The below legislative changes to Texas Business Law are meant to be a quick overview for the Texas small business owner. It is not meant to take the place of advice from a small business attorney. To see if these changes affect your business, call the Law Offices of Stanford & Wadler.
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Partnerships
- Addition of charging order provisions similar to those contained in the code for LP and corporations.
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Limited Liability Partnerships
- TBOC Section 152.804 requiring LLPs to prove that they have $100,000 liability insurance or $100,000 cash, letter of credit or bond was removed from the code
- Deleted was the provision making the partner liable for malfeasance or negligence of the other partner if the partner was supervising or had knowledge of and failed to take reasonable action to prevent it
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Corporations
- Safe-harbor approval procedures clarified so that transactions between the corporation and one of its officers can be considered valid and enforceable without liability of the officer for breach of fiduciary duty
- Amendments made to the notice and demand requirements for those shareholders asserting their dissenter appraisal rights
- Clarification of the fact that a merger can include cancellation of ownership interests in the new company with payment
- Clarification that in order to bring a derivative action, a shareholder must be a shareholder at the time of the relevant offence and fairly represent the interest of the corporation
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Limited Liability Companies
- Safe-harbor approval procedures clarified so that transactions between the LLC and one of its officers can be considered valid and enforceable without liability of the officer for breach of fiduciary duty
- Amendment states LLCs may not unreasonably restrict the right of a member or manager to the LLC books and records
- Clarification that an LLC membership can be community property for marriage purposes but that the right to participate in the management of the business is not community property
- Amendments made to the notice and demand requirements for those members asserting their dissenter appraisal rights
- Although already in play in the court system, the legislature added a provision allowing individuals to pursue the LLC owner’s assets through the corporate veil-piercing standards
- Clarification of the fact that a merger can include cancellation of ownership interests in the new company with payment
