Bill Text: TX HB2622 | 2013-2014 | 83rd Legislature | Introduced


Bill Title: Relating to the creation of a low-profit limited liability company.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2013-03-18 - Referred to Business & Industry [HB2622 Detail]

Download: Texas-2013-HB2622-Introduced.html
  83R8327 RWG-F
 
  By: Creighton H.B. No. 2622
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the creation of a low-profit limited liability company.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1.002, Business Organizations Code, is
  amended by amending Subdivision (46) and adding Subdivision (50-a)
  to read as follows:
               (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 and a low-profit
  limited liability company.
               (50-a)  "Low-profit limited liability company" means
  an entity governed as a limited liability company under Title 3 that
  meets the requirements of Section 2.013.
         SECTION 2.  Subchapter A, Chapter 2, Business Organizations
  Code, is amended by adding Section 2.013 to read as follows:
         Sec. 2.013.  PURPOSES OF LOW-PROFIT LIMITED LIABILITY
  COMPANY.  (a)  A limited liability company organized as a low-profit
  limited liability company must be organized and operated for a
  business purpose that significantly furthers the accomplishment of
  one or more religious, charitable, scientific, literary, or
  educational purposes as described by 26 U.S.C. Section
  170(c)(2)(B).
         (b)  A limited liability company organized as a low-profit
  limited liability company may not be operated with a significant
  purpose of producing income or capital appreciation.  The
  production of significant income or capital appreciation by a
  low-profit limited liability company alone is not conclusive
  evidence of a significant purpose prohibited by this subsection.
         (c)  A low-profit limited liability company may not be
  operated to accomplish a political or legislative purpose as
  described by 26 U.S.C. Section 170(c)(2)(D).
         (d)  A limited liability company that ceases to meet the
  requirements of this section:
               (1)  may not be designated as a low-profit limited
  liability company; and
               (2)  must change the company's name in accordance with
  Section 5.056(a).
         SECTION 3.  Subchapter A, Chapter 3, Business Organizations
  Code, is amended by adding Section 3.0101 to read as follows:
         Sec. 3.0101.  SUPPLEMENTAL PROVISIONS REQUIRED IN
  CERTIFICATE OF FORMATION OF LOW-PROFIT LIMITED LIABILITY COMPANY.
  In addition to the information required by Sections 3.005 and
  3.010, the certificate of formation of a low-profit limited
  liability company must state a purpose or purposes for formation
  that meet the requirements of Section 2.013.
         SECTION 4.  Subchapter B, Chapter 3, Business Organizations
  Code, is amended by adding Section 3.0612 to read as follows:
         Sec. 3.0612.  SUPPLEMENTAL PROVISIONS FOR RESTATED
  CERTIFICATE OF FORMATION FOR LIMITED LIABILITY COMPANY TO OPERATE
  AS LOW-PROFIT LIMITED LIABILITY COMPANY.  In addition to the
  provisions authorized or required by Sections 3.059 and 3.0611, a
  limited liability company may operate as a low-profit limited
  liability company if the restated certificate of formation of the
  limited liability company contains the information required by
  Section 3.0101.
         SECTION 5.  Section 3.151, Business Organizations Code, is
  amended by adding Subsection (d) to read as follows:
         (d)  The information kept by a low-profit limited liability
  company under Subsection (a) must be sufficient to establish that
  the purposes of the entity meet the requirements of Section 2.013.
         SECTION 6.  Section 3.153, Business Organizations Code, is
  amended to read as follows:
         Sec. 3.153.  RIGHT OF EXAMINATION BY OWNER OR MEMBER. (a)
  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.
         (b)  In addition to the requirements of Subsection (a), a
  private foundation, as defined by 26 U.S.C. Section 509(a), that is
  an owner or member of a low-profit limited liability company may
  examine the books and records of the company maintained under
  Section 3.151 and other books and records of the company,
  notwithstanding any provision of the governing documents of the
  company or this code, as necessary for the foundation to determine
  whether the foundation's operations and investments comply with
  federal tax laws.
         SECTION 7.  Subchapter B, Chapter 5, Business Organizations
  Code, is amended by adding Section 5.0561 to read as follows:
         Sec. 5.0561.  NAME OF LOW-PROFIT LIMITED LIABILITY COMPANY.
  The name of a low-profit limited liability company must contain:
               (1)  the phrase "low-profit limited liability
  company"; or
               (2)  the abbreviation "L.3.C."
         SECTION 8.  Subchapter B, Chapter 11, Business Organizations
  Code, is amended by adding Section 11.0561 to read as follows:
         Sec. 11.0561.  SUPPLEMENTAL PROVISIONS FOR LOW-PROFIT
  LIMITED LIABILITY COMPANY.  In addition to the requirements of
  Section 11.056, the failure of a low-profit limited liability
  company to meet the requirements of Section 2.013 is an event
  requiring winding up under Section 11.051(4) unless, not later than
  the 60th day after the date of that event, the company files a
  certificate of amendment to change the company's name to conform
  with the requirements of Section 5.056.
         SECTION 9.  This Act takes effect September 1, 2013.
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