall be retroactive to the time of the
  defective corporate act.
         Sec. 21.910.  ADOPTION OF RESOLUTION; EFFECT ON PUTATIVE
  SHARES. On or after the validation effective time, unless
  determined otherwise in an action brought under Section 21.914,
  each putative share or fraction of a putative share issued or
  purportedly issued pursuant to the defective corporate act and
  identified in the resolution adopted under Sections 21.903 and
  21.904 may not be considered void or voidable as a result of a
  failure of authorization identified in the resolution and, in the
  absence of any failure of authorization not ratified, is considered
  to be an identical share or fraction of a share outstanding as of
  the time it was purportedly issued.
         Sec. 21.911.  NOTICE TO SHAREHOLDERS FOLLOWING ADOPTION OF
  RESOLUTION. (a)  Notice of the adoption of a resolution under this
  subchapter shall be given promptly to:
               (1)  each holder of valid shares and putative shares,
  regardless of whether the shares are voting or nonvoting, as of the
  date the board of directors adopted the resolution; or
               (2)  each holder of valid shares and putative shares,
  regardless of whether the shares are voting or nonvoting, as of a
  date not later than the 60th day after the date on which the
  resolution is adopted, as established by the board of directors.
         (b)  Notice under this section shall be sent to the address
  of a holder of shares described by Subsection (a)(1) or (a)(2) as
  the address appears or most recently appeared, as appropriate, on
  the records of the corporation.
         (c)  Notice under this section shall also be given to each
  holder of record of valid shares and putative shares, regardless of
  whether the shares are voting or nonvoting, as of the time of the
  defective corporate act, except that notice is not required to be
  given to a holder whose identity or address cannot be ascertained
  from the corporation's records.
         (d)  The notice must contain:
               (1)  a copy of the resolution; and
               (2)  a statement that the following must be brought not
  later than the 120th day of the validation effective time:
                     (A)  any claim that the defective corporate act or
  putative shares ratified under this subchapter are void or voidable
  due to the identified failure of authorization; or
                     (B)  any claim that the district court, in its
  discretion, should declare that a ratification made in accordance
  with this subchapter not take effect or that it take effect only on
  certain conditions.
         (e)  Notwithstanding Subsections (a)-(d), notice is not
  required to be given under this section if notice of the resolution
  is given in accordance with Section 21.906.
         (f)  For purposes of Section 21.906 and this section, notice
  to holders of putative shares and notice to holders of valid shares
  and putative shares as of the time of the defective corporate act
  shall be treated as notice to holders of valid shares for purposes
  of Sections 6.051, 6.052, 6.053, 21.353, and 21.3531.
         Sec. 21.912.  VALID SHARES OR PUTATIVE SHARES. In the
  absence of actual fraud in the transaction, the judgment of the
  board of directors of a corporation that shares of the corporation
  are valid shares or putative shares is conclusive, unless otherwise
  determined by the district court in a proceeding brought under
  Section 21.914.
         Sec. 21.913.  RATIFICATION PROCEDURES OR COURT PROCEEDINGS
  CONCERNING VALIDATION NOT EXCLUSIVE. (a)  Ratification of an act
  or transaction under this subchapter or validation of an act or
  transaction as provided by Sections 21.914 through 21.917 is not
  the exclusive means of ratifying or validating any act or
  transaction taken by or on behalf of the corporation, including any
  defective corporate act or any issuance of putative shares or other
  shares.
         (b)  The absence or failure of ratification of an act or
  transaction in accordance with this subchapter or of validation of
  an act or transaction as provided by Sections 21.914 through 21.917
  does not, of itself, affect the validity or effectiveness of any act
  or transaction or the issuance of any shares properly ratified
  under common law or otherwise, nor does it create a presumption that
  any such act or transaction is or was a defective corporate act or
  that those shares are void or voidable.
         Sec. 21.914.  PROCEEDING REGARDING VALIDITY OF DEFECTIVE
  CORPORATE ACTS AND SHARES. (a)  The following may bring an action
  under this section:
               (1)  the corporation;
               (2)  any successor entity to the corporation;
               (3)  any member of the corporation's board of
  directors;
               (4)  any record or beneficial holder of valid shares or
  putative shares of the corporation;
               (5)  any record or beneficial holder of valid shares or
  putative shares as of the time a defective corporate act was
  ratified in accordance with this subchapter; or
               (6)  any other person claiming to be substantially and
  adversely affected by a ratification under this subchapter.
         (b)  Subject to Section 21.917, the district court, on
  application by a person described by Subsection (a), may:
               (1)  determine the validity and effectiveness of any
  defective corporate act ratified in accordance with this
  subchapter;
               (2)  determine the validity and effectiveness of the
  ratification of any defective corporate act in accordance with this
  subchapter;
               (3)  determine the validity and effectiveness of:
                     (A)  any defective corporate act not ratified
  under this subchapter; or
                     (B)  any defective corporate act not ratified
  effectively under this subchapter;
               (4)  determine the validity of any corporate act or
  transaction and of any shares, rights, or options to acquire
  shares; and
               (5)  modify or waive any of the procedures set forth in
  Sections 21.901 through 21.913 to ratify a defective corporate act.
         (c)  In connection with an action brought under this section,
  the district court may:
               (1)  declare that a ratification in accordance with and
  pursuant to this subchapter is not effective or that the
  ratification is effective only at a time or on conditions as
  specified by the district court;
               (2)  validate and declare effective any defective
  corporate act or putative shares and impose conditions on such a
  validation;
               (3)  require measures to remedy or avoid harm to any
  person substantially and adversely affected by a ratification under
  this subchapter or from any order of the district court pursuant to
  this section, excluding any harm that would have resulted had the
  defective corporate act been valid when approved or effectuated;
               (4)  order the filing officer to accept for filing an
  instrument with an effective date and time as specified by the
  court, which may be before or subsequent to the time of the order;
               (5)  approve share records for the corporation that
  include any shares ratified in accordance with this subchapter or
  validated in accordance with this section and Sections 21.915
  through 21.917;
               (6)  declare that putative shares are valid shares or
  require a corporation to issue and deliver valid shares in place of
  any putative shares;
               (7)  order that a meeting of holders of valid shares or
  putative shares be held and determine the right and power of persons
  to vote at the meeting;
               (8)  declare that a defective corporate act validated
  by the court is effective as of the time of the defective corporate
  act or at such other time as determined by the court;
               (9)  declare that putative shares validated by the
  district court are considered to be an identical valid share or a
  fraction of a valid share as of the time the shares were originally
  or purportedly issued or at such other time as determined by the
  district court; and
               (10)  make any other order regarding such matters as
  the court considers appropriate under the circumstances.
         (d)  In connection with the resolution of matters under
  Subsections (b) and (c), the district court may consider:
               (1)  whether the defective corporate act was originally
  approved or effectuated with the belief that the approval or
  effectuation was in compliance with the provisions of the corporate
  statute or the governing documents of the corporation;
               (2)  whether the corporation and the corporation's
  board of directors have treated the defective corporate act as a
  valid act or transaction and whether any person has acted in
  reliance on the public record that the defective corporate act was
  valid;
               (3)  whether any person will be or was harmed by the
  ratification or validation of the defective corporate act,
  excluding any harm that would have resulted had the defective
  corporate act been valid when it was approved or took effect;
               (4)  whether any person will be harmed by the failure to
  ratify or validate the defective corporate act; and
               (5)  any other factors or considerations the district
  court considers just and equitable.
         Sec. 21.915.  EXCLUSIVE JURISDICTION. The district court
  has exclusive jurisdiction to hear and determine any action brought
  under Section 21.914.
         Sec. 21.916.  SERVICE. (a)  Service of an application filed
  under Section 21.914 on the registered agent of a corporation or in
  any other manner permitted by applicable law is considered to be
  service on the corporation, and no other party need be joined in
  order for the district court to adjudicate the matter.
         (b)  If an action is brought by a corporation under Section
  21.914, the district court may require that notice of the action be
  provided to other persons identified by the court and permit those
  other persons to intervene in the action.
         Sec. 21.917.  STATUTE OF LIMITATIONS. (a)  This section
  does not apply to:
               (1)  an action asserting that a ratification was not
  accomplished in accordance with this subchapter; or
               (2)  any person to whom notice of the ratification was
  not given as required by Sections 21.906 and 21.911.
         (b)  Notwithstanding any other provision of this subchapter,
  the following may not be brought after the expiration of the 120th
  day of the validation effective time:
               (1)  an action asserting that a defective corporate act
  or putative shares ratified in accordance with this subchapter are
  void or voidable due to a failure of authorization identified in the
  resolution adopted in accordance with Section 21.903; or
               (2)  an action asserting that the district court, in
  its discretion, should declare that a ratification in accordance
  with this subchapter not take effect or that the ratification take
  effect only on certain conditions.
         SECTION 31.  This Act takes effect September 1, 2015.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 860 passed the Senate on
  April 9, 2015, by the following vote:  Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 860 passed the House on
  May 4, 2015, by the following vote:  Yeas 135, Nays 0, two present
  not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor