S.B. No. 748
 
 
 
 
AN ACT
  relating to business entities and associations.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1.002, Business Organizations Code, is
  amended by adding Subdivisions (55-a), (69-c), (69-d), and (69-e)
  and amending Subdivision (69-b) to read as follows:
               (55-a)  "National securities exchange" means an
  exchange registered as a national securities exchange under Section
  6, Securities Exchange Act of 1934 (15 U.S.C. Section 78f).
               (69-b)  "Person" means an individual or a corporation,
  partnership, limited liability company, business trust, trust,
  association, or other organization, estate, government or
  governmental subdivision or agency, or other legal entity [has the
  meaning assigned by Section 311.005, Government Code].
               (69-c)  "Plan of conversion" means a document that
  conforms with the requirements of Section 10.103.
               (69-d)  "Plan of exchange" means a document that
  conforms with the requirements of Section 10.052.
               (69-e)  "Plan of merger" means a document that conforms
  with the requirements of Sections 10.002 and 10.003.
         SECTION 2.  Subsection (b), Section 6.101, Business
  Organizations Code, is amended to read as follows:
         (b)  Subject to this code and the governing documents of a
  domestic entity, the governing authority of the entity, in advance,
  may provide a record date for determining the owners or members of
  the entity, except that the date may not be earlier than the 60th
  day before the date the action requiring the determination of
  owners or members is originally to be taken.
         SECTION 3.  Subsection (a), Section 6.205, Business
  Organizations Code, is amended to read as follows:
         (a)  Any photographic, photostatic, facsimile, or similarly
  reliable reproduction of a consent in writing signed by an owner,
  member, or governing person of a filing entity may be substituted or
  used instead of the original writing for any purpose for which the
  original writing could be used[, if the reproduction is a complete
  reproduction of the entire original writing].
         SECTION 4.  Subdivisions (1) and (2), Section 8.001,
  Business Organizations Code, are amended to read as follows:
               (1)  "Delegate" means a person who, while serving as a
  governing person of an enterprise, is or was serving [as a
  representative of the enterprise] at the request of that enterprise
  as a representative of [at] another enterprise, [or] another
  organization, or [to] an employee benefit plan.  A person is a
  delegate to an employee benefit plan if the performance of the
  person's official duties to the enterprise also imposes duties on
  or otherwise involves service by the person to the plan or
  participants in or beneficiaries of the plan.
               (2)  "Enterprise" means a domestic entity or an
  organization subject to this chapter.  The term includes[,
  including] a predecessor enterprise [domestic entity or
  organization].
         SECTION 5.  Subsection (d), Section 8.103, Business
  Organizations Code, is amended to read as follows:
         (d)  With respect to a limited partnership, a vote of a
  majority-in-interest of the limited partners in a vote that
  excludes the interest held by each general partner who is not
  disinterested and independent constitutes a determination under
  Subsection (a)(4). For purposes of this subsection,
  "majority-in-interest" means, with respect to limited partners,
  limited partners who own more than 50 percent of the current
  percentage or other interest in the profits of the partnership that
  is owned by all of the limited partners.
         SECTION 6.  Subsection (d), Section 8.104, Business
  Organizations Code, is amended to read as follows:
         (d)  With respect to a limited partnership, a vote of a
  majority-in-interest of the limited partners in a vote that
  excludes the interest held by each general partner who is not
  disinterested and independent constitutes an authorization under
  Subsection (b). For purposes of this subsection,
  "majority-in-interest" means, with respect to limited partners,
  limited partners who own more than 50 percent of the current
  percentage or other interest in the profits of the partnership that
  is owned by all of the limited partners.
         SECTION 7.  Subsection (d), Section 8.105, Business
  Organizations Code, is amended to read as follows:
         (d)  Notwithstanding any authorization or determination
  specified in this chapter, an enterprise may pay or reimburse, in
  advance of the final disposition of a proceeding and on terms the
  enterprise considers appropriate, reasonable expenses incurred by:
               (1)  a former governing person [managerial official] or
  delegate who was, is, or is threatened to be made a respondent in
  the proceeding;[,] or
               (2)  a present or former employee, [or] agent, or
  officer who is not a governing person of the enterprise and who was,
  is, or is threatened to be made a respondent in the proceeding.
         SECTION 8.  Section 8.151, Business Organizations Code, is
  amended by adding Subsection (c-1) to read as follows:
         (c-1)  With respect to a limited partnership, a vote of a
  majority-in-interest of the limited partners constitutes approval
  of the owners for purposes of Subsection (c).
         SECTION 9.  Subsection (b), Section 9.007, Business
  Organizations Code, is amended to read as follows:
         (b)  The application for registration must state:
               (1)  the partnership's name;
               (2)  the federal taxpayer [tax] identification number
  of the partnership;
               (3)  the partnership's jurisdiction of formation;
               (4)  the date of initial registration as a limited
  liability partnership under the laws of the jurisdiction [state] of
  formation;
               (5)  the date the foreign entity began or will begin to
  transact business in this state;
               (6)  that the partnership exists as a valid limited
  liability partnership under the laws of the jurisdiction [state] of
  its formation;
               (7)  the number of partners at the date of the
  statement;
               (8)  each business or activity that the partnership
  proposes to pursue in this state, which may be stated to be any
  lawful business or activity under the laws of this state;
               (9)  the address of the principal office of the
  partnership;
               (10)  the address of the initial registered office and
  the name and address of the initial registered agent for service of
  process required to be maintained under Section 152.904; and
               (11)  that the secretary of state is appointed the
  agent of the partnership for service of process under the same
  circumstances as set forth by Section 5.251 for a foreign filing
  entity.
         SECTION 10.  Section 10.002, Business Organizations Code, is
  amended to read as follows:
         Sec. 10.002.  PLAN OF MERGER:  REQUIRED PROVISIONS. (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 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 to be canceled rather than converted or exchanged;
               (7)  the certificate of formation of each new domestic
  filing entity to be created by the plan of merger;
               (8) [(7)]  the governing documents of each new domestic
  nonfiling entity to be created by the plan of merger; and
               (9) [(8)]  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.
         (b)  An item required by Subsections (a)(7)-(9) [(a)(6)-(8)]
  may be included in the plan of merger by an attachment or exhibit to
  the plan.
         (c)  If the plan of merger provides for a manner and basis of
  converting or exchanging an ownership or membership interest that
  may be converted or exchanged in a manner or basis different than
  any other ownership or membership interest of the same class or
  series of the ownership or membership interest, the manner and
  basis of conversion or exchange must be included in the plan of
  merger in the same manner as provided by Subsection (a)(5).  A plan
  of merger may provide for cancellation of an ownership or
  membership interest while providing for the conversion or exchange
  of other ownership or membership interests of the same class or
  series as the ownership or membership interest to be canceled.
         SECTION 11.  Subsection (a), Section 10.008, Business
  Organizations Code, is amended to read as follows:
         (a)  When a merger takes effect:
               (1)  the separate existence of each domestic entity
  that is a party to the merger, other than a surviving or new
  domestic entity, ceases;
               (2)  all rights, title, and interests to all real
  estate and other property owned by each organization that is a party
  to the merger is allocated to and vested, subject to any existing
  liens or other encumbrances on the property, in one or more of the
  surviving or new organizations as provided in the plan of merger
  without:
                     (A)  reversion or impairment;
                     (B)  any further act or deed; or
                     (C)  any transfer or assignment having occurred;
               (3)  all liabilities and obligations of each
  organization that is a party to the merger are allocated to one or
  more of the surviving or new organizations in the manner provided by
  the plan of merger;
               (4)  each surviving or new domestic organization to
  which a liability or obligation is allocated under the plan of
  merger is the primary obligor for the liability or obligation, and,
  except as otherwise provided by the plan of merger or by law or
  contract, no other party to the merger, other than a surviving
  domestic entity or non-code organization liable or otherwise
  obligated at the time of the merger, and no other new domestic
  entity or non-code organization created under the plan of merger is
  liable for the debt or other obligation;
               (5)  any proceeding pending by or against any domestic
  entity or by or against any non-code organization that is a party to
  the merger may be continued as if the merger did not occur, or the
  surviving or new domestic entity or entities or the surviving or new
  non-code organization or non-code organizations to which the
  liability, obligation, asset, or right associated with that
  proceeding is allocated to and vested in under the plan of merger
  may be substituted in the proceeding;
               (6)  the governing documents of each surviving domestic
  entity are amended to the extent provided by the plan of merger;
               (7)  each new filing entity whose certificate of
  formation is included in the plan of merger under this chapter, on
  meeting any additional requirements, if any, of this code for its
  formation, is formed as a domestic entity under this code as
  provided by the plan of merger;
               (8)  the ownership or membership interests of each
  organization that is a party to the merger and that are to be
  converted or exchanged, in whole or part, into ownership or
  membership interests, obligations, rights to purchase securities,
  or other securities of one or more of the surviving or new
  organizations, into cash or other property, including ownership or
  membership interests, obligations, rights to purchase securities,
  or other securities of any organization, or into any combination of
  these, or that are to be canceled, are converted, [and] exchanged,
  or canceled 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 12.  Subsection (a), Section 10.052, Business
  Organizations Code, is amended 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 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.
         SECTION 13.  Subsection (a), Section 10.103, Business
  Organizations Code, is amended 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 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.
         SECTION 14.  Subsection (b), Section 10.354, Business
  Organizations Code, is amended to read as follows:
         (b)  Notwithstanding Subsection (a), subject to Subsection
  (c), an owner may not dissent from a plan of merger or conversion in
  which there is a single surviving or new domestic entity or non-code
  organization, or from a plan of exchange, if:
               (1)  the ownership interest, or a depository receipt in
  respect of the ownership interest, held by the owner is part of a
  class or series of ownership interests, or depository receipts in
  respect of ownership interests, that are, on the record date set for
  purposes of determining which owners are entitled to vote on the
  plan of merger, conversion, or exchange, as appropriate:
                     (A)  listed on a national securities exchange [or
  a similar system]; or
                     (B)  [listed on the Nasdaq Stock Market or a
  successor quotation system;
                     [(C)     designated as a national market security on
  an interdealer quotation system by the National Association of
  Securities Dealers, Inc., or a successor system; or
                     [(D)]  held of record by at least 2,000 owners;
               (2)  the owner is not required by the terms of the plan
  of merger, conversion, or exchange, as appropriate, to accept for
  the owner's ownership interest any consideration that is different
  from the consideration to be provided to any other holder of an
  ownership interest of the same class or series as the ownership
  interest held by the owner, other than cash instead of fractional
  shares or interests the owner would otherwise be entitled to
  receive; and
               (3)  the owner is not required by the terms of the plan
  of merger, conversion, or exchange, as appropriate, to accept for
  the owner's ownership interest any consideration other than:
                     (A)  ownership interests, or depository receipts
  in respect of ownership interests, of a domestic entity or non-code
  organization of the same general organizational type that,
  immediately after the effective date of the merger, conversion, or
  exchange, as appropriate, will be part of a class or series of
  ownership interests, or depository receipts in respect of ownership
  interests, that are:
                           (i)  listed on a national securities
  exchange or authorized for listing on the exchange on official
  notice of issuance; or
                           (ii)  [approved for quotation as a national
  market security on an interdealer quotation system by the National
  Association of Securities Dealers, Inc., or a successor entity; or
                           [(iii)]  held of record by at least 2,000
  owners;
                     (B)  cash instead of fractional ownership
  interests the owner would otherwise be entitled to receive; or
                     (C)  any combination of the ownership interests
  and cash described by Paragraphs (A) and (B).
         SECTION 15.  Subsections (c) and (e), Section 10.355,
  Business Organizations Code, are amended to read as follows:
         (c)  A notice required to be provided under Subsection (a) or
  (b) 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 (3) [10.356(b)(2)]
  may be provided.
         (e)  Not later than the 10th day after the date an action
  described by Subsection (a)(1) takes effect, the responsible
  organization shall give notice that the action has been effected to
  each owner who voted against the action and sent notice under
  Section 10.356(b)(1) [10.356(b)(2)].
         SECTION 16.  Subsections (b), (c), and (d), Section 10.356,
  Business Organizations Code, are 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) [(2)]  must give to the responsible organization a
  demand in writing [notice dissenting to the action] 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 
  [before the action is considered for approval], if the action was
  approved by [is to be submitted to] 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 [a] notice
  required by Section 10.355(d)(2) that the action has taken effect
  [was approved by the requisite vote of the owners], if the action
  was approved by [is to be undertaken on] 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.
         (c)  An owner who does not make a demand within the period
  required by Subsection (b)(3)(E) or, if Subsection (b)(1) is
  applicable, does not give the notice of objection before the
  meeting of the owners [(b)(2)(E)] is bound by the action and is not
  entitled to exercise the rights of dissent and appraisal under
  Section 10.354.
         (d)  Not later than the 20th day after the date an owner makes
  a demand under Subsection (b)(3) [this section], the owner must
  submit to the responsible organization any certificates
  representing the ownership interest to which the demand relates for
  purposes of making a notation on the certificates that a demand for
  the payment of the fair value of an ownership interest has been made
  under this section. An owner's failure to submit the certificates
  within the required period has the effect of terminating, at the
  option of the responsible organization, the owner's rights to
  dissent and appraisal under Section 10.354 unless a court, for good
  cause shown, directs otherwise.
         SECTION 17.  Subsections (a), (d), and (e), Section 10.358,
  Business Organizations Code, are amended to read as follows:
         (a)  Not later than the 20th day after the date a responsible
  organization receives a demand for payment made by a dissenting
  owner in accordance with Section 10.356(b)(3) [10.356], the
  responsible organization shall respond to the dissenting owner in
  writing by:
               (1)  accepting the amount claimed in the demand as the
  fair value of the ownership interests specified in the notice; or
               (2)  rejecting the demand and including in the response
  the requirements prescribed by Subsection (c).
         (d)  If the dissenting owner decides to accept the offer made
  by the responsible organization under Subsection (c)(2), the owner
  must provide to the responsible organization notice of the
  acceptance of the offer not later than the 90th day after the date
  the action that is the subject of the demand took effect  [An offer
  made under Subsection (c)(2) must remain open for a period of at
  least 60 days from the date the offer is first delivered to the
  dissenting owner].
         (e)  If, not later than the 90th day after the date the action
  that is the subject of the demand took effect, a dissenting owner
  accepts an offer made by a responsible organization under
  Subsection (c)(2) or [if] a dissenting owner and a responsible
  organization reach an agreement on the fair value of the ownership
  interests, the responsible organization shall pay the agreed amount
  not later than the 120th [60th] day after the date the action that
  is the subject of the demand took effect [the offer is accepted or
  the agreement is reached, as appropriate], if the dissenting owner
  delivers to the responsible organization:
               (1)  endorsed certificates representing the ownership
  interests if the ownership interests are certificated; or
               (2)  signed assignments of the ownership interests if
  the ownership interests are uncertificated.
         SECTION 18.  Section 11.057, Business Organizations Code, is
  amended by adding Subsection (f) to read as follows:
         (f)  "Majority-in-interest" means, with respect to all or a
  specified group of partners, partners who own more than 50 percent
  of the current percentage or other interest in the profits of the
  partnership that is owned by all of the partners or by the partners
  in the specified group, as appropriate.
         SECTION 19.  Section 11.402, Business Organizations Code, is
  amended to read as follows:
         Sec. 11.402.  JURISDICTION TO APPOINT RECEIVER. (a)  A
  court that has subject matter jurisdiction over specific property
  of a domestic or foreign entity that is located in this state and is
  involved in litigation has jurisdiction to appoint a receiver for
  that property as provided by Section 11.403.
         (b)  A district court in the county in which the registered
  office or principal place of business of a domestic entity is
  located has jurisdiction to:
               (1)  appoint a receiver for the property and business
  of a domestic entity for the purpose of rehabilitating the entity as
  provided by Section 11.404; or
               (2)  order the liquidation of the property and business
  of a domestic entity and appoint a receiver to effect that
  liquidation as provided by Section 11.405.
         SECTION 20.  Subsection (b), Section 11.404, Business
  Organizations Code, is amended to read as follows:
         (b)  A court may appoint a receiver under Subsection (a) only
  if:
               (1)  circumstances exist that are considered by the
  court to necessitate the appointment of a receiver to conserve the
  property and business of the domestic entity and avoid damage to
  interested parties;
               (2)  all other requirements of law are complied with;
  and
               (3)  the court determines that all other available
  legal and equitable remedies, including the appointment of a
  receiver for specific property of the domestic entity under Section
  11.402(a) [11.402], are inadequate.
         SECTION 21.  Subsection (a), Section 21.109, Business
  Organizations Code, is amended to read as follows:
         (a)  A shareholders' agreement authorized by this subchapter
  ceases to be effective when shares of the corporation are:
               (1)  listed on a national securities exchange [or
  similar system]; or
               (2)  [quoted on an interdealer quotation system of a
  national securities association or successor system; or
               [(3)]  regularly traded in a market maintained by one
  or more members of a national or affiliated securities association.
         SECTION 22.  Subchapter C, Chapter 21, Business
  Organizations Code, is amended by adding Section 21.110 to read as
  follows:
         Sec. 21.110.  OTHER SHAREHOLDER AGREEMENTS PERMITTED. This
  subchapter does not prohibit or impair any agreement between two or
  more shareholders, or between the corporation and one or more of the
  corporation's shareholders, permitted by Title 1, this chapter, or
  other law.
         SECTION 23.  Section 21.203, Business Organizations Code, is
  amended by adding Subsection (c) to read as follows:
         (c)  This section and Sections 21.204 through 21.208 do not
  invalidate or impair a corporation's right or power to grant an
  enforceable nonstatutory preemptive right in:
               (1)  a contract between the corporation and a
  shareholder or other person; or
               (2)  the governing documents of the corporation.
         SECTION 24.  Subsection (a), Section 21.206, Business
  Organizations Code, is amended to read as follows:
         (a)  An action brought against a corporation, the board of
  directors or an officer, shareholder, or agent of the corporation,
  or an owner of a beneficial interest in shares of the corporation
  for the violation of a preemptive right of a shareholder under
  Sections 21.203 and 21.204 must be brought not later than the
  earlier of:
               (1)  the first anniversary of the date written notice
  is given to each shareholder whose preemptive right was violated;
  or
               (2)  the fourth anniversary of the latest of:
                     (A)  the date the corporation issued the shares,
  securities, or rights;
                     (B)  the date the corporation sold the shares,
  securities, or rights; or
                     (C)  the date the corporation otherwise
  distributed the shares, securities, or rights.
         SECTION 25.  Subsection (b), Section 21.222, Business
  Organizations Code, is amended to read as follows:
         (b)  It is a defense to an action brought under this section
  that the person suing:
               (1)  has, within the two years preceding the date the
  action is brought, sold or offered for sale a list of shareholders
  or of holders of voting trust certificates [in consideration] for
  shares of the corporation or any other corporation;
               (2)  has aided or abetted a person in procuring a list
  of shareholders or of holders of voting trust certificates for the
  purpose described by Subdivision (1);
               (3)  has improperly used information obtained through a
  prior examination of the books and account records, minutes, or
  share transfer records of the corporation or any other corporation;
  or
               (4)  was not acting in good faith or for a proper
  purpose in making the person's request for examination.
         SECTION 26.  Section 21.357, Business Organizations Code, is
  amended to read as follows:
         Sec. 21.357.  RECORD DATE FOR PURPOSE OF SHAREHOLDERS'
  MEETING [OTHER THAN WRITTEN CONSENT TO ACTION]. The record date for
  the purpose of determining shareholders entitled to notice of or to
  vote at a shareholders' meeting or any adjournment of the meeting,
  as provided by the directors in accordance with Section 6.101, must
  be at least 10 days before the date of the shareholders' meeting [on
  which the particular action requiring the determination of
  shareholders is to be taken].
         SECTION 27.  Subsection (a), Section 21.415, Business
  Organizations Code, is amended to read as follows:
         (a)  The act of a majority of the directors present at a
  meeting at which a quorum is present at the time of the act is the
  act of the board of directors of a corporation, unless the act of a
  greater number is required by the certificate of formation or
  bylaws of the corporation or by this code.
         SECTION 28.  Section 21.418, Business Organizations Code, is
  amended by amending Subsections (a) and (b) and adding Subsections
  (d) and (e) to read as follows:
         (a)  This section applies [only] to a contract or transaction
  between a corporation and:
               (1)  one or more [of the corporation's] directors or
  officers, or one or more affiliates or associates of one or more
  directors or officers, of the corporation; or
               (2)  an entity or other organization in which one or
  more [of the corporation's] directors or officers, or one or more
  affiliates or associates of one or more directors or officers, of
  the corporation:
                     (A)  is a managerial official; or
                     (B)  has a financial interest.
         (b)  An otherwise valid and enforceable contract or
  transaction described by Subsection (a) is valid and enforceable,
  and is not void or voidable, notwithstanding any relationship or
  interest described by Subsection (a), if any one of the following
  conditions is satisfied [notwithstanding that the director or
  officer having the relationship or interest described by Subsection
  (a) is present at or participates in the meeting of the board of
  directors, or of a committee of the board that authorizes the
  contract or transaction, or votes or signs, in the person's
  capacity as a director or committee member, a unanimous written
  consent of directors or committee members to authorize the contract
  or transaction, if]:
               (1)  the material facts as to the relationship or
  interest described by Subsection (a) and as to the contract or
  transaction are disclosed to or known by:
                     (A)  the corporation's board of directors or a
  committee of the board of directors, and the board of directors or
  committee in good faith authorizes the contract or transaction by
  the approval of the majority of the disinterested directors or
  committee members, regardless of whether the disinterested
  directors or committee members constitute a quorum; or
                     (B)  the shareholders entitled to vote on the
  authorization of the contract or transaction, and the contract or
  transaction is specifically approved in good faith by a vote of the
  shareholders; or
               (2)  the contract or transaction is fair to the
  corporation when the contract or transaction is authorized,
  approved, or ratified by the board of directors, a committee of the
  board of directors, or the shareholders.
         (d)  A person who has the relationship or interest described
  by Subsection (a) may:
               (1)  be present at or participate in and, if the person
  is a director or committee member, may vote at a meeting of the
  board of directors or of a committee of the board that authorizes
  the contract or transaction; or
               (2)  sign, in the person's capacity as a director or
  committee member, a unanimous written consent of the directors or
  committee members to authorize the contract or transaction.
         (e)  If at least one of the conditions of Subsection (b) is
  satisfied, neither the corporation nor any of the corporation's
  shareholders will have a cause of action against any of the persons
  described by Subsection (a) for breach of duty with respect to the
  making, authorization, or performance of the contract or
  transaction because the person had the relationship or interest
  described by Subsection (a) or took any of the actions authorized by
  Subsection (d).
         SECTION 29.  Section 21.453, Business Organizations Code, is
  amended by adding Subsections (f) and (g) to read as follows:
         (f)  If after the adoption of a resolution under Subsection
  (b) the board of directors of the corporation determines that the
  plan of conversion is not advisable, the plan of conversion may be
  submitted to the shareholders of the corporation with a
  recommendation that the shareholders not approve the plan of
  conversion.
         (g)  A plan of conversion for a corporation may include a
  provision requiring that the plan of conversion be submitted to the
  shareholders of the corporation, regardless of whether the board of
  directors determines, after adopting a resolution or making a
  determination under this section, that the plan of conversion is
  not advisable and recommends that the shareholders not approve the
  plan of conversion.
         SECTION 30.  Subdivision (1), Section 21.601, Business
  Organizations Code, is amended to read as follows:
               (1)  "Issuing public corporation" means a domestic
  corporation that has:
                     (A)  100 or more shareholders of record as shown
  by the share transfer records of the corporation;
                     (B)  a class or series of the corporation's voting
  shares registered under the Securities Exchange Act of 1934 (15
  U.S.C. Section 77b et seq.), as amended; or
                     (C)  a class or series of the corporation's voting
  shares qualified for trading on [in] a national securities exchange
  [market system].
         SECTION 31.  Section 21.603, Business Organizations Code, is
  amended to read as follows:
         Sec. 21.603.  BENEFICIAL OWNER OF SHARES OR OTHER [SIMILAR]
  SECURITIES. (a)  For purposes of this subchapter [chapter], a
  person is a beneficial owner of shares or other [similar]
  securities if the person individually, or through an affiliate or
  associate, [beneficially owns,] directly or indirectly
  beneficially owns the shares or other securities or has the right[,
  shares or similar securities.
         [(b)     A beneficial owner of shares or similar securities is
  entitled, individually or through an affiliate or associate,] to:
               (1)  acquire the shares or other [similar] securities
  [that may be exercised] immediately or after the passage [of a
  certain amount] of time according to an oral or written agreement,
  arrangement, or understanding, or on the exercise of conversion
  rights, exchange rights, warrants, or options;
               (2)  vote the shares or other [similar] securities
  according to an oral or written agreement, arrangement, or
  understanding; or
               (3)  [subject to Subsection (c),] acquire, hold or
  dispose of, or vote the shares or other [similar] securities with
  another person who individually, or through an affiliate or
  associate, beneficially owns, directly or indirectly, the shares or
  other [similar] securities.
         (b) [(c)]  A person, however, is not considered a beneficial
  owner of shares or other [similar] securities for purposes of this
  subchapter if:
               (1)  the shares or other [similar] securities are:
                     (A)  tendered under a tender or exchange offer
  made by the person or an affiliate or associate of the person before
  the tendered shares or securities are accepted for purchase or
  exchange; or
                     (B)  subject to an agreement, arrangement, or
  understanding that expressly conditions the acquisition or
  purchase of shares or securities on the approval of the acquisition
  or purchase under Section 21.606 if the person has no direct or
  indirect rights of ownership or voting with respect to the shares or
  other securities until the time the approval is obtained; or
               (2)  the agreement, arrangement, or understanding to
  vote the shares:
                     (A)  arises solely from an immediately revocable
  proxy that authorizes the person named in the proxy to vote at a
  meeting of the shareholders that has been called when the proxy is
  delivered or at an adjournment of the meeting; and
                     (B)  would [is] not be reportable on a Schedule
  13D under the Securities Exchange Act of 1934 (15 U.S.C. Section 77b
  et seq.), as amended, or a comparable or successor report.
         SECTION 32.  Subdivision (1), Section 21.701, Business
  Organizations Code, is amended to read as follows:
               (1)  "Close corporation" means a domestic corporation
  formed under this subchapter or governed by this subchapter because
  of Section 21.705, 21.706, or 21.707.
         SECTION 33.  Section 22.230, Business Organizations Code, is
  amended by amending Subsections (a) and (b) and adding Subsections
  (d) and (e) to read as follows:
         (a)  This section applies [only] to a contract or transaction
  between a corporation and:
               (1)  one or more [of the corporation's] directors,
  officers, or members, or one or more affiliates or associates of one
  or more directors, officers, or members, of the corporation; or
               (2)  an entity or other organization in which one or
  more [of the corporation's] directors, officers, or members, or one
  or more affiliates or associates of one or more directors,
  officers, or members, of the corporation:
                     (A)  is a managerial official or a member; or
                     (B)  has a financial interest.
         (b)  An otherwise valid and enforceable contract or
  transaction is valid and enforceable, and is not void or voidable,
  notwithstanding any relationship or interest described by
  Subsection (a), if any one of the following conditions is satisfied
  [notwithstanding that a director, officer, or member of the
  corporation is present at or participates in the meeting of the
  board of directors, of a committee of the board, or of the members
  that authorizes the contract or transaction, or votes to authorize
  the contract or transaction, if]:
               (1)  the material facts as to the relationship or
  interest and as to the contract or transaction are disclosed to or
  known by:
                     (A)  the corporation's board of directors, a
  committee of the board of directors, or the members, and the board,
  the committee, or the members in good faith and with ordinary care
  authorize the contract or transaction by the affirmative vote of
  the majority of the disinterested directors, committee members or
  members, regardless of whether the disinterested directors,
  committee members or members constitute a quorum; or
                     (B)  the members entitled to vote on the
  authorization of the contract or transaction, and the contract or
  transaction is specifically approved in good faith and with
  ordinary care by a vote of the members; or
               (2)  the contract or transaction is fair to the
  corporation when the contract or transaction is authorized,
  approved, or ratified by the board of directors, a committee of the
  board of directors, or the members.
         (d)  A person who has the relationship or interest described
  by Subsection (a) may:
               (1)  be present at or participate in and, if the person
  is a director, member, or committee member, may vote at a meeting of
  the board of directors, of the members, or of a committee of the
  board that authorizes the contract or transaction; or
               (2)  sign, in the person's capacity as a director,
  member, or committee member, a written consent of the directors,
  members, or committee members to authorize the contract or
  transaction.
         (e)  If at least one of the conditions of Subsection (b) is
  satisfied, neither the corporation nor any of the corporation's
  shareholders will have a cause of action against any of the persons
  described by Subsection (a) for breach of duty with respect to the
  making, authorization, or performance of the contract or
  transaction because the person had the relationship or interest
  described by Subsection (a) or took any of the actions authorized by
  Subsection (d).
         SECTION 34.  Section 101.054, Business Organizations Code,
  is amended by amending Subsection (a) and adding Subsection (e) to
  read as follows:
         (a)  Except as provided by this section, the following
  provisions may not be waived or modified in the company agreement of
  a limited liability company:
               (1)  this section;
               (2)  Section 101.101, 101.151, 101.206, 101.501,
  101.602(b), or 101.613 [101.502];
               (3)  Chapter 1, if the provision is used to interpret a
  provision or define a word or phrase contained in a section listed
  in this subsection;
               (4)  Chapter 2, except that Section 2.104(c)(2),
  2.104(c)(3), or 2.113 may be waived or modified in the company
  agreement;
               (5)  Chapter 3, except that Subchapters C and E may be
  waived or modified in the company agreement; or
               (6)  Chapter 4, 5, 7, 10, 11, or 12, other than Section
  11.056.
         (e)  The company agreement may not unreasonably restrict a
  person's right of access to records and information under Section
  101.502.
         SECTION 35.  Section 101.106, Business Organizations Code,
  is amended by adding Subsections (a-1) and (a-2) to read as follows:
         (a-1)  A membership interest may be community property under
  applicable law.
         (a-2)  A member's right to participate in the management and
  conduct of the business of the limited liability company is not
  community property.
         SECTION 36.  Subchapter C, Chapter 101, Business
  Organizations Code, is amended by adding Section 101.1115 to read
  as follows:
         Sec. 101.1115.  EFFECT OF DEATH OR DIVORCE ON MEMBERSHIP
  INTEREST. (a)  For purposes of this code:
               (1)  on the divorce of a member, the member's spouse, to
  the extent of the spouse's membership interest, if any, is an
  assignee of the membership interest;
               (2)  on the death of a member, the member's surviving
  spouse, if any, and an heir, devisee, personal representative, or
  other successor of the member, to the extent of their respective
  membership interest, are assignees of the membership interest; and
               (3)  on the death of a member's spouse, an heir,
  devisee, personal representative, or other successor of the spouse,
  other than the member, to the extent of their respective membership
  interest, if any, is an assignee of the membership interest.
         (b)  This chapter does not impair an agreement for the
  purchase or sale of a membership interest at any time, including on
  the death or divorce of an owner of the membership interest.
         SECTION 37.  Subsection (a), Section 101.254, Business
  Organizations Code, is amended to read as follows:
         (a)  Except as provided by this title and Title 1, each
  governing person of a limited liability company and each officer
  [or agent] of a limited liability company vested with actual or
  apparent authority by the governing authority of the company is an
  agent of the company for purposes of carrying out the company's
  business.
         SECTION 38.  Section 101.255, Business Organizations Code,
  is amended by amending Subsections (a) and (b) and adding
  Subsections (d) and (e) to read as follows:
         (a)  This section applies [only] to a contract or transaction
  between a limited liability company and:
               (1)  one or more [of the company's] governing persons or
  officers, or one or more affiliates or associates of one or more
  governing persons or officers, of the company; or
               (2)  an entity or other organization in which one or
  more [of the company's] governing persons or officers, or one or
  more affiliates or associates of one or more governing persons or
  officers, of the company:
                     (A)  is a managerial official; or
                     (B)  has a financial interest.
         (b)  An otherwise valid and enforceable contract or
  transaction described by Subsection (a) is valid and enforceable,
  and is not void or voidable, notwithstanding any relationship or
  interest described by Subsection (a), if any one of the following
  conditions is satisfied [notwithstanding that the governing person
  or officer having the relationship or interest described by
  Subsection (a) is present at or participates in the meeting of the
  governing authority, or of a committee of the governing authority,
  that authorizes the contract or transaction or votes or signs, in
  the person's capacity as a governing person or committee member, a
  written consent of governing persons or committee members to
  authorize the contract or transaction, if]:
               (1)  the material facts as to the relationship or
  interest described by Subsection (a) and as to the contract or
  transaction are disclosed to or known by:
                     (A)  the company's governing authority or a
  committee of the governing authority and the governing authority or
  committee in good faith authorizes the contract or transaction by
  the approval of the majority of the disinterested governing persons
  or committee members, regardless of whether the disinterested
  governing persons or committee members constitute a quorum; or
                     (B)  the members of the company, and the members
  in good faith approve the contract or transaction by vote of the
  members; or
               (2)  the contract or transaction is fair to the company
  when the contract or transaction is authorized, approved, or
  ratified by the governing authority, a committee of the governing
  authority, or the members of the company.
         (d)  A person who has the relationship or interest described
  by Subsection (a) may:
               (1)  be present at or participate in and, if the person
  is a governing person or committee member, may vote at a meeting of
  the governing authority or of a committee of the governing
  authority that authorizes the contract or transaction; or
               (2)  sign, in the person's capacity as a governing
  person or committee member, a written consent of the governing
  persons or committee members to authorize the contract or
  transaction.
         (e)  If at least one of the conditions of Subsection (b) is
  satisfied, neither the company nor any of the company's members
  will have a cause of action against any of the persons described by
  Subsection (a) for breach of duty with respect to the making,
  authorization, or performance of the contract or transaction
  because the person had the relationship or interest described by
  Subsection (a) or took any of the actions authorized by Subsection
  (d).
         SECTION 39.  Subsection (b), Section 101.357, Business
  Organizations Code, is amended to read as follows:
         (b)  A manager or committee member of a limited liability
  company[, if authorized by the company agreement,] may vote:
               (1)  in person; or
               (2)  if authorized by the company agreement, by a proxy
  executed in writing by the manager or committee member, as
  appropriate.
         SECTION 40.  Subsection (b), Section 101.611, Business
  Organizations Code, is amended to read as follows:
         (b)  Section 101.206 [101.207] does not apply to a
  distribution with respect to the series.
         SECTION 41.  Subsection (d), Section 151.003, Business
  Organizations Code, is amended to read as follows:
         (d)  Receipt of notice by a general partner of a fact
  relating to the partnership is effective immediately as notice to
  the partnership unless fraud against the partnership is committed
  by or with the consent of the partner receiving the notice.
         SECTION 42.  Subsection (a), Section 152.304, Business
  Organizations Code, is amended to read as follows:
         (a)  Except as provided by Subsection (b) or Section
  152.801(a), all partners are [liable] jointly and severally liable
  for all obligations [a debt or obligation] of the partnership
  unless otherwise:
               (1)  agreed by the claimant; or
               (2)  provided by law.
         SECTION 43.  Subchapter E, Chapter 152, Business
  Organizations Code, is amended by adding Section 152.308 to read as
  follows:
         Sec. 152.308.  PARTNER'S PARTNERSHIP INTEREST SUBJECT TO
  CHARGING ORDER.  (a)  On application by a judgment creditor of a
  partner or of any other owner of a partnership interest, a court
  having jurisdiction may charge the partnership interest of the
  judgment debtor to satisfy the judgment.
         (b)  To the extent that the partnership interest is charged
  in the manner provided by Subsection (a), the judgment creditor has
  only the right to receive any distribution to which the judgment
  debtor would otherwise be entitled in respect of the partnership
  interest.
         (c)  A charging order constitutes a lien on the judgment
  debtor's partnership interest. The charging order lien may not be
  foreclosed on under this code or any other law.
         (d)  The entry of a charging order is the exclusive remedy by
  which a judgment creditor of a partner or of any other owner of a
  partnership interest may satisfy a judgment out of the judgment
  debtor's partnership interest.
         (e)  This section does not deprive a partner or other owner
  of a partnership interest of a right under exemption laws with
  respect to the judgment debtor's partnership interest.
         (f)  A creditor of a partner or of any other owner of a
  partnership interest does not have the right to obtain possession
  of, or otherwise exercise legal or equitable remedies with respect
  to, the property of the partnership.
         SECTION 44.  Subsections (a) and (c), Section 152.406,
  Business Organizations Code, are amended to read as follows:
         (a)  For purposes of this code:
               (1)  on the divorce of a partner, the partner's spouse,
  to the extent of the spouse's partnership interest, if any, is a
  transferee of the partnership interest [from the partner];
               (2)  on the death of a partner:
                     (A)  if the partnership interest of the deceased
  partner is subject to redemption under Subchapter H, the partner's
  surviving spouse, if any, and an heir, devisee, personal
  representative, or other successor of the partner, to the extent of
  their respective right to the redemption price, are creditors of
  the partnership until the redemption price is paid; or
                     (B)  if the partnership interest of the deceased
  partner is not subject to redemption under Subchapter H, the
  partner's surviving spouse, if any, and an heir, devisee, personal
  representative, or other successor of the partner, to the extent of
  their respective partnership interest, are transferees of the
  partnership interest[, the partner's surviving spouse, if any, and
  an heir, legatee, or personal representative of the partner, to the
  extent of their respective partnership interest, is a transferee of
  the partnership interest from the partner]; and
               (3)  on the death of a partner's spouse, an heir,
  devisee [legatee], [or] personal representative, or other
  successor of the spouse, other than the partner, to the extent of
  their respective partnership interest, if any, is a transferee of
  the partnership interest [from the partner].
         (c)  This chapter does not impair an agreement for the
  purchase or sale of a partnership interest at any time, including on
  the death or divorce of an owner of the partnership interest.
         SECTION 45.  Subsection (b), Section 152.707, Business
  Organizations Code, is amended to read as follows:
         (b)  In settling accounts among the partners, the
  partnership interest of a withdrawn partner that is [not] redeemed
  under Section 152.610 [Subchapter H] is credited with a share of any
  profits for the period after the partner's withdrawal but is
  charged with a share of losses for that period only to the extent of
  profits credited for that period.
         SECTION 46.  Section 152.801, Business Organizations Code,
  is amended to read as follows:
         Sec. 152.801.  LIABILITY OF PARTNER. (a)  Except as
  provided by [Subsection (b) or] the partnership agreement, a
  partner [in a limited liability partnership] is not personally
  liable to any person, including a partner, directly or indirectly,
  by contribution, indemnity, or otherwise, for any [a debt or]
  obligation of the partnership incurred while the partnership is a
  limited liability partnership.
         (b)  [A partner in a limited liability partnership is not
  personally liable for a debt or obligation of the partnership
  arising from an error, omission, negligence, incompetence, or
  malfeasance committed by another partner or representative of the
  partnership while the partnership is a limited liability
  partnership and in the course of the partnership business unless
  the first partner:
               [(1)     was supervising or directing the other partner or
  representative when the error, omission, negligence, incompetence,
  or malfeasance was committed by the other partner or
  representative;
               [(2)     was directly involved in the specific activity in
  which the error, omission, negligence, incompetence, or
  malfeasance was committed by the other partner or representative;
  or
               [(3)     had notice or knowledge of the error, omission,
  negligence, incompetence, or malfeasance by the other partner or
  representative at the time of the occurrence and then failed to take
  reasonable action to prevent or cure the error, omission,
  negligence, incompetence, or malfeasance.
         [(c)]  Sections 2.101(1), 152.305, and 152.306 do not limit
  the effect of Subsection (a) in a limited liability partnership.
         (c)  For purposes of this section, [(d)     In this section,
  "representative" includes] an obligation is incurred while a
  partnership is [agent, servant, or employee of] a limited liability
  partnership if:
               (1)  the obligation relates to an action or omission
  occurring while the partnership is a limited liability partnership;
  or
               (2)  the obligation arises under a contract or
  commitment entered into while the partnership is a limited
  liability partnership.
         (d)  Subsection [(e) Subsections] (a) does [and (b) do] not
  affect:
               (1)  the liability of a partnership to pay its [debts
  and] obligations from partnership property;
               (2)  the liability of a partner, if any, imposed by law
  or contract independently of the partner's status as a partner; or
               (3)  the manner in which service of citation or other
  civil process may be served in an action against a partnership.
         (e) [(f)]  This section controls over the other parts of this
  chapter and the other partnership provisions regarding the
  liability of partners of a limited liability partnership, the
  chargeability of the partners for the [debts and] obligations of
  the partnership, and the obligations of the partners regarding
  contributions and indemnity.
         SECTION 47.  Subsections (a), (f), and (j), Section 152.802,
  Business Organizations Code, are amended to read as follows:
         (a)  In addition to complying with Section [Sections]
  152.803 [and 152.804], a partnership, to become a limited liability
  partnership, must file an application with the secretary of state
  in accordance with Chapter 4 and this section. The application
  must:
               (1)  set out:
                     (A)  the name of the partnership;
                     (B)  the federal taxpayer [tax] identification
  number of the partnership;
                     (C)  the street address of the partnership's
  principal office in this state or outside of this state, as
  applicable; and
                     (D)  the number of partners at the date of
  application; and
               (2)  contain a brief statement of the partnership's
  business.
         (f)  A registration may be withdrawn by filing a withdrawal
  notice with the secretary of state in accordance with Chapter 4.  A
  certificate from the comptroller stating that all taxes
  administered by the comptroller under Title 2, Tax Code, have been
  paid must be filed with the notice of withdrawal.  A withdrawal
  notice terminates the status of the partnership as a limited
  liability partnership from the date on which the notice is filed or
  a later date specified in the notice, but not later than the
  expiration date under Subsection (e).  A withdrawal notice must:
               (1)  contain:
                     (A)  the name of the partnership;
                     (B)  the federal taxpayer [tax] identification
  number of the partnership;
                     (C)  the date of registration of the partnership's
  last application under this subchapter; and
                     (D)  the current street address of the
  partnership's principal office in this state and outside this
  state, if applicable; and
               (2)  be signed by:
                     (A)  a majority-in-interest of the partners; or
                     (B)  one or more partners authorized by a
  majority-in-interest of the partners.
         (j)  A document filed under this subchapter may be amended by
  filing an application for amendment of registration with the
  secretary of state in accordance with Chapter 4 and this
  subsection. The application for amendment must:
               (1)  contain:
                     (A)  the name of the partnership;
                     (B)  the taxpayer [tax] identification number of
  the partnership;
                     (C)  the identity of the document being amended;
                     (D)  the date on which the document being amended
  was filed;
                     (E)  a reference to the part of the document being
  amended; and
                     (F)  the amendment or correction; and
               (2)  be signed by:
                     (A)  a majority-in-interest of the partners; or
                     (B)  one or more partners authorized by a
  majority-in-interest of the partners.
         SECTION 48.  Subsection (b), Section 152.906, Business
  Organizations Code, is amended to read as follows:
         (b)  In addition to the information required by Section
  9.011, the certificate of withdrawal must:
               (1)  contain:
                     (A)  the federal taxpayer [tax] identification
  number of the partnership; and
                     (B)  the date of effectiveness of the
  partnership's last application for registration under this
  subchapter; and
               (2)  be signed by:
                     (A)  a majority-in-interest of the partners; or
                     (B)  one or more partners authorized by a
  majority-in-interest of the partners.
         SECTION 49.  Subsection (b), Section 152.910, Business
  Organizations Code, is amended to read as follows:
         (b)  A partner of a foreign limited liability partnership is
  not liable for an [a debt or] obligation of the partnership solely
  because the partnership transacted business in this state without
  being registered.
         SECTION 50.  Subsection (b), Section 152.911, Business
  Organizations Code, is amended to read as follows:
         (b)  The application for amendment must contain:
               (1)  the name of the partnership;
               (2)  the taxpayer [tax] identification number of the
  partnership;
               (3)  the identity of the document being amended;
               (4)  a reference to the date on which the document being
  amended was filed;
               (5)  the part of the document being amended; and
               (6)  the amendment or correction.
         SECTION 51.  Subsection (a), Section 153.004, Business
  Organizations Code, is amended to read as follows:
         (a)  Except as provided by this section, the following
  provisions of Title 1 may not be waived or modified in the
  partnership agreement of a limited partnership:
               (1)  Chapter 1, if the provision is used to interpret a
  provision or define a word or phrase contained in a section listed
  in this subsection;
               (2)  Chapter 2, other than Section 2.104(c)(2),
  2.104(c)(3), or 2.113;
               (3)  Chapter 3, other than Subchapters C and E of that
  chapter and Section 3.151 (provided, that in all events a
  partnership agreement may not validly waive or modify Section
  [Sections] 153.551 or unreasonably restrict a partner's right of
  access to books and records under Section [and] 153.552); or
               (4)  Chapter 4, 5, 10, 11, or 12, other than Section
  11.058.
         SECTION 52.  Section 153.103, Business Organizations Code,
  is amended to read as follows:
         Sec. 153.103.  ACTIONS NOT CONSTITUTING PARTICIPATION IN
  BUSINESS FOR LIABILITY PURPOSES. For purposes of this section and
  Sections 153.102, 153.104, and 153.105, a limited partner does not
  participate in the control of the business because the limited
  partner has or has acted in one or more of the following capacities
  or possesses or exercises one or more of the following powers:
               (1)  acting as:
                     (A)  a contractor for or an officer or other agent
  or employee of the limited partnership;
                     (B)  a contractor for or an agent or employee of a
  general partner;
                     (C)  an officer, director, or stockholder of a
  corporate general partner;
                     (D)  a partner of a partnership that is a general
  partner of the limited partnership; or
                     (E)  a member or manager of a limited liability
  company that is a general partner of the limited partnership;
               (2)  acting in a capacity similar to that described in
  Subdivision (1) with any other person that is a general partner of
  the limited partnership;
               (3)  consulting with or advising a general partner on
  any matter, including the business of the limited partnership;
               (4)  acting as surety, guarantor, or endorser for the
  limited partnership, guaranteeing or assuming one or more specific
  obligations of the limited partnership, or providing collateral for
  borrowings of the limited partnership;
               (5)  calling, requesting, attending, or participating
  in a meeting of the partners or the limited partners;
               (6)  winding up the business of a limited partnership
  under Chapter 11 and Subchapter K of this chapter;
               (7)  taking an action required or permitted by law to
  bring, pursue, settle, or otherwise terminate a derivative action
  in the right of the limited partnership;
               (8)  serving on a committee of the limited partnership
  or the limited partners; or
               (9)  proposing, approving, or disapproving, by vote or
  otherwise, one or more of the following matters:
                     (A)  the winding up or termination of the limited
  partnership;
                     (B)  an election to reconstitute the limited
  partnership or continue the business of the limited partnership;
                     (C)  the sale, exchange, lease, mortgage,
  assignment, pledge, or other transfer of, or granting of a security
  interest in, an asset of the limited partnership;
                     (D)  the incurring, renewal, refinancing, or
  payment or other discharge of indebtedness by the limited
  partnership;
                     (E)  a change in the nature of the business of the
  limited partnership;
                     (F)  the admission, removal, or retention of a
  general partner;
                     (G)  the admission, removal, or retention of a
  limited partner;
                     (H)  a transaction or other matter involving an
  actual or potential conflict of interest;
                     (I)  an amendment to the partnership agreement or
  certificate of formation;
                     (J)  if the limited partnership is qualified as an
  investment company under the federal Investment Company Act of 1940
  (15 U.S.C. Section 80a-1 et seq.), as amended, any matter required
  by that Act or the rules and regulations of the Securities and
  Exchange Commission under that Act, to be approved by the holders of
  beneficial interests in an investment company, including:
                           (i)  electing directors or trustees of the
  investment company;
                           (ii)  approving or terminating an investment
  advisory or underwriting contract;
                           (iii)  approving an auditor; and
                           (iv)  acting on another matter that that Act
  requires to be approved by the holders of beneficial interests in
  the investment company;
                     (K)  indemnification of a general partner under
  Chapter 8 or otherwise;
                     (L)  any other matter stated in the partnership
  agreement;
                     (M)  the exercising of a right or power granted or
  permitted to limited partners under this code and not specifically
  enumerated in this section; or
                     (N)  the merger, [or] conversion, or interest
  exchange with respect to [of] a limited partnership.
         SECTION 53.  Subsection (b), Section 153.158, Business
  Organizations Code, is amended to read as follows:
         (b)  Until an action described by Subsection (a) is taken,
  the owner of the partnership interest of the withdrawn general
  partner has the status of an assignee under Subchapter F[, Section
  153.113, and Section 153.555].
         SECTION 54.  Subsection (b), Section 153.501, Business
  Organizations Code, is amended to read as follows:
         (b)  The limited partnership may cancel under Section 11.152
  an event requiring winding up arising from an event of withdrawal of
  a general partner as specified in Section 11.058(b) if:
               (1)  there remains at least one general partner and the
  partnership agreement permits the business of the limited
  partnership to be carried on by the remaining general partners and
  those remaining general partners carry on the business; or
               (2)  not later than one year after the event, all
  remaining partners, or another group or percentage of partners
  specified in the partnership agreement:
                     (A)  agree in writing to continue the business of
  the limited partnership [in writing]; and
                     (B)  to the extent that they desire or if there are
  no remaining general partners, agree to the appointment of one or
  more new general partners.
         SECTION 55.  Section 153.504, Business Organizations Code,
  is amended to read as follows:
         Sec. 153.504.  DISPOSITION OF ASSETS. On the winding up of a
  limited partnership, its assets shall be paid or transferred as
  follows:
               (1)  to the extent otherwise permitted by law, to
  creditors, including partners who are creditors other than solely
  because of the application of Section 153.207, for the payment or
  the making of reasonable provision for payment to satisfy the
  liabilities of the limited partnership;
               (2)  unless otherwise provided by the partnership
  agreement, to partners and former partners to satisfy the
  partnership's liability for distributions under Section 153.111 or
  153.209; and
               (3)  unless otherwise provided by the partnership
  agreement, to partners first for the return of their capital and
  second with respect to their partnership interests, in the
  proportions provided by Sections 153.208(a) and (b).
         SECTION 56.  Subsection (a), Section 153.551, Business
  Organizations Code, is amended to read as follows:
         (a)  A domestic limited partnership shall maintain the
  following records in its principal office in the United States or
  make the records available in that office not later than the fifth
  day after the date on which a written request under Section
  153.552(a) is received:
               (1)  a current list that states:
                     (A)  the name and mailing address of each partner,
  separately identifying in alphabetical order the general partners
  and the limited partners;
                     (B)  the last known street address of the business
  or residence of each general partner;
                     (C)  the percentage or other interest in the
  partnership owned by each partner; and
                     (D)  if one or more classes or groups are
  established under the partnership agreement, the names of the
  partners who are members of each specified class or group;
               (2)  a copy of:
                     (A)  the limited partnership's federal, state,
  and local information or income tax returns for each of the
  partnership's six most recent tax years;
                     (B)  the partnership agreement and certificate of
  formation; and
                     (C)  all amendments or restatements;
               (3)  copies of any document that creates, in the manner
  provided by the partnership agreement, classes or groups of
  partners;
               (4)  an executed copy of any powers of attorney under
  which the partnership agreement, certificate of formation, and all
  amendments or restatements to the agreement and certificate have
  been executed;
               (5)  unless contained in the written partnership
  agreement, a written statement of:
                     (A)  the amount of the cash contribution and a
  description and statement of the agreed value of any other
  contribution made by each partner;
                     (B)  the amount of the cash contribution and a
  description and statement of the agreed value of any other
  contribution that the partner has agreed to make in the future as an
  additional contribution;
                     (C)  [the date on which additional contributions
  are to be made or] the [date of] events requiring additional
  contributions to be made or the date on which additional
  contributions are to be made;
                     (D)  the events requiring the winding up of the
  limited partnership; and
                     (E)  the date on which each partner in the limited
  partnership became a partner; and
               (6)  books and records of the accounts of the limited
  partnership.
         SECTION 57.  Section 200.317, Business Organizations Code,
  is amended by amending Subsections (a) and (b) and adding
  Subsections (d) and (e) to read as follows:
         (a)  This section applies [only] to a contract or transaction
  between a real estate investment trust and:
               (1)  one or more [of the trust's] trust managers or
  officers, or one or more affiliates or associates of one or more
  directors or officers, of the trust; or
               (2)  an entity or other organization in which one or
  more [of the trust's] trust managers or officers, or one or more
  affiliates or associates of one or more directors or officers, of
  the trust:
                     (A)  is a managerial official; or
                     (B)  has a financial interest.
         (b)  An otherwise valid and enforceable contract or
  transaction described by Subsection (a) is valid and enforceable,
  and is not void or voidable, notwithstanding any relationship or
  interest described by Subsection (a), if any one of the following
  conditions is satisfied [notwithstanding that the trust manager or
  officer having the relationship or interest described by Subsection
  (a) is present at or participates in the meeting of the trust
  managers or of a committee of the trust managers that authorizes the
  contract or transaction, or votes or signs, in the person's
  capacity as a trust manager or committee member, a unanimous
  written consent of trust managers or committee members to authorize
  the contract or transaction, if]:
               (1)  the material facts as to the relationship or
  interest described by Subsection (a) and as to the contract or
  transaction are disclosed to or known by:
                     (A)  the trust managers or a committee of the
  trust managers, and the trust managers or committee of the trust
  managers in good faith authorize the contract or transaction by the
  approval of the majority of disinterested trust managers or
  committee members, regardless of whether the disinterested trust
  managers or committee members constitute a quorum; or
                     (B)  the shareholders entitled to vote on the
  authorization of the contract or transaction, and the contract or
  transaction is specifically approved in good faith by a vote of the
  shareholders; or
               (2)  the contract or transaction is fair to the real
  estate investment trust when the contract or transaction is
  authorized, approved, or ratified by the trust managers, a
  committee of the trust managers, or the shareholders.
         (d)  A person who has the relationship or interest described
  by Subsection (a) may:
               (1)  be present at or participate in and, if the person
  is a trust manager or committee member, may vote at a meeting of the
  trust managers, or of a committee of the trust managers, that
  authorizes the contract or transaction; or
               (2)  sign, in the person's capacity as a trust manager
  or committee member, a unanimous written consent of the trust
  managers or committee members to authorize the contract or
  transaction.
         (e)  If at least one of the conditions of Subsection (b) is
  satisfied, neither the trust nor any of the trust's shareholders
  will have a cause of action against any of the persons described by
  Subsection (a) for breach of duty with respect to the making,
  authorization, or performance of the contract or transaction
  because the person had the relationship or interest described by
  Subsection (a) or took any of the actions authorized by Subsection
  (d).
         SECTION 58.  Subsections (b) and (f), Section 252.011,
  Business Organizations Code, are amended to read as follows:
         (b)  A statement appointing an agent must contain:
               (1)  the name of the nonprofit association;
               (2)  the federal taxpayer [tax] identification number
  of the nonprofit association, if applicable;
               (3)  the address in this state, including the street
  address, if any, of the nonprofit association or, if the nonprofit
  association does not have an address in this state, its address out
  of state; and
               (4)  the name of the person in this state authorized to
  receive service of process and the person's address, including the
  street address, in this state.
         (f)  A statement appointing an agent may be canceled by
  filing with the secretary of state a written notice of cancellation
  executed by a person authorized to manage the affairs of the
  nonprofit association. A notice of cancellation must contain:
               (1)  the name of the nonprofit association;
               (2)  the federal taxpayer [tax] identification number
  of the nonprofit association, if applicable;
               (3)  the date of filing of the nonprofit association's
  statement appointing the agent; and
               (4)  a current street address, if any, of the nonprofit
  association in this state or, if the nonprofit association does not
  have an address in this state, its address out of state.
         SECTION 59.  Section 402.003, Business Organizations Code,
  is amended to read as follows:
         Sec. 402.003.  EARLY ADOPTION OF CODE BY EXISTING DOMESTIC
  ENTITY. (a)  A domestic entity formed before the effective date of
  this code may voluntarily elect to adopt and become subject to this
  code by:
               (1)  adopting the code by complying with the procedures
  for approval, under prior law and its governing documents, of an
  amendment to:
                     (A)  its articles of incorporation, with respect
  to a corporation or cooperative association;
                     (B)  its regulations, with respect to a limited
  liability company;
                     (C)  its articles of association, with respect to
  a professional association;
                     (D)  its declaration of trust, with respect to a
  real estate investment trust;
                     (E)  its partnership agreement, with respect to a
  partnership; or
                     (F)  its primary governing document, with respect
  to another type of domestic entity;
               (2)  if any of its governing documents, including its
  certificate of formation, do not comply with this code, complying
  with the procedures, under prior law and its governing documents,
  to amend the noncomplying governing documents to comply with this
  code, including filing with the filing officer in accordance with
  Chapter 4 a certificate of amendment to cause its certificate of
  formation to comply with this code; and
               (3)  if the domestic entity is a filing entity, filing
  with the filing officer in accordance with Chapter 4 a statement
  that the filing entity is electing to adopt this code.
         (b)  A domestic entity that elected to adopt and become
  subject to this code as provided by Subsection (a) is not considered
  to have failed to comply with Subsection (a)(2) because:
               (1)  the entity's governing documents do not state the
  type of entity formed; or
               (2)  a circumstance described by Section 402.0051
  applies.
         SECTION 60.  Section 402.004, Business Organizations Code,
  is amended to read as follows:
         Sec. 402.004.  EARLY ADOPTION OF CODE BY REGISTERED FOREIGN
  FILING ENTITY. (a)  A foreign filing entity registered with the
  secretary of state to transact business in this state before the
  effective date of this code may voluntarily elect to adopt and
  become subject to this code by filing with the secretary of state in
  accordance with Chapter 4:
               (1)  a statement that the foreign filing entity is
  electing to adopt this code; and
               (2)  an amendment to its application for registration
  that would cause its application for registration to comply with
  this code.
         (b)  A foreign filing entity that elected to adopt and become
  subject to this code as provided by Subsection (a) is not considered
  to have failed to comply with Subsection (a)(2) because:
               (1)  the application for registration or any amendment
  to the registration:
                     (A)  does not state the entity's type; or
                     (B)  does not include the appointment of the
  secretary of state as agent for service of process under the
  circumstances provided by Section 5.251; or
               (2)  a circumstance described by Section 402.0051
  applies.
         SECTION 61.  Section 402.005, Business Organizations Code,
  is amended by adding Subsection (c) to read as follows:
         (c)  A domestic or foreign filing entity is not considered to
  have failed to comply with Subsection (a)(3) or (4) because:
               (1)  the certificate of formation does not state the
  type of entity formed;
               (2)  the application for registration or any amendment
  to the registration:
                     (A)  does not state the entity's type; or
                     (B)  does not include the appointment of the
  secretary of state as agent for service of process, notice, or
  demand under the circumstances provided by Section 5.251; or
               (3)  a circumstance described by Section 402.0051
  applies.
         SECTION 62.  Chapter 402, Business Organizations Code, is
  amended by adding Section 402.0051 to read as follows:
         Sec. 402.0051.  EFFECT OF REFERENCES TO PRIOR LAW AND USE OF
  SYNONYMOUS TERMS. (a)  A governing document or a filing
  instrument, including a certificate of formation or application for
  registration, is not considered to have failed to conform to this
  code if the governing document or filing instrument:
               (1)  contains a reference to prior law that was
  applicable at the time of its filing or adoption;
               (2)  contains a provision that was authorized by prior
  law at the time of its filing or adoption;
               (3)  includes a term or phrase described by Section
  1.006; or
               (4)  includes a term or phrase from prior law that is
  different from the corresponding term or phrase used in this code.
         (b)  A reference in a governing document or filing instrument
  to a statute or provision of a statute in effect before January 1,
  2010, that was repealed by this code is considered to be a reference
  to the provision or provisions of this code that correspond to the
  repealed statute or provision unless the governing document or
  filing instrument expressly provides otherwise.
         (c)  An entity is not considered to have failed to comply
  with this code if a governing document or filing instrument makes a
  reference to prior law rather than to the corresponding provisions
  of the prior law in this code.
         (d)  For purposes of this section, prior law includes a
  predecessor statute to the prior law.
         SECTION 63.  The heading to Section 402.013, Business
  Organizations Code, is amended to read as follows:
         Sec. 402.013.  REINSTATEMENT OF ENTITIES CANCELED, REVOKED,
  DISSOLVED, INVOLUNTARILY DISSOLVED, SUSPENDED, OR FORFEITED UNDER
  PRIOR LAW.
         SECTION 64.  Section 402.013, Business Organizations Code,
  is amended by adding Subsections (b-1) and (b-2) to read as follows:
         (b-1)  On or after January 1, 2010, a domestic filing entity
  whose existence has been voluntarily dissolved or involuntarily
  dissolved under prior law or whose certificate of formation or
  equivalent governing document has been canceled, revoked,
  suspended, or forfeited under prior law may reinstate the entity in
  accordance with this code.
         (b-2)  On or after January 1, 2010, a foreign filing entity
  whose registration to do business has been canceled, revoked,
  suspended, or forfeited under prior law may reinstate its
  registration in accordance with this code.
         SECTION 65.  (a)  In this section:
               (1)  "Governing document" has the meaning assigned by
  Subdivision (36), Section 1.002, Business Organizations Code.
               (2)  "Prior law" has the meaning assigned by Section
  401.001, Business Organizations Code.
         (b)  This section applies only to a domestic entity whose
  existence has been voluntarily dissolved under prior law or whose
  certificate of formation or equivalent governing document has been
  canceled under prior law.
         (c)  The reinstatement of a domestic filing entity that was
  filed in accordance with Chapter 11 and Section 402.003, Business
  Organizations Code, after December 31, 2005, and before January 1,
  2010, is validated in all respects as of the date on which the
  reinstatement occurred.
         SECTION 66.  The following provisions of the Business
  Organizations Code are repealed:
               (1)  Section 21.001;
               (2)  Subsection (i), Section 152.802; and
               (3)  Section 152.804.
         SECTION 67.  This Act takes effect September 1, 2011.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 748 passed the Senate on
  March 17, 2011, by the following vote: Yeas 31, Nays 0; and that
  the Senate concurred in House amendments on May 11, 2011, by the
  following vote: Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 748 passed the House, with
  amendments, on May 5, 2011, by the following vote: Yeas 145,
  Nays 0, two present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor