By: Hancock S.B. No. 1203     A BILL TO BE ENTITLED   AN ACT   relating to business entities.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Sections 1.002(33), (49), and (53), Business   Organizations Code, are amended to read as follows:                (33)  "General partner" means:                      (A)  each partner in a general partnership; or                      (B)  a person who has become, and has not ceased to   be, [is admitted to a limited partnership as] a general partner in a   limited partnership in accordance with the governing documents of   the limited partnership or this code.                (49)  "Limited partner" means a person who has become,   and has not ceased to be, [been admitted to a limited partnership   as] a limited partner in a limited partnership in accordance with   the governing documents of the limited partnership or this code [as   provided by:                      [(A) in the case of a domestic limited   partnership, Chapter 153; or                      [(B) in the case of a foreign limited partnership,   the laws of its jurisdiction of formation].                (53)  "Member" means:                      (A)  in the case of a limited liability company, a   person who [is a member or] has become, and has not ceased to be,    [been admitted as] a member in the limited liability company as   provided by [under] its governing documents or this code;                      (B)  in the case of a nonprofit corporation, a   person who has membership rights in the nonprofit corporation under   its governing documents;                      (C)  in the case of a cooperative association, a   member of a nonshare or share association;                      (D)  in the case of a nonprofit association, a   person who has membership rights in the nonprofit association under   its governing documents; or                      (E)  in the case of a professional association, a   person who has membership rights in the professional association   under its governing documents.          SECTION 2.  Subchapter B, Chapter 2, Business Organizations   Code, is amended by adding Section 2.115 to read as follows:          Sec. 2.115.  CHOICE OF FORUM PROVISIONS. (a) In this   section, "internal entity claim" means a claim of any nature,   including a derivative claim in the right of an entity, that is   based on, arises from, or relates to the internal affairs of the   entity, as defined by Section 1.105.          (b)  The governing documents of a domestic entity may   require, consistent with applicable state and federal   jurisdictional requirements, that any internal entity claims shall   be brought only in a court in this state.          SECTION 3.  Section 3.010, Business Organizations Code, is   amended to read as follows:          Sec. 3.010.  SUPPLEMENTAL PROVISIONS REQUIRED IN   CERTIFICATE OF FORMATION OF LIMITED LIABILITY COMPANY. In addition   to the information required by Section 3.005, the certificate of   formation of a limited liability company must state:                (1)  whether the limited liability company initially   has [will] or does [will] not have managers;                (2)  if the limited liability company initially has   [will have] managers, the name and address of each initial manager   of the limited liability company; and                (3)  if the limited liability company does [will] not   initially have managers, the name and address of each initial   member of the limited liability company.          SECTION 4.  Section 3.060(a), Business Organizations Code,   is amended 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 any prior   statements regarding [update] the [current] number of directors and   the names and addresses of the 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   persons currently serving as directors.          SECTION 5.  Section 3.061(a), Business Organizations Code,   is amended 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 [update] the   [current] number of directors and the names and addresses of the   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 persons currently serving as   directors.          SECTION 6.  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. 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 [if the company's certificate of   formation states that] the company currently has or does not [will]   have [one or more] managers[, update the names and addresses of the   persons serving as managers]; [or]                (2)  [if the certificate of formation states] that the   company currently has [will not have] managers and[, update] 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.          SECTION 7.  Section 3.251, Business Organizations Code, is   amended to read as follows:          Sec. 3.251.  DEFINITIONS [EMERGENCY DEFINED]. In [For   purposes of] this subchapter:                (1)  "Emergency" means any of the following:                      (A)  an attack on the United States, a state, or a   political subdivision of a state;                      (B)  a nuclear or atomic disaster;                      (C)  the occurrence of a catastrophic event,   including:                            (i)  an epidemic or pandemic;                            (ii)  a hurricane, tropical storm, tornado,   or other weather condition; or                            (iii)  a riot or civil disturbance;                      (D)  the declaration of a national emergency by   the United States government;                      (E)  the declaration of an emergency by a state or   a political subdivision of a state; or                      (F)  any other similar emergency situation.                (2)  "Emergency action" means an action taken by   majority vote of the governing persons present at a meeting of the   governing authority of a domestic entity during an emergency   period.                (3)  "Emergency period" means any period during which   the governing authority of a domestic entity, due to a condition   that is a part of or results from an emergency, is unable to satisfy   one or more requirements of the entity's governing documents or   this code necessary for action by vote of the governing authority   outside of an emergency period[, an emergency exists if a majority   of a domestic entity's governing persons cannot readily participate   in a meeting because of the occurrence of a catastrophic event].          SECTION 8.  Section 3.252, Business Organizations Code, is   amended to read as follows:          Sec. 3.252.  PROVISIONS IN GOVERNING DOCUMENTS. (a) The   [Except as otherwise provided by the entity's governing documents,   the] governing persons and, if applicable, the owners[,] or members   of a domestic entity may adopt provisions in the domestic entity's   governing documents regarding [the management of the entity during   an] emergency actions, including provisions that apply only during   an emergency period that authorize, limit, or prohibit:                (1)  [prescribing] procedures for calling a meeting of   the governing persons;                (2)  the necessity of a quorum for action by vote at a   meeting of the governing persons;                (3)  [establishing] minimum requirements for   participation at the meeting of the governing persons; and                (4)  the designation of [(3)  designating] additional   or substitute governing persons.          (b)  Any [The emergency] provisions in a domestic entity's   governing documents that apply only during an emergency period must   be adopted in accordance with:                (1)  the requirements of the governing documents that   apply outside of an emergency period; and                (2)  the applicable provisions of this code that apply   outside of an emergency period.          SECTION 9.  Subchapter F, Chapter 3, Business Organizations   Code, is amended by adding Section 3.2535 to read as follows:          Sec. 3.2535.  ACTIONS DURING EMERGENCY PERIOD. (a) Except   as otherwise limited or prohibited by the domestic entity's   governing documents or except as provided by Subsection (b), the   governing authority of a domestic entity may take an emergency   action during an emergency period without satisfying the   requirements of the entity's governing documents or this code that   apply outside of an emergency period with respect to:                (1)  procedures for calling a meeting of the governing   persons;                (2)  the necessity of a quorum for action by vote at a   meeting of the governing persons;                (3)  minimum requirements for participation at a   meeting of the governing persons; and                (4)  any other procedural requirements for action at a   meeting of the governing persons.          (b)  Subsection (a) does not apply to an action by the   governing authority of a domestic entity:                (1)  to amend the entity's governing documents; or                (2)  that must be approved by a separate vote of the   owners or members of the entity in accordance with the requirements   of the entity's governing documents or this code that apply outside   of an emergency period.          SECTION 10.  Section 3.255, Business Organizations Code, is   amended to read as follows:          Sec. 3.255.  EFFECT OF EMERGENCY ACTION [TAKEN]. An   emergency action taken by the governing persons of a domestic   entity in accordance with the entity's governing documents or   Section 3.2535, if taken in good faith and based on the reasonable   belief that the emergency action was in the entity's best interest   [in accordance with the emergency provisions]:                (1)  is binding on the entity; and                (2)  may not be used to impose liability on a managerial   official, employee, or agent of the entity.          SECTION 11.  Section 6.201, Business Organizations Code, is   amended by amending Subsection (b) and adding Subsections (b-1),   (b-2), (b-3), (b-4), and (b-5) to read as follows:          (b)  The owners or members or the governing authority of a   filing entity, or a committee of the governing authority, may take   action without holding a meeting, providing notice, or taking a   vote if each person entitled to vote on the action signs a written   consent or consents stating the action taken. Except as provided by   this section, the written consent or consents take effect when   signed by all persons entitled to vote on the action.          (b-1)  By a provision in the written consent or consents or   by a written instruction to an agent of the filing entity by one or   more persons granting the written consent or consents, a written   consent or consents may be made to take effect at a future time,   which must be not later than the 60th day after the date all persons   entitled to vote on the action have signed the consent or consents.   If a written consent or consents described by this subsection are to   take effect at a future time, all of the written consents take   effect at that future effective time.          (b-2)  If two or more of the written consents described by   Subsection (b-1) have different future effective times, the latest   future effective time of those consents applies to all of the   consents. The written consent or consents are considered to have   been given at the applicable effective time so long as all of the   persons entitled to vote on the action, which is determined as of   that effective time or, if applicable, the record date established   under Section 6.102, have:                (1)  signed the consent or consents; and                (2)  not revoked their consent or consents before the   applicable effective time.          (b-3)  By a provision in the written consent or by a written   instruction to an agent of the filing entity, a person signing a   written consent may provide that the person's consent is to take   effect at a future time, which must be not later than the 60th day   after the date all persons entitled to vote on the action have   signed the person's consent or consents. A person's written consent   is considered to have been given at the later of that future   effective time or a later effective time determined under   Subsection (b-1) or (b-2), so long as the person:                (1)  is entitled to vote on the action subject to the   consent, which is determined as of the applicable effective time   or, if applicable, the record date established under Section 6.102;   and                (2)  did not revoke the consent before the applicable   effective time.          (b-4)  A person signing a written consent may revoke the   person's consent any time before the applicable effective time of   the consent.          (b-5)  For purposes of this section, a "future time" includes   a time that is determined on the happening of an event.          SECTION 12.  Section 6.202, Business Organizations Code, is   amended by amending Subsection (c) and adding Subsections (c-1),   (c-2), (c-3), (c-4), (e), and (f) to read as follows:          (c)  A written consent or consents described by Subsection   (b) must include:                (1)  the date each owner or member signed the consent;   and                (2)  the date of signing of the latest dated consent   satisfying the minimum number of owners or members necessary to   approve the action that is the subject of the consent.          (c-1)  The date described by Subsection (c)(2) must be [is   effective to take the action that is the subject of the consent only   if the consent or consents are delivered to the entity] not later   than the 60th day after the date of the signing of the earliest   dated consent of the owners or members signing the consent or   consents.  If a consent does not contain the date that an owner or   member signed the consent, the date that the owner or member signed   the consent is considered to be the date that the consent is   received by the filing entity. A written consent or consents   described by Subsection (b) that are not solicited by or on behalf   of a filing entity or the filing entity's governing authority must   be delivered to the entity as required by Section 6.203 to take   effect [is delivered to the entity as required by Section 6.203].          (c-2)  By a provision in the written consent or consents or   by a written instruction to an agent of the filing entity from one   or more persons granting the written consent or consents, a written   consent or consents described by Subsection (b) may be made to take   effect at a future time, which must be not later than the 60th day   after the date the last of the minimum number of owners or members   necessary to sign the consent or consents as required by Subsection   (b) have signed the consent or consents. If the written consent or   consents described by this subsection are to take effect at a future   time, all of the written consent or consents take effect at that   future effective time.          (c-3)  If two or more of the written consents described by   Subsection (c-2) have different future effective times, the latest   future effective time of those consents applies to all of the   consents. The written consent or consents are considered to have   been given for purposes of this section at the applicable effective   time so long as owners or members satisfying the minimum   requirements in Subsection (b):                (1)  are determined to be owners or members, as   applicable, as of:                      (A)  that effective time; or                      (B)  if applicable, the record date established   under Section 6.102; and                (2)  have signed and not revoked the owner's or member's   consent or consents at any time before the applicable effective   time of the consent.          (c-4)  By a provision in the written consent or by a written   instruction to an agent of the filing entity, an owner or member of   a filing entity signing a written consent described by Subsection   (b) may provide that the owner's or member's consent is to take   effect at a future time, which must be not later than the 60th day   after the date on which the consent is signed by the last of the   minimum number of owners or members of the entity necessary to sign   the consent or consents as required by Subsection (b). The owner's   or member's consent is considered to have been given for purposes of   this section at the later of that future effective time or a later   effective time determined under Subsection (c-3) so long as:                (1)  the person is an owner or member, as applicable, as   of:                      (A)  the applicable effective time; or                      (B)  if applicable, the record date established   under Section 6.102; and                (2)  the owner or member did not revoke the consent at   any time before the applicable effective time of the consent.          (e)  An owner or member of a filing entity signing a written   consent may revoke the owner's or member's consent at any time   before the applicable effective time of the consent.          (f)  For purposes of this section, a "future time" includes a   time that is determined on the happening of an event.          SECTION 13.  Section 8.002(a), Business Organizations Code,   is amended to read as follows:          (a)  Except as provided by Subsection (b) and Section 8.005,   this chapter does not apply to a:                (1)  general partnership; or                (2)  limited liability company.          SECTION 14.  Section 8.003, Business Organizations Code, is   amended to read as follows:          Sec. 8.003.  LIMITATIONS IN GOVERNING DOCUMENTS. A   governing document [(a) The certificate of formation] of an   enterprise may restrict the circumstances under which the   enterprise must or may indemnify or may advance expenses to a person   under this chapter.          [(b)  The written partnership agreement of a limited   partnership may restrict the circumstances in the same manner as   the certificate of formation under Subsection (a).]          SECTION 15.  Subchapter A, Chapter 8, Business Organizations   Code, is amended by adding Section 8.005 to read as follows:          Sec. 8.005.  INDEMNIFICATION AGAINST NEGLIGENCE. (a) This   section applies to:                (1)  an enterprise subject to this chapter; and                 (2)  notwithstanding Section 8.002, a general   partnership or limited liability company.          (b)  A requirement under the laws of this state that   indemnification or exculpation for negligence be expressly and   conspicuously stated does not apply to a provision in an   enterprise's governing documents that provides for indemnification   or exculpation.          SECTION 16.  Section 9.251, Business Organizations Code, is   amended to read as follows:          Sec. 9.251.  ACTIVITIES NOT CONSTITUTING TRANSACTING   BUSINESS IN THIS STATE. For purposes of this chapter, activities   that do not constitute transaction of business in this state   include:                (1)  maintaining or defending an action or suit or an   administrative or arbitration proceeding, or effecting the   settlement of:                      (A)  such an action, suit, or proceeding; or                      (B)  a claim or dispute to which the entity is a   party;                (2)  holding a meeting of the entity's managerial   officials, owners, or members or carrying on another activity   concerning the entity's internal affairs;                (3)  maintaining a bank account;                (4)  maintaining an office or agency for:                      (A)  transferring, exchanging, or registering   securities the entity issues; or                      (B)  appointing or maintaining a trustee or   depositary related to the entity's securities;                (5)  voting the interest of an entity the foreign   entity has acquired;                (6)  effecting a sale through an independent   contractor;                (7)  creating, as borrower or lender, or acquiring   indebtedness or a mortgage or other security interest in real or   personal property;                (8)  securing or collecting a debt due the entity or   enforcing a right in property that secures a debt due the entity;                (9)  transacting business in interstate commerce;                (10)  conducting an isolated transaction that:                      (A)  is completed within a period of 30 days; and                      (B)  is not in the course of a number of repeated,   similar transactions;                (11)  in a case that does not involve an activity that   would constitute the transaction of business in this state if the   activity were one of a foreign entity acting in its own right:                      (A)  exercising a power of executor or   administrator of the estate of a nonresident decedent under   ancillary letters issued by a court of this state; or                      (B)  exercising a power of a trustee under the   will of a nonresident decedent, or under a trust created by one or   more nonresidents of this state, or by one or more foreign entities;                (12)  regarding a debt secured by a mortgage or lien on   real or personal property in this state:                      (A)  acquiring the debt in a transaction outside   this state or in interstate commerce;                      (B)  collecting or adjusting a principal or   interest payment on the debt;                      (C)  enforcing or adjusting a right or property   securing the debt;                      (D)  taking an action necessary to preserve and   protect the interest of the mortgagee in the security; or                      (E)  engaging in any combination of transactions   described by this subdivision;                (13)  investing in or acquiring, in a transaction   outside of this state, a royalty or other nonoperating mineral   interest;                (14)  executing a division order, contract of sale, or   other instrument incidental to ownership of a nonoperating mineral   interest; [or]                (15)  owning, without more, real or personal property   in this state; or                (16)  acting as a governing person of a domestic or   foreign entity that is registered to transact business in this   state.          SECTION 17.  Section 11.001(3), Business Organizations   Code, is amended to read as follows:                (3)  "Existing claim" with respect to an entity means:                      (A)  a claim that existed before the entity's   termination and is not barred by limitations; or                      (B)  a claim that exists after the entity's   termination and before the third anniversary of the date of the   entity's termination and is not barred by limitations, including a   claim under a contractual or other obligation incurred after   termination.          SECTION 18.  Section 11.153, Business Organizations Code, is   amended to read as follows:          Sec. 11.153.  COURT REVOCATION OF FRAUDULENT TERMINATION.   (a) Notwithstanding any provision of this code to the contrary, a   court may order the revocation of termination of an entity's   existence that was terminated as a result of actual or constructive   fraud. In an action under this section, any limitation period   provided by law is tolled in accordance with the discovery   rule.  The secretary of state shall take any action necessary to   implement an order under this section.          (b)  If the termination of an entity's existence is revoked   under Subsection (a):                (1)  the revocation relates back to the effective date   of the termination and takes effect as of that date; and                (2)  the entity's status as an entity continues in   effect as if the termination of the entity's existence had never   occurred.          SECTION 19.  Section 11.254, Business Organizations Code, is   amended to read as follows:          Sec. 11.254.  REINSTATEMENT OF CERTIFICATE OF FORMATION   FOLLOWING TAX FORFEITURE. (a) A filing entity whose certificate of   formation has been forfeited under the provisions of the Tax Code   must follow the procedures in the Tax Code to reinstate its   certificate of formation. A filing entity whose certificate of   formation is reinstated under the provisions of the Tax Code is   considered to have continued in existence without interruption from   the date of forfeiture.          (b)  The reinstatement of a filing entity's certificate of   formation after its forfeiture has no effect on any issue of the   personal liability of the governing persons, officers, or agents of   the filing entity during the period between forfeiture and   reinstatement of the certificate of formation.          SECTION 20.  Section 11.359, Business Organizations Code, is   amended by adding Subsection (c) to read as follows:          (c)  Notwithstanding Subsections (a) and (b), the   extinguishment of an existing claim with respect to a terminated   filing entity as provided by this section is nullified if:                (1)  the filing entity's termination is revoked with   retroactive effect under Section 11.153;                (2)  the terminated filing entity is reinstated with   retroactive effect as provided by Section 11.206;                (3)  the terminated filing entity is reinstated with   retroactive effect as provided by Section 11.253(d); or                (4)  the terminated filing entity's certificate of   formation is reinstated under the Tax Code with retroactive effect   as provided by Section 11.254.          SECTION 21.  Section 21.314(a), Business Organizations   Code, is amended to read as follows:          (a)  For purposes of this subchapter, the determination of   whether a corporation is or would be insolvent and the   determination of the amount [value] of a corporation's [net   assets,] stated capital[,] or surplus, the value of the   corporation's net assets, and the amount or value of any component   of the corporation's stated capital, surplus, or net assets, [each   of the components of net assets, stated capital, or surplus] may be   based on:                (1)  financial statements of the corporation, which may   include financial statements of subsidiary entities or other   entities accounted for on a consolidated basis or on the equity   method of accounting, [including financial statements] that:                      (A)  [include subsidiary corporations or other   corporations accounted for on a consolidated basis or on the equity   method of accounting; or                      [(B)]  present the financial condition of the   corporation, and any subsidiary or other entities included in those   financial statements, in accordance with generally accepted   accounting principles or international financial reporting   standards; or                      (B)  have been [(2)  financial statements]   prepared using the method of accounting used to file the   corporation's federal income tax return or using any other   accounting practices and principles that are reasonable under the   circumstances;                (2) [(3)]  financial information, including condensed   or summary financial statements, that is prepared on the same basis   as financial statements described by Subdivision (1) [or (2)];                (3) [(4)]  a projection, a forecast, or other   forward-looking information relating to the future economic   performance, financial condition, or liquidity of the corporation   that is reasonable under the circumstances;                (4) [(5)]  a fair valuation or information from any   other method that is reasonable under the circumstances; or                (5) [(6)]  a combination of a statement, a valuation,   or information authorized by this section.          SECTION 22.  Subchapter H, Chapter 21, Business   Organizations Code, is amended by adding Section 21.3521 to read as   follows:          Sec. 21.3521.  SHAREHOLDER MEETINGS BY REMOTE   COMMUNICATION. Except for any limitation or other requirements in   the governing documents of the corporation, if a meeting of a   corporation's shareholders under Section 21.351 or 21.352 is held   by means of a telephone conference or other communication system   authorized by Section 6.002, the meeting is considered to have   satisfied the requirement of Section 6.002(a) that shareholders   participating in the meeting be able to communicate with all other   persons participating in the meeting if the corporation implements   reasonable measures to provide each shareholder entitled to vote at   the meeting, or the shareholder's proxyholder, a reasonable   opportunity to:                (1)  vote on matters submitted to the shareholders; and                (2)  read or hear the proceedings of the meeting   substantially concurrently with those proceedings.          SECTION 23.  Section 21.551(2), Business Organizations   Code, is amended to read as follows:                (2)  "Shareholder" includes [means] a shareholder as   defined by Section 1.002 or a beneficial owner whose shares are held   in a voting trust or by a nominee on the beneficial owner's behalf.          SECTION 24.  Section 21.908(a), Business Organizations   Code, is amended to read as follows:          (a)  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, regardless of whether a filing   instrument or other document was previously filed with respect to   the defective corporate act. [The filing of another filing   instrument or document is not required.]          SECTION 25.  Section 22.508(a), Business Organizations   Code, is amended to read as follows:          (a)  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, regardless of whether a filing   instrument or other document was previously filed with respect to   the defective corporate act. [The filing of another filing   instrument or document is not required.]          SECTION 26.  Section 101.052(d), Business Organizations   Code, is amended to read as follows:          (d)  The company agreement may contain any provisions for the   regulation and management of the affairs of the limited liability   company not inconsistent with law [or the certificate of   formation].          SECTION 27.  Section 101.206, Business Organizations Code,   is amended by adding Subsections (c-1), (c-2), and (g) to read as   follows:          (c-1)  For purposes of this section, the determination of the   amount of a limited liability company's liabilities or the value of   a company's assets may be based on:                (1)  financial statements of the company, which may   include the financial statements of subsidiary entities or other   entities accounted for on a consolidated basis or on the equity   method of accounting, that:                      (A)  present the financial condition of the   company and any subsidiary or other entities included in those   financial statements, in accordance with generally accepted   accounting principles or international financial reporting   standards; or                      (B)  have been prepared using the method of   accounting used to file the company's federal income tax return or   using any other accounting practices and principles that are   reasonable under the circumstances;                (2)  financial information, including condensed or   summary financial statements, that is prepared on the same basis as   financial statements described by Subdivision (1);                (3)  projections, forecasts, or other forward-looking   information relating to the future economic performance, financial   condition, or liquidity of the company that is reasonable under the   circumstances;                (4)  a fair valuation or information from any other   method that is reasonable under the circumstances; or                (5)  a combination of a statement, valuation, or   information authorized by this subsection.          (c-2)  Subsection (c-1) does not apply to the computation of   the franchise tax or any other tax imposed on a limited liability   company under the laws of this state.          (g)  An action alleging a distribution is made in violation   of this section must be commenced not later than the second   anniversary of the date of the distribution.          SECTION 28.  Section 101.251, Business Organizations Code,   is amended to read as follows:          Sec. 101.251.  GOVERNING AUTHORITY. (a) The governing   authority of a limited liability company consists of:                (1)  the managers of the company, if the company   agreement provides [company's certificate of formation states]   that the company is managed by [will have] one or more managers; or                (2)  the members of the company, if the company   agreement provides [company's certificate of formation states]   that the company is managed by the members [will not have managers].          (b)  If the company agreement does not provide otherwise, the   governing authority of a limited liability company consists of:                (1)  the managers of the company, if the company's   certificate of formation states that the company has managers; or                (2)  the members of the company, if the company's   certificate of formation does not state that the company has   managers.          SECTION 29.  Section 101.451(3), Business Organizations   Code, is amended to read as follows:                (3)  "Member" includes [means] a person who is a member   or is an assignee of a membership interest or a person who   beneficially owns a membership interest through a voting trust or a   nominee on the person's behalf.          SECTION 30.  Section 101.457, Business Organizations Code,   is amended to read as follows:          Sec. 101.457.  TOLLING OF STATUTE OF LIMITATIONS. A written   demand filed with the limited liability company under Section   101.453 tolls the statute of limitations on the claim on which   demand is made until the later of:                (1)  the 31st day after the expiration of any waiting   period under Section 101.453(a) [153.403]; or                (2)  the 31st day after the expiration of any stay   granted under Section 101.455 [153.405], including all   continuations of the stay.          SECTION 31.  Section 153.151, Business Organizations Code,   is amended by adding Subsection (a-1) to read as follows:          (a-1)  On formation of a limited partnership, a person   becomes a general partner if the person:                (1)  has entered into the partnership agreement as a   general partner; and                (2)  is named as a general partner in the certificate of   formation of the limited partnership.          SECTION 32.  Section 153.210, Business Organizations Code,   is amended by adding Subsections (c), (d), and (e) to read as   follows:          (c)  For purposes of this section, the determination of the   amount of a limited partnership's liabilities or the value of a   limited partnership's assets may be based on:                (1)  financial statements of the limited partnership,   which may include the financial statements of subsidiary entities   or other entities accounted for on a consolidated basis or on the   equity method of accounting, that:                      (A)  present the financial condition of the   limited partnership and any subsidiary or other entities included   in those financial statements in accordance with generally accepted   accounting principles or international financial reporting   standards; or                      (B)  have been prepared using the method of   accounting used to file the partnership's federal income tax return   or using any other accounting practices and principles that are   reasonable under the circumstances;                (2)  financial information, including condensed or   summary financial statements, that are prepared on the same basis   as financial statements described by Subdivision (1);                (3)  projections, forecasts, or other forward-looking   information relating to the future economic performance, financial   condition, or liquidity of the limited partnership that is   reasonable under the circumstances;                (4)  a fair valuation or information from any other   method that is reasonable under the circumstances; or                (5)  a combination of a statement, valuation, or   information authorized by this subsection.          (d)  Subsection (c) does not apply to the computation of the   franchise tax or any other tax imposed on a limited partnership   under the laws of this state.          (e)  An action alleging a distribution is made in violation   of this section must be commenced not later than the second   anniversary of the date of the distribution.          SECTION 33.  Section 200.209, Business Organizations Code,   is amended to read as follows:          Sec. 200.209.  DETERMINATION OF SOLVENCY, NET ASSETS, STATED   CAPITAL, AND SURPLUS. (a) The determination of whether a real   estate investment trust is or would be insolvent and the   determination of the amount [value] of a real estate investment   trust's [net assets,] stated capital[,] or surplus or any component   of the trust's stated capital or surplus, or the value of the real   estate investment trust's net assets or any component of the trust's   net assets, [and each of the components of net assets, stated   capital, or surplus] may be based on:                (1)  financial statements of the real estate investment   trust that present the financial condition of the real estate   investment trust in accordance with generally accepted accounting   principles or international financial reporting standards,   including financial statements that include subsidiary entities or   other entities accounted for on a consolidated basis or on the   equity method of accounting;                (2)  financial statements prepared using the method of   accounting used to file the real estate investment trust's federal   income tax return or using any other accounting practices and   principles that are reasonable under the circumstances;                (3)  financial information, including condensed or   summary financial statements, that is prepared on the same basis as   financial statements described by Subdivision (1) or (2);                (4)  a projection, a forecast, or other forward-looking   information relating to the future economic performance, financial   condition, or liquidity of the real estate investment trust that is   reasonable under the circumstances;                (5)  a fair valuation or information from any other   method that is reasonable under the circumstances; or                (6)  a combination of a statement, a valuation, or   information authorized by this section.          (b)  Subsection (a) does not apply to the computation of the   franchise tax or any other tax imposed on a real estate investment   trust under the laws of this state.          SECTION 34.  The following provisions of the Business   Organizations Code are repealed:                (1)  Section 3.253; and                (2)  Section 3.254.          SECTION 35.  Sections 101.206 and 153.210, Business   Organizations Code, as amended by this Act, apply only to a   distribution made on or after the effective date of this Act. A   distribution made before the effective date of this Act is governed   by the law in effect on the date the distribution was made, and the   former law is continued in effect for that purpose.          SECTION 36.  This Act takes effect September 1, 2021.