Relating to business organizations.

89(R) SB 2411 - Enrolled version - Bill Text

S.B. No. 2411

AN ACT

relating to business organizations.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter B, Chapter 1, Business Organizations

Code, is amended by adding Sections 1.056 and 1.057 to read as

follows:

Sec.

1.056.

REFERENCES IN CODE TO CERTAIN DISTRICT COURTS

INCLUDES BUSINESS COURTS. Notwithstanding any other law, a

reference or grant of jurisdiction in this code, including a grant

of exclusive jurisdiction, to a district court constitutes a

reference or grant of concurrent jurisdiction to a business court

established under Chapter 25A, Government Code, if the business

court has authority and jurisdiction under Chapter 25A, Government

Code, to adjudicate the action or claim. This section does not

expand the authority of the business court under Chapter 25A,

Government Code.

Sec.

1.057.

LAWS GOVERNING FORMATION, INTERNAL AFFAIRS, AND

GOVERNANCE OF DOMESTIC ENTITY. (a) The plain meaning of the text

of this code may not be supplanted, contravened, or modified by the

laws or judicial decisions of any other state.

(b)

The managerial officials of a domestic entity, in

exercising their powers with respect to the domestic entity, may

consider the laws and judicial decisions of other states and the

practices observed by entities formed in those other states. The

failure or refusal of a managerial official to consider, or to

conform the exercise of the managerial official's powers to, the

laws, judicial decisions, or practices of another state does not

constitute or imply a breach of this code or of any duty existing

under the laws of this state.

SECTION 2. Section 2.115(b), Business Organizations Code,

is amended to read as follows:

(b) The governing documents of a domestic entity [
may

require
], consistent with applicable state and federal

jurisdictional requirements,
may require:

(1)
that any internal entity claims shall be brought

only in a court in this state
; and

(2)

that one or more courts in this state having

jurisdiction shall serve as the exclusive forum and venue for any

internal entity claims
.

SECTION 3. Section 3.007(a), Business Organizations Code,

is amended to read as follows:

(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
individual
[
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.

SECTION 4. Section 3.015(a), Business Organizations Code,

is amended 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;

(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
individual

[
person
] serving as an initial member of the board of directors or

executive committee of the association.

SECTION 5. Section 3.060, Business Organizations Code, is

amended by amending Subsection (a) and adding Subsection (c) 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 omit
:

(1)
any prior statements regarding the number of

directors and the names and addresses of the
individuals
[
persons
]

serving as directors and, at the corporation's election, may insert

a statement regarding the current number of directors and the names

and addresses of the
individuals
[
persons
] currently serving as

directors
; and

(2)

any provisions that were necessary to effect a

change, exchange, reclassification, subdivision, combination, or

cancellation of shares, if the change, exchange, reclassification,

subdivision, combination, or cancellation has become effective
.

(c)

Any omission or insertion under Subsection (a) or

omission under Section 3.059(b) is not considered an amendment that

requires shareholder approval.

SECTION 6. Section 3.061, Business Organizations Code, is

amended by amending Subsection (a) and adding Subsection (c) to

read as follows:

(a) In addition to the provisions authorized or required by

Section 3.059, a restated certificate of formation for a nonprofit

corporation may omit any prior statements regarding the number of

directors and the names and addresses of the
individuals
[
persons
]

serving as directors and, at the corporation's election, may insert

a statement regarding the current number of directors and the names

and addresses of the
individuals
[
persons
] currently serving as

directors.

(c)

Any omission or insertion under Subsection (a) or

omission under Section 3.059(b) is not considered an amendment that

requires member approval.

SECTION 7. Section 3.0611, Business Organizations Code, is

amended to read as follows:

Sec. 3.0611. SUPPLEMENTAL PROVISIONS FOR RESTATED

CERTIFICATE OF FORMATION FOR LIMITED LIABILITY COMPANY.
(a)
In

addition to the provisions authorized or required by Section 3.059,

a restated certificate of formation for a limited liability company

may omit any prior statements regarding whether the company has or

does not have managers and the names and addresses of managers or

members and, at the company's election, may insert a statement:

(1) regarding whether the company currently has or

does not have managers;

(2) that the company currently has managers and the

names and addresses of the persons currently serving as managers;

or

(3) that the company currently does not have managers

and the names and addresses of the current members of the company.

(b)

Any omission or insertion under Subsection (a) or

omission under Section 3.059(b) is not considered an amendment that

requires member approval.

SECTION 8. Section 3.062, Business Organizations Code, is

amended to read as follows:

Sec. 3.062. SUPPLEMENTAL PROVISIONS FOR RESTATED

CERTIFICATE OF FORMATION FOR REAL ESTATE INVESTMENT TRUST.
(a)
In

addition to the provisions authorized or required by Section 3.059,

a restated certificate of formation for a real estate investment

trust may update the current number of trust managers and the names

and addresses of the
individuals
[
persons
] serving as trust

managers.

(b)

Any update under Subsection (a) or Section 3.059(b) is

not considered an amendment that requires shareholder approval.

SECTION 9. Subchapter C, Chapter 3, Business Organizations

Code, is amended by adding Section 3.106 to read as follows:

Sec.

3.106.

AUTHORIZATION OF PLANS, AGREEMENTS,

INSTRUMENTS, AND OTHER DOCUMENTS. (a) If this code expressly

requires the governing authority to approve or take other action

with respect to any plan, agreement, instrument, or other document,

the plan, agreement, instrument, or other document may be approved

by the governing authority in final form or in substantially final

form.

(b)

If the governing authority has acted to approve or take

other action with respect to a plan, agreement, instrument, or

other document that is required by this code to be filed with the

secretary of state or referenced in any certificate to be filed with

the secretary of state, the governing authority may, at any time

after acting to approve or taking that other action and before the

effectiveness of the filing with the secretary of state, act to

ratify the plan, agreement, instrument, or other document. That

ratification is considered:

(1)

to be effective as of the time of the original act

to approve or the original taking of other action by the governing

authority; and

(2)

to satisfy any requirement under this code that

the governing authority approve or take other action with respect

to the plan, agreement, instrument, or other document in a specific

manner or sequence.

SECTION 10. Section 4.001(a), Business Organizations Code,

is amended to read as follows:

(a) A filing instrument must be:

(1) signed by a person authorized by this code to act

on behalf of the entity in regard to the filing instrument; and

(2) delivered to the secretary of state in person or by

mail, courier, [
facsimile or
] electronic transmission, or any other

method approved by the secretary of state
[
comparable form of

delivery
].

SECTION 11. 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 or revocation, $75;

(15) for filing a certificate of validation, $15, plus

the filing fee imposed for filing each new filing instrument that is

attached as an exhibit to the certificate of validation under

Section
21.908(b)(3)(B)
[
21.908(b)(3)(C)
]; and

(16) for filing any instrument as provided by this

code for which this section does not expressly provide a fee, $15.

SECTION 12. Section 4.153, Business Organizations Code, is

amended to read as follows:

Sec. 4.153. FILING FEES: NONPROFIT CORPORATIONS. For a

filing by or for a nonprofit corporation, the secretary of state

shall impose the following fees:

(1) for filing a certificate of formation, $25;

(2) for filing a certificate of amendment, $25;

(3) for filing a certificate of merger, conversion, or

consolidation, without regard to whether the surviving or new

corporation is a domestic or foreign corporation, $50;

(4) for filing a statement of change of a registered

office, registered agent, or both, $5;

(5) for filing a certificate of termination, $5;

(6) for filing an application of a foreign corporation

for registration to conduct affairs in this state, $25;

(7) for filing an application of a foreign corporation

for an amended registration to conduct affairs in this state, $25;

(8) for filing a certificate of withdrawal of a

foreign corporation, $5;

(9) for filing a restated certificate of formation and

accompanying statement, $50;

(10) 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 $250;

(11) for filing a report under Chapter 22, $5;

(12) for filing a report under Chapter 22 to reinstate

a corporation's right to conduct affairs in this state, $5, plus a

late fee in the amount of $5 or in the amount of $1 for each month or

part of a month that the report remains unfiled, whichever amount is

greater, except that the late fee may not exceed $25;

(13) for filing a report under Chapter 22 to reinstate

a corporation or registration following involuntary termination or

revocation, $25;

(14) for filing a certificate of validation, $5, plus

the filing fee imposed for filing each new filing instrument that is

attached as an exhibit to the certificate of validation under

Section
22.508(c)(3)(B)
[
22.508(c)(3)(C)
]; and

(15) for filing any instrument of a domestic or

foreign corporation as provided by this code for which this section

does not expressly provide a fee, $5.

SECTION 13. Section 4.162(b), Business Organizations Code,

is amended to read as follows:

(b) For a filing by or for a registered series of a domestic

limited liability company when no other fee has been provided, the

secretary of state shall impose the same fee as the filing fee for a

similar instrument under Section 4.151
or 4.154
.

SECTION 14. Section 6.051, Business Organizations Code, is

amended by adding Subsection (c) to read as follows:

(c)

When a notice is required or permitted by this code or

the governing documents of a domestic entity to be given to an

owner, member, or governing person of the domestic entity, a

document enclosed with, or annexed or appended to, the notice is

considered part of the notice for the purpose of determining

whether notice was properly given under this code and the governing

documents.

SECTION 15. Section 6.202(d), Business Organizations Code,

is amended to read as follows:

(d) The entity shall promptly
provide notice to
[
notify
]

each
person who is an
owner or member
as of the record date for the

action, as determined by Section 6.102,
who did not sign a consent

described by Subsection (b) of the action that is the subject of the

consent.
The notice required by this subsection:

(1)

in addition to other information required by

applicable law, must contain a reasonable description of the action

that is the subject of the consent; and

(2)

may, instead of containing the complete notice,

include information directing the owner or member to a publicly

available electronic resource at which a reasonable description of

the action that is the subject of the consent and any other

information required by applicable law may be accessed by the owner

or member without subscription or cost.

SECTION 16. Section 7.001, Business Organizations Code, is

amended to read as follows:

Sec. 7.001. LIMITATION OF LIABILITY OF
MANAGERIAL OFFICIAL

[
GOVERNING PERSON
]. (a) Subsections (b) and (c) apply to:

(1) a domestic entity other than a partnership or

limited liability company;

(2) another organization incorporated or organized

under another law of this state; and

(3) to the extent permitted by federal law, a

federally chartered bank, savings and loan association, or credit

union.

(b) The certificate of formation or similar instrument of an

organization to which this section applies may provide that a

managerial official
[
governing person
] of the organization is not

liable, or is liable only to the extent provided by the certificate

of formation or similar instrument, to the organization or its

owners or members for monetary damages for an act or omission by the

managerial official
[
person
] in the
managerial official's

[
person's
] capacity as a
managerial official
[
governing person
].

(c) Subsection (b) does not authorize the elimination or

limitation of the liability of a
managerial official
[
governing

person
] to the extent the
managerial official
[
person
] is found

liable under applicable law for:

(1) a breach of the
managerial official's
[
person's
]

duty of loyalty, if any, to the organization or its owners or

members;

(2) an act or omission not in good faith that:

(A) constitutes a breach of duty of the

managerial official
[
person
] to the organization; or

(B) involves intentional misconduct or a knowing

violation of law;

(3) a transaction from which the
managerial official

[
person
] received an improper benefit, regardless of whether the

benefit resulted from an action taken within the scope of the

managerial official's
[
person's
] duties; or

(4) an act or omission for which the liability of a

managerial official
[
governing person
] is expressly provided by an

applicable statute.

(d) The liability of a
managerial official
[
governing

person
] may be limited or eliminated:

(1) in a general partnership by its partnership

agreement to the same extent Subsections (b) and (c) permit the

limitation or elimination of liability of a
managerial official

[
governing person
] of an organization to which those subsections

apply and to the additional extent permitted under Chapter 152;

(2) in a limited partnership by its partnership

agreement to the same extent Subsections (b) and (c) permit the

limitation or elimination of liability of a
managerial official

[
governing person
] of an organization to which those subsections

apply and to the additional extent permitted under Chapter 153 and,

to the extent applicable to limited partnerships, Chapter 152; and

(3) in a limited liability company by its certificate

of formation or company agreement to the same extent Subsections

(b) and (c) permit the limitation or elimination of liability of a

managerial official
[
governing person
] of an organization to which

those subsections apply and to the additional extent permitted

under
Sections 101.052 and
[
Section
] 101.401.

SECTION 17. Section 10.002, Business Organizations Code, is

amended by adding Subsection (e) to read as follows:

(e)

Unless otherwise expressly provided by the plan of

merger, a disclosure letter, disclosure schedules, or similar

documents or instruments delivered in connection with the plan of

merger are not considered part of the plan of merger for purposes of

this chapter, but those documents or instruments have the effects

provided in the plan of merger.

SECTION 18. Section 10.004, Business Organizations Code, is

amended to read as follows:

Sec. 10.004. PLAN OF MERGER: PERMISSIVE PROVISIONS.
(a)
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)
provisions for the appointment, at or after the

time at which the plan of merger is adopted by the owners or members

of a party to the merger, of one or more persons, which may include

an organization surviving or resulting from the merger or any

managerial official, representative, or agent of a party to the

merger or of a surviving or resulting organization, as

representative of the owners or members of a party to the merger,

including those whose ownership interests or membership interests

are cancelled, converted, or exchanged in the merger; and

(4)
any other provisions relating to the merger that

are not required by this chapter.

(b)

Provisions for the appointment of a representative in a

plan of merger under Subsection (a)(3) may:

(1)

delegate to the representative the sole and

exclusive authority to take action on behalf of the owners or

members under the plan of merger, including the authority to take

any action the representative determines to enforce or settle the

rights of the owners or members under the plan of merger, subject to

the terms and conditions prescribed by the plan of merger;

(2)

prescribe the irrevocable nature and binding

effect of the appointment as to all owners or members to be bound by

the appointment from and after the approval of the plan of merger by

those owners or members in accordance with this subchapter; and

(3) provide that any of the provisions:

(A)

may not be amended after the merger has

become effective; or

(B)

may be amended only with the consent or

approval of persons specified in the plan of merger.

SECTION 19. Section 10.006(e), Business Organizations

Code, is amended to read as follows:

(e) Sections 10.001(c)-(e), 10.002(c), 10.003,
10.004,
and

10.007-10.010 apply to a merger approved under Subsection (d),

except that the resolution approving the merger should be

considered the plan of merger for purposes of those sections.

SECTION 20. Section 10.052, Business Organizations Code, is

amended by adding Subsection (d) to read as follows:

(d)

Unless otherwise expressly provided by the plan of

exchange, a disclosure letter, disclosure schedules, or similar

documents or instruments delivered in connection with the plan of

exchange are not considered part of the plan of exchange for

purposes of this chapter, but the documents or instruments have the

effect provided in the plan of exchange.

SECTION 21. Section 10.053, Business Organizations Code, is

amended to read as follows:

Sec. 10.053. PLAN OF EXCHANGE: PERMISSIVE PROVISIONS.
(a)

A plan of exchange may include
:

(1)

provisions for the appointment, at or after the

time at which the plan of exchange is adopted by the owners or

members whose ownership or membership interests are being acquired

in the interest exchange, of one or more persons, which may include

an organization that is a party to the interest exchange or any

managerial official, representative, or agent of a party to the

interest exchange, as representative of those owners or members;

and

(2)
any other provisions not required by Section

10.052 relating to the interest exchange.

(b)

Provisions for the appointment of a representative in a

plan of exchange under Subsection (a)(1) may:

(1)

delegate to the representative the sole and

exclusive authority to take action on behalf of the owners or

members under the plan of exchange, including the authority to take

actions the representative determines to enforce or settle the

rights of the owners or members under the plan of exchange, subject

to the terms and conditions as prescribed by the plan of exchange;

(2)

prescribe the irrevocable nature and binding

effect of the appointment as to all owners or members to be bound by

the appointment from and after the approval of the plan of exchange

by those owners or members in accordance with this subchapter; and

(3) provide that any of the provisions:

(A)

may not be amended after the interest

exchange has become effective; or

(B)

may be amended only with the consent or

approval of persons specified in the plan of exchange.

SECTION 22. Section 10.104, Business Organizations Code, is

amended to read as follows:

Sec. 10.104. PLAN OF CONVERSION: PERMISSIVE PROVISIONS.

(a)
A plan of conversion may include other provisions relating to

the conversion that are not inconsistent with law.

(b)

An action to be taken by the converted entity in

connection with the conversion of the converting entity that is

provided by the plan of conversion adopted in the manner required by

Section 10.101 or 10.102, as applicable, and that is within the

power of the converted entity under the law of its jurisdiction of

formation:

(1)

is considered authorized, adopted, and approved,

as applicable, by:

(A) the converted entity; and

(B)

the governing authority and owners or members

of the converted entity, as applicable; and

(2)

does not require any further action of the

governing authority, owners, or members of the converted entity for

purposes of this code.

SECTION 23. Section 21.053, Business Organizations Code, is

amended by amending Subsection (c) and adding Subsections (d), (e),

(f), and (g) to read as follows:

(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
:

(1)
may, without shareholder approval, adopt an

amendment to the corporation's certificate of formation to
:

(A)
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
;

(B)

omit any provision that specifies the name

and address of each organizer or director; or

(C)

omit any provisions that were necessary to

effect a change, exchange, reclassification, subdivision,

combination, or cancellation of shares, if the change, exchange,

reclassification, subdivision, combination, or cancellation has

become effective; and

(2)

if the corporation has only one class of

outstanding stock that is not divided into series and in which no

change is made in any par value of shares of that class, may,

without shareholder approval, adopt an amendment to the

corporation's certificate of formation to:

(A)

reclassify by subdividing the issued shares

of the class into a greater number of issued shares of the class;

and

(B)

if the reclassification is primarily for the

purpose of maintaining the listing eligibility of the class on any

applicable national securities exchange, reclassify by combining

the issued shares of the class into a lesser number of issued shares

of the class
.

(d)

An amendment described by Subsection (c)(2)(A) may also

increase the number of authorized shares of the class up to an

amount determined by multiplying the existing number of authorized

shares of the class by the same multiple by which the issued shares

of the class are subdivided in the reclassification and rounding up

any resulting fractional number of shares to a whole number of

shares.

(e)

An amendment described by Subsection (c)(2)(B) may also

decrease the number of authorized shares of the class to an amount

determined by dividing the existing number of authorized shares of

the class by the same multiple by which the issued shares of the

class are combined in the reclassification and rounding up any

resulting fractional number of shares to a whole number of shares.

(f) When a reclassification of issued shares:

(1)

with par value is made by a corporation under

Subsection (c)(2)(A), an amount of surplus designated by the

corporation's board of directors that is not less than the

aggregate par value of the shares issued as a result of the

reclassification shall be transferred to stated capital; and

(2)

without par value is made by a corporation under

Subsection (c)(2)(A), an amount of surplus equal to an aggregate

value with respect to the shares issued as a result of the

reclassification, as set by the board of directors when the

reclassification is authorized, shall be transferred to stated

capital.

(g)

A corporation may not effect a reclassification under

Subsection (c)(2)(A) if the surplus of the corporation is less than

the amount required by Subsection (f)(1) or (f)(2), as applicable,

to be transferred to stated capital at the time the

reclassification becomes effective.

SECTION 24. Section 21.160(c), Business Organizations

Code, is amended to read as follows:

(c) A corporation may dispose of treasury shares for

consideration that may be determined by the board of directors.
The

consideration received for treasury shares may:

(1)

have a value greater or less than, or equal to, the

par value, if any, of the shares; and

(2)

consist of the types of consideration described by

Section 21.159.

SECTION 25. Section 21.168(e), Business Organizations

Code, is amended to read as follows:

(e) An authorization of the board of directors may delegate

to a person or persons, in addition to the board of directors, the

authority to enter into one or more transactions to issue rights or

options. For a transaction entered into by a person or persons to

whom authority was delegated under this subsection, the rights or

options may be issued in the number, at the time, and for the

consideration
, and under the other terms on which shares may be

issued on the exercise of those rights and options,
as the person or

persons may determine if that authorization of the board of

directors:

(1) states:

(A) the maximum number of [
rights or options, and

the maximum number of
] shares issuable on exercise of those rights

or options, that may be issued under the authorization;

(B) the period of time during which the rights or

options[
,
] and
the period of time during which
the shares issuable

on exercise of those rights or options, may be issued; and

(C) the minimum amount of consideration:

(i) if any, for which the rights or options

may be issued; and

(ii) for the shares issuable on exercise of

the rights or options; and

(2) does not permit the person or persons to whom

authority was delegated to issue rights, options, or shares to that

person or those persons.

SECTION 26. Section 21.402, Business Organizations Code, is

amended to read as follows:

Sec. 21.402. BOARD MEMBER ELIGIBILITY REQUIREMENTS. Unless

the certificate of formation or bylaws of a corporation provide

otherwise, a
director
[
person
] is not required to be a resident of

this state or a shareholder of the corporation [
to serve as a

director
]. The certificate of formation or bylaws may prescribe

other qualifications for directors.

SECTION 27. Section 21.404, Business Organizations Code, is

amended to read as follows:

Sec. 21.404. DESIGNATION OF INITIAL BOARD OF DIRECTORS. If

the corporation is to be managed by a board of directors, the

certificate of formation of a corporation must state the
name and

address
[
names and addresses
] of
each individual who will serve as

director until the first annual meeting of shareholders and until a

successor is elected and qualified
[
the persons constituting the

initial board of directors of the corporation
].

SECTION 28. Section 21.561, Business Organizations Code, is

amended by adding Subsection (c) to read as follows:

(c)

For purposes of Subsection (b)(1), substantial benefit

to the corporation does not include additional or amended

disclosures made to the shareholders, regardless of materiality.

SECTION 29. Section 21.562(a), Business Organizations

Code, is amended to read as follows:

(a) In a derivative proceeding brought in the right of a

foreign corporation, the matters covered by this subchapter are

governed by the laws of the jurisdiction of formation of the foreign

corporation, except for Sections 21.555, 21.560, and 21.561, which

with respect to foreign corporations
are procedural provisions and

do not relate to the internal affairs of the foreign corporation,

unless applying the laws of the jurisdiction of formation of the

foreign corporation requires otherwise with respect to Section

21.555.

SECTION 30. Section 21.563(b), Business Organizations

Code, is amended to read as follows:

(b) Sections 21.552-21.560 do not apply to [
a claim or
] a

derivative proceeding by a shareholder of a closely held

corporation against a
present or former
director, officer, or

shareholder of the corporation. In the event the
shareholder also

asserts a
claim
in the
[
or
] derivative proceeding [
is also made
]

against a person who is not
a present or former
[
that
] director,

officer, or shareholder, this subsection applies only to
a
[
the
]

claim
in the
[
or
] derivative proceeding against
a present or former

[
the
] director, officer, or shareholder.

SECTION 31. Sections 21.901(2) and (4), Business

Organizations Code, are amended to read as follows:

(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, without

regard to the failure of authorization identified in Section

21.903(a)(4), but is
ineffective,
void
,
or voidable due to a

failure of authorization
, including a failure to file with the

filing officer a filing instrument that was required under the

corporate statute to complete the effectiveness of the act or

transaction
.

(4) "Failure of authorization" means:

(A) 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, any plan or

agreement to which the corporation is a party, or the disclosure set

forth in any proxy or consent solicitation statement, if and to the

extent the failure would render the act or transaction
ineffective,

void
,
or voidable; or

(B) the failure of the board of directors or an

officer of the corporation to authorize or approve an act or

transaction taken by or on behalf of the corporation that required

the prior authorization or approval of the board of directors or the

officer.

SECTION 32. Section 21.902, Business Organizations Code, is

amended to read as follows:

Sec. 21.902. RATIFICATION OF DEFECTIVE CORPORATE ACT AND

PUTATIVE SHARES.
(a) Except as provided by Subsection (b) and

subject
[
Subject
] to Section 21.909 or 21.910, a defective

corporate act or putative shares are not
ineffective,
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.

(b)

A corporation may not ratify with retroactive effect in

accordance with this subchapter a defective corporate act resulting

from a failure of authorization that is attributable to the failure

to file with the filing officer the following filing instrument:

(1)

a statement of change of registered agent or a

statement of change of registered office under Subchapter E,

Chapter 5;

(2)

a certificate of amendment or restated certificate

of formation that amends the registered agent or registered office

under Subchapter B, Chapter 3;

(3)

a certificate of formation under Subchapter A,

Chapter 3;

(4)

a certificate of termination under Subchapter C,

Chapter 11;

(5)

a certificate of merger or certificate of

conversion under Subchapter D, Chapter 10; or

(6)

a report under Subchapter E, Chapter 171, Tax

Code.

SECTION 33. Sections 21.908(a), (b), and (c), Business

Organizations Code, are amended to read as follows:

(a)
The
[
If a 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 shall file a

certificate of validation with respect to the defective corporate

act in accordance with Chapter 4
, if:

(1)

a 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; and

(2) the filing instrument or other document:

(A)

previously filed with the filing officer

requires any change to give effect to the defective corporate act in

accordance with this subchapter, including a change to the date and

time of the effectiveness of the filed filing instrument or other

document; or

(B)

was not previously filed with the filing

officer under any other provision of the corporate statute
[
,

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 include:

(1)
a statement that the corporation has ratified one

or more defective corporate acts that would have required the

filing of a filing instrument or other document with the filing

officer under any provision of the corporate statute
[
each

defective corporate act that is a subject of the certificate of

validation, including:

[
(A)

for a defective corporate act involving the

issuance of putative shares, the number and type of putative shares

issued and the date or dates on which the putative shares were

purported to have been issued;

[
(B) the date of the defective corporate act; and

[
(C)

the nature of the failure of authorization

with respect to the defective corporate act
];

(2) a statement that each defective corporate act
has

been
[
was
] ratified in accordance with this subchapter[
, including:

[
(A)

the date on which the board of directors

ratified each defective corporate act; and

[
(B)

the date, if any, on which the shareholders

approved the ratification of each defective corporate act
]; and

(3) as appropriate:

(A) if a filing instrument was previously filed

with a filing officer under the corporate statute with respect to

the defective corporate act and [
no change to the filing instrument

is required to give effect to the defective corporate act as

ratified in accordance with this subchapter:

[
(i)

the name, title, and filing date of the

previously filed filing instrument and of any certificate of

correction to the filing instrument; and

[
(ii)

a statement that a copy of the

previously filed filing instrument, together with any certificate

of correction to the filing instrument, is attached as an exhibit to

the certificate of validation;

[
(B)

if a filing instrument was previously filed

with a filing officer under the corporate statute with respect to

the defective corporate act and
] the filing instrument requires any

change to give effect to the defective corporate act as ratified in

accordance with this subchapter, including a change to the date and

time of the effectiveness of the filing instrument:

(i) the name, title, and filing date of the

previously filed filing instrument and of any certificate of

correction to the filing instrument;

(ii) a statement that a filing instrument

containing all the information required to be included under the

applicable provisions of this code to give effect to the ratified

defective corporate act is attached as an exhibit to the

certificate of validation; and

(iii) the date and time that the attached

filing instrument is considered to have become effective under this

subchapter; or

(B)
[
(C)
] if a filing instrument was not

previously filed with a filing officer under the corporate statute

with respect to the defective corporate act and the defective

corporate act as ratified under this subchapter would have required

under the other applicable provisions of this code the filing of a

filing instrument in accordance with Chapter 4, if the defective

corporate act had occurred when this code was in effect:

(i) a statement that a filing instrument

containing all the information required to be included under the

applicable provisions of this code to give effect to the defective

corporate act, as if the defective corporate act had occurred when

this code was in effect, is attached as an exhibit to the

certificate of validation; and

(ii) the date and time that the attached

filing instrument is considered to have become effective under this

subchapter.

(c) A filing instrument attached to a certificate of

validation under
this section
[
Subsection (b)(3)(B) or (C)
] does

not need to be executed separately and does not need to include any

statement required by any other provision of this code that the

instrument has been approved and adopted in accordance with that

provision.

SECTION 34. Section 21.909, Business Organizations Code, is

amended to read as follows:

Sec. 21.909. ADOPTION OF RESOLUTIONS; EFFECT ON DEFECTIVE

CORPORATE ACT. On or after the validation effective time, unless

determined otherwise in an action brought under Section 21.914 and

subject to
Sections 21.902(b) and
[
Section
] 21.907(e), each

defective corporate act ratified in accordance with this subchapter

may not be considered
ineffective,
void
,
or voidable as a result of

the failure of authorization described by the resolutions adopted

under Sections 21.903 and 21.904, and the effect shall be

retroactive to the time of the defective corporate act.

SECTION 35. Section 21.910, Business Organizations Code, is

amended to read as follows:

Sec. 21.910. ADOPTION OF RESOLUTIONS; EFFECT ON PUTATIVE

SHARES. On or after the validation effective time, unless

determined otherwise in an action brought under Section 21.914 and

subject to
Sections 21.902(b) and
[
Section
] 21.907(e), each

putative share or fraction of a putative share issued or

purportedly issued pursuant to a defective corporate act ratified

in accordance with this subchapter and described by the resolutions

adopted under Sections 21.903 and 21.904 may not be considered

ineffective,
void
,
or voidable and is considered to be an identical

share or fraction of a share outstanding as of the time it was

purportedly issued.

SECTION 36. Section 21.913(b), Business Organizations

Code, is amended to read as follows:

(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
ineffective,
void
,
or voidable.

SECTION 37. Section 21.915, Business Organizations Code, is

amended to read as follows:

Sec. 21.915. EXCLUSIVE JURISDICTION.
Subject to Section

1.056, the
[
The
] district court has exclusive jurisdiction to hear

and determine any action brought under Section 21.914.

SECTION 38. Section 21.917(b), Business Organizations

Code, is amended to read as follows:

(b) Notwithstanding any other provision of this subchapter:

(1) an action claiming that a defective corporate act

or putative shares are
ineffective,
void
,
or voidable due to a

failure of authorization identified in the resolutions adopted in

accordance with Section 21.903 may not be filed in or must be

dismissed by any court after the applicable validation effective

time; and

(2) an action claiming that a court of appropriate

jurisdiction, 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 may not be

filed with the court after the expiration of the 120th day after the

later of the validation effective time or the time that any notice

required to be given under Section 21.911 is given with respect to

the ratification.

SECTION 39. Sections 22.001(1) and (3-a), Business

Organizations Code, are amended to read as follows:

(1) "Board of directors" means the group of

individuals
[
persons
] vested with the management of the affairs of

the corporation, regardless of the name used to designate the

group
. The term does not include the member or members of the

corporation if the certificate of formation of the corporation

vests the management of the affairs of the corporation in the

members
.

(3-a) "Director" means
an individual
[
a person
] who is

a member of the board of directors, regardless of the name or title

used to designate the
individual
[
person
]. The term does not

include
an individual
[
a person
] designated as a director of the

corporation, or as an ex officio, honorary, or other type of

director of the corporation if the
individual
[
person
] is not

entitled to vote as a director.

SECTION 40. Section 22.218(a), Business Organizations

Code, is amended to read as follows:

(a)
The
[
If authorized by the
] certificate of formation or

bylaws of the corporation
:

(1)
[
, the board of directors of a corporation, by

resolution adopted by the majority of the directors in office,
] may

designate one or more committees to have and exercise
all, or a

specified portion, of
the authority of the board
of directors of the

corporation
in the management of the corporation
; or

(2)

may authorize the board of directors, by

resolution adopted by the majority of the directors in office, to

designate one or more committees to have and exercise all, or a

specified portion, of the authority of the board in the management

of the corporation to the extent permitted in the authorization in

the certificate of formation or bylaws
[
to the extent provided by:

[
(1) the resolution;

[
(2) the certificate of formation; or

[
(3) the bylaws
].

SECTION 41. Section 22.231(a), Business Organizations

Code, is amended to read as follows:

(a) The officers of a corporation shall include a president

and a secretary and may include one or more vice presidents, a

treasurer, and other officers and assistant officers as considered

necessary. Any two or more offices, other than the offices of

president and secretary, may be held by the same
individual

[
person
].

SECTION 42. Sections 22.501(2) and (4), Business

Organizations Code, are amended to read as follows:

(2) "Defective corporate act" means:

(A) an election or appointment of directors that

is void or voidable due to a failure of authorization; or

(B) 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

ineffective,
void
,
or voidable due to a failure of authorization
,

including a failure to file with the filing officer a filing

instrument that was required under the corporate statute to

complete the effectiveness of the act or transaction
.

(4) "Failure of authorization" means:

(A) 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, a corporate

resolution, 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
ineffective,
void
,
or voidable; or

(B) the failure of the board of directors or an

officer of the corporation to authorize or approve an act or

transaction taken by or on behalf of the corporation that required

the prior authorization or approval of the board of directors or the

officer.

SECTION 43. Section 22.502, Business Organizations Code, is

amended to read as follows:

Sec. 22.502. RATIFICATION OF DEFECTIVE CORPORATE ACT.
(a)

Except as provided by Subsection (b) and subject
[
Subject
] to

Section 22.509, a defective corporate act is not
ineffective,
void
,

or voidable solely as a result of a failure of authorization if the

act is:

(1) ratified in accordance with this subchapter; or

(2) validated by the district court in a proceeding

brought under Section 22.512.

(b)

A corporation may not ratify with retroactive effect in

accordance with this subchapter a defective corporate act resulting

from a failure of authorization that is attributable to the failure

to file with the filing officer the following filing instrument:

(1)

a statement of change of registered agent or a

statement of change of registered office under Subchapter E,

Chapter 5;

(2)

a certificate of amendment or restated certificate

of formation that amends the registered agent or registered office

under Subchapter B, Chapter 3;

(3)

a certificate of formation under Subchapter A,

Chapter 3;

(4)

a certificate of termination under Subchapter C,

Chapter 11;

(5)

a certificate of merger or certificate of

conversion under Subchapter D, Chapter 10;

(6)

a report under Subchapter E, Chapter 171, Tax

Code; or

(7) a report under Sections 22.357 through 22.359.

SECTION 44. Sections 22.508(a), (c), and (d), Business

Organizations Code, are amended to read as follows:

(a)
The
[
If a 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 shall file a

certificate of validation with respect to the defective corporate

act in accordance with Chapter 4
, if:

(1)

a 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; and

(2) the filing instrument or other document:

(A)

previously filed with the filing officer

requires any change to give effect to the defective corporate act in

accordance with this subchapter, including a change to the date and

time of the effectiveness of the filed filing instrument or other

document; or

(B)

was not previously filed with the filing

officer under any other provision of the corporate statute
[
,

regardless of whether a filing instrument or other document was

previously filed
] with respect to the defective corporate act.

(c) The certificate of validation must include:

(1)
a statement that the corporation has ratified one

or more defective corporate acts that would have required the

filing of a filing instrument or other document with the filing

officer under any provision of the corporate statute
[
each

defective corporate act that is a subject of the certificate of

validation, including:

[
(A) the date of the defective corporate act; and

[
(B)

the nature of the failure of authorization

with respect to the defective corporate act
];

(2) a statement that each defective corporate act
has

been
[
was
] ratified in accordance with this subchapter[
, including:

[
(A)

the date on which the board of directors

ratified each defective corporate act; and

[
(B)

if the corporation has members with voting

rights, the date, if any, on which the members approved the

ratification of each defective corporate act or, if the management

of the affairs of the corporation is vested in its members under

Section 22.202, the date on which the members ratified each

defective corporate act
]; and

(3) as appropriate:

(A) [
if a filing instrument was previously filed

with a filing officer under the corporate statute with respect to

the defective corporate act and no change to the filing instrument

is required to give effect to the defective corporate act as

ratified in accordance with this subchapter:

[
(i)

the name, title, and filing date of the

previously filed filing instrument and of any certificate of

correction to the filing instrument; and

[
(ii)

a statement that a copy of the

previously filed filing instrument, together with any certificate

of correction to the filing instrument, is attached as an exhibit to

the certificate of validation;

[
(B)
] if a filing instrument was previously filed

with a filing officer under the corporate statute with respect to

the defective corporate act and the filing instrument requires any

change to give effect to the defective corporate act as ratified in

accordance with this subchapter, including a change to the date and

time of the effectiveness of the filing instrument:

(i) the name, title, and filing date of the

previously filed filing instrument and of any certificate of

correction to the filing instrument;

(ii) a statement that a filing instrument

containing all the information required to be included under the

applicable provisions of this code to give effect to the ratified

defective corporate act is attached as an exhibit to the

certificate of validation; and

(iii) the date and time that the attached

filing instrument is considered to have become effective under this

subchapter; or

(B)
[
(C)
] if a filing instrument was not

previously filed with a filing officer under the corporate statute

with respect to the defective corporate act and the defective

corporate act as ratified under this subchapter would have required

under the other applicable provisions of this code the filing of a

filing instrument in accordance with Chapter 4, if the defective

corporate act had occurred when this code was in effect:

(i) a statement that a filing instrument

containing all the information required to be included under the

applicable provisions of this code to give effect to the defective

corporate act, as if the defective corporate act had occurred when

this code was in effect, is attached as an exhibit to the

certificate of validation; and

(ii) the date and time that the attached

filing instrument is considered to have become effective under this

subchapter.

(d) A filing instrument attached to a certificate of

validation under
this section
[
Subsection (c)(3)(B) or (C)
] does

not need to be executed separately and does not need to include any

statement required by any other provision of this code that the

instrument has been approved and adopted in accordance with that

provision.

SECTION 45. Section 22.509, Business Organizations Code, is

amended to read as follows:

Sec. 22.509. ADOPTION OF RESOLUTIONS; EFFECT ON DEFECTIVE

CORPORATE ACT. On or after the validation effective time, unless

determined otherwise in an action brought under Section 22.512
and

subject to Section 22.502(b)
, each defective corporate act ratified

in accordance with this subchapter may not be considered

ineffective,
void
,
or voidable as a result of the failure of

authorization described by the resolutions adopted under Sections

22.503 and 22.504, and the effect shall be retroactive to the time

of the defective corporate act.

SECTION 46. Section 22.513, Business Organizations Code, is

amended to read as follows:

Sec. 22.513. EXCLUSIVE JURISDICTION.
Subject to Section

1.056, the
[
The
] district court has exclusive jurisdiction to hear

and determine any action brought under Section 22.512.

SECTION 47. Section 22.515(b), Business Organizations

Code, is amended to read as follows:

(b) Notwithstanding any other provision of this subchapter:

(1) an action claiming that a defective corporate act

is
ineffective,
void
,
or voidable due to a failure of authorization

identified in the resolutions adopted in accordance with Section

22.503 may not be filed in or must be dismissed by any court after

the applicable validation effective time; and

(2) an action claiming that a court of appropriate

jurisdiction, 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 may not be

filed with the court after the expiration of the 120th day after the

later of the validation effective time or the time that any notice

required to be given under Section 22.510 is given with respect to

the ratification.

SECTION 48. Subchapter C, Chapter 101, Business

Organizations Code, is amended by adding Section 101.1055 to read

as follows:

Sec.

101.1055.

SUBSCRIPTIONS. (a) A subscription to

purchase a membership interest in a limited liability company in

the process of being formed is irrevocable to the extent provided by

the terms of the subscription if:

(1)

the subscription is in writing and signed by the

subscriber; and

(2) the subscription states that it is irrevocable.

(b)

A written subscription entered into after the limited

liability company is formed is a contract between the subscriber

and the company.

SECTION 49. Section 101.109(a), Business Organizations

Code, is amended to read as follows:

(a) A person who is assigned a membership interest in a

limited liability company is entitled to:

(1) receive any allocation of income, gain, loss,

deduction, credit, or a similar item that the assignor is entitled

to receive to the extent the allocation of the item is assigned;

(2) receive any distribution the assignor is entitled

to receive to the extent the distribution is assigned;
and

(3)
the rights described by Section 101.502
[
require,

for any proper purpose, reasonable information or a reasonable

account of the transactions of the company; and

[
(4)

make, for any proper purpose, reasonable

inspections of the books and records of the company
].

SECTION 50. Section 101.463(b), Business Organizations

Code, is amended to read as follows:

(b) Sections 101.452-101.460 do not apply to [
a claim or
] a

derivative proceeding by a member of a closely held limited

liability company against a
present or former
governing person,

member, or officer of the limited liability company. In the event

the
member also asserts a
claim
in the
[
or
] derivative proceeding

[
is also made
] against a person who is not
a present or former

[
that
] governing person, member, or officer, this subsection

applies only to
a
[
the
] claim
in the
[
or
] derivative proceeding

against
a present or former
[
the
] governing person, member, or

officer.

SECTION 51. Subchapter F, Chapter 153, Business

Organizations Code, is amended by adding Section 153.258 to read as

follows:

Sec.

153.258.

SUBSCRIPTIONS. (a) A subscription to

purchase a partnership interest in a limited partnership in the

process of being formed is irrevocable to the extent provided by the

terms of the subscription if:

(1)

the subscription is in writing and signed by the

subscriber; and

(2) the subscription states that it is irrevocable.

(b)

A written subscription entered into after the limited

partnership is formed is a contract between the subscriber and the

partnership.

SECTION 52. Section 153.413(b), Business Organizations

Code, is amended to read as follows:

(b) Sections 153.402-153.410 do not apply to [
a claim or
] a

derivative proceeding by a limited partner of a closely held

limited partnership against a
present or former
general partner,

limited partner, or officer of the limited partnership. In the

event the
limited partner also asserts a
claim
in the
[
or
]

derivative proceeding [
is also made
] against a person who is not
a

present or former
[
that
] general partner, limited partner, or

officer, this subsection shall apply only to
a
[
the
] claim
in the

[
or
] derivative proceeding against
a present or former
[
the
]

general partner, limited partner, or officer.

SECTION 53. Section 153.553(a-1), Business Organizations

Code, is amended to read as follows:

(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);

(2) a certificate of amendment or restated certificate

of formation
containing amendments
must be signed by at least one

general partner and by each other general partner designated in the

certificate of amendment
or the restated certificate of formation

as a new general partner, unless signed and filed by a person under

Section 153.052(b) or (c), but the certificate of amendment
or the

restated certificate of formation
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
by

at least one general partner and by each other general partner

designated as a new general partner by any amendment to the

certificate of formation of the limited partnership being made by

the certificate of merger, but the certificate of merger need not be

signed by a withdrawing general partner;
[
as provided by Chapter

10; and
]

(5) a certificate
of conversion or exchange filed on

behalf of a domestic limited partnership must be signed by at least

one general partner; and

(6) a certificate
filed under Subchapter G, Chapter

10, must be signed by the person designated by the court.

SECTION 54. Section 251.352(a), Business Organizations

Code, is amended to read as follows:

(a) A cooperative association shall submit a written report

to its members at the annual meeting of the cooperative

association. The annual report must contain:

(1) a balance sheet;

(2) an income and expense statement;

(3) the amount and nature of the cooperative

association's authorized, subscribed, and paid-in capital;

(4) the total number of shareholders;

(5) the number of shareholders who were admitted to or

withdrew from the association during the year;

(6) the par value of the association's shares;

(7) the rate at which any investment dividends have

been paid; [
and
]

(8) if the cooperative association does not issue

shares:

(A) the total number of members;

(B) the number of members who were admitted to or

withdrew from the association during the year; and

(C) the amount of membership fees received
;

(9)

the name, address, occupation, and date of

expiration of the term of office of each officer and director; and

(10)

any compensation paid by the association to each

officer or director of the association
.

SECTION 55. Section 252.017(b), Business Organizations

Code, is amended to read as follows:

(b) Chapters 1,
2,
4, [
and
] 10
, and 11
and, if a nonprofit

association designates an agent for service of process, Subchapter

E, Chapter 5, apply to a nonprofit association.

SECTION 56. Sections 153.502(c), 251.353, and 251.354,

Business Organizations Code, are repealed.

SECTION 57. Section 4.001(a), Business Organizations Code,

as amended by this Act, applies only to a filing instrument

delivered to the secretary of state on or after the effective date

of this Act. A filing instrument delivered to the secretary of state

before the effective date of this Act is governed by the law in

effect on the date the filing instrument was delivered to the

secretary of state, and the former law is continued in effect for

that purpose.

SECTION 58. Sections 21.561 and 21.562, Business

Organizations Code, as amended by this Act, apply only to a

derivative proceeding instituted on or after the effective date of

this Act. A derivative proceeding instituted before the effective

date of this Act is governed by the law in effect on the date the

proceeding was instituted, and the former law is continued in

effect for that purpose.

SECTION 59. This Act takes effect September 1, 2025.

______________________________

______________________________

President of the Senate

Speaker of the House

I hereby certify that S.B. No. 2411 passed the Senate on

April 15, 2025, by the following vote: Yeas 30, Nays 1.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 2411 passed the House on

May 14, 2025, by the following vote: Yeas 136, Nays 3, two

present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor