89R9470 SRA-F     By: Longoria H.B. No. 4862       A BILL TO BE ENTITLED   AN ACT   relating to business organizations.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subchapter B, Chapter 1, Business Organizations   Code, is amended by adding Sections 1.056 and 1.057 to read as   follows:          Sec. 1.056.  REFERENCES IN CODE TO CERTAIN DISTRICT COURTS   INCLUDES BUSINESS COURTS. Notwithstanding any other law, a   reference or grant of jurisdiction in this code, including a grant   of exclusive jurisdiction, to a district court constitutes a   reference or grant of concurrent jurisdiction to a business court   established under Chapter 25A, Government Code, if the business   court has authority and jurisdiction under Chapter 25A, Government   Code, to adjudicate the action or claim. This section does not   expand the authority of the business court under Chapter 25A,   Government Code.          Sec. 1.057.  LAWS GOVERNING FORMATION, INTERNAL AFFAIRS, AND   GOVERNANCE OF DOMESTIC ENTITY. (a) The plain meaning of the laws   enacted by the legislature in this code must not be supplanted,   contravened, or modified by the laws or judicial decisions of any   other state.          (b)  The managerial officials of a domestic entity, in   exercising their powers with respect to the domestic entity, may   consider the laws and judicial decisions of other states and the   practices observed by entities formed in those other states. The   failure or refusal of a managerial official to consider, or to   conform the exercise of the managerial official's powers to, the   laws, judicial decisions, or practices of another state does not   constitute or imply a breach of this code or of any duty existing   under the laws of this state.          SECTION 2.  Section 2.115(b), Business Organizations Code,   is amended to read as follows:          (b)  The governing documents of a domestic entity [may   require], consistent with applicable state and federal   jurisdictional requirements, may require that:                (1)  any internal entity claims shall be brought only   in a court in this state; and                (2)  one or more courts in this state having   jurisdiction shall serve as the exclusive forum and venue for any or   all internal entity claims.          SECTION 3.  Section 3.007(a), Business Organizations Code,   is amended to read as follows:          (a)  In addition to the information required by Section   3.005, the certificate of formation of a for-profit or professional   corporation must state:                (1)  the aggregate number of shares the corporation is   authorized to issue;                (2)  if the shares the corporation is authorized to   issue consist of one class of shares only, the par value of each   share or a statement that each share is without par value;                (3)  if the corporation is to be managed by a board of   directors, the number of directors constituting the initial board   of directors and the name and address of each individual [person]   who will serve as director until the first annual meeting of   shareholders and until a successor is elected and qualified; and                (4)  if the corporation is to be managed pursuant to a   shareholders' agreement in a manner other than by a board of   directors, the name and address of each person who will perform the   functions required by this code to be performed by the initial board   of directors.          SECTION 4.  Section 3.015(a), Business Organizations Code,   is amended to read as follows:          (a)  In addition to containing the information required   under Sections 3.005 and 3.014, the certificate of formation of a   professional association must:                (1)  be signed by each member of the association; and                (2)  state:                      (A)  the name and address of each original member   of the association;                      (B)  whether the association is to be governed by   a board of directors or by an executive committee; and                      (C)  the name and address of each individual   [person] serving as an initial member of the board of directors or   executive committee of the association.          SECTION 5.  Section 3.060, Business Organizations Code, is   amended by amending Subsection (a) and adding Subsection (c) to   read as follows:          (a)  In addition to the provisions authorized or required by   Section 3.059, a restated certificate of formation for a for-profit   corporation or professional corporation may omit:                (1)  any prior statements regarding the number of   directors and the names and addresses of the individuals [persons]   serving as directors and, at the corporation's election, may insert   a statement regarding the current number of directors and the names   and addresses of the individuals [persons] currently serving as   directors; and                (2)  any provisions that were necessary to effect a   change, exchange, reclassification, subdivision, combination, or   cancellation of shares, if the change, exchange, reclassification,   subdivision, combination, or cancellation has become effective.          (c)  Any omission or insertion under Subsection (a) or   omission under Section 3.059(b) is not considered an amendment that   requires shareholder approval.          SECTION 6.  Section 3.061, Business Organizations Code, is   amended by amending Subsection (a) and adding Subsection (c) to   read as follows:          (a)  In addition to the provisions authorized or required by   Section 3.059, a restated certificate of formation for a nonprofit   corporation may omit any prior statements regarding the number of   directors and the names and addresses of the individuals [persons]   serving as directors and, at the corporation's election, may insert   a statement regarding the current number of directors and the names   and addresses of the individuals [persons] currently serving as   directors.          (c)  Any omission or insertion under Subsection (a) or   omission under Section 3.059(b) is not considered an amendment that   requires member approval.          SECTION 7.  Section 3.0611, Business Organizations Code, is   amended to read as follows:          Sec. 3.0611.  SUPPLEMENTAL PROVISIONS FOR RESTATED   CERTIFICATE OF FORMATION FOR LIMITED LIABILITY COMPANY.  (a) In   addition to the provisions authorized or required by Section 3.059,   a restated certificate of formation for a limited liability company   may omit any prior statements regarding whether the company has or   does not have managers and the names and addresses of managers or   members and, at the company's election, may insert a statement:                (1)  regarding whether the company currently has or   does not have managers;                (2)  that the company currently has managers and the   names and addresses of the persons currently serving as managers;   or                (3)  that the company currently does not have managers   and the names and addresses of the current members of the company.          (b)  Any omission or insertion under Subsection (a) or   omission under Section 3.059(b) is not considered an amendment that   requires member approval.          SECTION 8.  Section 3.062, Business Organizations Code, is   amended to read as follows:          Sec. 3.062.  SUPPLEMENTAL PROVISIONS FOR RESTATED   CERTIFICATE OF FORMATION FOR REAL ESTATE INVESTMENT TRUST. (a) In   addition to the provisions authorized or required by Section 3.059,   a restated certificate of formation for a real estate investment   trust may update the current number of trust managers and the names   and addresses of the individuals [persons] serving as trust   managers.          (b)  Any update under Subsection (a) or Section 3.059(b) is   not considered an amendment that requires shareholder approval.          SECTION 9.  Subchapter C, Chapter 3, Business Organizations   Code, is amended by adding Section 3.106 to read as follows:          Sec. 3.106.  AUTHORIZATION OF PLANS, AGREEMENTS,   INSTRUMENTS, AND OTHER DOCUMENTS. (a) If this code expressly   requires the governing authority to approve or take other action   with respect to any plan, agreement, instrument, or other document,   the plan, agreement, instrument, or other document may be approved   by the governing authority in final form or in substantially final   form.          (b)  If the governing authority has acted to approve or take   other action with respect to a plan, agreement, instrument, or   other document that is required by this code to be filed with the   secretary of state or referenced in any certificate to be filed with   the secretary of state, the governing authority may, at any time   after acting to approve or taking that other action and before the   effectiveness of the filing with the secretary of state, act to   ratify the plan, agreement, instrument, or other document. That   ratification is considered:                (1)  to be effective as of the time of the original act   to approve or the original taking of other action by the governing   authority; and                (2)  to satisfy any requirement under this code that   the governing authority approve or take other action with respect   to the plan, agreement, instrument, or other document in a specific   manner or sequence.          SECTION 10.  Section 4.152, Business Organizations Code, is   amended to read as follows:          Sec. 4.152.  FILING FEES: FOR-PROFIT CORPORATIONS. For a   filing by or for a for-profit corporation, the secretary of state   shall impose the following fees:                (1)  for filing a certificate of formation, $300;                (2)  for filing a certificate of amendment, $150;                (3)  for filing an application of a foreign corporation   for registration to transact business in this state, $750;                (4)  for filing an application of a foreign corporation   for an amended registration to transact business in this state,   $150;                (5)  for filing a restated certificate of formation and   accompanying statement, $300;                (6)  for filing a statement of change of registered   office, registered agent, or both, $15;                (7)  for filing a statement of change of name or address   of a registered agent, $15, except that the maximum fee for   simultaneous filings by a registered agent for more than one   corporation may not exceed $750;                (8)  for filing a statement of resolution establishing   one or more series of shares, $15;                (9)  for filing a certificate of termination, $40;                (10)  for filing a certificate of withdrawal of a   foreign corporation, $15;                (11)  for filing a certificate from the home state of a   foreign corporation that the corporation no longer exists in that   state, $15;                (12)  for filing a bylaw or agreement restricting   transfer of shares or securities other than as an amendment to the   certificate of formation, $15;                (13)  for filing an application for reinstatement of a   certificate of formation or registration as a foreign corporation   following forfeiture under the Tax Code, $75;                (14)  for filing an application for reinstatement of a   corporation or registration as a foreign corporation after   involuntary termination or revocation, $75;                (15)  for filing a certificate of validation, $15, plus   the filing fee imposed for filing each new filing instrument that is   attached as an exhibit to the certificate of validation under   Section 21.908(b)(3)(B) [21.908(b)(3)(C)]; and                (16)  for filing any instrument as provided by this   code for which this section does not expressly provide a fee, $15.          SECTION 11.  Section 4.153, Business Organizations Code, is   amended to read as follows:          Sec. 4.153.  FILING FEES: NONPROFIT CORPORATIONS. For a   filing by or for a nonprofit corporation, the secretary of state   shall impose the following fees:                (1)  for filing a certificate of formation, $25;                (2)  for filing a certificate of amendment, $25;                (3)  for filing a certificate of merger, conversion, or   consolidation, without regard to whether the surviving or new   corporation is a domestic or foreign corporation, $50;                (4)  for filing a statement of change of a registered   office, registered agent, or both, $5;                (5)  for filing a certificate of termination, $5;                (6)  for filing an application of a foreign corporation   for registration to conduct affairs in this state, $25;                (7)  for filing an application of a foreign corporation   for an amended registration to conduct affairs in this state, $25;                (8)  for filing a certificate of withdrawal of a   foreign corporation, $5;                (9)  for filing a restated certificate of formation and   accompanying statement, $50;                (10)  for filing a statement of change of name or   address of a registered agent, $15, except that the maximum fee for   simultaneous filings by a registered agent for more than one   corporation may not exceed $250;                (11)  for filing a report under Chapter 22, $5;                (12)  for filing a report under Chapter 22 to reinstate   a corporation's right to conduct affairs in this state, $5, plus a   late fee in the amount of $5 or in the amount of $1 for each month or   part of a month that the report remains unfiled, whichever amount is   greater, except that the late fee may not exceed $25;                (13)  for filing a report under Chapter 22 to reinstate   a corporation or registration following involuntary termination or   revocation, $25;                (14)  for filing a certificate of validation, $5, plus   the filing fee imposed for filing each new filing instrument that is   attached as an exhibit to the certificate of validation under   Section 22.508(c)(3)(B) [22.508(c)(3)(C)]; and                (15)  for filing any instrument of a domestic or   foreign corporation as provided by this code for which this section   does not expressly provide a fee, $5.          SECTION 12.  Section 4.162(b), Business Organizations Code,   is amended to read as follows:          (b)  For a filing by or for a registered series of a domestic   limited liability company when no other fee has been provided, the   secretary of state shall impose the same fee as the filing fee for a   similar instrument under Section 4.151 or 4.154.          SECTION 13.  Section 6.051, Business Organizations Code, is   amended by adding Subsection (c) to read as follows:          (c)  When a notice is required or permitted by this code or   the governing documents of a domestic entity to be given to an   owner, member, or governing person of the domestic entity, a   document enclosed with, or annexed or appended to, the notice is   considered part of the notice for the purpose of determining   whether notice was given under this code and the governing   documents.          SECTION 14.  Section 6.202(d), Business Organizations Code,   is amended to read as follows:          (d)  The entity shall promptly provide written notice to   [notify] each person who is an owner or member as of the record date   for the action, as determined by Section 6.102, who did not sign a   consent described by Subsection (b) of the action that is the   subject of the consent. The notice required by this subsection:                (1)  in addition to other information required by   applicable law, must contain a reasonable description of the action   that is the subject of the consent; and                (2)  may, instead of containing the complete notice in   writing, include information directing the owner or member to a   publicly available electronic resource at which a reasonable   description of the action that is the subject of the consent and any   other information required by applicable law may be accessed by the   owner or member without subscription or cost.          SECTION 15.  Section 7.001, Business Organizations Code, is   amended to read as follows:          Sec. 7.001.  LIMITATION OF LIABILITY OF MANAGERIAL OFFICIAL   [GOVERNING PERSON]. (a) Subsections (b) and (c) apply to:                (1)  a domestic entity other than a partnership or   limited liability company;                (2)  another organization incorporated or organized   under another law of this state; and                (3)  to the extent permitted by federal law, a   federally chartered bank, savings and loan association, or credit   union.          (b)  The certificate of formation or similar instrument of an   organization to which this section applies may provide that a   managerial official [governing person] of the organization is not   liable, or is liable only to the extent provided by the certificate   of formation or similar instrument, to the organization or its   owners or members for monetary damages for an act or omission by the   managerial official [person] in the managerial official's   [person's] capacity as a managerial official [governing person].          (c)  Subsection (b) does not authorize the elimination or   limitation of the liability of a managerial official [governing   person] to the extent the managerial official [person] is found   liable under applicable law for:                (1)  a breach of the managerial official's [person's]   duty of loyalty, if any, to the organization or its owners or   members;                (2)  an act or omission not in good faith that:                      (A)  constitutes a breach of duty of the   managerial official [person] to the organization; or                      (B)  involves intentional misconduct or a knowing   violation of law;                (3)  a transaction from which the managerial official   [person] received an improper benefit, regardless of whether the   benefit resulted from an action taken within the scope of the   managerial official's [person's] duties; or                (4)  an act or omission for which the liability of a   managerial official [governing person] is expressly provided by an   applicable statute.          (d)  The liability of a managerial official [governing   person] may be limited or eliminated:                (1)  in a general partnership by its partnership   agreement to the same extent Subsections (b) and (c) permit the   limitation or elimination of liability of a managerial official   [governing person] of an organization to which those subsections   apply and to the additional extent permitted under Chapter 152;                (2)  in a limited partnership by its partnership   agreement to the same extent Subsections (b) and (c) permit the   limitation or elimination of liability of a managerial official   [governing person] of an organization to which those subsections   apply and to the additional extent permitted under Chapter 153 and,   to the extent applicable to limited partnerships, Chapter 152; and                (3)  in a limited liability company by its certificate   of formation or company agreement to the same extent Subsections   (b) and (c) permit the limitation or elimination of liability of a   managerial official [governing person] of an organization to which   those subsections apply and to the additional extent permitted   under Section 101.401.          SECTION 16.  Section 10.002, Business Organizations Code, is   amended by adding Subsection (e) to read as follows:          (e)  Unless otherwise expressly provided by the plan of   merger, a disclosure letter, disclosure schedules, or similar   documents or instruments delivered in connection with the plan of   merger is not considered part of the plan of merger for purposes of   this chapter, but those documents or instructions have the effects   provided in the plan of merger.          SECTION 17.  Section 10.004, Business Organizations Code, is   amended to read as follows:          Sec. 10.004.  PLAN OF MERGER: PERMISSIVE PROVISIONS.  (a)  A   plan of merger may include:                (1)  amendments to, restatements of, or amendments and   restatements of the governing documents of any surviving   organization, including a certificate of amendment, a restated   certificate of formation without amendment, or a restated   certificate of formation containing amendments;                (2)  provisions relating to an interest exchange,   including a plan of exchange; [and]                (3)  provisions for the appointment, at or after the   time at which the plan of merger is adopted by the owners or members   of a party to the merger, of one or more persons, which may include   an entity surviving or resulting from the merger or any managerial   official, representative, or agent of a party to the merger or of a   surviving or resulting organization, as representative of the   owners or members of a party to the merger, including those whose   ownership interests or membership interests are cancelled,   converted, or exchanged in the merger; and                (4)  any other provisions relating to the merger that   are not required by this chapter.          (b)  Provisions for the appointment of a representative in a   plan of merger under Subsection (a)(3) may:                (1)  delegate to the representative the sole and   exclusive authority to take action on behalf of the owners or   members under the plan of merger, including the authority to take   any action the representative determines is necessary or   appropriate to enforce or settle the rights of the owners or members   under the plan of merger, subject to the terms and conditions   prescribed by the plan of merger;                (2)  prescribe the irrevocable nature and binding   effect of the appointment as to all owners or members to be bound by   the appointment from and after the approval of the plan of merger by   those owners or members in accordance with this subchapter; and                (3)  provide that any of the provisions:                      (A)  may not be amended after the merger has   become effective; or                      (B)  may be amended only with the consent or   approval of persons specified in the plan of merger.          SECTION 18.  Section 10.006(e), Business Organizations   Code, is amended to read as follows:          (e)  Sections 10.001(c)-(e), 10.002(c), 10.003, 10.004, and   10.007-10.010 apply to a merger approved under Subsection (d),   except that the resolution approving the merger should be   considered the plan of merger for purposes of those sections.          SECTION 19.  Section 10.052, Business Organizations Code, is   amended by adding Subsection (d) to read as follows:          (d)  Unless otherwise expressly provided by the plan of   exchange, a disclosure letter, disclosure schedules, or similar   documents or instruments delivered in connection with the plan of   exchange is not considered part of the plan of exchange for purposes   of this chapter, but the documents or instruments have the effect   provided in the plan of exchange.          SECTION 20.  Section 10.053, Business Organizations Code, is   amended to read as follows:          Sec. 10.053.  PLAN OF EXCHANGE: PERMISSIVE PROVISIONS.  (a)   A plan of exchange may include:                (1)  provisions for the appointment, at or after the   time at which the plan of exchange is adopted by the owners or   members whose ownership or membership interests are being acquired   in the interest exchange, of one or more persons, which may include   an entity that is a party to the interest exchange or any managerial   official, representative, or agent of a party to the interest   exchange, as representative of those owners or members; and                (2)  any other provisions not required by Section   10.052 relating to the interest exchange.          (b)  Provisions for the appointment of a representative in a   plan of exchange under Subsection (a)(1) may:                (1)  delegate to the representative the sole and   exclusive authority to take action on behalf of the owners or   members under the plan of exchange, including the authority to take   actions the representative determines necessary or appropriate to   enforce or settle the rights of the owners or members under the plan   of exchange, subject to the terms and conditions as prescribed by   the plan of exchange;                (2)  prescribe the irrevocable nature and binding   effect of the appointment as to all owners or members to be bound by   the appointment from and after the approval of the plan of exchange   by those owners or members in accordance with this subchapter; and                (3)  provide that any of the provisions:                      (A)  may not be amended after the interest   exchange has become effective; or                      (B)  may be amended only with the consent or   approval of persons specified in the plan of exchange.          SECTION 21.  Section 10.104, Business Organizations Code, is   amended to read as follows:          Sec. 10.104.  PLAN OF CONVERSION: PERMISSIVE PROVISIONS.   (a) A plan of conversion may include other provisions relating to   the conversion that are not inconsistent with law.          (b)  An action to be taken by the converted entity in   connection with the conversion of the converting entity that is   provided by the plan of conversion adopted in the manner required by   Section 10.101 or 10.102, as applicable, and that is within the   power of the converted entity under the law of its jurisdiction of   formation:                (1)  is considered authorized, adopted, and approved,   as applicable, by:                      (A)  the converted entity; and                      (B)  the governing authority and owners or members   of the converted entity, as applicable; and                (2)  may not require any further action of the   governing authority, owners, or members of the converted entity for   purposes of this code.          SECTION 22.  Section 21.053, Business Organizations Code, is   amended by amending Subsection (c) and adding Subsections (d), (e),   (f), and (g) to read as follows:          (c)  Notwithstanding Section 21.054 and except as otherwise   provided by the certificate of formation, the board of directors of   a corporation that has outstanding shares:                (1)  may, without shareholder approval, adopt an   amendment to the corporation's certificate of formation to:                      (A)  change the word or abbreviation in its   corporate name as required by Section 5.054(a) to be a different   word or abbreviation required by that section;                      (B)  omit any provision that specifies the name   and address of each organizer or director; or                      (C)  omit any provisions that were necessary to   effect a change, exchange, reclassification, subdivision,   combination, or cancellation of shares, if the change, exchange,   reclassification, subdivision, combination, or cancellation has   become effective; and                (2)  if the corporation has only one class of   outstanding stock that is not divided into series and in which no   change is made in any par value of shares of that class, may,   without shareholder approval, adopt an amendment to the   corporation's certificate of formation to:                      (A)  reclassify by subdividing the issued shares   of the class into a greater number of issued shares of the class;   and                      (B)  if the reclassification is primarily for the   purpose of maintaining the listing eligibility of the class on any   applicable national securities exchange, reclassify by combining   the issued shares of the class into a lesser number of issued shares   of the class.          (d)  An amendment described by Subsection (c)(2)(A) may also   increase the number of authorized shares of the class up to an   amount determined by multiplying the existing number of authorized   shares of the class by the same multiple by which the issued shares   of the class are subdivided in the reclassification and rounding up   any resulting fractional number of shares to a whole number of   shares.          (e)  An amendment described by Subsection (c)(2)(B) may also   decrease the number of authorized shares of the class to an amount   determined by dividing the existing number of authorized shares of   the class by the same multiple by which the issued shares of the   class are combined in the reclassification and rounding up any   resulting fractional number of shares to a whole number of shares.          (f)  When a reclassification of issued shares with par value   is made by a corporation under:                (1)  Subsection (c)(2)(A), an amount of surplus   designated by the corporation's board of directors that is not less   than the aggregate par value of the shares issued as a result of the   reclassification shall be transferred to stated capital; or                (2)  Subsection (c)(2)(B), an amount of surplus equal   to an aggregate value with respect to the shares issued as a result   of the reclassification, as set by the board of directors when the   reclassification is authorized, shall be transferred to stated   capital.          (g)  A corporation may not effect a reclassification under   Subsection (c)(2)(A) if the surplus of the corporation is less than   the amount required by Subsection (f)(1) or (f)(2), as applicable,   to be transferred to stated capital at the time the   reclassification becomes effective.          SECTION 23.  Section 21.160(c), Business Organizations   Code, is amended to read as follows:          (c)  A corporation may dispose of treasury shares for   consideration that may be determined by the board of directors. The   consideration received for treasury shares may:                (1)  have a value greater or less than, or equal to, the   par value, if any, of the shares; and                (2)  consist of the types of consideration described by   Section 21.159.          SECTION 24.  Section 21.168(e), Business Organizations   Code, is amended to read as follows:          (e)  An authorization of the board of directors may delegate   to a person or persons, in addition to the board of directors, the   authority to enter into one or more transactions to issue rights or   options.  For a transaction entered into by a person or persons to   whom authority was delegated under this subsection, the rights or   options may be issued in the number, at the time, and for the   consideration, and under the other terms on which shares may be   issued on the exercise of those rights and options, as the person or   persons may determine if that authorization of the board of   directors:                (1)  states:                      (A)  the maximum number of [rights or options, and   the maximum number of] shares issuable on exercise of those rights   or options, that may be issued under the authorization;                      (B)  the period of time during which the rights or   options[,] and the period of time during which the shares issuable   on exercise of those rights or options, may be issued; and                      (C)  the minimum amount of consideration:                            (i)  if any, for which the rights or options   may be issued; and                            (ii)  for the shares issuable on exercise of   the rights or options; and                (2)  does not permit the person or persons to whom   authority was delegated to issue rights, options, or shares to that   person or those persons.          SECTION 25.  Section 21.218, Business Organizations Code, is   amended by amending Subsection (b) and adding Subsection (b-2) to   read as follows:          (b)  On written demand stating a proper purpose, a holder of   shares of a corporation for at least six months immediately   preceding the holder's demand, or a holder of at least five percent   of all of the outstanding shares of a corporation, is entitled to   examine and copy, at a reasonable time at the corporation's   principal place of business or other location approved by the   corporation and the holder, the corporation's books, records of   account, minutes, share transfer records, and other records,   whether in written or other tangible form, if the records are   [record is] reasonably related to and appropriate to examine and   copy for that proper purpose.          (b-2)  If the corporation reasonably determines that the   written demand is in connection with a pending derivative   proceeding in the right of the corporation under Subchapter L that   is instituted or maintained by the holder or the holder's   affiliate, or a pending civil lawsuit to which the corporation, or   its affiliate, and the holder, or the holder's affiliate, are   adversarial named parties, the demand is not a proper purpose under   Subsection (b).  This subsection does not impair any rights of:                (1)  the holder or the holder's affiliate to obtain   discovery of records from the corporation:                      (A)  in the civil lawsuit; or                      (B)  subject to Section 21.556, in the derivative   proceeding; and                (2)  the holder to obtain a court order to compel   production of records of the corporation for examination by the   holder under Subsection (c).          SECTION 26.  Section 21.402, Business Organizations Code, is   amended to read as follows:          Sec. 21.402.  BOARD MEMBER ELIGIBILITY REQUIREMENTS. Unless   the certificate of formation or bylaws of a corporation provide   otherwise, a director [person] is not required to be a resident of   this state or a shareholder of the corporation [to serve as a   director]. The certificate of formation or bylaws may prescribe   other qualifications for directors.          SECTION 27.  Section 21.404, Business Organizations Code, is   amended to read as follows:          Sec. 21.404.  DESIGNATION OF INITIAL BOARD OF DIRECTORS. If   the corporation is to be managed by a board of directors, the   certificate of formation of a corporation must state the name and   address [names and addresses] of each individual who will serve as   director until the first annual meeting of shareholders and until a   successor is elected and qualified [the persons constituting the   initial board of directors of the corporation].          SECTION 28.  Section 21.416, Business Organizations Code, is   amended by adding Subsections (g), (h), (i), (j), and (k) to read as   follows:          (g)  Subject to Subsection (c), the board of directors may   adopt resolutions that authorize formation of a committee of   independent and disinterested directors to review and approve   transactions, whether or not contemplated at the time of the   committee's formation or the filing of a petition under Subsection   (h) that involves the corporation or any of its subsidiaries and the   persons described in the resolutions, including a controlling   shareholder, director, or officer.          (h)  The corporation may petition a court having   jurisdiction to hold an evidentiary hearing to determine whether   the directors appointed to a committee under Subsection (g) are   independent and disinterested with respect to any transactions   involving the corporation or any of its subsidiaries and the   persons described in the resolution.  In the petition, the   corporation shall designate legal counsel to act on behalf of the   corporation and its shareholders, other than the persons described   in the resolution, and shall give notice to the shareholders of the   designated counsel and the petition. If the corporation has a class   of shares listed on a national securities exchange, the required   notice may be provided through the filing of a current report with   the Securities and Exchange Commission in accordance with the   requirements of the Securities Exchange Act of 1934 (15 U.S.C.   Section 78a et seq.), including related regulations.          (i)  Promptly after receiving the petition, and not later   than the 10th day after the date of the notice described by   Subsection (h) has been given, the court shall hold a preliminary   hearing to determine the appropriate legal counsel to represent the   corporation and its shareholders, other than the persons described   in the resolution, whether or not the same as the legal counsel   identified in the petition. Any other legal counsel representing a   shareholder, other than the persons described in the resolution,   may participate in the hearing to request designation by the court   as the appropriate legal counsel.          (j)  Promptly after the determination of the appropriate   legal counsel by the court, the court shall hold an evidentiary   hearing as to whether the directors on the committee are   independent and disinterested with respect to transactions   involving the corporation or any of its subsidiaries and the   persons described in the resolution. The appropriate legal counsel   determined by Subsection (i) and legal counsel for the corporation   may participate in the hearing. After hearing and reviewing the   evidence presented, the court will make its determination as to   whether the directors are independent and disinterested.          (k)  The court's determination that the directors are   independent and disinterested under Subsection (j) is   presumptively dispositive and binding in any subsequent lawsuit or   other legal proceeding involving the issue of whether those   directors are independent and disinterested with respect to a   particular transaction involving the corporation or any of its   subsidiaries and any of the persons described in the resolution. To   overcome that presumption, any person asserting in the subsequent   lawsuit or other legal proceeding that the directors are not   independent and disinterested:                (1)  must provide evidence of material facts not   presented in the proceedings in which the court made that   determination; and                (2)  has the burden to establish that one or more of   those directors is not independent and disinterested with respect   to the particular transaction involving the corporation or any of   its subsidiaries and any of the persons described in the   resolution.          SECTION 29.  Section 21.551(2), Business Organizations   Code, is amended to read as follows:                (2)  "Shareholder" includes:                      (A)  a shareholder as defined by Section 1.002;                      (B)  [or] a beneficial owner whose shares are held   in a voting trust or by a nominee on the beneficial owner's behalf;   or                      (C)  except for Section 21.563(a)(1), two or more   persons described by Paragraph (A) or (B) acting together, under   any agreement, arrangement, or understanding, with respect to a   derivative proceeding.          SECTION 30.  Section 21.554, Business Organizations Code, is   amended to read as follows:          Sec. 21.554.  DETERMINATION BY DIRECTORS OR INDEPENDENT   PERSONS. (a)  A determination of how to proceed on allegations made   in a demand or petition relating to a derivative proceeding must be   made by an affirmative vote of the majority of:                (1)  all independent and disinterested directors of the   corporation, regardless of whether the independent and   disinterested directors constitute a quorum of the board of   directors;                (2)  a committee consisting of one or more independent   and disinterested directors appointed by an affirmative vote of the   majority of one or more independent and disinterested directors,   regardless of whether the independent and disinterested directors   constitute a quorum of the board of directors; or                (3)  a panel of one or more independent and   disinterested individuals appointed by the court on a motion by the   corporation listing the names of the individuals, who may be   directors, to be appointed and stating that, to the best of the   corporation's knowledge, the individuals to be appointed are   disinterested and qualified to make the determinations   contemplated by Section 21.558.          (b)  The court shall appoint a panel under Subsection (a)(3)   if the court determines [finds] that the individuals recommended by   the corporation are independent and disinterested and are otherwise   qualified with respect to expertise, experience, independent   judgment, and other factors considered appropriate by the court   under the circumstances to make the determinations.  An individual   appointed by the court to a panel under this section may not be held   liable to the corporation or the corporation's shareholders for an   action taken or omission made by the individual in that capacity,   except for an act or omission constituting fraud or wilful   misconduct.          (c)  Before the corporation's determination of how to   proceed on the allegations under Subsection (a), the corporation   may petition the court in which the derivative proceeding has been   instituted, or a court having jurisdiction if no derivative   proceeding has been instituted, to request a determination as to   whether the directors identified or appointed under Subsection   (a)(1) or (2) are independent and disinterested with respect to the   allegations made in the demand.          (d)  For purposes of Subsection (c), if a derivative   proceeding has been instituted, the corporation must promptly   deliver a copy of the petition to the shareholder making the demand   who will have the right, if promptly exercised, to challenge the   petition before the court makes its determination.          (e)  After hearing and reviewing the evidence presented, the   court will make its determination as to whether the directors are   independent and disinterested.          (f)  The court's determination that the directors or   individuals are independent and disinterested under this section is   presumptively dispositive and binding in the derivative   proceeding, if it has been instituted, or in any subsequent lawsuit   or other legal proceeding involving the issue of whether those   directors or individuals were independent and disinterested when   they made the determination on how to proceed with respect to the   allegations made.          (g)  To overcome the presumption under Subsection (f), any   person asserting in the derivative proceeding or the subsequent   lawsuit or other legal proceeding that the directors or individuals   are not independent and disinterested:                (1)  must provide evidence of material facts not   presented in the proceedings in which the court made that   determination; and                (2)  has the burden to establish that one or more of   those directors or individuals was not independent and   disinterested when the director or individuals made the   determination on how to proceed with respect to the allegations   made in the demand.          SECTION 31.  Section 21.561, Business Organizations Code, is   amended by adding Subsection (c) to read as follows:          (c)  For purposes of Subsection (b)(1), substantial benefit   to the corporation does not include additional or amended   disclosures made to the shareholders, regardless of materiality.          SECTION 32.  Section 21.562(a), Business Organizations   Code, is amended to read as follows:          (a)  In a derivative proceeding brought in the right of a   foreign corporation, the matters covered by this subchapter are   governed by the laws of the jurisdiction of formation of the foreign   corporation, except for Sections 21.555, 21.560, and 21.561, which   with respect to foreign corporations are procedural provisions and   do not relate to the internal affairs of the foreign corporation,   unless applying the laws of the jurisdiction of formation of the   foreign corporation requires otherwise with respect to Section   21.555.          SECTION 33.  Section 21.563(b), Business Organizations   Code, is amended to read as follows:          (b)  Sections 21.552-21.560 do not apply to [a claim or] a   derivative proceeding by a shareholder of a closely held   corporation against a present or former director, officer, or   shareholder of the corporation.  In the event the shareholder also   asserts a claim in the [or] derivative proceeding [is also made]   against a person who is not a present or former [that] director,   officer, or shareholder, this subsection applies only to a [the]   claim in the [or] derivative proceeding against a present or former   [the] director, officer, or shareholder.          SECTION 34.  Sections 21.901(2) and (4), Business   Organizations Code, are amended to read as follows:                (2)  "Defective corporate act" means:                      (A)  an overissue;                      (B)  an election or appointment of directors that   is void or voidable due to a failure of authorization; or                      (C)  any act or transaction purportedly taken by   or on behalf of the corporation that is, and at the time the act or   transaction was purportedly taken would have been, within the power   of a corporation to take under the corporate statute, without   regard to the failure of authorization identified in Section   21.903(a)(4), but is ineffective, void, or voidable due to a   failure of authorization, including a failure to file with the   filing officer a filing instrument that was required under the   corporate statute to complete the effectiveness of the act or   transaction.                (4)  "Failure of authorization" means:                      (A)  the failure to authorize or effect an act or   transaction in compliance with the provisions of the corporate   statute, the governing documents of the corporation, any plan or   agreement to which the corporation is a party, or the disclosure set   forth in any proxy or consent solicitation statement, if and to the   extent the failure would render the act or transaction ineffective,   void, or voidable; or                      (B)  the failure of the board of directors or an   officer of the corporation to authorize or approve an act or   transaction taken by or on behalf of the corporation that required   the prior authorization or approval of the board of directors or the   officer.          SECTION 35.  Section 21.902, Business Organizations Code, is   amended to read as follows:          Sec. 21.902.  RATIFICATION OF DEFECTIVE CORPORATE ACT AND   PUTATIVE SHARES. (a) Except as provided by Subsection (b) and   subject [Subject] to Section 21.909 or 21.910, a defective   corporate act or putative shares are not ineffective, void, or   voidable solely as a result of a failure of authorization if the act   or shares are:                (1)  ratified in accordance with this subchapter; or                (2)  validated by the district court in a proceeding   brought under Section 21.914.          (b)  A corporation may not ratify with retroactive effect in   accordance with this subchapter a defective corporate act resulting   from a failure of authorization that is attributable to the failure   to file with the filing officer the following filing instrument:                (1)  a statement of change of registered agent or a   statement of change of registered office under Subchapter E,   Chapter 5;                (2)  a certificate of amendment or restated certificate   of formation that amends the registered agent or registered office   under Subchapter B, Chapter 3;                (3)  a certificate of formation under Subchapter A,   Chapter 3;                (4)  a certificate of termination under Subchapter C,   Chapter 11;                (5)  a certificate of merger or certificate of   conversion under Subchapter D, Chapter 10; or                (6)  a report under Subchapter E, Chapter 171, Tax   Code.          SECTION 36.  Sections 21.908(a), (b), and (c), Business   Organizations Code, are amended to read as follows:          (a)  The [If a defective corporate act ratified under this   subchapter would have required under any other provision of the   corporate statute the filing of a filing instrument or other   document with the filing officer, the] corporation shall file a   certificate of validation with respect to the defective corporate   act in accordance with Chapter 4, if:                (1)  a defective corporate act ratified under this   subchapter would have required under any other provision of the   corporate statute the filing of a filing instrument or other   document with the filing officer; and                (2)  the filing instrument or other document:                      (A)  previously filed with the filing officer   requires any change to give effect to the defective corporate act in   accordance with this subchapter, including a change to the date and   time of the effectiveness of the filed filing instrument or other   document; or                      (B)  was not previously filed with the filing   officer under any other provision of the corporate statute [,   regardless of whether a filing instrument or other document was   previously filed] with respect to the defective corporate act.          (b)  The certificate of validation must include:                (1)  a statement that the corporation has ratified one   or more defective corporate acts that would have required the   filing of a filing instrument or other document with the filing   officer under any provision of the corporate statute [each   defective corporate act that is a subject of the certificate of   validation, including:                      [(A)  for a defective corporate act involving the   issuance of putative shares, the number and type of putative shares   issued and the date or dates on which the putative shares were   purported to have been issued;                      [(B)  the date of the defective corporate act; and                      [(C)  the nature of the failure of authorization   with respect to the defective corporate act];                (2)  a statement that each defective corporate act has   been [was] ratified in accordance with this subchapter [,   including:                      [(A)  the date on which the board of directors   ratified each defective corporate act; and                      [(B)  the date, if any, on which the shareholders   approved the ratification of each defective corporate act]; and                (3)  as appropriate:                      (A)  if a filing instrument was previously filed   with a filing officer under the corporate statute with respect to   the defective corporate act and [no change to the filing instrument   is required to give effect to the defective corporate act as   ratified in accordance with this subchapter:                            [(i)  the name, title, and filing date of the   previously filed filing instrument and of any certificate of   correction to the filing instrument; and                            [(ii)  a statement that a copy of the   previously filed filing instrument, together with any certificate   of correction to the filing instrument, is attached as an exhibit to   the certificate of validation;                      [(B)  if a filing instrument was previously filed   with a filing officer under the corporate statute with respect to   the defective corporate act and] the filing instrument requires any   change to give effect to the defective corporate act as ratified in   accordance with this subchapter, including a change to the date and   time of the effectiveness of the filing instrument:                            (i)  the name, title, and filing date of the   previously filed filing instrument and of any certificate of   correction to the filing instrument;                            (ii)  a statement that a filing instrument   containing all the information required to be included under the   applicable provisions of this code to give effect to the ratified   defective corporate act is attached as an exhibit to the   certificate of validation; and                            (iii)  the date and time that the attached   filing instrument is considered to have become effective under this   subchapter; or                      (B) [(C)]  if a filing instrument was not   previously filed with a filing officer under the corporate statute   with respect to the defective corporate act and the defective   corporate act as ratified under this subchapter would have required   under the other applicable provisions of this code the filing of a   filing instrument in accordance with Chapter 4, if the defective   corporate act had occurred when this code was in effect:                            (i)  a statement that a filing instrument   containing all the information required to be included under the   applicable provisions of this code to give effect to the defective   corporate act, as if the defective corporate act had occurred when   this code was in effect, is attached as an exhibit to the   certificate of validation; and                            (ii)  the date and time that the attached   filing instrument is considered to have become effective under this   subchapter.          (c)  A filing instrument attached to a certificate of   validation under this section [Subsection (b)(3)(B) or (C)] does   not need to be executed separately and does not need to include any   statement required by any other provision of this code that the   instrument has been approved and adopted in accordance with that   provision.          SECTION 37.  Section 21.909, Business Organizations Code, is   amended to read as follows:          Sec. 21.909.  ADOPTION OF RESOLUTIONS; EFFECT ON DEFECTIVE   CORPORATE ACT. On or after the validation effective time, unless   determined otherwise in an action brought under Section 21.914 and   subject to Sections 21.902(b) and [Section] 21.907(e), each   defective corporate act ratified in accordance with this subchapter   may not be considered ineffective, void, or voidable as a result of   the failure of authorization described by the resolutions adopted   under Sections 21.903 and 21.904, and the effect shall be   retroactive to the time of the defective corporate act.          SECTION 38.  Section 21.910, Business Organizations Code, is   amended to read as follows:          Sec. 21.910.  ADOPTION OF RESOLUTIONS; EFFECT ON PUTATIVE   SHARES. On or after the validation effective time, unless   determined otherwise in an action brought under Section 21.914 and   subject to Sections 21.902(b) and [Section] 21.907(e), each   putative share or fraction of a putative share issued or   purportedly issued pursuant to a defective corporate act ratified   in accordance with this subchapter and described by the resolutions   adopted under Sections 21.903 and 21.904 may not be considered   ineffective, void, or voidable and is considered to be an identical   share or fraction of a share outstanding as of the time it was   purportedly issued.          SECTION 39.  Section 21.913(b), Business Organizations   Code, is amended to read as follows:          (b)  The absence or failure of ratification of an act or   transaction in accordance with this subchapter or of validation of   an act or transaction as provided by Sections 21.914 through 21.917   does not, of itself, affect the validity or effectiveness of any act   or transaction or the issuance of any shares properly ratified   under common law or otherwise, nor does it create a presumption that   any such act or transaction is or was a defective corporate act or   that those shares are ineffective, void, or voidable.          SECTION 40.  Section 21.915, Business Organizations Code, is   amended to read as follows:          Sec. 21.915.  EXCLUSIVE JURISDICTION. Subject to Section   1.056, the [The] district court has exclusive jurisdiction to hear   and determine any action brought under Section 21.914.          SECTION 41.  Section 21.917(b), Business Organizations   Code, is amended to read as follows:          (b)  Notwithstanding any other provision of this subchapter:                (1)  an action claiming that a defective corporate act   or putative shares are ineffective, void, or voidable due to a   failure of authorization identified in the resolutions adopted in   accordance with Section 21.903 may not be filed in or must be   dismissed by any court after the applicable validation effective   time; and                (2)  an action claiming that a court of appropriate   jurisdiction, in its discretion, should declare that a ratification   in accordance with this subchapter not take effect or that the   ratification take effect only on certain conditions may not be   filed with the court after the expiration of the 120th day after the   later of the validation effective time or the time that any notice   required to be given under Section 21.911 is given with respect to   the ratification.          SECTION 42.  Sections 22.001(1) and (3-a), Business   Organizations Code, are amended to read as follows:                (1)  "Board of directors" means the group of   individuals [persons] vested with the management of the affairs of   the corporation, regardless of the name used to designate the   group. The term does not include the member or members of the   corporation if the certificate of formation of the corporation   vests the management of the affairs of the corporation in the   members.                (3-a)  "Director" means an individual [a person] who is   a member of the board of directors, regardless of the name or title   used to designate the individual [person]. The term does not   include an individual [a person] designated as a director of the   corporation, or as an ex officio, honorary, or other type of   director of the corporation if the individual [person] is not   entitled to vote as a director.          SECTION 43.  Section 22.218(a), Business Organizations   Code, is amended to read as follows:          (a)  The [If authorized by the] certificate of formation or   bylaws of the corporation:                (1)  [, the board of directors of a corporation, by   resolution adopted by the majority of the directors in office,] may   designate one or more committees to have and exercise all, or a   specified portion, of the authority of the board of directors of the   corporation in the management of the corporation; or                (2)  may authorize the board of directors, by   resolution adopted by the majority of the directors in office, to   designate one or more committees to have and exercise all, or a   specified portion, of the authority of the board in the management   of the corporation to the extent permitted in the authorization in   the certificate of formation or bylaws [to the extent provided by:                [(1)  the resolution;                [(2)  the certificate of formation; or                [(3)  the bylaws].          SECTION 44.  Section 22.231(a), Business Organizations   Code, is amended to read as follows:          (a)  The officers of a corporation shall include a president   and a secretary and may include one or more vice presidents, a   treasurer, and other officers and assistant officers as considered   necessary. Any two or more offices, other than the offices of   president and secretary, may be held by the same individual   [person].          SECTION 45.  Sections 22.501(2) and (4), Business   Organizations Code, are amended to read as follows:                (2)  "Defective corporate act" means:                      (A)  an election or appointment of directors that   is void or voidable due to a failure of authorization; or                      (B)  any act or transaction purportedly taken by   or on behalf of the corporation that is, and at the time the act or   transaction was purportedly taken would have been, within the power   of a corporation to take under the corporate statute, but is   ineffective, void, or voidable due to a failure of authorization,   including a failure to file with the filing officer a filing   instrument that was required under the corporate statute to   complete the effectiveness of the act or transaction.                (4)  "Failure of authorization" means:                      (A)  the failure to authorize or effect an act or   transaction in compliance with the provisions of the corporate   statute, the governing documents of the corporation, a corporate   resolution, or any plan or agreement to which the corporation is a   party, if and to the extent the failure would render the act or   transaction ineffective, void, or voidable; or                      (B)  the failure of the board of directors or an   officer of the corporation to authorize or approve an act or   transaction taken by or on behalf of the corporation that required   the prior authorization or approval of the board of directors or the   officer.          SECTION 46.  Section 22.502, Business Organizations Code, is   amended to read as follows:          Sec. 22.502.  RATIFICATION OF DEFECTIVE CORPORATE ACT.  (a)     Except as provided by Subsection (b) and subject [Subject] to   Section 22.509, a defective corporate act is not ineffective, void,   or voidable solely as a result of a failure of authorization if the   act is:                (1)  ratified in accordance with this subchapter; or                (2)  validated by the district court in a proceeding   brought under Section 22.512.          (b)  A corporation may not ratify with retroactive effect in   accordance with this subchapter a defective corporate act resulting   from a failure of authorization that is attributable to the failure   to file with the filing officer the following filing instrument:                (1)  a statement of change of registered agent or a   statement of change of registered office under Subchapter E,   Chapter 5;                (2)  a certificate of amendment or restated certificate   of formation that amends the registered agent or registered office   under Subchapter B, Chapter 3;                (3)  a certificate of formation under Subchapter A,   Chapter 3;                (4)  a certificate of termination under Subchapter C,   Chapter 11;                (5)  a certificate of merger or certificate of   conversion under Subchapter D, Chapter 10;                (6)  a report under Subchapter E, Chapter 171, Tax   Code; or                (7)  a report under Section 22.357.          SECTION 47.  Sections 22.508(a), (c), and (d), Business   Organizations Code, are amended to read as follows:          (a)  The [If a defective corporate act ratified under this   subchapter would have required under any other provision of the   corporate statute the filing of a filing instrument or other   document with the filing officer, the] corporation shall file a   certificate of validation with respect to the defective corporate   act in accordance with Chapter 4, if:                (1)  a defective corporate act ratified under this   subchapter would have required under any other provision of the   corporate statute the filing of a filing instrument or other   document with the filing officer; and                (2)  the filing instrument or other document:                      (A)  previously filed with the filing officer   requires any change to give effect to the defective corporate act in   accordance with this subchapter, including a change to the date and   time of the effectiveness of the filed filing instrument or other   document; or                      (B)  was not previously filed with the filing   officer under any other provision of the corporate statute [,   regardless of whether a filing instrument or other document was   previously filed] with respect to the defective corporate act.          (c)  The certificate of validation must include:                (1)  a statement that the corporation has ratified one   or more defective corporate acts that would have required the   filing of a filing instrument or other document with the filing   officer under any provision of the corporate statute [each   defective corporate act that is a subject of the certificate of   validation, including:                      [(A)  the date of the defective corporate act; and                      [(B)  the nature of the failure of authorization   with respect to the defective corporate act];                (2)  a statement that each defective corporate act has   been [was] ratified in accordance with this subchapter [,   including:                      [(A)  the date on which the board of directors   ratified each defective corporate act; and                      [(B)  if the corporation has members with voting   rights, the date, if any, on which the members approved the   ratification of each defective corporate act or, if the management   of the affairs of the corporation is vested in its members under   Section 22.202, the date on which the members ratified each   defective corporate act]; and                (3)  as appropriate:                      (A)  [if a filing instrument was previously filed   with a filing officer under the corporate statute with respect to   the defective corporate act and no change to the filing instrument   is required to give effect to the defective corporate act as   ratified in accordance with this subchapter:                            [(i)  the name, title, and filing date of the   previously filed filing instrument and of any certificate of   correction to the filing instrument; and                            [(ii)  a statement that a copy of the   previously filed filing instrument, together with any certificate   of correction to the filing instrument, is attached as an exhibit to   the certificate of validation;                      [(B)]  if a filing instrument was previously filed   with a filing officer under the corporate statute with respect to   the defective corporate act and the filing instrument requires any   change to give effect to the defective corporate act as ratified in   accordance with this subchapter, including a change to the date and   time of the effectiveness of the filing instrument:                            (i)  the name, title, and filing date of the   previously filed filing instrument and of any certificate of   correction to the filing instrument;                            (ii)  a statement that a filing instrument   containing all the information required to be included under the   applicable provisions of this code to give effect to the ratified   defective corporate act is attached as an exhibit to the   certificate of validation; and                            (iii)  the date and time that the attached   filing instrument is considered to have become effective under this   subchapter; or                      (B) [(C)]  if a filing instrument was not   previously filed with a filing officer under the corporate statute   with respect to the defective corporate act and the defective   corporate act as ratified under this subchapter would have required   under the other applicable provisions of this code the filing of a   filing instrument in accordance with Chapter 4, if the defective   corporate act had occurred when this code was in effect:                            (i)  a statement that a filing instrument   containing all the information required to be included under the   applicable provisions of this code to give effect to the defective   corporate act, as if the defective corporate act had occurred when   this code was in effect, is attached as an exhibit to the   certificate of validation; and                            (ii)  the date and time that the attached   filing instrument is considered to have become effective under this   subchapter.          (d)  A filing instrument attached to a certificate of   validation under this section [Subsection (c)(3)(B) or (C)] does   not need to be executed separately and does not need to include any   statement required by any other provision of this code that the   instrument has been approved and adopted in accordance with that   provision.          SECTION 48.  Section 22.509, Business Organizations Code, is   amended to read as follows:          Sec. 22.509.  ADOPTION OF RESOLUTIONS; EFFECT ON DEFECTIVE   CORPORATE ACT.  On or after the validation effective time, unless   determined otherwise in an action brought under Section 22.512 and   subject to Section 22.502(b), each defective corporate act ratified   in accordance with this subchapter may not be considered   ineffective, void, or voidable as a result of the failure of   authorization described by the resolutions adopted under Sections   22.503 and 22.504, and the effect shall be retroactive to the time   of the defective corporate act.          SECTION 49.  Section 22.513, Business Organizations Code, is   amended to read as follows:          Sec. 22.513.  EXCLUSIVE JURISDICTION.  Subject to Section   1.056, the [The] district court has exclusive jurisdiction to hear   and determine any action brought under Section 22.512.          SECTION 50.  Section 22.515(b), Business Organizations   Code, is amended to read as follows:          (b)  Notwithstanding any other provision of this subchapter:                (1)  an action claiming that a defective corporate act   is ineffective, void, or voidable due to a failure of authorization   identified in the resolutions adopted in accordance with Section   22.503 may not be filed in or must be dismissed by any court after   the applicable validation effective time; and                (2)  an action claiming that a court of appropriate   jurisdiction, in its discretion, should declare that a ratification   in accordance with this subchapter not take effect or that the   ratification take effect only on certain conditions may not be   filed with the court after the expiration of the 120th day after the   later of the validation effective time or the time that any notice   required to be given under Section 22.510 is given with respect to   the ratification.          SECTION 51.  Subchapter C, Chapter 101, Business   Organizations Code, is amended by adding Section 101.1055 to read   as follows:          Sec. 101.1055.  SUBSCRIPTIONS. (a) A subscription to   purchase a membership interest in a limited liability company in   the process of being formed is irrevocable to the extent provided by   the terms of the subscription if:                (1)  the subscription is in writing and signed by the   subscriber; and                (2)  the subscription states that it is irrevocable.          (b)  A written subscription entered into after the limited   liability company is formed is a contract between the subscriber   and the company.          SECTION 52.  Section 101.109(a), Business Organizations   Code, is amended to read as follows:          (a)  A person who is assigned a membership interest in a   limited liability company is entitled to:                (1)  receive any allocation of income, gain, loss,   deduction, credit, or a similar item that the assignor is entitled   to receive to the extent the allocation of the item is assigned;                (2)  receive any distribution the assignor is entitled   to receive to the extent the distribution is assigned; and                (3)  the rights described by Section 101.502 [require,   for any proper purpose, reasonable information or a reasonable   account of the transactions of the company; and                [(4)  make, for any proper purpose, reasonable   inspections of the books and records of the company].          SECTION 53.  Section 101.463(b), Business Organizations   Code, is amended to read as follows:          (b)  Sections 101.452-101.460 do not apply to [a claim or] a   derivative proceeding by a member of a closely held limited   liability company against a present or former governing person,   member, or officer of the limited liability company.  In the event   the member also asserts a claim in the [or] derivative proceeding   [is also made] against a person who is not a present or former   [that] governing person, member, or officer, this subsection   applies only to a [the] claim in the [or] derivative proceeding   against a present or former [the] governing person, member, or   officer.          SECTION 54.  Subchapter F, Chapter 153, Business   Organizations Code, is amended by adding Section 153.258 to read as   follows:          Sec. 153.258.  SUBSCRIPTIONS. (a) A subscription to   purchase a partnership interest in a limited partnership in the   process of being formed is irrevocable to the extent provided by the   terms of the subscription if:                (1)  the subscription is in writing and signed by the   subscriber; and                (2)  the subscription states that it is irrevocable.          (b)  A written subscription entered into after the limited   partnership is formed is a contract between the subscriber and the   partnership.          SECTION 55.  Section 153.413(b), Business Organizations   Code, is amended to read as follows:          (b)  Sections 153.402-153.410 do not apply to [a claim or] a   derivative proceeding by a limited partner of a closely held   limited partnership against a present or former general partner,   limited partner, or officer of the limited partnership.  In the   event the limited partner also asserts a claim in the [or]   derivative proceeding [is also made] against a person who is not a   present or former [that] general partner, limited partner, or   officer, this subsection shall apply only to a [the] claim in the   [or] derivative proceeding against a present or former [the]   general partner, limited partner, or officer.          SECTION 56.  Section 153.553(a-1), Business Organizations   Code, is amended to read as follows:          (a-1)  The following certificates shall be executed as   follows:                (1)  an initial certificate of formation must be signed   as provided in Section 3.004(b)(1);                (2)  a certificate of amendment or restated certificate   of formation containing amendments must be signed by at least one   general partner and by each other general partner designated in the   certificate of amendment or the restated certificate of formation   as a new general partner, unless signed and filed by a person under   Section 153.052(b) or (c), but the certificate of amendment or the   restated certificate of formation need not be signed by a   withdrawing general partner;                (3)  a certificate of termination must be signed by all   general partners participating in the winding up of the limited   partnership's business or, if no general partners are winding up   the limited partnership's business, by all nonpartner liquidators   or, if the limited partners are winding up the limited   partnership's business, by a majority-in-interest of the limited   partners;                (4)  a certificate of merger [, conversion, or   exchange] filed on behalf of a domestic limited partnership must be   signed by at least one general partner and by each other general   partner designated as a new general partner by any amendment to the   certificate of formation of the limited partnership being made by   the certificate of merger, but the certificate of merger need not be   signed by a withdrawing general partner; [as provided by Chapter   10; and]                (5)  a certificate of conversion or exchange filed on   behalf of a domestic limited partnership must be signed by at least   one general partner; and                (6)  a certificate filed under Subchapter G, Chapter   10, must be signed by the person designated by the court.          SECTION 57.  Section 251.352(a), Business Organizations   Code, is amended to read as follows:          (a)  A cooperative association shall submit a written report   to its members at the annual meeting of the cooperative   association. The annual report must contain:                (1)  a balance sheet;                (2)  an income and expense statement;                (3)  the amount and nature of the cooperative   association's authorized, subscribed, and paid-in capital;                (4)  the total number of shareholders;                (5)  the number of shareholders who were admitted to or   withdrew from the association during the year;                (6)  the par value of the association's shares;                (7)  the rate at which any investment dividends have   been paid; [and]                (8)  if the cooperative association does not issue   shares:                      (A)  the total number of members;                      (B)  the number of members who were admitted to or   withdrew from the association during the year; and                      (C)  the amount of membership fees received;                (9)  the name, address, occupation, and date of   expiration of the term of office of each officer and director; and                (10)  any compensation paid by the association to each   officer or director of the association.          SECTION 58.  Section 252.017(b), Business Organizations   Code, is amended to read as follows:          (b)  Chapters 1, 2, 4, [and] 10, and 11 and, if a nonprofit   association designates an agent for service of process, Subchapter   E, Chapter 5, apply to a nonprofit association.          SECTION 59.  Sections 153.502(c), 251.353, and 251.354,   Business Organizations Code, are repealed.          SECTION 60.  Sections 21.551, 21.554, 21.561, and 21.562,   Business Organizations Code, as amended by this Act, apply only to a   derivative proceeding instituted on or after the effective date of   this Act.  A derivative proceeding instituted before the effective   date of this Act is governed by the law in effect on the date the   proceeding was instituted, and the former law is continued in   effect for that purpose.          SECTION 61.  This Act takes effect September 1, 2025.