Bill Text: TX SB849 | 2013-2014 | 83rd Legislature | Enrolled


Bill Title: Relating to social purposes of a for-profit corporation and the consideration of social purposes and other interests by officers and directors of a for-profit corporation.

Spectrum: Bipartisan Bill

Status: (Passed) 2013-05-18 - Effective on 9/1/13 [SB849 Detail]

Download: Texas-2013-SB849-Enrolled.html
 
 
  S.B. No. 849
 
 
 
 
AN ACT
  relating to social purposes of a for-profit corporation and the
  consideration of social purposes and other interests by officers
  and directors of a for-profit corporation.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1.002, Business Organizations Code, is
  amended by adding Subdivision (82-a) to read as follows:
               (82-a)  "Social purposes" means one or more purposes of
  a for-profit corporation that are specified in the corporation's
  certificate of formation and consist of promoting one or more
  positive impacts on society or the environment or of minimizing one
  or more adverse impacts of the corporation's activities on society
  or the environment.  Those impacts may include:
                     (A)  providing low-income or underserved
  individuals or communities with beneficial products or services;
                     (B)  promoting economic opportunity for
  individuals or communities beyond the creation of jobs in the
  normal course of business;
                     (C)  preserving the environment;
                     (D)  improving human health;
                     (E)  promoting the arts, sciences, or advancement
  of knowledge;
                     (F)  increasing the flow of capital to entities
  with a social purpose; and
                     (G)  conferring any particular benefit on society
  or the environment.
         SECTION 2.  Section 3.007, Business Organizations Code, is
  amended by adding Subsection (d) to read as follows:
         (d)  Notwithstanding Section 2.008, a for-profit corporation
  may include one or more social purposes in addition to the purpose
  or purposes required to be stated in the corporation's certificate
  of formation by Section 3.005(a)(3). The corporation may also
  include in the certificate of formation a provision that the board
  of directors and officers of the corporation shall consider any
  social purpose specified in the certificate of formation in
  discharging the duties of directors or officers under this code or
  otherwise.
         SECTION 3.  Subsection (a), Section 21.101, Business
  Organizations Code, is amended to read as follows:
         (a)  The shareholders of a corporation may enter into an
  agreement that:
               (1)  restricts the discretion or powers of the board of
  directors;
               (2)  eliminates the board of directors and authorizes
  the business and affairs of the corporation to be managed, wholly or
  partly, by one or more of its shareholders or other persons;
               (3)  establishes the individuals who shall serve as
  directors or officers of the corporation;
               (4)  determines the term of office, manner of selection
  or removal, or terms or conditions of employment of a director,
  officer, or other employee of the corporation, regardless of the
  length of employment;
               (5)  governs the authorization or making of
  distributions whether in proportion to ownership of shares, subject
  to Section 21.303;
               (6)  determines the manner in which profits and losses
  will be apportioned;
               (7)  governs, in general or with regard to specific
  matters, the exercise or division of voting power by and between the
  shareholders, directors, or other persons, including use of
  disproportionate voting rights or director proxies;
               (8)  establishes the terms of an agreement for the
  transfer or use of property or for the provision of services between
  the corporation and another person, including a shareholder,
  director, officer, or employee of the corporation;
               (9)  authorizes arbitration or grants authority to a
  shareholder or other person to resolve any issue about which there
  is a deadlock among the directors, shareholders, or other persons
  authorized to manage the corporation;
               (10)  requires winding up and termination of the
  corporation at the request of one or more shareholders or on the
  occurrence of a specified event or contingency, in which case the
  winding up and termination of the corporation will proceed as if all
  of the shareholders had consented in writing to the winding up and
  termination as provided by Subchapter K; [or]
               (11)  with regard to one or more social purposes
  specified in the corporation's certificate of formation, governs
  the exercise of corporate powers, the management of the operations
  and affairs of the corporation, the approval by shareholders or
  other persons of corporate actions, or the relationship among the
  shareholders, the directors, and the corporation; or
               (12)  otherwise governs the exercise of corporate
  powers, the management of the business and affairs of the
  corporation, or the relationship among the shareholders, the
  directors, and the corporation as if the corporation were a
  partnership or in a manner that would otherwise be appropriate only
  among partners and not contrary to public policy.
         SECTION 4.  Section 21.401, Business Organizations Code, is
  amended by amending Subsection (b) and adding Subsections (c), (d),
  and (e) to read as follows:
         (b)  In discharging the duties of director under this code or
  otherwise and in considering the best interests of the corporation,
  a director is entitled to [may] consider the long-term and
  short-term interests of the corporation and the shareholders of the
  corporation, including the possibility that those interests may be
  best served by the continued independence of the corporation.
         (c)  In discharging the duties of a director under this code
  or otherwise, a director is entitled to consider any social
  purposes specified in the corporation's certificate of formation.
         (d)  Subject to direction by the board of directors of the
  corporation, in discharging the duties of an officer under this
  code or otherwise, an officer is entitled to consider:
               (1)  the long-term and short-term interests of the
  corporation and of the corporation's shareholders, including the
  possibility that those interests may be best served by the
  continued independence of the corporation; and
               (2)  any social purposes specified in the corporation's
  certificate of formation.
         (e)  Nothing in this section prohibits or limits a director
  or officer of a corporation that does not have a social purpose
  specified as a purpose in the corporation's certificate of
  formation from considering, approving, or taking an action that
  promotes or has the effect of promoting a social, charitable, or
  environmental purpose.
         SECTION 5.  This Act takes effect September 1, 2013.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 849 passed the Senate on
  March 27, 2013, by the following vote:  Yeas 30, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 849 passed the House on
  May 2, 2013, by the following vote:  Yeas 147, Nays 0, two present
  not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor
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