Search results
31 results
Sort by:
Entity Acquisitions Under the Texas Business Organizations Code
The Texas Business Organizations Code (the TBOC or the Code) is a substantive codification of the prior Texas statutes governing non-profit and for-profit private-sector entities, which, for the most part, were repealed effective as of January 1, 2010. These statutes consisted of the Texas Business Corporation Act (TBCA), Texas Miscellaneous Corporation Laws Act (TMCLA), Texas Limited Liability Company Act (TLLCA), Texas Revised Limited Partnership Act (TRLPA), Texas Revised Partnership Act (TRPA), Texas Non-Profit Corporation Act (TNPCA), Texas Real Estate Investment Trust Act (TREITA), Texas Uniform Unincorporated Nonprofit Associations Act (TUUNAA), Texas Professional Corporation Act (TPCA), Texas Professional Associations Act (TPAA), Cooperative Associations Act (CAA) and other existing provisions of Texas statutes governing private entities.
Shareholder Agreements: Drafting and Analysis
Under the Texas Business Organizations Code (the “TBOC”), there are three kinds of shareholders agreements for a Texas for-profit corporation. First, there are shareholders agreements between the corporation and one or more of the corporation’s shareholders or agreements between two or more shareholders that are not executed by all of the shareholders of the corporation. The TBOC has no specific provisions governing this first kind of shareholders agreements other than to state that the statutory provisions governing the other two kinds of shareholders agreementsdo not prohibit or impair such agreements. Second, there are written shareholders agreements that are executed by all of the shareholders at the time of the agreement and made known to the corporation. Third, there are shareholders agreements that are contained in the certificate of formation or bylaws if approved by all of the shareholders at the time of the agreement. The latter two forms of shareholder agreements are authorized and governed by Subchapter C of Chapter 21 of the TBOC. These latter agreements may be amended only by all of the shareholders at the time of the amendment, unless the agreement provides otherwise.4 This article refers to the latter kinds of shareholders agreements as “statutory shareholders agreements”.
2023 Texas Legislative Update on Amendments to Texas Business Organizations Code
This article summarizes several bills that were passed by the Texas Legislature in its 2023 Regular Session and that amend the Texas Business Organizations Code (the “TBOC”). There are many other bills that were passed affecting business law, so this article should not be viewed as containing a listing of all business-related bills. The article contains summaries only and should not be relied on as a complete description of any bill or portion thereof.
2019 Texas Legislative Update on Amendments to Entity Laws
This article summarizes several pieces of legislation that have been passed by the Texas Legislature in its 2019 Regular Session and that amend the Texas Business Organizations Code and the Texas Business and Commerce Code. It covers changes to assumed name filings, authorized use of electronic data systems, delayed effectiveness of filings, deriviative proceedings, voting agreements, LLC provision amendments, partnership provision amendments, two-step offer merger transactions, ratification of defective acts, directors of non-profit organizations, and notice of redemptions by for profit corporations.
Derivative Actions Under the Texas Business Organizations Code
The fiduciary duties of directors or other governing persons of an entity and its officers are generally owed to the corporation, limited liability company (“LLC”) or limited partnership (“LP”) entity they serve and not to any individual owners. Thus, a cause of action against a director or other governing persons of an entity and its officers for breach of fiduciary duty would be vested in, and brought by or in the right of, the entity. Statutes in both Texas6 and Delaware authorize an action brought in the right of the entity by a stakeholder against its Board for breach of fiduciary duty.8 Such an action is called a “derivative action.” The TBOC was amended in the 2019 Legislative Session to make consistent derivative proceedings provisions governing for profit corporations with those governing LLCs and LPs by House Bill No. 3603, which became effective on September 1, 2019.
Entities and Marital Property Law: Interrelated Claims and Assets
Valuing assets is part art and part science. In a litigation context, it becomes even harder. In a divorce case, the difficulty again multiplies. Preparing a valuation with the hypothetical assumptions required by Texas case law further complicates the process. There is no simple “cookbook” approach to valuing assets. The appraiser must be intuitive in his or her approach. One challenging the appraiser, in Court or otherwise, must be prepared to not only have a complete understanding of the asset itself, but also a complete understanding of the approach chosen by the appraiser, the approaches discarded as inappropriate, and why one was deemed better than another in this case. There is no substitute for hard work, thorough attention to detail, and that spark of imagination and creativity necessary to achieve results that stand the test of time.
Forming New Non-Profits
Many attorneys use the term “nonprofit” interchangeably with the term “tax-exempt.” They are not the same. Chapter 22 of the Texas Business Organizations Code (“Code”) governs nonprofit corporations. A nonprofit corporation may be exempt from various taxes, or it may be subject to various other taxes. “Tax-exempt” means that the organization is exempt from one or more federal or state tax. Frequently, the tax exemption requires that the organization qualify as a nonprofit corporation. This paper discusses entities commonly used by non-profits, purposes that qualify non-profits for tax-exempt status and common mistakes made. The author also provides a list of tax-exempt purposes under federal and Texas law, a certificate of formation for a non-profit corporation and bylaws for a non-profit corporation.
Representing Minority Owners and Addressing Fiduciary Duties - What is Left After Ritchie v. Rupe
Over half a century ago, the Texas Supreme court recognized a cause of action by a minority shareholder against the majority shareholder for wrongful suppression of dividends. Following that decision, numerous Texas courts recognized and addressed a cause of action for minority stockholder oppression. But notwithstanding that jurisprudence, the Texas Supreme Court abruptly changed the rules in 2014. There remains a statutory claim for “oppressive” conduct under the TBOC that allows the appointment of a receiver for specific assets of the corporation. And other sections of the TBOC authorize the appointment of a receiver to liquidate the business. This paper examines some of the rights minority shareholders still have after this “seismic shift” in the law.
Texas Business Organizations Code Update
The Business Organizations Code (“BOC”) was adopted in the 2003 legislative session and became effective January 1, 2006. The BOC reorganizes and combines in one code the provisions of the following business entity statutes: Texas Business Corporation Act Texas Miscellaneous Corporation Laws Act Texas Non-Profit Corporation Act Texas Professional Corporation Act Texas Professional Association Act Texas Revised Partnership Act Texas Revised Limited Partnership Act Texas Limited Liability Company Act Texas Real Estate Investment Trust Act Texas Cooperative Association Act Texas Uniform Unincorporated Nonprofit Association Act
2011 Legislative Update: Amendments to the Texas Business Organizations Code and Texas Business and Commerce Code
This article summarizes several pieces of legislation that were passed by the Texas Legislature in its 2011 Regular Session and that amend the Texas Business Organizations Code (―TBOC‖ or the ―Code‖). This article also summarizes two pieces of legislation that were passed by the Texas Legislature in its 2011 Regular Session and that amend the Texas Business & Commerce Code (―TBCC‖).
Drafting LLC Documents Under the Business Organizations Code
These are the presentation slides.
View from the Secretary of State Office: Issues, Traps, Development
On January 1, 2010, the Texas Business Organizations Code (BOC) applied to all entities. Many entities and practitioners are now asking whether the governing documents of an entity must be amended to comply with the BOC. Section 402.005(a)(2) states that a domestic or foreign filing entity is not considered to have failed to comply with the BOC if the entity‟s certificate of formation or application for registration does not comply with the code. However, section 402.005(a)(3) and (4) state that the entity should file an amendment to conform its certificate of formation or application for registration to the BOC when it next files an amendment to its certificate or application. What does “conform” mean? To “conform” means “to be similar” or “to be in accord or agreement.”
Chapter 10 of the Texas Business Organizations Code
Mergers, Interest Exchanges, Conversions, and Sales of Assets
2017 Texas Legislative Update on Business Law
This article summarizes several pieces of legislation that were passed by the Texas Legislature in its 2017 Regular Session and that amend the Texas Business Organizations Code (the “Code” or “TBOC”). There are many other bills that were passed affecting business law, so this article should not be viewed as containing a listing of all business-related bills. The article contains summaries only and should not be relied on as a complete description of any bill or portion thereof.
Inadvertent Partnerships
This paper discusses situations in which individuals or entities, through their words or dealings, may wind up being treated as having formed a partnership even though they did not explicitly say they were doing so. A party dealing with another may seek to characterize their relationship as a partnership to take advantage of business opportunities or to impose fiduciary-type duties on the other party. Similarly, someone dealing with a party who is not solvent may seek to characterize the insolvent party’s relationship with another as a partnership so that the other, solvent party becomes liable for the debts and obligations of their purported “business.” These rules often are applied in hindsight. Practitioners and their clients must be careful in how they document their relationship and how they hold themselves out to third parties.
Corporation, Partnership and Limited Liability Company Structuring and Opt-In Decisions - Business Organizations Code
The Texas Business Organizations Code (the "TBOC" or the "Code") was a substantive codification of the prior Texas statutes governing non-profit and for-profit, private-sector entities. Those statutes consisted of the Texas Business Corporation Act ("TBCA"), Texas Miscellaneous Corporation Laws Act ("TMCLA"), Texas Limited Liability Company Act ("TLLCA"), Texas Revised Limited Partnership Act ("TRLPA"), Texas Revised Partnership Act ("TRPA"), Texas Non- Profit Corporation Act ("TNPCA"), Texas Real Estate Investment Trust Act ("TREITA"), Texas Uniform Unincorporated Nonprofit Associations Act ("TUUNAA"), Texas Professional Corporation Act ("TPCA"), Texas Professional Associations Act ("TPAA"), Cooperative Associations Act ("CAA") and other pre-existing provisions of Texas statutes governing private entities.
Legislative Update: Certain 2013 Amendments to the Texas Business and Commerce Code
This article summarizes several pieces of legislation passed by the Texas Legislature in its 2013 Regular Session that amend the Texas Business & Commerce Code (“TBCC”). Senate Bill 847 (“S.B. 847”) was authored by Senator John Carona, sponsored by Representative Rene Oliveira, signed into law by Governor Rick Perry on May 2, 2013 and becomes effective on September 1, 2013. In addition to amendments to the Texas Business Organizations Code, S.B. 847 makes an amendment to the fraudulent transfer provisions of the TBCC. House Bill 1624 (“H.B. 1624”) was authored by Representative Philip Cortez, sponsored by Senator Van de Putte, signed into law by the Governor on June 14, 2013 and becomes effective on September 1, 2013. H.B. 1624 amends the TBCC’s provisions to require a limited liability company to file an assumed name certificate if a series of the limited liability company operates under an assumed name. Senate Bill 474 (“S.B. 474”) was authored by Senator John Carona, sponsored by Representative Mike Villareal, signed into law by the Governor on June 14, 2013 and becomes effective on July 1, 2013. S.B. 474 makes several amendments to Chapter 9 Secured Transactions of the TBCC relating to the contents of financing statements, which are based on uniform amendments to the Uniform Commercial Code (the “UCC”) approved at the national level. Senate Bill 230 (“S.B. 230”) was authored by Senator John Carona, sponsored by Representative Joe Deshotel, signed into law by the Governor on May 10, 2013, and becomes effective on September 1, 2013. S.B. 230 amends Chapter 4A Funds Transfers of the TBCC based on a uniform amendment to the UCC approved at the national level relating to the applicability of Chapter 4A to “remittance transfers.” Senate Bill 699 (“S.B. 699”) was authored by Senator John Carona, sponsored by Representative Villalba, signed into law by the Governor on June 14, 2013, and becomes effective on September 1, 2013. S.B. 699 amends the assumed name provisions of the TBCC to simplify some of the information required in assumed name certificates filed with the Texas Secretary of State and offices of county clerks in Texas.
Corporation, Partnership (General, Limited and LLP) and Limited Liability Company Acquisitions Under Texas Business Organizations Code, Including Special Issues
The Texas Business Organizations Code (the ―TBOC‖ or the ―Code‖) is a substantive codification of the prior Texas statutes governing non-profit and for-profit, private-sector entities, which, for the most part were repealed effective as of January 1, 2010. These statutes consisted of the Texas Business Corporation Act (―TBCA‖), Texas Miscellaneous Corporation Laws Act (―TMCLA‖), Texas Limited Liability Company Act (―TLLCA‖), Texas Revised Limited Partnership Act (―TRLPA‖), Texas Revised Partnership Act (―TRPA‖), Texas Non-Profit Corporation Act (―TNPCA‖), Texas Real Estate Investment Trust Act (―TREITA‖), Texas Uniform Unincorporated Nonprofit Associations Act (―TUUNAA‖), Texas Professional Corporation Act (―TPCA‖), Texas Professional Associations Act (―TPAA‖), Cooperative Associations Act (―CAA‖) and other existing provisions of Texas statutes governing private entities. The Code was a joint project of the Business Law Section of the State Bar of Texas and The Office of the Texas Secretary of State. The Texas Legislative Council provided drafting and editing assistance. The Code has been under development since 1995, when the Business Law Section first formed a committee to study codification of the foregoing statutes. This committee evolved into a drafting committee (the ―Committee‖) that included representatives of the Secretary of State’s Office, solo practitioners, law firm lawyers and prominent law professors from several Texas law schools. The Committee’s continuing work to improve the Code has resulted in a number of amendments to the Code, the most recent of which were included in a few bills passed by the 2011 Texas Legislature and became effective on September 1, 2011.
Recent Legislative Developments in Texas Business Law: 2011 Amendments to the Texas Business Organizations Code and Texas Business and Commerce Code
This article summarizes several pieces of legislation that were passed by the Texas Legislature in its 2011 Regular Session and that amend the Texas Business Organizations Code (―TBOC‖ or the ―Code‖). This article also summarizes two pieces of legislation that were passed by the Texas Legislature in its 2011 Regular Session and that amend the Texas Business & Commerce Code (―TBCC‖).
2017 Texas Legislative Update on Amendments to Texas Business Organizations Code
This article summarizes several pieces of legislation that, at the time of the writing of this paper, are expected to be passed by the Texas Legislature in its 2017 Regular Session and that amend the Texas Business Organizations Code (the “Code”). There are many other bills that were passed affecting business law, so this article should not be viewed as containing a listing of business-related bills. The article contains summaries only and should not be relied on as a complete description of any bill or portion thereof.
Changes in Texas Business Organizations Code in 2015 Session of Texas Legislature
This article summarizes several pieces of legislation passed by the Texas Legislature in its 2015 Regular Session that amend primarily the Texas Business Organizations Code (the “Code”) .
Comparison of Limites Partnership Laws of Texas and Delaware
Choosing the applicable law under which to form the modern day limited partnership can be a crucial decision, and many lawyers and business people fail to appreciate the impact that the choice of law can have on future operations and transactions involving the limited partnership. Incorporating under the Delaware General Corporation Law has long been the dominant choice for public corporations. It is wise to examine the differences between Delaware and Texas law applicable to limited partnerships before automatically deferring to the choice of Delaware law for formation. The statutory provisions governing limited partnerships in Texas are located in the Texas Business Organizations Code (the “TBOC”). Title 1 of the TBOC contains 12 Chapters that are generally applicable to all types of domestic entities formed under Texas law, including limited partnerships. The provisions of Chapters 151, 153 and 154 of the TBOC are applicable to limited partnerships. Chapters 151 and 154 of the TBOC also apply to general partnerships, which are separately governed by Chapter 152 of the TBOC. The provisions of Chapter 151, 153 and 154 and the provisions of Title 1 and Chapter 152 to the extent applicable to limited partnerships may be cited as the “Texas Limited Partnership Law.” The statutory provisions governing a Delaware limited partnership are found in the Delaware Revised Uniform Limited Partnership Act (the “DRULPA”). The DRULPA constitutes Chapter 17 of Subtitle II of Title 6 of the Delaware Laws. While I have attempted to prepare a fairly comprehensive comparison of what I view as the more important aspects of these limited partnership laws, the comparison is not complete. There are other provisions in each of the statutes that I have not attempted to address and compare. Any reader, of course, should review the statutory provisions himself or herself in order to make his or her own analysis and to compare other provisions that I have not addressed.
Divisive Mergers: How To Divide An Entity Into Two or More Entities Under A Merger Authorized By The Texas Business Organizations Code
The common conception of a merger is the combination of two entities into one surviving entity. However, the Texas Business Organizations Code (the“TBOC”) provides that through the use of the merger provisions of the code, a Texas domestic entity (an organization formed under or the internal affairs of which are governed by the TBOC) may be divided into two or more new domestic entities or other organizations or into a surviving domestic entity and one or more new domestic or foreign entities or non-code organizations. This division through use of the merger statutes is sometimes called a divisive merger or a divisional merger. These provisions remain unique to Texas, although Pennsylvania provides for a statutory division but does not deal with division in its merger statutes. Through an illustrative, fictitious case study, this paper will consider the possibilities presented by the Texas divisional merger provisions as a tool to accomplish client goals and will provide a checklist of steps required to accomplish a divisional merger of a Texas limited liability company or limited partnership(including presenting a form plan of merger). This paper will not examine the federal income tax implications of a divisional merger.
Tax Considerations in Entity Choice and Acquisitions, Including Federal Tax Law Changes That Go Into Effect in 2015 and Developments in 2015 Texas Legislative Session
This outline discusses certain relevant federal income and Texas state tax considerations relating to the selection of an entity for engaging in business or investment. The outline begins with a discussion of the classification of entities for federal tax purposes and, in particular, the check-the-box regulations. It then provides a summary of some of the principal tax considerations relating to sole proprietorships, C corporations, partnerships, limited liability companies and S corporations. This outline does not address the taxation of trusts and estates, regulated investment companies, real estate investment trusts, real estate mortgage investment conduits, cooperatives, exempt organizations or insurance companies.
Amendments to the Texas Business Organizations Code in 2015 Session of Texas Legislature
This article summarizes two pieces of legislation passed by the Texas Legislature in its 2015 Regular Session that amend the Texas Business Organizations 2Code (the “Code”). As of the date of this paper, these bills have not yet been signed by Governor Greg Abbott, but are expected to be so signed by the Governor.