Bill Text: TX SB1859 | 2019-2020 | 86th Legislature | Enrolled
Bill Title: Relating to business entities.
Spectrum: Bipartisan Bill
Status: (Passed) 2019-06-10 - Effective on 9/1/19 [SB1859 Detail]
Download: Texas-2019-SB1859-Enrolled.html
S.B. No. 1859 |
|
||
relating to business entities. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 1.002, Business Organizations Code, is | ||
amended by amending Subdivisions (20-a) and (81) and adding | ||
Subdivision (20-b) to read as follows: | ||
(20-a) "Electronic data system" means an electronic | ||
network or database. The term includes a distributed electronic | ||
network or database, including one that employs blockchain or | ||
distributed ledger technology. | ||
(20-b) "Electronic transmission" means a form of | ||
communication, including communication by use of or participation | ||
in one or more electronic data systems, that: | ||
(A) does not directly involve the physical | ||
transmission of paper; | ||
(B) creates a record that may be retained, | ||
retrieved, and reviewed by the recipient; and | ||
(C) may be directly reproduced in paper form by | ||
the recipient through an automated process. | ||
(81) "Shareholder" or "holder of shares" means: | ||
(A) the person in whose name shares issued by a | ||
for-profit corporation, professional corporation, or real estate | ||
investment trust are registered in the share transfer records | ||
maintained by or on behalf of the for-profit corporation, | ||
professional corporation, or real estate investment trust; or | ||
(B) the beneficial owner of shares issued by a | ||
for-profit corporation, whose shares are held in a voting trust or | ||
by a nominee on the beneficial owner's behalf, to the extent of the | ||
rights granted by a nominee statement on file with the for-profit | ||
corporation in accordance with Sections 21.201(b) and (c). | ||
SECTION 2. Sections 3.151(a) and (b), Business | ||
Organizations Code, are amended to read as follows: | ||
(a) Each filing entity shall keep: | ||
(1) books and records of accounts; | ||
(2) minutes of the proceedings of the owners or | ||
members or governing authority of the filing entity and committees | ||
of the owners or members or governing authority of the filing | ||
entity; | ||
(3) [ |
||
|
||
current record of the name and mailing address of each owner or | ||
member of the filing entity; and | ||
(4) other books and records as required by the title of | ||
this code governing the entity. | ||
(b) The books, records, minutes, and ownership or | ||
membership records of any filing entity[ |
||
|
||
(1) in written paper form; or | ||
(2) maintained by or on behalf of the filing entity on, | ||
or by means of, an information storage device or method or one or | ||
more electronic data systems, provided that any books, records, | ||
minutes, and ownership or membership records so maintained can be | ||
[ |
||
within a reasonable time. | ||
SECTION 3. Sections 3.205(a) and (c), Business | ||
Organizations Code, are amended to read as follows: | ||
(a) Except as provided by Subsection (c) and in accordance | ||
with Chapter 8, Business & Commerce Code, after an issuance | ||
[ |
||
ownership interest in a domestic entity, [ |
||
|
||
writing or by electronic transmission of any information required | ||
under this subchapter to be stated on a certificate representing | ||
the ownership interest. | ||
(c) The owner of an uncertificated ownership interest in a | ||
[ |
||
under Subsection (a) if: | ||
(1) the required information is included in the | ||
governing documents of the entity; and | ||
(2) the owner of the uncertificated ownership interest | ||
is provided with a copy of the governing documents. | ||
SECTION 4. Sections 4.052, 4.053, 4.054, 4.055, and 4.056, | ||
Business Organizations Code, are amended to read as follows: | ||
Sec. 4.052. DELAYED EFFECTIVENESS OF CERTAIN FILINGS. | ||
(a) Except as provided by Section 4.058, a filing instrument may | ||
take effect after the time the instrument would otherwise take | ||
effect as provided by this code for the entity filing the | ||
instrument. | ||
(b) If the effectiveness of a filing instrument is to be | ||
delayed as permitted by this section, the filing instrument may | ||
take effect [ |
||
(1) at a specified date; | ||
(2) at a specified date and time; [ |
||
(3) [ |
||
event or fact, including an act of any person; or | ||
(4) after the occurrence of a future event or fact, | ||
including the act of any person, at a specified date, at a specified | ||
date and time, or after the passage of a specified period of time. | ||
Sec. 4.053. CONDITIONS FOR DELAYED EFFECTIVENESS. (a) The | ||
date, or the date and time, at which a filing instrument takes | ||
effect is delayed if the instrument clearly and expressly states, | ||
in addition to any other required statement or information: | ||
(1) the specified date, or the specified [ |
||
date and time, at which the instrument takes effect; or | ||
(2) if the instrument takes effect on or after the | ||
occurrence of a future event or fact that may occur: | ||
(A) the [ |
||
will cause the instrument to take effect; [ |
||
(B) when the filing instrument is to take effect | ||
if the instrument is to take effect after the occurrence of a | ||
specified future event or fact; and | ||
(C) the date of the 90th day after the date the | ||
instrument is signed. | ||
(b) If the effectiveness of a filing instrument is to be | ||
delayed as permitted by Section 4.052 [ |
||
|
||
(1) the effective date may not be later than the 90th | ||
day after the date the instrument is signed; and | ||
(2) the specified [ |
||
instrument is to take effect may not be specified as "12:00 a.m." or | ||
"12:00 p.m." | ||
Sec. 4.054. DELAYED EFFECTIVENESS ON FUTURE EVENT OR FACT. | ||
A filing instrument that is to take effect on or after the | ||
occurrence of a future event or fact in accordance with Section | ||
4.053(a)(2)[ |
||
statement required by Section 4.055 is filed within the prescribed | ||
time[ |
||
(1) the date, or the date and time, at which the [ |
||
|
||
(2) the specified date, the specified date and time, | ||
or the passage of the specified period of time after the occurrence | ||
or waiver of the event or fact [ |
||
|
||
Sec. 4.055. STATEMENT OF EVENT OR FACT. An entity that | ||
files a filing instrument that takes effect on or after the | ||
occurrence of a future event or fact in accordance with Section | ||
4.053(a)(2)[ |
||
provided by Subchapter A, not later than the 90th day after the date | ||
the filing instrument is filed, a statement that: | ||
(1) confirms that each event or fact on which the | ||
effect of the instrument is conditioned has been satisfied or | ||
waived; [ |
||
(2) states the date, or the date and time, on which the | ||
condition was satisfied or waived; and | ||
(3) if the filing instrument was to take effect after | ||
the occurrence of a specified future event or fact, states the date, | ||
or the date and time, at which the filing instrument took effect. | ||
Sec. 4.056. FAILURE TO FILE STATEMENT. (a) If the [ |
||
|
||
|
||
Section 4.053(a)(2)[ |
||
statement required by Section 4.055 is not filed before the | ||
expiration of the prescribed time, the filing instrument does not | ||
take effect. This section does not preclude the filing of a | ||
subsequent filing instrument required by this code to make the | ||
action or transaction evidenced by the original filing instrument | ||
effective. | ||
(b) If the [ |
||
on or after [ |
||
fact[ |
||
fact does not occur and is not waived, the parties to the filing | ||
instrument must sign and file a certificate of abandonment as | ||
provided by Section 4.057. | ||
SECTION 5. Section 4.057(e), Business Organizations Code, | ||
is amended to read as follows: | ||
(e) If in the interim before a certificate of abandonment is | ||
filed the name of an entity that is a party to the action or | ||
transaction becomes indistinguishable from [ |
||
|
||
or reserved or registered under this code, the filing officer may | ||
not file the certificate of abandonment unless the entity by or for | ||
whom the certificate is filed changes its name in the manner | ||
provided by this code for that entity. | ||
SECTION 6. Section 4.059, Business Organizations Code, is | ||
amended to read as follows: | ||
Sec. 4.059. ACKNOWLEDGMENT OF FILING WITH DELAYED | ||
EFFECTIVENESS. (a) An acknowledgment of filing issued or other | ||
action taken by the secretary of state affirming the filing of a | ||
filing instrument that has a specific delayed effective date, or a | ||
specific delayed effective date and time, must state the date, or | ||
the date and time, at which the instrument takes effect. | ||
(b) An acknowledgment of filing issued or other action taken | ||
by the secretary of state affirming the filing of a filing | ||
instrument the effectiveness [ |
||
or after the occurrence of a future event or fact must[ |
||
[ |
||
|
||
|
||
[ |
||
the effective date and time, of the instrument is conditioned on the | ||
occurrence of a future event or fact. | ||
SECTION 7. Section 6.205(b), Business Organizations Code, | ||
is amended to read as follows: | ||
(b) Except as otherwise provided by an entity's governing | ||
documents, an electronic transmission of a consent by an owner, | ||
member, or governing person to the taking of an action by the entity | ||
is considered a signed writing if the transmission contains or is | ||
accompanied by information from which it can be determined: | ||
(1) that the electronic transmission was transmitted | ||
by or on behalf of the owner, member, or governing person; and | ||
(2) the date on which the electronic transmission was | ||
transmitted by or on behalf of the owner, member, or governing | ||
person [ |
||
SECTION 8. Section 101.302(c), Business Organizations | ||
Code, is amended to read as follows: | ||
(c) The number of managers of a limited liability company | ||
may be increased or decreased by amendment to, or as provided by, | ||
the company agreement[ |
||
|
||
SECTION 9. Section 101.501, Business Organizations Code, is | ||
amended by adding Subsection (d) to read as follows: | ||
(d) All books and records required to be maintained by a | ||
limited liability company under this section may be maintained in | ||
any form and manner permitted under Section 3.151(b). | ||
SECTION 10. Section 101.503(a), Business Organizations | ||
Code, is amended to read as follows: | ||
(a) A limited liability company that refuses to allow a | ||
member or an assignee of a membership interest to examine and copy, | ||
on written request that complies with Section 101.502(a), records | ||
or other information described by that section is liable to the | ||
member or assignee for any cost or expense, including attorney's | ||
fees, incurred in enforcing the member's or assignee's rights under | ||
Section 101.502. The liability imposed on a limited liability | ||
company under this subsection is in addition to any other damages or | ||
remedy afforded to the member or assignee by law. | ||
SECTION 11. Section 101.621, Business Organizations Code, | ||
is amended to read as follows: | ||
Sec. 101.621. WINDING UP BY COURT ORDER. A district court | ||
in the county in which the registered office or principal place of | ||
business in this state of a domestic limited liability company is | ||
located, on application by or for a member associated with the | ||
series, has jurisdiction to order the winding up and termination of | ||
a series if the court determines that: | ||
(1) it is not reasonably practicable to carry on the | ||
business of the series in conformity with the company agreement; | ||
(2) the economic purpose of the series is likely to be | ||
unreasonably frustrated; or | ||
(3) another member associated with the series has | ||
engaged in conduct relating to the series' business that makes it | ||
not reasonably practicable to carry on the business with that | ||
member. | ||
SECTION 12. Sections 152.306(b) and (c), Business | ||
Organizations Code, are amended to read as follows: | ||
(b) Except as provided by Subsection (c), a creditor may | ||
proceed against [ |
||
more [ |
||
the partnership only if a judgment: | ||
(1) is [ |
||
(2) based on the same claim: | ||
(A) is obtained against the partnership; | ||
(B) has not been reversed or vacated; and | ||
(C) remains unsatisfied for 90 days after: | ||
(i) the date on which the judgment is | ||
entered; or | ||
(ii) the date on which the stay expires, if | ||
the judgment is contested by appropriate proceedings and execution | ||
on the judgment is stayed. | ||
(c) Subsection (b)(2) [ |
||
from proceeding directly against [ |
||
property of one or more [ |
||
|
||
(1) the partnership is a debtor in bankruptcy; | ||
(2) the creditor and the partner or partners whose | ||
property is the subject of the proceeding brought by the creditor | ||
[ |
||
with Subsection (b)(2) [ |
||
(3) a court orders otherwise, based on a finding that | ||
partnership property subject to execution in the state is clearly | ||
insufficient to satisfy the judgment or that compliance with | ||
Subsection (b)(2) [ |
||
(4) liability is imposed on the partner by law or | ||
contract independently of the person's status as a partner. | ||
SECTION 13. Section 152.606, Business Organizations Code, | ||
is amended to read as follows: | ||
Sec. 152.606. INDEMNIFICATION OF WITHDRAWN PARTNER [ |
||
|
||
withdrawn partner whose interest is redeemed against all [ |
||
partnership obligations, whether [ |
||
after the date of withdrawal, except for an obligation [ |
||
|
||
[ |
||
[ |
||
under Section 152.504. | ||
[ |
||
|
||
|
||
SECTION 14. Sections 153.551(b) and (c), Business | ||
Organizations Code, are amended to read as follows: | ||
(b) All books and records required to be maintained by a [ |
||
limited partnership under this section may be maintained in any | ||
form and manner permitted under Section 3.151(b) [ |
||
|
||
|
||
(c) A limited partnership shall keep in its registered | ||
office in this state and make available to a partner on reasonable | ||
request the street address of its principal office in the United | ||
States in which the records required by this section are maintained | ||
or made available. | ||
SECTION 15. This Act takes effect September 1, 2019. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I hereby certify that S.B. No. 1859 passed the Senate on | ||
May 3, 2019, by the following vote: Yeas 31, Nays 0. | ||
______________________________ | ||
Secretary of the Senate | ||
I hereby certify that S.B. No. 1859 passed the House on | ||
May 22, 2019, by the following vote: Yeas 138, Nays 6, two | ||
present not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
Approved: | ||
______________________________ | ||
Date | ||
______________________________ | ||
Governor |