BUSINESS ORGANIZATIONS CODE
CHAPTER 3. FORMATION AND GOVERNANCE
SUBCHAPTER A. FORMATION, EXISTENCE, AND CERTIFICATE OF FORMATION
§ 3.001. FORMATION AND EXISTENCE OF FILING
ENTITIES. (a) Subject to the other provisions of this code, to
form a filing entity, a certificate of formation complying with
Sections 3.003, 3.004, and 3.005 must be filed in accordance with
Chapter 4.
(b) The filing of a certificate of formation described by
Subsection (a) may be included in a filing under Chapter 10.
(c) The existence of a filing entity commences when the
filing of the certificate of formation takes effect as provided by
Chapter 4.
(d) Except in a proceeding by the state to terminate the
existence of a filing entity, an acknowledgment of the filing of a
certificate of formation issued by the filing officer is conclusive
evidence of:
(1) the formation and existence of the filing entity;
(2) the satisfaction of all conditions precedent to
the formation of the filing entity; and
(3) the authority of the filing entity to transact
business in this state.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.002. FORMATION AND EXISTENCE OF NONFILING
ENTITIES. The requirements for the formation of and the
determination of the existence of a nonfiling entity are governed
by the title of this code that applies to that entity.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.003. DURATION. A domestic entity exists
perpetually unless otherwise provided in the governing documents of
the entity. A domestic entity may be terminated in accordance with
this code or the Tax Code.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.004. ORGANIZERS. (a) Any person having the
capacity to contract for the person or for another may be an
organizer of a filing entity.
(b) Each organizer of a filing entity must sign the
certificate of formation of the filing entity, except that:
(1) each general partner must sign the certificate of
formation of a domestic limited partnership; and
(2) each trust manager must sign and acknowledge
before an officer who is authorized by law to take acknowledgment of
a deed the certificate of formation of a domestic real estate
investment trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.005. CERTIFICATE OF FORMATION. (a) The
certificate of formation must state:
(1) the name of the filing entity being formed;
(2) the type of filing entity being formed;
(3) for filing entities other than limited
partnerships, the purpose or purposes for which the filing entity
is formed, which may be stated to be or include any lawful purpose
for that type of entity;
(4) for filing entities other than limited
partnerships, the period of duration, if the entity is not formed to
exist perpetually;
(5) the street address of the initial registered
office of the filing entity and the name of the initial registered
agent of the filing entity at the office;
(6) the name and address of each:
(A) organizer for the filing entity, unless the
entity is formed under a plan of conversion or merger;
(B) general partner, if the filing entity is a
limited partnership; or
(C) trust manager, if the filing entity is a real
estate investment trust;
(7) if the filing entity is formed under a plan of
conversion or merger, a statement to that effect and, if formed
under a plan of conversion, the name, address, date of formation,
prior form of organization, and jurisdiction of formation of the
converting entity; and
(8) any other information required by this code to be
included in the certificate of formation for the filing entity.
(b) The certificate of formation may contain other
provisions not inconsistent with law relating to the organization,
ownership, governance, business, or affairs of the filing entity.
(c) Except as provided by Section 3.004, Chapter 4 governs
the signing and filing of a certificate of formation for a domestic
entity.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.006. FILINGS IN CASE OF MERGER OR
CONVERSION. (a) If a new domestic filing entity is formed under a
plan of conversion or merger, the certificate of formation of the
entity must be filed with the certificate of conversion or merger
under Section 10.155(a) or 10.153(a). The certificate of formation
is not required to be filed separately under Section 3.001.
(b) The formation and existence of a domestic filing entity
that is a converted entity in a conversion or that is to be created
under a plan of merger takes effect and commences on the
effectiveness of the conversion or merger, as appropriate.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.007. SUPPLEMENTAL PROVISIONS REQUIRED IN
CERTIFICATE OF FORMATION OF FOR-PROFIT CORPORATION. (a) In
addition to the information required by Section 3.005, the
certificate of formation of a for-profit 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 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.
(b) If the shares a for-profit corporation is authorized to
issue consist of more than one class of shares, the certificate of
formation of the for-profit corporation must, with respect to each
class, state:
(1) the designation of the class;
(2) the aggregate number of shares in the class;
(3) the par value of each share or a statement that
each share is without par value;
(4) the preferences, limitations, and relative rights
of the shares; and
(5) if the shares in a class the corporation is
authorized to issue consist of more than one series, the following
with respect to each series:
(A) the designation of the series;
(B) the aggregate number of shares in the series;
(C) any preferences, limitations, and relative
rights of the shares to the extent provided in the certificate of
formation; and
(D) any authority vested in the board of
directors to establish the series and set and determine the
preferences, limitations, and relative rights of the series.
(c) If the shareholders of a for-profit corporation are to
have a preemptive right or cumulative voting right, the certificate
of formation of the for-profit corporation must comply with Section
21.203 or 21.360, as appropriate.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.008. SUPPLEMENTAL PROVISIONS REQUIRED IN
CERTIFICATE OF FORMATION OF CLOSE CORPORATION. (a) In addition
to a provision required or permitted to be stated in the certificate
of formation of a for-profit corporation under Section 3.007, the
certificate of formation of a close corporation, whether original,
amended, or restated, must include the sentence, "This corporation
is a close corporation."
(b) The certificate of formation of the close corporation
may contain:
(1) a provision contained or permitted to be contained
in a shareholders' agreement conforming to Subchapter O, Chapter
21, that the organizers elect to include in the certificate of
formation; or
(2) a copy of a shareholders' agreement that conforms
to Subchapter O, Chapter 21, and that may be filed in the manner
provided by Section 21.212.
(c) A provision contained in the certificate of formation
under Subsection (b) must be preceded by a statement that the
provision is subject to the corporation remaining a close
corporation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.009. SUPPLEMENTAL PROVISIONS REQUIRED IN
CERTIFICATE OF FORMATION OF NONPROFIT CORPORATION. In addition to
the information required by Section 3.005, the certificate of
formation of a nonprofit corporation must include:
(1) if the nonprofit corporation is to have no
members, a statement to that effect;
(2) if management of the nonprofit corporation's
affairs is to be vested in the nonprofit corporation's members, a
statement to that effect;
(3) the number of directors constituting the initial
board of directors and the names and addresses of those directors
or, if the management of the nonprofit corporation is vested solely
in the nonprofit corporation's members, a statement to that effect;
and
(4) if the nonprofit corporation is to be authorized
on its winding up to distribute the nonprofit corporation's assets
in a manner other than as provided by Section 22.304, a statement
describing the manner of distribution.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 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 will or will
not have managers;
(2) if the limited liability company will have
managers, the name and address of each initial manager of the
limited liability company; and
(3) if the limited liability company will not have
managers, the name and address of each initial member of the limited
liability company.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.011. SUPPLEMENTAL PROVISIONS REGARDING CERTIFICATE
OF FORMATION OF LIMITED PARTNERSHIP. (a) To form a limited
partnership, the partners must enter into a partnership agreement
and file a certificate of formation.
(b) The partners of a limited partnership formed under
Section 10.001 or 10.101 may include the partnership agreement
required under Subsection (a) in the plan of merger or conversion.
(c) A certificate of formation for a limited partnership
must include the address of the principal office of the partnership
in the United States where records are to be kept or made available
under Section 153.551.
(d) The fact that a certificate of formation is on file with
the secretary of state is notice that the partnership is a limited
partnership and of all other facts contained in the certificate as
required by Section 3.005.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.012. SUPPLEMENTAL PROVISIONS REQUIRED IN
CERTIFICATE OF FORMATION OF REAL ESTATE INVESTMENT TRUST. In
addition to the information required by Section 3.005, the
certificate of formation of a real estate investment trust must
state:
(1) that an assumed name certificate stating the name
of the real estate investment trust has been filed in the manner
provided by law;
(2) that the purpose of the real estate investment
trust is to:
(A) purchase, hold, lease, manage, sell,
exchange, develop, subdivide, and improve real property and
interests in real property, other than severed mineral, oil, or gas
royalty interests, and carry on any other business and perform any
other action in connection with a purpose described by this
paragraph;
(B) exercise powers conferred by the laws of this
state on a real estate investment trust; and
(C) perform any action described by Chapter 200
or Title 1 to the same extent as an individual;
(3) the post office address of the initial principal
office and place of business of the real estate investment trust;
(4) the aggregate number of shares of beneficial
interest the real estate investment trust is authorized to issue
and the par value to be received by the real estate investment trust
for the issuance of each share;
(5) if shares described by Subdivision (4) are divided
into classes as authorized by Section 200.102 or 200.103, a
description of each class of shares, including any preferences,
conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and
conditions of redemption; and
(6) that the trust managers shall manage the money or
property received for the issuance of shares for the benefit of the
shareholders of the real estate investment trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.013. SUPPLEMENTAL PROVISIONS REQUIRED IN
CERTIFICATE OF FORMATION OF COOPERATIVE ASSOCIATION. In addition
to the information required by Section 3.005, the certificate of
formation of a cooperative association must state:
(1) whether the cooperative association is organized
with or without shares;
(2) the number of shares or memberships subscribed for
the cooperative association;
(3) if the cooperative association is organized with
shares:
(A) the amount of authorized capital;
(B) the number and type of shares;
(C) par value of the shares, if any; and
(D) the rights, preferences, and restrictions of
each type of share;
(4) the method of distribution on winding up and
termination of any surplus of the cooperative association in
accordance with Section 251.403; and
(5) the names and street addresses of the directors
who will manage the affairs of the cooperative association for the
initial year, unless sooner changed by the members.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.014. SUPPLEMENTAL PROVISIONS REQUIRED IN
CERTIFICATE OF FORMATION OF PROFESSIONAL ENTITY. In addition to
the information required by Section 3.005, the certificate of
formation of a professional entity must state:
(1) the type of professional service to be provided by
the professional entity as the purpose of the entity; and
(2) that the professional entity is a:
(A) professional association;
(B) professional corporation; or
(C) professional limited liability company.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.015. SUPPLEMENTAL PROVISIONS REQUIRED IN
CERTIFICATE OF FORMATION OF PROFESSIONAL ASSOCIATION. (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; and
(B) that a member of the association may not
dissolve the association independently of other members of the
association.
(b) The certificate of formation of a professional
association may contain:
(1) provisions regarding shares or units of ownership
in the association;
(2) provisions governing the winding up and
termination of the association's business; and
(3) any other provision consistent with state law
regulating the internal affairs of a professional association.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER B. AMENDMENTS AND REINSTATEMENTS OF CERTIFICATE OF
FORMATION
§ 3.051. RIGHT TO AMEND CERTIFICATE OF
FORMATION. (a) A filing entity may amend its certificate of
formation.
(b) An amended certificate of formation may contain only
provisions that:
(1) would be permitted at the time of the amendment if
the amended certificate of formation were a newly filed original
certificate of formation; or
(2) effect a change, exchange, reclassification, or
cancellation in the membership or ownership interests or the rights
of owners or members of the filing entity.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.052. PROCEDURES TO AMEND CERTIFICATE OF
FORMATION. (a) The procedure to adopt an amendment to the
certificate of formation is as provided by the title of this code
that applies to the entity.
(b) A filing entity that amends its certificate of formation
shall sign and file, in the manner required by Chapter 4, a
certificate of amendment complying with Section 3.053 or a restated
certificate of formation complying with Section 3.059.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.053. CERTIFICATE OF AMENDMENT. A certificate of
amendment for a filing entity must state:
(1) the name of the filing entity;
(2) the type of the filing entity;
(3) for each provision of the certificate of formation
that is added, altered, or deleted, an identification by reference
or description of the added, altered, or deleted provision and, if
the provision is added or altered, a statement of the text of the
amended or added provision;
(4) that the amendment or amendments have been
approved in the manner required by this code and the governing
documents of the entity; and
(5) any other matter required by the provisions of
this code applicable to the filing entity to be in the certificate
of amendment.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.054. SUPPLEMENTAL PROVISIONS FOR CERTIFICATE OF
AMENDMENT OF FOR-PROFIT CORPORATION. (a) In addition to the
statements required by Section 3.053, a certificate of amendment
for a for-profit corporation must state:
(1) if the amendment provides for an exchange,
reclassification, or cancellation of issued shares, the manner in
which the exchange, reclassification, or cancellation of the issued
shares will be effected if the manner is not specified in the
amendment; and
(2) if the amendment effects a change in the amount of
stated capital, the manner in which the change in the amount of
stated capital is effected and the amount of stated capital
expressed in dollar terms as changed by the amendment.
(b) An officer shall sign the certificate of amendment on
behalf of the for-profit corporation. If shares of the for-profit
corporation have not been issued and the certificate of amendment
is adopted by the board of directors, a majority of the directors
may sign the certificate of amendment on behalf of the for-profit
corporation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.055. SUPPLEMENTAL PROVISIONS FOR CERTIFICATE OF
AMENDMENT OF REAL ESTATE INVESTMENT TRUST. (a) In addition to the
statements required by Section 3.053, a certificate of amendment
for a real estate investment trust must state:
(1) if the amendment provides for an exchange,
reclassification, or cancellation of issued shares, the manner in
which the exchange, reclassification, or cancellation of the issued
shares will be effected if the manner is not specified in the
amendment; and
(2) if the amendment effects a change in the amount of
stated capital, the manner in which the change in the amount of
stated capital is effected and the amount of stated capital
expressed in dollar terms as changed by the amendment.
(b) If shares of the real estate investment trust have not
been issued and the certificate of amendment is adopted by the trust
managers, a majority of the trust managers may execute the
certificate of amendment on behalf of the real estate investment
trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.056. EFFECT OF FILING OF CERTIFICATE OF
AMENDMENT. (a) An amendment to a certificate of formation takes
effect when the filing of the certificate of amendment takes effect
as provided by Chapter 4.
(b) An amendment to a certificate of formation does not
affect:
(1) an existing cause of action in favor of or against
the entity for which the certificate of amendment is sought;
(2) a pending suit to which the entity is a party; or
(3) an existing right of a person other than an
existing owner.
(c) If the name of an entity is changed by amendment, an
action brought by or against the entity in the former name of the
entity does not abate because of the name change.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.057. RIGHT TO RESTATE CERTIFICATE OF
FORMATION. (a) A filing entity may restate its certificate of
formation.
(b) An amendment effected by a restated certificate of
formation must comply with Section 3.051(b).
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.058. PROCEDURES TO RESTATE CERTIFICATE OF
FORMATION. (a) The procedure to adopt a restated certificate of
formation is governed by the title of this code that applies to the
entity.
(b) A filing entity that restates its certificate of
formation shall sign and file, in the manner required by Chapter 4,
a restated certificate of formation and accompanying statements
complying with Section 3.059.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.059. RESTATED CERTIFICATE OF FORMATION. (a) A
restated certificate of formation must accurately state the text of
the previous certificate of formation, regardless of whether the
certificate of formation is an original, corrected, or restated
certificate, and include:
(1) each previous amendment to the certificate being
restated that is carried forward; and
(2) each new amendment to the certificate being
restated.
(b) A restated certificate of formation may omit:
(1) the name and address of each organizer other than
the name and address of each general partner of a limited
partnership or trust manager of a real estate investment trust; and
(2) any other information that may be omitted under
the provisions of this code applicable to the filing entity.
(c) A restated certificate of formation that does not make
new amendments to the certificate of formation being restated must
be accompanied by:
(1) a statement that the restated certificate of
formation accurately states the text of the certificate of
formation being restated, as amended, restated, and corrected,
except for information omitted under Subsection (b); and
(2) any other information required by other provisions
of this code applicable to the filing entity.
(d) A restated certificate of formation that makes new
amendments to the certificate of formation being restated must:
(1) be accompanied by a statement that each new
amendment has been made in accordance with this code;
(2) identify by reference or description each added,
altered, or deleted provision;
(3) be accompanied by a statement that each amendment
has been approved in the manner required by this code and the
governing documents of the entity;
(4) be accompanied by a statement that the restated
certificate of formation:
(A) accurately states the text of the certificate
of formation being restated and each amendment to the certificate
of formation being restated that is in effect, as further amended by
the restated certificate of formation; and
(B) does not contain any other change in the
certificate of formation being restated except for information
omitted under Subsection (b); and
(5) include any other information required by the
title of this code applicable to the entity.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.060. SUPPLEMENTAL PROVISIONS FOR RESTATED
CERTIFICATE OF FORMATION FOR FOR-PROFIT CORPORATION. (a) In
addition to the provisions authorized or required by Section 3.059,
a restated certificate of formation for a for-profit corporation
may update the current number of directors and the names and
addresses of the persons serving as directors.
(b) An officer shall sign the restated certificate of
formation on behalf of the corporation. If shares of the
corporation have not been issued and the restated certificate of
formation is adopted by the board of directors, the majority of the
directors may sign the restated certificate of formation on behalf
of the corporation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.061. SUPPLEMENTAL PROVISIONS FOR RESTATED
CERTIFICATE OF FORMATION FOR NONPROFIT CORPORATION. (a) In
addition to the provisions authorized or required by Section 3.059,
a restated certificate of formation for a nonprofit corporation may
update the current number of directors and the names and addresses
of the persons serving as directors.
(b) If the nonprofit corporation is a church in which
management is vested in the church's members under Section 22.202,
and the original certificate of formation is not required to
contain a statement to that effect, any restated certificate of
formation for the church must contain a statement to that effect in
addition to the information required by Section 3.059.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.062. SUPPLEMENTAL PROVISIONS FOR RESTATED
CERTIFICATE OF FORMATION FOR REAL ESTATE INVESTMENT TRUST. 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 persons serving as trust managers.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.063. EFFECT OF FILING OF RESTATED CERTIFICATE OF
FORMATION. (a) A restated certificate of formation takes effect
when the filing of the restated certificate of formation takes
effect as provided by Chapter 4.
(b) On the date the restated certificate of formation takes
effect, the original certificate of formation and each prior
amendment or restatement of the certificate of formation is
superseded and the restated certificate of formation is the
effective certificate of formation.
(c) Sections 3.056(b) and (c) apply to an amendment effected
by a restated certificate of formation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER C. GOVERNING PERSONS AND OFFICERS
§ 3.101. GOVERNING AUTHORITY. Subject to the title of
this code that governs the domestic entity and the governing
documents of the domestic entity, the governing authority of a
domestic entity manages and directs the business and affairs of the
domestic entity.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.102. RIGHTS OF GOVERNING PERSONS IN CERTAIN
CASES. (a) In discharging a duty or exercising a power, a
governing person, including a governing person who is a member of a
committee, may, in good faith and with ordinary care, rely on
information, opinions, reports, or statements, including financial
statements and other financial data, concerning a domestic entity
or another person and prepared or presented by:
(1) an officer or employee of the entity;
(2) legal counsel;
(3) a certified public accountant;
(4) an investment banker;
(5) a person who the governing person reasonably
believes possesses professional expertise in the matter; or
(6) a committee of the governing authority of which
the governing person is not a member.
(b) A governing person may not in good faith rely on the
information described by Subsection (a) if the governing person has
knowledge of a matter that makes the reliance unwarranted.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.103. OFFICERS. (a) Officers of a domestic entity
may be elected or appointed in accordance with the governing
documents of the entity or by the governing authority of the entity
unless prohibited by the governing documents.
(b) An officer of an entity shall perform the duties in the
management of the entity and has the authority as provided by the
governing documents of the entity or the governing authority that
elects or appoints the officer.
(c) A person may simultaneously hold any two or more offices
of an entity unless prohibited by this code or the governing
documents of the entity.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.104. REMOVAL OF OFFICERS. (a) Unless otherwise
provided by the governing documents of a domestic entity, an
officer may be removed for or without cause by the governing
authority or as provided by the governing documents of the entity.
The removal of an officer does not prejudice any contract rights of
the person removed.
(b) Election or appointment of an officer does not by itself
create contract rights.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.105. RIGHTS OF OFFICERS IN CERTAIN CASES. (a) In
discharging a duty or exercising a power, an officer of a domestic
entity may, in good faith and ordinary care, rely on information,
opinions, reports, or statements, including financial statements
and other financial data, concerning the entity or another person
and prepared or presented by:
(1) another officer or an employee of the entity;
(2) legal counsel;
(3) a certified public accountant;
(4) an investment banker; or
(5) a person who the officer reasonably believes
possesses professional expertise in the matter.
(b) An officer may not in good faith rely on the information
described by Subsection (a) if the officer has knowledge of a matter
that makes the reliance unwarranted.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER D. RECORDKEEPING OF FILING ENTITIES
§ 3.151. BOOKS AND RECORDS FOR ALL FILING
ENTITIES. (a) Each filing entity shall keep:
(1) books and records of accounts;
(2) minutes of the proceedings of the owners or
members or governing authority of the filing entity and committees
of the owners or members or governing authority of the filing
entity;
(3) at its registered office or principal place of
business, or at the office of its transfer agent or registrar, a
current record of the name and mailing address of each owner or
member of the filing entity; and
(4) other books and records as required by the title of
this code governing the entity.
(b) The books, records, minutes, and ownership or
membership records of any filing entity, including those described
in Subsection (a)(4), may be in written form or another form capable
of being converted into written form within a reasonable time.
(c) The records required by Subsection (a)(2) need not be
maintained by a limited partnership or a limited liability company
except to the extent required by its governing documents.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.152. GOVERNING PERSON'S RIGHT OF
INSPECTION. (a) A governing person of a filing entity may examine
the entity's books and records maintained under Section 3.151 and
other books and records of the entity for a purpose reasonably
related to the governing person's service as a governing person.
(b) A court may require a filing entity to open the books and
records of the filing entity, including the books and records
maintained under Section 3.151, to permit a governing person to
inspect, make copies of, or take extracts from the books and records
on a showing by the governing person that:
(1) the person is a governing person of the entity;
(2) the person demanded to inspect the entity's books
and records;
(3) the person's purpose for inspecting the entity's
books and records is reasonably related to the person's service as a
governing person; and
(4) the entity refused the person's good faith demand
to inspect the books and records.
(c) A court may award a governing person attorney's fees and
any other proper relief in a suit to require a filing entity to open
its books and records under Subsection (b).
(d) This section does not apply to limited partnerships.
Section 153.552 applies to limited partnerships.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.153. RIGHT OF EXAMINATION BY OWNER OR MEMBER. Each
owner or member of a filing entity may examine the books and records
of the filing entity maintained under Section 3.151 and other books
and records of the filing entity to the extent provided by the
governing documents of the entity and the title of this code
governing the filing entity.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER E. CERTIFICATES REPRESENTING OWNERSHIP INTEREST
§ 3.201. CERTIFICATED OR UNCERTIFICATED OWNERSHIP
INTEREST; APPLICABILITY. (a) Ownership interests in a domestic
entity may be certificated or uncertificated.
(b) The ownership interests in a for-profit corporation,
real estate investment trust, or professional corporation must be
certificated unless the governing documents of the entity or a
resolution adopted by the governing authority of the entity states
that the ownership interests are uncertificated. If a domestic
entity changes the form of its ownership interests from
certificated to uncertificated, a certificated ownership interest
subject to the change becomes an uncertificated ownership interest
only after the certificate is surrendered to the domestic entity.
(c) Ownership interests in a domestic entity, other than a
domestic entity described by Subsection (b), are uncertificated
unless this code or the governing documents of the domestic entity
state that the interests are certificated.
(d) Sections 3.202-3.205 do not apply to a partnership or a
limited liability company except to the extent that the governing
documents of the partnership or limited liability company specify.
(e) The governing documents of a partnership or a limited
liability company may:
(1) provide that an owner's ownership interest may be
evidenced by a certificate of ownership interest issued by the
entity;
(2) provide for the assignment or transfer of
ownership interests represented by certificates; and
(3) make other provisions with respect to the
certificate.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.202. FORM AND VALIDITY OF CERTIFICATES; ENFORCEMENT
OF ENTITY'S RIGHTS. (a) A certificate representing the ownership
interest in a domestic entity may contain an impression of the seal
of the entity, if any. A facsimile of the entity's seal may be
printed or lithographed on the certificate.
(b) If a domestic entity is authorized to issue ownership
interests of more than one class or series, each certificate
representing ownership interests that is issued by the entity must
conspicuously state on the front or back of the certificate:
(1) the designations, preferences, limitations, and
relative rights of the ownership interests of each class or series
to the extent they have been determined and the authority of the
governing authority to make those determinations as to subsequent
series; or
(2) that the information required by Subdivision (1)
is stated in the domestic entity's governing documents and that the
domestic entity, on written request to the entity's principal place
of business or registered office, will provide a free copy of that
information to the record holder of the certificate.
(c) A certificate representing ownership interests must
state on the front of the certificate:
(1) that the domestic entity is organized under the
laws of this state;
(2) the name of the person to whom the certificate is
issued;
(3) the number and class of ownership interests and
the designation of the series, if any, represented by the
certificate; and
(4) if the ownership interests are shares, the par
value of each share represented by the certificate, or a statement
that the shares are without par value.
(d) A certificate representing ownership interests that is
subject to a restriction, placed by or agreed to by the domestic
entity under this code, or otherwise contained in its governing
documents, on the transfer or registration of the transfer of the
ownership interests must:
(1) conspicuously state or provide a summary of the
restriction on the front of the certificate;
(2) state the restriction on the back of the
certificate and conspicuously refer to that statement on the front
of the certificate; or
(3) conspicuously state on the front or back of the
certificate that a restriction exists pursuant to a specified
document and:
(A) that the domestic entity, on written request
to the entity's principal place of business, will provide a free
copy of the document to the certificate record holder; or
(B) if the document has been filed in accordance
with this code, that the document:
(i) is on file with the secretary of state
or, in the case of a real estate investment trust, with the county
clerk of the county in which the real estate investment trust's
principal place of business is located; and
(ii) contains a complete statement of the
restriction.
(e) A domestic entity that fails to provide to the record
holder of a certificate within a reasonable time a document as
required by Subsection (d)(3)(A) may not enforce the entity's
rights under the restriction imposed on the certificated ownership
interests.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.203. SIGNATURE REQUIREMENT. (a) The managerial
official or officials of a domestic entity authorized by the
governing documents of the entity to sign certificated ownership
interests of the entity must sign any certificate representing an
ownership interest in the entity.
(b) A certificated ownership interest that contains the
manual or facsimile signature of a person who is no longer a
managerial official of a domestic entity when the certificate is
issued may be issued by the entity in the same manner and with the
same effect as if the person had remained a managerial official.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.204. DELIVERY REQUIREMENT. A domestic entity shall
deliver a certificate representing a certificated ownership
interest to which the owner is entitled.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 3.205. NOTICE FOR UNCERTIFICATED OWNERSHIP
INTEREST. (a) Except as provided by Subsection (c) and in
accordance with Chapter 8, Business & Commerce Code, after issuing
or transferring an uncertificated ownership interest, a domestic
entity shall notify the owner of the ownership interest in writing
of any information required under this subchapter to be stated on a
certificate representing the ownership interest.
(b) Except as otherwise expressly provided by law, the
rights and obligations of the owner of an uncertificated ownership
interest are the same as the rights and obligations of the owner of
a certificated ownership interest of the same class and series.
(c) A domestic entity is not required to send a notice under
Subsection (a) if:
(1) the required information is included in the
governing documents of the entity; and
(2) the owner of the uncertificated ownership interest
is provided with a copy of the governing documents.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
