CHAPTER 1. DEFINITIONS AND OTHER GENERAL PROVISIONS
BUSINESS ORGANIZATIONS CODE
TITLE 1. GENERAL PROVISIONS
CHAPTER 1. DEFINITIONS AND OTHER GENERAL PROVISIONS
SUBCHAPTER A. DEFINITIONS AND PURPOSE
Sec. 1.001. PURPOSE. The purpose of this code is to make the
law encompassed by this code more accessible and understandable
by:
(1) rearranging the statutes into a more logical order;
(2) employing a format and numbering system designed to
facilitate citation of the law and to accommodate future
expansion of the law;
(3) eliminating repealed, duplicative, expired, executed, and
other ineffective provisions; and
(4) restating the law in modern American English to the greatest
extent possible.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 1.002. DEFINITIONS. In this code:
(1) "Affiliate" means a person who controls, is controlled by,
or is under common control with another person.
(2) "Associate," when used to indicate a relationship with a
person, means:
(A) a domestic or foreign entity or organization for which the
person:
(i) is an officer or governing person; or
(ii) beneficially owns, directly or indirectly, either
individually or through an affiliate, 10 percent or more of a
class of voting ownership interests or similar securities of the
entity or organization;
(B) a trust or estate in which the person has a substantial
beneficial interest or for which the person serves as trustee or
in a similar fiduciary capacity;
(C) the person's spouse or a relative of the person related by
consanguinity or affinity who resides with the person; or
(D) a governing person or an affiliate or officer of the person.
(3) "Association" means an entity governed as an association
under Title 6 or 7. The term includes a cooperative association,
nonprofit association, and professional association.
(4) "Assumed name" means a name adopted for use by a person.
The term includes an assumed name filed under Chapter 71,
Business & Commerce Code.
(5) "Business" means a trade, occupation, profession, or other
commercial activity.
(6) "Certificate of formation" means:
(A) the document required to be filed with the filing officer
under Chapter 3 to form a filing entity; and
(B) if appropriate, a restated certificate of formation and all
amendments of an original or restated certificate of formation.
(7) "Certificated ownership interest" means an ownership
interest of a domestic entity represented by a certificate issued
in bearer or registered form.
(8) "Close corporation" means a for-profit corporation that
elects to be governed as a close corporation in accordance with
Subchapter O, Chapter 21.
(9) "Contribution" means a tangible or intangible benefit that a
person transfers to an entity in consideration for an ownership
interest in the entity or otherwise in the person's capacity as
an owner or a member. The benefit includes cash, services
rendered, a contract for services to be performed, a promissory
note or other obligation of a person to pay cash or transfer
property to the entity, or securities or other interests in or
obligations of an entity, but does not include cash or property
received by the entity:
(A) with respect to a promissory note or other obligation to the
extent that the agreed value of the note or obligation has
previously been included as a contribution; or
(B) that the person intends to be a loan to the entity.
(10) "Conversion" means:
(A) the continuance of a domestic entity as a non-code
organization of any type;
(B) the continuance of a non-code organization as a domestic
entity of any type;
(C) the continuance of a domestic entity of one type as a
domestic entity of another type;
(D) the continuance of a domestic entity of one type as a
foreign entity of the same type that may be treated as a
domestication, continuance, or transfer transaction under the
laws of the jurisdiction of formation of the foreign entity; or
(E) the continuance of a foreign entity of one type as a
domestic entity of the same type that may be treated as a
domestication, continuance, or transfer transaction under the
laws of the jurisdiction of formation of the foreign entity.
(11) "Converted entity" means an organization resulting from a
conversion.
(12) "Converting entity" means an organization as the
organization existed before the organization's conversion.
(13) "Cooperative" or "cooperative association" means an
association governed as a cooperative association under Chapter
251.
(14) "Corporation" means an entity governed as a corporation
under Title 2 or 7. The term includes a for-profit corporation,
nonprofit corporation, and professional corporation.
(15) "Debtor in bankruptcy" means a person who is the subject
of:
(A) an order for relief under the United States bankruptcy laws
(Title 11, United States Code); or
(B) a comparable order under a:
(i) successor statute of general applicability; or
(ii) federal or state law governing insolvency.
(16) "Director" means an individual who serves on the board of
directors of a foreign or domestic corporation.
(17) "Domestic" means, with respect to an entity, that the
entity is formed under this code or the entity's internal affairs
are governed by this code.
(18) "Domestic entity" means an organization formed under or he
internal affairs of which are governed by this code.
(19) ""Domestic entity subject to dissenters' rights" means a
domestic entity the owners of which have rights of dissent and
appraisal under this code or the governing documents of the
entity.
(20) "Effective date of this code" means January 1, 2006. The
applicability of this code is governed by Title 8.
(20-a) "Electronic transmission" means a form of communication
that:
(A) does not directly involve the physical transmission of
paper;
(B) creates a record that may be retained, retrieved, and
reviewed by the recipient; and
(C) may be directly reproduced in paper form by the recipient
through an automated process.
(21) "Entity" means a domestic entity or foreign entity.
(22) "Filing entity" means a domestic entity that is a
corporation, limited partnership, limited liability company,
professional association, cooperative, or real estate investment
trust.
(23) "Filing instrument" means an instrument, document, or
statement that is required or authorized by this code to be filed
by or for an entity with the filing officer in accordance with
Chapter 4.
(24) "Filing officer" means:
(A) with respect to an entity other than a domestic real estate
investment trust, the secretary of state; or
(B) with respect to a domestic real estate investment trust, the
county clerk of the county in which the real estate investment
trust's principal office is located in this state.
(25) "For-profit corporation" means a corporation governed as a
for-profit corporation under Chapter 21.
(26) "For-profit entity" means an entity other than a nonprofit
entity.
(27) "Foreign" means, with respect to an entity, that the entity
is formed under, and the entity's internal affairs are governed
by, the laws of a jurisdiction other than this state.
(28) "Foreign entity" means an organization formed under, and
the internal affairs of which are governed by, the laws of a
jurisdiction other than this state.
(29) "Foreign filing entity" means a foreign entity, other than
a foreign limited liability partnership, that registers or is
required to register as a foreign entity under Chapter 9.
(30) "Foreign governmental authority" means a governmental
official, agency, or instrumentality of a jurisdiction other than
this state.
(31) "Foreign nonfiling entity" means a foreign entity that is
not a foreign filing entity.
(32) "Fundamental business transaction" means a merger, interest
exchange, conversion, or sale of all or substantially all of an
entity's assets.
(33) "General partner" means:
(A) each partner in a general partnership; or
(B) a person who is admitted to a limited partnership as a
general partner in accordance with the governing documents of the
limited partnership.
(34) "General partnership" means a partnership governed as a
general partnership under Chapter 152. The term includes a
general partnership registered as a limited liability
partnership.
(35)(A) "Governing authority" means a person or group of persons
who are entitled to manage and direct the affairs of an entity
under this code and the governing documents of the entity, except
that if the governing documents of the entity or this code divide
the authority to manage and direct the affairs of the entity
among different persons or groups of persons according to
different matters, "governing authority" means the person or
group of persons entitled to manage and direct the affairs of the
entity with respect to a matter under the governing documents of
the entity or this code. The term includes:
(i) the board of directors of a corporation or other persons
authorized to perform the functions of the board of directors of
a corporation;
(ii) the general partners of a general partnership or limited
partnership;
(iii) the managers of a limited liability company that is
managed by managers;
(iv) the members of a limited liability company that is managed
by members who are entitled to manage the company;
(v) the board of directors of a cooperative association; and
(vi) the trust managers of a real estate investment trust.
(B) The term does not include an officer who is acting in the
capacity of an officer.
(36) "Governing documents" means:
(A) in the case of a domestic entity:
(i) the certificate of formation for a domestic filing entity or
the document or agreement under which a domestic nonfiling entity
is formed; and
(ii) the other documents or agreements adopted by the entity
under this code to govern the formation or the internal affairs
of the entity; or
(B) in the case of a foreign entity, the instruments, documents,
or agreements adopted under the law of its jurisdiction of
formation to govern the formation or the internal affairs of the
entity.
(37) "Governing person" means a person serving as part of the
governing authority of an entity.
(38) "Individual" means a natural person.
(39) "Insolvency" means the inability of a person to pay the
person's debts as they become due in the usual course of business
or affairs.
(40) "Insolvent" means a person who is unable to pay the
person's debts as they become due in the usual course of business
or affairs.
(41) "Interest exchange" means the acquisition of an ownership
or membership interest in a domestic entity as provided by
Subchapter B, Chapter 10. The term does not include a merger or
conversion.
(42) "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended. The term includes corresponding provisions of
subsequent federal tax laws.
(43) "Jurisdiction of formation" means:
(A) in the case of a domestic filing entity, this state;
(B) in the case of a foreign entity for which a certificate of
formation or similar organizational instrument is filed in
connection with its formation, the jurisdiction in which the
entity's certificate of formation or similar organizational
instrument is filed; or
(C) in the case of a domestic nonfiling entity or a foreign
entity for which a certificate of formation or similar
organizational instrument is not filed in connection with its
formation:
(i) the jurisdiction the laws of which are chosen in the
entity's governing documents to govern its internal affairs if
that jurisdiction bears a reasonable relation to the owners or
members or to the entity's business and affairs under the
principles of this state that otherwise would apply to a contract
among the owners or members; or
(ii) if Subparagraph (i) does not apply, the jurisdiction in
which the entity has its chief executive office.
(44) "Law" means, unless the context requires otherwise, both
statutory and common law.
(45) "License" means a license, certificate of registration, or
other legal authorization.
(46) "Limited liability company" means an entity governed as a
limited liability company under Title 3 or 7. The term includes a
professional limited liability company.
(47) "Limited liability limited partnership" means a partnership
governed as a limited liability partnership and a limited
partnership under Title 4.
(48) "Limited liability partnership" means a partnership
governed as a limited liability partnership under Title 4.
(49) "Limited partner" means a person who has been admitted to a
limited partnership as a limited partner 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.
(50) "Limited partnership" means a partnership that is governed
as a limited partnership under Title 4 and that has one or more
general partners and one or more limited partners. The term
includes a limited partnership registered as a limited liability
limited partnership.
(51) "Manager" means a person designated as a manager of a
limited liability company that is not managed by members of the
company.
(52) "Managerial official" means an officer or a governing
person.
(53) "Member" means:
(A) in the case of a limited liability company, a person who is
a member or has been admitted as a member in the limited
liability company under its governing documents;
(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.
(54) "Membership interest" means a member's interest in an
entity. With respect to a limited liability company, the term
includes a member's share of profits and losses or similar items
and the right to receive distributions, but does not include a
member's right to participate in management.
(55) "Merger" means:
(A) the division of a domestic entity 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; or
(B) the combination of one or more domestic entities with one or
more domestic entities or non-code organizations resulting in:
(i) one or more surviving domestic entities or non-code
organizations;
(ii) the creation of one or more new domestic entities or
non-code organizations; or
(iii) one or more surviving domestic entities or non-code
organizations and the creation of one or more new domestic
entities or non-code organizations.
(56) "Non-code organization" means an organization other than a
domestic entity.
(56-a) "Non-United States entity" means a foreign entity formed
under, and the internal affairs of which are governed by, the
laws of a non-United States jurisdiction.
(56-b) "Non-United States jurisdiction" means a foreign country
or other foreign jurisdiction that is not the United States or a
state of the United States.
(57) "Nonfiling entity" means a domestic entity that is not a
filing entity. The term includes a domestic general partnership
and nonprofit association.
(58) "Nonprofit association" means an association governed as a
nonprofit association under Chapter 252.
(59) "Nonprofit corporation" means a corporation governed as a
nonprofit corporation under Chapter 22.
(60) "Nonprofit entity" means an entity that is a nonprofit
corporation, nonprofit association, or other entity that is
organized solely for one or more of the purposes specified by
Section 2.002.
(61) "Officer" means an individual elected, appointed, or
designated as an officer of an entity by the entity's governing
authority or under the entity's governing documents.
(62) "Organization" means a corporation, limited or general
partnership, limited liability company, business trust, real
estate investment trust, joint venture, joint stock company,
cooperative, association, bank, insurance company, credit union,
savings and loan association, or other organization, regardless
of whether the organization is for-profit, nonprofit, domestic,
or foreign.
(63) "Owner," for purposes of Title 1, 7, or 8, means:
(A) with respect to a foreign or domestic for-profit corporation
or real estate investment trust, a shareholder;
(B) with respect to a foreign or domestic partnership, a
partner;
(C) with respect to a foreign or domestic limited liability
company or professional association, a member; or
(D) with respect to another foreign or domestic entity, an owner
of an equity interest in that entity.
(64) "Ownership interest" means an owner's interest in an
entity. The term includes the owner's share of profits and losses
or similar items and the right to receive distributions. The term
does not include an owner's right to participate in management.
(65) "Parent" means an organization that, directly or indirectly
through or with one or more of its subsidiaries:
(A) owns at least 50 percent of the outstanding ownership or
membership interests of another organization; or
(B) possesses at least 50 percent of the voting power of the
owners or members of another organization.
(66) "Partner" means a limited partner or general partner.
(67) "Partnership" means an entity governed as a partnership
under Title 4.
(68) "Partnership interest" means a partner's interest in a
partnership. The term includes the partner's share of profits and
losses or similar items and the right to receive distributions.
The term does not include a partner's right to participate in
management.
(69) "Party to the merger" means a domestic entity or non-code
organization that under a plan of merger is divided or combined
by a merger. The term does not include a domestic entity or
non-code organization that is not to be divided or combined into
or with one or more domestic entities or non-code organizations,
regardless of whether ownership interest of the entity are to be
issued under the plan of merger.
(69-a) "Period of duration," in reference to when a domestic
entity is required to wind up its business and affairs:
(A) means:
(i) a specified term or period of time, such as a specified
number of months or years; or
(ii) a period that expires as of a specified time or date; and
(B) does not include:
(i) a period that expires or whose expiration is made contingent
on the occurrence of a future event or fact, other than the
passage of time or the occurrence of a specified time or date; or
(ii) a period specified to be perpetual.
(69-b) "Person" has the meaning assigned by Section 311.005,
Government Code.
(70) "President" means the:
(A) individual designated as president of an entity under the
entity's governing documents; or
(B) officer or committee of persons authorized to perform the
functions of the principal executive officer of an entity without
regard to the designated name of the officer or committee.
(71) "Professional association" has the meaning assigned by
Section 301.003.
(72) "Professional corporation" has the meaning assigned by
Section 301.003.
(73) "Professional entity" has the meaning assigned by Section
301.003.
(74) "Professional individual" has the meaning assigned by
Section 301.003.
(75) "Professional limited liability company" has the meaning
assigned by Section 301.003.
(76) "Professional service" has the meaning assigned by Section
301.003.
(77) "Property" includes tangible and intangible property and an
interest in that property.
(78) "Real estate investment trust" means an entity governed as
a real estate investment trust under Title 5.
(79) "Secretary" means the:
(A) individual designated as secretary of an entity under the
entity's governing documents; or
(B) officer or committee of persons authorized to perform the
functions of secretary of an entity without regard to the
designated name of the officer or committee.
(80) "Share" means a unit into which the ownership interest in a
for-profit corporation, professional corporation, real estate
investment trust, or professional association is divided,
regardless of whether the share is certificated or
uncertificated.
(81) "Shareholder" or "holder of shares" means:
(A) the person in whose name shares issued by a for-profit
corporation, professional corporation, or real estate investment
trust are registered in the share transfer records maintained by
the for-profit corporation, professional corporation, or real
estate investment trust; or
(B) the beneficial owner of shares issued by a for-profit
corporation, whose shares are held in a voting trust or by a
nominee on the beneficial owner's behalf, to the extent of the
rights granted by a nominee statement on file with the for-profit
corporation in accordance with Sections 21.201(b) and (c).
(82) "Signature" means any symbol executed or adopted by a
person with present intention to authenticate a writing. Unless
the context requires otherwise, the term includes a digital
signature, an electronic signature, and a facsimile of a
signature.
(83) "Subscriber" means a person who agrees with or makes an
offer to an entity to purchase by subscription an ownership
interest in the entity.
(84) "Subscription" means an agreement between a subscriber and
an entity, or a written offer made by a subscriber to an entity
before or after the entity's formation, in which the subscriber
agrees or offers to purchase a specified ownership interest in
the entity.
(85) "Subsidiary" means an organization for which another
organization, either directly or indirectly through or with one
or more of its other subsidiaries:
(A) owns at least 50 percent of the outstanding ownership or
membership interests of the organization; or
(B) possesses at least 50 percent of the voting power of the
owners or members of the organization.
(86) "Treasurer" means the:
(A) individual designated as treasurer of an entity under the
entity's governing documents; or
(B) officer or committee of persons authorized to perform the
functions of treasurer of an entity without regard to the
designated name of the officer or committee.
(87) "Uncertificated ownership interest" means an ownership
interest in a domestic entity that is not represented by an
instrument and is transferred by:
(A) amendment of the governing documents of the entity; or
(B) registration on books maintained by or on behalf of the
entity for the purpose of registering transfers of ownership
interests.
(88) "Vice president" means the:
(A) individual designated as vice president of an entity under
the governing documents of the entity; or
(B) officer or committee of persons authorized to perform the
functions of the president of the entity on the death, absence,
or resignation of the president or on the inability of the
president to perform the functions of office without regard to
the designated name of the officer or committee.
(89) "Writing" or "written" means an expression of words,
letters, characters, numbers, symbols, figures, or other textual
information that is inscribed on a tangible medium or that is
stored in an electronic or other medium that is retrievable in a
perceivable form. Unless the context requires otherwise, the
term:
(A) includes stored or transmitted electronic data, electronic
transmissions, and reproductions of writings; and
(B) does not include sound or video recordings of speech other
than transcriptions that are otherwise writings.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 1, eff. January 1, 2006.
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 1, eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.07, eff. April 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
84, Sec. 1, eff. September 1, 2009.
Sec. 1.003. DISINTERESTED PERSON. (a) For purposes of this
code, a person is disinterested with respect to the approval of a
contract, transaction, or other matter, or to the consideration
of the disposition of a claim or challenge relating to a
contract, transaction, or particular conduct, if the person or
the person's associate:
(1) is not a party to the contract or transaction or materially
involved in the conduct that is the subject of the claim or
challenge; and
(2) does not have a material financial interest in the outcome
of the contract or transaction or the disposition of the claim or
challenge.
(b) For purposes of Subsection (a), a person is not materially
involved in a contract or transaction that is the subject of a
claim or challenge and does not have a material financial
interest in the outcome of a contract or transaction or the
disposition of a claim or challenge solely because:
(1) the person was nominated or elected as a governing person by
a person who is:
(A) interested in the contract or transaction; or
(B) alleged to have engaged in the conduct that is the subject
of the claim or challenge;
(2) the person receives normal fees or customary compensation,
reimbursement for expenses, or benefits as a governing person of
the entity;
(3) the person has a direct or indirect equity interest in the
entity;
(4) the entity has, or its subsidiaries have, an interest in the
contract or transaction or was affected by the alleged conduct;
(5) the person or an associate of the person receives ordinary
and reasonable compensation for reviewing, making recommendations
regarding, or deciding on the disposition of the claim or
challenge; or
(6) in the case of a review by the person of the alleged conduct
that is the subject of the claim or challenge:
(A) the person is named as a defendant in the derivative
proceeding regarding the matter or as a person who engaged in the
alleged conduct; or
(B) the person, acting as a governing person, approved, voted
for, or acquiesced in the act being challenged if the act did not
result in a material personal or financial benefit to the person
and the challenging party fails to allege particular facts that,
if true, raise a significant prospect that the governing person
would be held liable to the entity or its owners or members as a
result of the conduct.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 1.004. INDEPENDENT PERSON. (a) For purposes of this code,
a person is independent with respect to considering the
disposition of a claim or challenge regarding a contract or
transaction, or particular or alleged conduct, if the person:
(1) is disinterested;
(2) either:
(A) is not an associate, or member of the immediate family, of a
party to the contract or transaction or of a person who is
alleged to have engaged in the conduct that is the subject of the
claim or challenge; or
(B) is an associate to a party or person described by Paragraph
(A) that is an entity if the person is an associate solely
because the person is a governing person of the entity or of the
entity's subsidiaries or associates;
(3) does not have a business, financial, or familial
relationship with a party to the contract or transaction, or with
another person who is alleged to have engaged in the conduct,
that is the subject of the claim or challenge that could
reasonably be expected to materially and adversely affect the
judgment of the person in favor of the party or other person with
respect to the consideration of the matter; and
(4) is not shown, by a preponderance of the evidence, to be
under the controlling influence of a party to the contract or
transaction that is the subject of the claim or challenge or of a
person who is alleged to have engaged in the conduct that is the
subject of the claim or challenge.
(b) For purposes of Subsection (a), a person does not have a
relationship that could reasonably be expected to materially and
adversely affect the judgment of the person regarding the
disposition of a matter that is the subject of a claim or
challenge and is not otherwise under the controlling influence of
a party to a contract or transaction that is the subject of a
claim or challenge or that is alleged to have engaged in the
conduct that is the subject of a claim or challenge solely
because:
(1) the person has been nominated or elected as a governing
person by a person who is interested in the contract or
transaction or alleged to be engaged in the conduct that is the
subject of the claim or challenge;
(2) the person receives normal fees or similar customary
compensation, reimbursement for expenses, or benefits as a
governing person of the entity;
(3) the person has a direct or indirect equity interest in the
entity;
(4) the entity has, or its subsidiaries have, an interest in the
contract or transaction or was affected by the alleged conduct;
(5) the person or an associate of the person receives ordinary
and reasonable compensation for reviewing, making recommendations
regarding, or deciding on the disposition of the claim or
challenge; or
(6) the person, an associate of the person, other than the
entity or its associates, or an immediate family member has a
continuing business relationship with the entity that is not
material to the person, associate, or family member.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 1.005. CONSPICUOUS INFORMATION. In this code, required
information is conspicuous if the information is placed in a
manner or displayed using a font that provides or should provide
notice to a reasonable person affected by the information.
Required information in a document is conspicuous if the font
used for the information is capitalized, boldfaced, italicized,
or underlined or is larger or of a different color than the
remainder of the document.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 1.006. SYNONYMOUS TERMS. To the extent not inconsistent
with the provisions of the constitution, other statutes or codes,
and governing documents wherein such terms may be found, and as
the context requires, in this code, any other statute or code of
this state, or any governing documents:
(1) a reference to "articles of incorporation," "articles of
organization," "articles of association," "certificate of limited
partnership," and "charter" includes a "certificate of
formation";
(2) a reference to "authorized capital stock" includes
"authorized shares";
(3) a reference to "capital stock" includes "authorized and
issued shares," "issued share," and "stated capital";
(4) a reference to a "certificate of registration," "certificate
of authority," and "permit to do business" includes
"registration";
(5) a reference to "stock" and "shares of stock" includes
"shares";
(6) a reference to "stockholder" includes "shareholder";
(7) a reference to "no par stock" includes "shares without par
value";
(8) a reference to "paid-up capital" includes "stated capital";
(9) a reference to "articles of merger" includes a "certificate
of merger";
(10) a reference to "articles of exchange" includes a
"certificate of exchange";
(11) a reference to "articles of conversion" includes a
"certificate of conversion";
(12) a reference to "articles of amendment" includes a
"certificate of amendment";
(13) a reference to "articles of dissolution" or "certificate of
cancellation" includes a "certificate of termination";
(14) a reference to "incorporator" includes an "organizer";
(15) a reference to "certificate of authority to transact
business" includes a "registration to transact business";
(16) a reference to "regulations" in connection with a limited
liability company includes a "company agreement"; and
(17) a reference to "business corporation" includes a
"for-profit corporation."
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 2, eff. January 1, 2006.
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 2, eff. September 1, 2007.
Sec. 1.007. SIGNING OF DOCUMENT OR OTHER WRITING. For purposes
of this code, a writing has been signed by a person when the
writing includes, bears, or incorporates the person's signature.
A transmission or reproduction of a writing signed by a person is
considered signed by that person for purposes of this code.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 3, eff. January 1, 2006.
Sec. 1.008. SHORT TITLES. (a) The provisions of this code as
described by this section may be cited as provided by this
section.
(b) The provisions of Title 2 and the provisions of Title 1 to
the extent applicable to corporations may be cited as the "Texas
Corporation Law."
(c) The provisions of Chapters 20 and 21 and the provisions of
Title 1 to the extent applicable to for-profit corporations may
be cited as the "Texas For-Profit Corporation Law."
(d) The provisions of Chapters 20 and 22 and the provisions of
Title 1 to the extent applicable to nonprofit corporations may be
cited as the "Texas Nonprofit Corporation Law."
(e) The provisions of Title 3 and the provisions of Title 1 to
the extent applicable to limited liability companies may be cited
as the "Texas Limited Liability Company Law."
(f) The provisions of Chapters 151, 152, and 154 and the
provisions of Title 1 to the extent applicable to general
partnerships may be cited as the "Texas General Partnership Law."
(g) The provisions of Chapters 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."
(h) The provisions of Title 5 and the provisions of Title 1 and
Chapters 20 and 21 to the extent applicable to real estate
investment trusts may be cited as the "Texas Real Estate
Investment Trust Law."
(i) The provisions of Chapter 251 and the provisions of Title 1
and Chapters 20 and 22 to the extent applicable to cooperative
associations may be cited as the "Texas Cooperative Association
Law."
(j) The provisions of Title 7 and the provisions of Titles 1, 2,
and 3 to the extent applicable to professional entities may be
cited as the "Texas Professional Entities Law."
(k) The provisions of Chapter 252 may be cited as the "Uniform
Unincorporated Nonprofit Association Act."
(l) The provisions of Chapters 301 and 302 and the provisions of
Chapters 20 and 21 and Title 1 to the extent applicable to
professional associations may be cited as the "Texas Professional
Association Law."
(m) The provisions of Chapters 301 and 303 and the provisions of
Chapters 20 and 21 and Title 1 to the extent applicable to
professional corporations may be cited as the "Texas Professional
Corporation Law."
(n) The provisions of Chapters 301 and 304 and the provisions of
Titles 1 and 3 to the extent applicable to professional limited
liability companies may be cited as the "Texas Professional
Limited Liability Company Law."
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 3, eff. September 1, 2007.
Sec. 1.009. DOLLARS AS MONETARY UNITS. Unless the context
requires otherwise, a value or amount that is required by this
code to be stated in monetary terms must be stated in United
States dollars. Currency that is not specified is considered to
be in United States dollars.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER B. CODE CONSTRUCTION
Sec. 1.051. CONSTRUCTION OF CODE. Chapter 311, Government Code
(Code Construction Act), applies to the construction of each
provision in this code except as otherwise expressly provided by
this code.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 1.052. REFERENCE IN LAW TO STATUTE REVISED BY CODE. A
reference in a law to a statute or a part of a statute revised by
this code is considered to be a reference to the part of this
code that revises that statute or part of that statute.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 1.053. APPLICABILITY TO FOREIGN AND INTERSTATE AFFAIRS.
This code applies to the conduct of affairs with foreign
countries and the other states of the United States only to the
extent permitted under the United States Constitution.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 1.054. RESERVATION OF POWER. The legislature at all times
has the power to amend, repeal, or modify this code and to
prescribe regulations, provisions, and limitations as the
legislature considers advisable. The regulations, provisions, and
limitations are binding on any entity subject to this code.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER C. DETERMINATION OF APPLICABLE LAW
Sec. 1.101. DOMESTIC FILING ENTITIES. The law of this state
governs the formation and internal affairs of an entity if the
entity's formation occurs when a certificate of formation filed
in accordance with Chapter 4 takes effect.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 1.102. FOREIGN FILING ENTITIES. If the formation of an
entity occurs when a certificate of formation or similar
instrument filed with a foreign governmental authority takes
effect, the law of the state or other jurisdiction in which that
foreign governmental authority is located governs the formation
and internal affairs of the entity.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 1.103. ENTITIES NOT FORMED BY FILING INSTRUMENT. If the
formation of an entity does not occur when a certificate of
formation or similar instrument filed with the secretary of state
or with a foreign governmental authority takes effect, the law
governing the entity's formation and internal affairs is the law
of the entity's jurisdiction of formation.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 1.104. LAW APPLICABLE TO LIABILITY. The law of the
jurisdiction that governs an entity as determined under Sections
1.101-1.103 applies to the liability of an owner, a member, or a
managerial official of the entity in the capacity as an owner, a
member, or a managerial official for an obligation, including a
debt or other liability, of the entity for which the owner,
member, or managerial official is not otherwise liable by
contract or under provisions of law other than this code.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 1.105. INTERNAL AFFAIRS. For purposes of this code, the
internal affairs of an entity include:
(1) the rights, powers, and duties of its governing authority,
governing persons, officers, owners, and members; and
(2) matters relating to its membership or ownership interests.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 1.106. ORDER OF PRECEDENCE. (a) This title applies to all
domestic entities and foreign entities to the extent provided by
this title.
(b) Each title of this code, other than this title, applies to a
different type of entity to the extent provided by that title.
(c) If a provision of this title conflicts with a provision in
another title of this code, the provision of the other title
supersedes the provision of this title.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.