Bill Text: TX SB1523 | 2021-2022 | 87th Legislature | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to registered and protected series of domestic limited liability companies; authorizing fees.

Spectrum: Bipartisan Bill

Status: (Passed) 2021-05-15 - Effective on . . . . . . . . . . . . . . . June 1, 2022 [SB1523 Detail]

Download: Texas-2021-SB1523-Comm_Sub.html

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By: Hancock S.B. No. 1523
(Turner of Tarrant)

A BILL TO BE ENTITLED
AN ACT
relating to registered and protected series of domestic limited
liability companies; authorizing fees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter M, Chapter 101, Business
Organizations Code, is amended to read as follows:
SUBCHAPTER M. SERIES LIMITED LIABILITY COMPANY
Sec. 101.601. SERIES OF MEMBERS, MANAGERS, MEMBERSHIP
INTERESTS, OR ASSETS. (a) A company agreement may establish or
provide for the establishment of one or more designated series of
members, managers, membership interests, or assets that:
(1) has separate rights, powers, or duties with
respect to specified property or obligations of the limited
liability company or profits and losses associated with specified
property or obligations; or
(2) has a separate business purpose or investment
objective.
(b) A series established in accordance with Subsection (a)
or a protected series or registered series established in
accordance with Section 101.602 may carry on any business, purpose,
or activity, whether or not for profit, that is not prohibited by
Section 2.003.
(c) Nothing in this subchapter shall be construed to limit
the freedom to contract to a series that is not a protected series
or a registered series. Except as otherwise provided by
Sections 101.627 through 101.636, a series may not merge or
convert.
(d) The provisions of the company agreement that govern a
protected series or registered series may be amended by the
approval of:
(1) each member associated with the protected series
or registered series;
(2) the members of each other protected series and
registered series if the amendment adversely affects those members;
and
(3) the members of the limited liability company that
are not associated with any protected series or registered series
if the amendment adversely affects those members.
Sec. 101.602. ENFORCEABILITY OF OBLIGATIONS AND EXPENSES OF
PROTECTED SERIES OR REGISTERED SERIES AGAINST ASSETS. (a)
Notwithstanding any other provision of this chapter or any other
law, but subject to Subsection (b) and any other provision of this
subchapter:
(1) the debts, liabilities, obligations, and expenses
incurred, contracted for, or otherwise existing with respect to a
particular protected series or registered series shall be
enforceable against the assets of that series only, and shall not be
enforceable against the assets of the limited liability company
generally or any other series; and
(2) none of the debts, liabilities, obligations, and
expenses incurred, contracted for, or otherwise existing with
respect to the limited liability company generally or any other
series shall be enforceable against the assets of a particular
protected series or registered series.
(b) Subsection (a) applies only [if]:
(1) to the extent the records maintained for that
particular protected series or registered series account for the
assets associated with that series separately from the other assets
of the company or any other series;
(2) if the company agreement contains a statement to
the effect of the limitations provided in Subsection (a), subject
to any exceptions permitted under Subsection (d); and
(3) if the company's certificate of formation contains
a notice of the limitations provided in Subsection (a), subject to
any exceptions permitted under Subsection (d).
(c) A certificate of registered series must be filed with
the secretary of state to form a registered series.
(d) Subsection (a) or any provision contained in a [limited
liability] company agreement, [or] certificate of formation, or
certificate of registered series pursuant to Subsections
[Subsection] (a) and (b) does not restrict:
(1) a particular protected series or registered series
or a limited liability company on behalf of a particular protected
series or registered series from expressly agreeing in the company
agreement, the certificate of formation, any certificate of
registered series, or in another [other] written agreement that
does not violate that agreement or those certificates that any [or
all] of the debts, liabilities, obligations, and expenses incurred,
contracted for, or otherwise existing with respect to the company
generally or any other series of the company shall be enforceable
against the assets of that particular protected series or
registered series if there are one or more liabilities that are
recourse to the company generally or any other series and that
cannot be enforced against those assets pursuant to the company
agreement, the certificate of formation, any certificate of
registered series, or in another written agreement that does not
violate that agreement or those certificates; or
(2) a limited liability company from expressly
agreeing in the company agreement or other written agreement that
any or all of the debts, liabilities, obligations, and expenses
incurred, contracted for, or otherwise existing with respect to a
particular protected series or registered series shall be
enforceable against the assets of the company generally.
(e) A company agreement does not need to use the term
"protected" or "registered" or refer to this section when
referencing a series. A series established by a company agreement
without designating whether the series is a protected series or
registered series and without filing the certificate of registered
series required by Subsection (c) is a protected series if it meets
the requirements of Subsections (a) and (b), subject to any
exceptions permitted by Subsection (d).
(f) A series established in accordance with this section,
but without filing the certificate of registered series under
Subsection (c), is a protected series.
(g) A series established in accordance with this section,
including by filing the certificate of registered series under
Subsection (c), is a registered series.
Sec. 101.603. ASSETS OF PROTECTED SERIES OR REGISTERED
SERIES. (a) Assets associated with a protected series or
registered series may be held directly or indirectly, including
being held in the name of the protected series or registered series,
in the name of the limited liability company, through a nominee, or
otherwise.
(b) To the extent [If] the records of a protected series or
registered series are maintained in a manner so that the assets of
the protected series or registered series can be reasonably
identified by specific listing, category, type, quantity, or
computational or allocational formula or procedure, including a
percentage or share of any assets, or by any other method in which
the identity of the assets can be objectively determined, the
records are considered to satisfy the requirements of Section
101.602(b)(1).
(c) In this subchapter, a reference to:
(1) "assets of a protected series" or "assets of a
registered series" includes assets associated with that series;
(2) "assets associated with a protected series" or
"assets associated with a registered series" includes assets of
that series;
(3) "members or managers of a protected series" or
"members or managers of a registered series" includes members or
managers associated with that series; and
(4) "members or managers associated with a protected
series" or "members or managers associated with a registered
series" includes members or managers of that series.
Sec. 101.604. NOTICE OF LIMITATION ON LIABILITIES OF
PROTECTED SERIES OR REGISTERED SERIES. (a) Notice of the
limitation on liabilities of a protected series or registered
series required by Section 101.602 that is contained in a
certificate of formation filed with the secretary of state
satisfies the requirements of Section 101.602(b)(3), regardless of
whether:
(1) the limited liability company has established any
protected series or registered series under this subchapter when
the notice is contained in the certificate of formation; [and]
(2) the notice makes a reference to a specific
protected series or registered series of the limited liability
company; and
(3) the notice:
(A) uses the term "protected" or "registered"
when referencing the series; or
(B) includes a reference to Section 101.602.
(b) The fact that the certificate of formation filed with
the secretary of state contains the notice of the limitation on
liabilities of a protected series or registered series required by
Section 101.602 is notice of that limitation on liabilities of a
protected series or registered series.
Sec. 101.605. GENERAL POWERS OF PROTECTED SERIES OR
REGISTERED SERIES. A protected series or registered series
established under this subchapter has the power and capacity, in
the [series' own] name of the protected series or registered
series, to:
(1) sue and be sued;
(2) contract;
(3) acquire, sell, and hold title to assets of the
protected series or registered series, including real property,
personal property, and intangible property;
(4) grant liens and security interests in assets of
the protected series or registered series;
(5) be a promoter, organizer, partner, owner, member,
associate, or manager of an organization; and
(6) exercise any power or privilege as necessary or
appropriate to the conduct, promotion, or attainment of the
business, purposes, or activities of the protected series or
registered series.
Sec. 101.606. LIABILITY OF MEMBER OR MANAGER FOR
OBLIGATIONS; DUTIES. (a) Except as and to the extent the company
agreement specifically provides otherwise, a member or manager
associated with a protected series or registered series or a member
or manager of the company is not liable for a debt, obligation, or
liability of a protected series or registered series, including a
debt, obligation, or liability under a judgment, decree, or court
order.
(b) Notwithstanding Subsection (a), a member or manager
associated with a protected series or registered series or a member
or manager of the company may agree to be obligated personally for
any or all of the debts, obligations, and liabilities of one or more
protected series or registered series under the company agreement
or another agreement.
(c) The company agreement may expand or restrict any duties,
including fiduciary duties, and related liabilities that a member,
manager, officer, or other person associated with a protected
series or registered series has to:
(1) the protected series or registered series or the
company;
(2) a member or manager associated with the protected
series or registered series; or
(3) a member or manager of the company.
Sec. 101.607. CLASS OR GROUP OF MEMBERS OR MANAGERS. (a)
The company agreement may:
(1) establish classes or groups of one or more members
or managers associated with a protected series or registered series
each of which has certain express relative rights, powers, and
duties, including voting rights; and
(2) provide for the manner of establishing additional
classes or groups of one or more members or managers associated with
the protected series or registered series each of which has certain
express rights, powers, and duties, including providing for voting
rights and rights, powers, and duties senior to existing classes
and groups of members or managers associated with the protected
series or registered series.
(b) The company agreement may provide for the taking of an
action[, including the amendment of the company agreement,] without
the vote or approval of any member or manager or class or group of
members or managers, including the amendment of the company
agreement or an action to create under the provisions of the company
agreement a class or group of the protected series or registered
series of membership interests that was not previously outstanding.
(c) The company agreement may provide that:
(1) all or certain identified members or managers or a
specified class or group of the members or managers associated with
a protected series or registered series have the right to vote on
any matter separately or with all or any class or group of the
members or managers associated with the protected series or
registered series;
(2) any member or class or group of members associated
with a protected series or registered series has no voting rights;
and
(3) voting by members or managers associated with a
protected series or registered series is on a per capita, number,
financial interest, class, group, or any other basis.
Sec. 101.608. GOVERNING AUTHORITY. (a) Notwithstanding
any conflicting provision of the certificate of formation of a
limited liability company or the certificate of registered series,
the governing authority of a protected series or registered series
consists of the managers or members associated with the protected
series or registered series as provided in the company agreement.
(b) If the company agreement does not provide for the
governing authority of the protected series or registered series,
the governing authority of the protected series or registered
series consists of:
(1) the managers associated with the protected series
or registered series, if the company's certificate of formation
states that the company has [will have] one or more managers; or
(2) the members associated with the protected series
or registered series, if the company's certificate of formation
does not provide [states] that the company has [will not have]
managers.
Sec. 101.609. APPLICABILITY OF OTHER PROVISIONS OF CHAPTER
OR TITLE 1; SYNONYMOUS TERMS. (a) To the extent not inconsistent
with this subchapter, this chapter applies to a protected series or
registered series and its associated members and managers.
(b) For purposes of the application of any other provision
of this chapter to a provision of this subchapter, and as the
context requires:
(1) a reference to "limited liability company" or
"company" means the "protected series" or "registered series";
(2) a reference to "member" means "member associated
with the protected series" or "member associated with the
registered series"; and
(3) a reference to "manager" means "manager associated
with the protected series[.]" or "manager associated with the
registered series."
(c) To the extent not inconsistent with this subchapter, a
protected series or registered series and the governing persons and
officers associated with the protected series or registered series
have the powers and rights provided by Subchapters C and D, Chapter
3, and Subchapter F, Chapter 10. For purposes of those provisions,
and as the context requires:
(1) a reference to "entity," "domestic entity," or
"filing entity" includes the "protected series" or "registered
series";
(2) a reference to "governing person"
includes "governing person associated with the protected series"
or "governing person associated with the registered series";
(3) a reference to "governing authority"
includes "governing authority associated with the protected
series" or "governing authority associated with the registered
series"; and
(4) a reference to "officer" includes "officer
associated with the protected series[.]" or "officer associated
with the registered series."
Sec. 101.610. EFFECT OF CERTAIN EVENT ON MANAGER OR MEMBER.
(a) An event that under this chapter or the company agreement
causes a manager to cease to be a manager with respect to a
protected series or registered series does not, in and of itself,
cause the manager to cease to be a manager of the limited liability
company or with respect to any other protected series or registered
series of the company.
(b) An event that under this chapter or the company
agreement causes a member to cease to be associated with a protected
series or registered series does not, in and of itself, cause the
member to cease to be associated with any other protected series or
registered series or terminate the continued membership of a member
in the limited liability company or require the winding up of the
protected series or registered series, regardless of whether the
member was the last remaining member associated with the protected
series or registered series.
Sec. 101.611. MEMBER STATUS WITH RESPECT TO DISTRIBUTION.
(a) Subject to Sections 101.613, 101.617, 101.618, 101.619, and
101.620, when a member associated with a protected series or
registered series established under this subchapter is entitled to
receive a distribution with respect to the protected series or
registered series, the member, with respect to the distribution,
has the same status as a creditor of the protected series or
registered series and is entitled to any remedy available to a
creditor of the protected series or registered series.
(b) Section 101.206 does not apply to a distribution with
respect to the protected series or registered series.
Sec. 101.612. RECORD DATE FOR ALLOCATIONS AND
DISTRIBUTIONS. A company agreement may establish or provide for
the establishment of a record date for allocations and
distributions with respect to a protected series or registered
series.
Sec. 101.613. DISTRIBUTIONS. (a) A limited liability
company may make a distribution with respect to a protected series
or registered series.
(b) A limited liability company may not make a distribution
with respect to a protected series or registered series to a member
if, immediately after making the distribution, the total amount of
the liabilities of the protected series or registered series, other
than liabilities described by Subsection (c), exceeds the fair
value of the assets associated with the protected series or
registered series.
(c) For purposes of Subsection (b), the liabilities of a
protected series or registered series do not include:
(1) a liability to a member related to the member's
membership interest associated with the protected series or
registered series; or
(2) except as provided by Subsection (e), a liability
of the protected series or registered series for which the recourse
of creditors is limited to specified property of the protected
series or registered series.
(d) For purposes of Subsection (b), the assets associated
with a protected series or registered series include the fair value
of property of the protected series or registered series subject to
a liability for which recourse of creditors is limited to specified
property of the protected series or registered series only if the
fair value of that property exceeds the liability.
(e) A member who receives a distribution from a protected
series or registered series in violation of this section is not
required to return the distribution to the protected series or
registered series unless the member had knowledge of the violation.
(f) This section may not be construed to affect the
obligation of a member to return a distribution to the protected
series or registered series under the company agreement, another
agreement, or other state or federal law.
(g) Section 101.206 does not apply to a distribution with
respect to a protected series or registered series.
(h) For purposes of this section, "distribution" does not
include an amount constituting reasonable compensation for present
or past services or a reasonable payment made in the ordinary course
of business under a bona fide retirement plan or other benefits
program.
(i) For purposes of this subchapter, the determination of
the amount of the liabilities or the value of the assets of a
protected series or registered series may be based on:
(1) financial statements of the protected series or
registered series, which may include the financial statements of
subsidiary entities of the protected series or registered series
accounted for on a consolidated basis or on the equity method of
accounting that:
(A) present the financial condition of the
protected series or registered series, and any subsidiary entity
included in those financial statements, in accordance with
generally accepted accounting principles or international
financial reporting standards; or
(B) have been prepared using the method of
accounting used to file a federal income tax return for the
protected series or registered series or using any other accounting
practices or principles that are reasonable under the
circumstances;
(2) financial information, including condensed or
summary financial statements, that is prepared on the same basis as
financial statements described by Subdivision (1);
(3) projections, forecasts, or other forward-looking
information relating to the future economic performance, financial
condition, or liquidity of the protected series or registered
series that is reasonable under the circumstances;
(4) a fair valuation or information from any other
method that is reasonable under the circumstances; or
(5) a combination of a statement, valuation, or
information authorized by this subsection.
(j) Subsection (i) does not apply to the computation of any
tax imposed on a protected series or registered series under the
laws of this state.
(k) An action alleging a distribution is made in violation
of this section must be commenced not later than the second
anniversary of the date of the distribution.
Sec. 101.614. AUTHORITY TO WIND UP AND TERMINATE PROTECTED
SERIES OR REGISTERED SERIES. Except to the extent otherwise
provided in the company agreement and subject to Sections 101.617,
101.618, 101.619, and 101.620, a protected series or registered
series and its business and affairs may be wound up and terminated
without causing the winding up of the limited liability company.
Sec. 101.615. TERMINATION OF PROTECTED SERIES OR REGISTERED
SERIES. (a) Except as otherwise provided by Sections 101.617,
101.618, 101.619, and 101.620, the protected series terminates on
the completion of the winding up of the business and affairs of the
protected series in accordance with Sections 101.617, 101.618,
101.619, and 101.620.
(b) Except as otherwise provided by Sections 101.617,
101.618, 101.619, and 101.620, the registered series terminates on:
(1) the completion of the winding up of the business
and affairs of the registered series in accordance with Sections
101.617, 101.618, 101.619, and 101.620; and
(2) the effectiveness of the filing with the secretary
of state of a certificate of termination for the registered series.
(c) The limited liability company shall provide notice of
the termination of a protected series or registered series in the
manner provided in the company agreement for notice of termination,
if any.
(d) [(c)] The termination of the protected series or
registered series does not affect the limitation on liabilities of
the protected series or registered series provided by Section
101.602.
Sec. 101.616. EVENT REQUIRING WINDING UP. Subject to
Sections 101.617, 101.618, 101.619, and 101.620, the business and
affairs of a protected series or registered series are required to
be wound up:
(1) if the winding up of the limited liability company
is required under Section 101.552(a) or Chapter 11; or
(2) on the earlier of:
(A) the time specified for winding up the
protected series or registered series in the company agreement;
(B) the occurrence of an event specified with
respect to the protected series or registered series in the company
agreement;
(C) the occurrence of a majority vote of all of
the members associated with the protected series or registered
series approving the winding up of the protected series or
registered series or, if there is more than one class or group of
members associated with the protected series or registered series,
a majority vote of the members of each class or group of members
associated with the protected series or registered series approving
the winding up of the protected series or registered series;
(D) if the protected series or registered series
has no members, the occurrence of a majority vote of all of the
managers associated with the protected series or registered series
approving the winding up of the protected series or registered
series or, if there is more than one class or group of managers
associated with the protected series or registered series, a
majority vote of the managers of each class or group of managers
associated with the protected series or registered series approving
the winding up of the protected series or registered series; or
(E) a determination by a court in accordance with
Section 101.621.
Sec. 101.617. PROCEDURES FOR WINDING UP AND TERMINATION OF
PROTECTED SERIES OR REGISTERED SERIES. (a) The following
provisions apply to a protected series or registered series and the
associated members and managers of the protected series or
registered series:
(1) Subchapters A, G, H, and I, Chapter 11; and
(2) Subchapter B, Chapter 11, other than Sections
11.051, 11.056, 11.057, 11.058, and 11.059.
(b) The following provisions apply to a registered series
and the associated members and managers of the registered series:
(1) Subchapters E and F, Chapter 11; and
(2) Section 11.102.
(c) For purposes of the application of Chapter 11 to a
protected series or registered series and as the context requires:
(1) a reference to "domestic entity," "filing entity,"
"domestic filing entity," or "entity" means the "protected series"
or "registered series";
(2) a reference to an "owner" means a "member
associated with the protected series" or "member associated with
the registered series";
(3) a reference to the "governing authority" or a
"governing person" means:
(A) the "governing authority associated with the
protected series" or a "governing person associated with the
protected series"; or
(B) the "governing authority associated with the
registered series" or a "governing person associated with the
registered series"; and
(4) a reference to "business," "property,"
"obligations," or "liabilities" means:
(A) the "business associated with the protected
series," "property associated with the protected series,"
"obligations associated with the protected series," or
"liabilities associated with the protected series[.]"; or
(B) the "business associated with the registered
series," "property associated with the registered series,"
"obligations associated with the registered series," or
"liabilities associated with the registered series."
(d) [(c)] After the occurrence of an event requiring
winding up of a protected series or registered series under Section
101.616, unless a revocation as provided by Section 101.618 or a
cancellation as provided by Section 101.619 occurs, the winding up
of the protected series or registered series must be carried out by:
(1) the governing authority of the protected series or
registered series or one or more persons, including a governing
person, designated by:
(A) the governing authority of the protected
series or registered series;
(B) the members associated with the protected
series or registered series; or
(C) the company agreement; or
(2) a person appointed by the court to carry out the
winding up of the protected series or registered series under
Section 11.054, 11.405, 11.409, or 11.410.
(e) [(d)] An action taken in accordance with this section
does not affect the limitation on liability of members and managers
provided by Section 101.606.
Sec. 101.618. REVOCATION OF VOLUNTARY WINDING UP. Before
the termination of the protected series or registered series takes
effect, a voluntary decision to wind up the protected series or
registered series under Section 101.616(2)(C) or (D) may be revoked
by:
(1) a majority vote of all of the members associated
with the protected series or registered series approving the
revocation or, if there is more than one class or group of members
associated with the protected series or registered series, a
majority vote of the members of each class or group of members
associated with the protected series or registered series approving
the revocation; or
(2) if the protected series or registered series has
no members, a majority vote of all the managers associated with the
protected series or registered series approving the revocation or,
if there is more than one class or group of managers associated with
the protected series or registered series, a majority vote of the
managers of each class or group of managers associated with the
protected series or registered series approving the revocation.
Sec. 101.619. CANCELLATION OF EVENT REQUIRING WINDING UP.
(a) Unless the cancellation is prohibited by the company
agreement, an event requiring winding up of the protected series or
registered series under Section 101.616(2)(A) or (B) [101.616(1) or
(2)] may be canceled by the consent of all of the members of the
protected series or registered series before the termination of the
protected series or registered series takes effect.
(b) In connection with the cancellation, the members must
amend the company agreement to:
(1) eliminate or extend the time specified for the
protected series or registered series if the event requiring
winding up of the protected series or registered series occurred
under Section 101.616(2)(A) [101.616(1)]; or
(2) eliminate or revise the event specified with
respect to the protected series or registered series if the event
requiring winding up of the protected series or registered series
occurred under Section 101.616(2)(B) [101.616(2)].
Sec. 101.620. CONTINUATION OF BUSINESS. The protected
series or registered series may continue its business following the
revocation under Section 101.618 or the cancellation under Section
101.619.
Sec. 101.621. WINDING UP BY COURT ORDER. A district court
in the county in which the registered office or principal place of
business in this state of a domestic limited liability company is
located, on application by or for a member associated with a
protected series or registered [the] series of the company, has
jurisdiction to order the winding up and termination of the
protected series or registered [a] series if the court determines
that:
(1) it is not reasonably practicable to carry on the
business of the protected series or registered series in conformity
with the company agreement;
(2) the economic purpose of the protected series or
registered series is likely to be unreasonably frustrated; or
(3) another member associated with the protected
series or registered series has engaged in conduct relating to the
protected series' or registered series' business that makes it not
reasonably practicable to carry on the business with that member.
Sec. 101.622. PROTECTED SERIES OR REGISTERED SERIES NOT A
SEPARATE DOMESTIC ENTITY OR ORGANIZATION. For purposes of this
chapter and Title 1, a protected series or registered series has the
rights, powers, and duties provided by this subchapter to the
protected series or registered series but is not a separate
domestic entity or organization.
Sec. 101.623. FILING OF CERTIFICATE OF REGISTERED SERIES.
(a) To establish a registered series of a limited liability company
in accordance with Section 101.602, a certificate of registered
series for the registered series must be filed in accordance with
this section.
(b) A certificate of registered series must state:
(1) the name of the limited liability company;
(2) the name of the registered series being formed,
which must conform with the requirements of Section 5.056(c); and
(3) if the registered series is formed under a plan of
conversion or merger, a statement to that effect.
(c) A certificate of registered series may include any other
provisions not inconsistent with law relating to the organization,
ownership, governance, business, or affairs of the registered
series.
(d) A certificate of registered series shall be executed by
the limited liability company in accordance with Section 101.0515
and filed with the secretary of state in accordance with and take
effect as a filing instrument as specified by Chapter 4.
(e) A certificate of registered series is not an amendment
to the certificate of formation of the limited liability company.
(f) If a new registered series is established under a plan
of conversion or plan of merger, the certificate of registered
series of the registered series must be filed simultaneously with
the certificate of conversion or certificate of merger under
Section 101.627(b) or 101.634(e). The certificate of registered
series is not required to be filed separately under Subsection (a).
The formation and existence of a registered series that results
from a conversion or merger takes effect and commences on the
effectiveness of the conversion or merger.
Sec. 101.624. AMENDING CERTIFICATE OF REGISTERED SERIES.
(a) A certificate of registered series is amended by filing a
certificate of amendment in accordance with this section.
(b) If the company agreement of the limited liability
company specifies the manner of adopting an amendment to the
certificate of registered series, the amendment must be adopted as
specified by the company agreement. If the company agreement does
not specify the manner of adopting an amendment to the certificate
of registered series but specifies the manner of adopting an
amendment to the provisions of the company agreement governing the
registered series, the amendment must be adopted as specified in
the company agreement for the adoption of an amendment to the
provisions of the company agreement governing the registered
series. If the company agreement does not specify the manner of
adopting an amendment to the certificate of registered series or to
the provisions of the company agreement governing the registered
series, the amendment must be approved:
(1) by all of the members of the registered series;
(2) if the registered series does not yet have any
members but has managers, by all of the managers of the registered
series; or
(3) if the registered series does not have members or
managers, in the manner specified by the company agreement for
authorization of the establishment of a new registered series of
the limited liability company.
(c) The certificate of amendment must state:
(1) the name of the limited liability company;
(2) the name of the registered series;
(3) for each provision of the certificate of
registered series 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 altered or added provision; and
(4) that the amendment has been approved in the manner
required by this subchapter and by the governing documents of the
registered series.
(d) A manager associated with a registered series or, if
there is no manager, any member associated with the registered
series who becomes aware that any statement in a certificate of
registered series filed with respect to the registered series was
false when made, or that any provision in the certificate of
registered series has changed making the certificate of registered
series false in any material respect, shall promptly amend the
certificate of registered series.
(e) The certificate of amendment must be executed by the
registered series in accordance with Section 101.0515 and shall be
filed with the secretary of state in accordance with and take effect
as a filing instrument as specified by Chapter 4.
Sec. 101.625. CERTIFICATE OF TERMINATION FOR REGISTERED
SERIES. (a) On completion of the winding up of a registered
series, a certificate of termination shall be filed in accordance
with this section.
(b) The certificate of termination must contain:
(1) the name of the limited liability company;
(2) the name of the registered series;
(3) the registered series' filing number assigned by
the secretary of state;
(4) the nature of the event requiring winding up the
registered series;
(5) a statement that the registered series has
complied with the provisions of this code governing the series'
winding up; and
(6) any other information the person filing the
certificate of termination determines.
(c) The certificate of termination must be executed by the
registered series in accordance with Section 101.0515 and shall be
filed with the secretary of state in accordance with and take effect
as a filing instrument as specified by Chapter 4.
(d) The secretary of state may not issue a certificate of
fact confirming the existence of a registered series if the limited
liability company has ceased to be in existence.
Sec. 101.626. NAME OF REGISTERED SERIES. The name of each
registered series included in a series' certificate of registered
series must:
(1) comply with the requirements of Chapter 5; and
(2) contain the name of the limited liability company
and the phrase or abbreviation required by Section 5.0561.
Sec. 101.627. CONVERSION OF A REGISTERED SERIES TO A
PROTECTED SERIES. (a) Upon compliance with Section 101.628, a
registered series of a domestic limited liability company may
convert to a protected series of the domestic limited liability
company by filing a certificate of conversion that complies with
Section 101.631 with the secretary of state in accordance with, and
taking effect as a filing instrument as specified, by Chapter 4.
(b) Upon compliance with Section 101.628, a protected
series of a domestic limited liability company may convert to a
registered series of the domestic limited liability company by
filing simultaneously with the secretary of state in accordance
with, and taking effect as a filing instrument as specified by,
Chapter 4:
(1) a certificate of conversion that complies with
Section 101.631; and
(2) a certificate of registered series as provided by
Section 101.623.
(c) An existing registered series may not become a protected
series except as provided by Subsection (a) and Sections 101.628
through 101.632.
(d) For purposes of this section and Sections 101.628
through 101.632:
(1) "Conversion" means the continuation of:
(A) a registered series as a protected series; or
(B) a protected series as a registered series.
(2) "Converted series" means a registered series or
protected series resulting from a conversion of, respectively, a
protected series or registered series, of a domestic limited
liability company.
(3) "Converting series" means a registered series or
protected series before a conversion of that series.
(4) "Plan of conversion" means a document that
conforms with the requirements of Section 101.628.
Sec. 101.628. AUTHORIZATION OF CONVERSION. (a) A
converting series of a domestic limited liability company may
convert to a converted series of the company by adopting a plan of
conversion of the converting series to a converted series of the
company.
(b) If the company agreement of the limited liability
company specifies the manner of adopting a plan of conversion of a
converting series to a converted series of that company, the plan of
conversion must be adopted as specified by the company agreement.
If the company agreement does not specify the manner of adopting a
plan of conversion of a converting series of the company to a
converted series of that company and does not prohibit a conversion
of a converting series to a converted series, the plan of conversion
must be authorized by members of the converting series who own more
than 50 percent of the then-current percentage or other interest in
the profits of the converting series owned by all of the members of
the converting series. If the plan of conversion provides for any
amendment to the company agreement, the plan of conversion must
also be approved in the manner required by this subchapter for the
approval of that amendment.
(c) A converting series may not convert if a member
associated with the converting series, as a result of the
conversion, would become subject to liability under the company
agreement as a member, without that member's consent, for a
liability or other obligation of the converted series for which the
member is not liable under the company agreement as a member of the
converting series before the conversion.
(d) At the time a conversion takes effect, each member of
the converting series has, unless otherwise agreed to by that
member, a membership interest in and is the member of the converted
series.
(e) A plan of conversion must be in writing and must
include:
(1) the name of the converting series;
(2) the name of the converted series;
(3) a statement that the converting protected series
or registered series, as applicable, is continuing its existence in
the form of the converted protected series or registered series, as
applicable;
(4) the manner and basis, including use of a formula,
of converting the membership interests of the converting series
into membership interests of the converted series;
(5) any amendment to the company agreement that may be
necessary to reflect the conversion of the converting series and
the establishment of the converted series; and
(6) the certificate of registered series required to
be filed under this subchapter if the converted series is a
registered series.
(f) An amendment or certificate of registered series
described by Subsection (e)(5) or (6) may be included in the plan of
conversion by an attachment or exhibit to the plan.
(g) Any of the terms of the plan of conversion may be made
dependent on a fact ascertainable outside of the plan if the manner
in which those facts will operate on the terms of the conversion is
clearly and expressly stated in the plan. In this subsection,
"facts" includes the occurrence of any event, including a
determination or action by any person.
Sec. 101.629. CONVERSION NOT WINDING UP EVENT. Unless
otherwise agreed, the conversion of a converting series under
Sections 101.627 through 101.631 does not:
(1) require the limited liability company or the
converting series to wind up the series' affairs under
Section 11.051, 11.056, 101.552 or 101.616 or to pay the series'
liabilities and distribute its assets under Sections 11.053 and
101.617; or
(2) constitute an event requiring winding up of the
company or the converting series.
Sec. 101.630. EFFECT OF CONVERSION. When a conversion
takes effect:
(1) the converting series continues to exist without
interruption in the form of the converted series rather than in the
form of the converting series;
(2) all rights, title, and interests to all property
owned by the converting series continues to be owned, subject to any
existing liens or other encumbrances on the property, by the
converted series in the new form without:
(A) reversion or impairment;
(B) further act or deed; or
(C) any transfer or assignment having occurred;
(3) all liabilities and obligations of the converting
series continue to be liabilities and obligations of the converted
series in the new form without impairment or diminution because of
the conversion;
(4) the rights of creditors or other parties with
respect to or against the previous members associated with the
converting series in their capacities as members in existence when
the conversion takes effect continue to exist as to those
liabilities and obligations and may be enforced by the creditors
and obligees as if a conversion had not occurred;
(5) a proceeding pending by or against the converting
series or by or against any of the converting series' members in
their capacities as members may be continued by or against the
converted series in the new form and by or against the previous
members without a need for substituting a party;
(6) the membership interests of the converting series
that are to be converted into membership interests of the converted
series as provided by the plan of conversion are converted as
provided by the plan, and the former members of the converting
series are entitled only to the rights provided by the plan of
conversion;
(7) the amendment to the company agreement under the
plan of conversion becomes effective; and
(8) if, after the conversion takes effect, a member of
the converted series as a member is liable for the liabilities or
obligations of the converted series, the member is liable for the
liabilities and obligations of the converting series that existed
before the conversion took effect only to the extent that the
member:
(A) agrees in writing to be liable for the
liabilities or obligations;
(B) was liable, before the conversion took
effect, for the liabilities or obligations; or
(C) by becoming a member of the converted series,
becomes liable under other applicable law for the existing
liabilities and obligations of the converted series.
Sec. 101.631. FILING OF CERTIFICATE OF CONVERSION. (a)
After adoption of a plan of conversion as provided by Section
101.628, a certificate of conversion must be signed by the
converting series and must include a statement certifying the
following:
(1) the name of the limited liability company and, if
it has been changed, the name under which the company's certificate
of formation was originally filed;
(2) the filing number of the limited liability company
assigned by the secretary of state;
(3) the name of the converting series and, if it is a
registered series and its name has been changed, the name under
which its certificate of registered series was originally filed;
(4) if the converting series is a registered series,
the filing number of the registered series assigned by the
secretary of state;
(5) that a plan of conversion is on file at the
principal place of business of the converting series, and the
address of the principal place of business;
(6) that a plan of conversion will be on file after the
conversion at the principal place of business of the converted
series, and the address of the principal place of business;
(7) that a copy of the plan of conversion will be on
written request furnished without cost by the converting series
before the conversion or by the converted series after the
conversion to any owner or member of the converting series or the
converted series; and
(8) that the plan of conversion has been adopted as
required by the company agreement of the limited liability company
and Section 101.628.
(b) The certificate of conversion must be filed with the
secretary of state in accordance with Section 101.627.
Sec. 101.632. PROHIBITION ON CONVERSION PERMITTED. A
company agreement may prohibit the conversion of a registered
series or protected series of the company under Sections 101.627
through 101.631.
Sec. 101.633. MERGER AMONG MERGING SERIES OF SAME LIMITED
LIABILITY COMPANY. (a) For purposes of the section and Sections
101.634 through 101.636:
(1) "Merger" means:
(A) the division of a merging series into two or
more new protected series and registered series; or
(B) the combination of one or more merging series
with one or more merging series resulting in:
(i) one or more surviving merging series;
(ii) the creation of one or more new
protected series or registered series; or
(iii) one or more surviving merging series
and the creation of one or more new protected series or registered
series.
(2) "Merging series" means each and all protected
series and registered series that are parties to a merger.
(3) "Party to a merger" means a protected series or
registered series that under a plan of merger is divided or combined
by a merger.
(4) "Plan of merger" means a document that conforms to
the requirements of this section.
(b) One or more merging series of the same limited liability
company may affect a merger as provided by a plan of merger that is
approved in accordance with this section and that complies with
Sections 101.634 through 101.636. The plan of merger shall provide
for one or more surviving or new protected series or registered
series.
(c) Unless otherwise provided by the company agreement, the
plan of merger shall be approved by each protected series or
registered series that is a party to the merger. If the company
agreement specifies the manner of adopting a plan of merger for the
merging series, the amendment must be adopted as specified in the
company agreement. If the company agreement does not specify the
manner of adopting a plan of merger for the merging series but
specifies the manner of adopting an amendment to the provisions of
the company agreement governing the merging series, the plan of
merger must be adopted as specified in the company agreement for the
adoption of an amendment to the provisions of the company agreement
governing the merging series. If the company agreement does not
specify the manner of adopting a plan of merger for the merging
series or an amendment to the provisions of the company agreement
governing the merging series, the amendment must be approved by
members of that merging series who own more than 50 percent of the
then-current percentage or other interest in the profits of that
merging series owned by all of the members of that merging series.
If the plan of merger provides for any amendment to the company
agreement, the plan of merger must also be approved in the manner
required by this subchapter for the approval of that amendment.
(d) A plan of merger must be in writing and must include:
(1) the name of each merging series that is a party to
the merger;
(2) the name of each merging series that will survive
the merger;
(3) the name of each new protected series or
registered series that is to be created by the plan of merger;
(4) the manner and basis, including use of a formula,
of converting or exchanging any of the membership interests of each
merging series that is a party to the merger into:
(A) membership interests, obligations, rights to
purchase securities, or other securities of one or more of the
surviving merging series or new protected series or registered
series;
(B) cash;
(C) other property, including membership
interests, obligations, rights to purchase securities, or other
securities of any other person or entity; or
(D) any combination of the items described by
Paragraphs (A)-(C);
(5) the identification of any of the membership
interests of a merging series that is a party to the merger that
are:
(A) to be canceled rather than converted or
exchanged; or
(B) to remain outstanding rather than converted
or exchanged if the protected series or registered series survives
the merger;
(6) any amendment to the company agreement that may be
necessary to reflect the merger of the merging series and the
establishment of any new protected series or registered series that
is to be created by the merger;
(7) any amendment to the certificate of registered
series of any registered series that is a surviving registered
series, including a change in the name of the surviving registered
series, that will be effected by the merger; and
(8) the certificate of registered series of each new
registered series to be created by the plan of merger.
(e) An item required by Subsections (d)(6) and (8) may be
included in the plan of merger by an attachment or exhibit to the
plan.
(f) If the plan of merger provides for a manner and basis of
converting or exchanging a membership interest that may be
converted or exchanged in a manner or basis different than any other
membership interest of the same class of the membership interest,
the manner and basis of conversion or exchange must be included in
the plan of merger in the same manner as provided by Subsection
(d)(4). A plan of merger may provide for cancellation of a
membership interest while providing for the conversion or exchange
of other membership interests of the same class as the membership
interest to be canceled.
(g) Any of the terms of the plan of merger may be made
dependent on facts ascertainable outside of the plan if the manner
in which those facts will operate on the terms of the merger is
clearly and expressly stated in the plan. In this subsection,
"facts" includes the occurrence of any event, including a
determination or action by any person.
(h) If more than one series is to survive or to be created by
the plan of merger, the plan of merger must include:
(1) the manner and basis of allocating and vesting the
property of each merging series that is a party to the merger among
one or more of the surviving or new series; and
(2) the manner and basis of allocating each liability
and obligation of each merging series that is a party to the merger,
or adequate provisions for the payment and discharge of each
liability and obligation, among one or more of the surviving or new
series.
(i) A plan of merger may include:
(1) amendments to provisions of the company agreement
relating to any surviving merging series or any new protected
series or registered series to be created by the merger; and
(2) any other provisions relating to the merger that
are not required by this subchapter.
(j) Notwithstanding prior approval, a plan of merger may be
terminated or amended under a provision for that termination or
amendment contained in the plan of merger.
(k) A merging series may not merge under this section if a
member of that merging series that is a party to the merger will, as
a result of the merger, become subject to liability under the
company agreement as a member, without that member's consent, for a
liability or other obligation of any other person for which the
member is not liable under the company agreement as a member of that
merging series before the merger.
Sec. 101.634. CERTIFICATE OF MERGER. (a) After approval of
a plan of merger as provided by Section 101.633, if a registered
series is a party to the merger or if a new registered series is to
be created by the merger, a certificate of merger must be signed by
each merging series that is a party to the merger and must include a
statement certifying the following:
(1) the name of each merging series that is a party to
the merger and the name of the limited liability company that formed
that merging series;
(2) that a plan of merger has been approved and
executed by or on behalf of each merging series that is to merge;
(3) the name of each merging series that survives the
merger and each new registered series or protected series that is
created by the merger;
(4) any amendment to the certificate of registered
series of any registered series that is a surviving merging series,
including a change in the name of the surviving registered series,
to be effected by the merger or a statement that amendments are
being made to the certificate of registered series of any
registered series that is a surviving merging series under a
certificate of amendment attached to the certificate of merger
under Subsection (d);
(5) the certificate of registered series for each new
registered series that is to be created by the merger is being filed
with the certificate of merger;
(6) that the plan of merger is on file at a place of
business of each surviving or new registered series or the limited
liability company that formed the registered series, and the
address of that place of business;
(7) that a copy of the plan of merger will be on
written request furnished without cost by each surviving merging
series or new registered series or protected series to any member of
any merging series that is a party to the merger or any registered
series or protected series created by the plan of merger and, for a
merger with multiple surviving or new series, to any creditor or
obligee of the parties to the merger at the time of the merger if a
liability or obligation is then outstanding;
(8) if approval of the members of any merging series
that was a party to the plan of merger is not required by this code
or the company agreement, a statement to that effect; and
(9) a statement that the plan of merger has been
approved as required by this code and by the company agreement.
(b) As provided by Subsection (a)(4), a certificate of
merger filed under this section may include as an attachment a
certificate of amendment containing amendments to the certificate
of registered series for any registered series that is a surviving
registered series of the merger.
(c) A certificate of merger that contains any amendment or
certificate of amendment to the certificate of registered series of
a registered series that is a surviving registered series in
accordance with Subsection (a)(4) and, if applicable, Subsection
(b) is considered to be an amendment to the certificate of
registered series of that surviving registered series. No further
action is required to amend the certificate of registered series of
the surviving registered series under Section 101.624 with respect
to the amendment.
(d) The certificate of merger must be filed with the
secretary of state in accordance with, and take effect as a filing
instrument as specified by Chapter 4. If a new registered series is
to be created by the merger, a certificate of registered series for
the new registered series that complies with Section 101.623 must
be simultaneously filed with the certificate of merger in
accordance with Chapter 4 as a filing instrument and must take
effect simultaneously with the effectiveness of the certificate of
merger.
(e) Whenever this section requires the filing of a
certificate of merger, that requirement is satisfied by the filing
of the plan of merger containing the information required to be
included in the certificate of merger as provided by this section.
Sec. 101.635. EFFECTS OF MERGER OF MERGING SERIES. (a)
When a merger of merging series takes effect:
(1) the separate existence of each merging series that
is a party to the merger, other than a surviving merging series or a
new protected series or registered series, ceases;
(2) all rights, title, and interests to all real
estate and other property owned by each merging series that is a
party to the merger is allocated to and vested, subject to any
existing liens or other encumbrances on the property, in one or more
of the series as provided by the plan of merger without:
(A) reversion or impairment;
(B) any further act or deed; or
(C) any transfer or assignment having occurred;
(3) all liabilities and obligations of each merging
series that is a party to the merger are allocated to one or more of
the surviving or new series provided by the plan of merger;
(4) each surviving or new series to which a liability
or obligation is allocated under the plan of merger is the primary
obligor for the liability or obligation, and, except as otherwise
provided by the plan of merger or by law or contract, no other party
to the merger, other than a surviving merging series liable or
otherwise obligated at the time of the merger, and no other new
registered series or protected series created under the plan of
merger is liable for the debt or other obligation;
(5) any proceeding pending by or against any merging
series that is a party to the merger may be continued as if the
merger did not occur, or the surviving or new series to which the
liability, obligation, asset, or right associated with that
proceeding is allocated to and vested in under the plan of merger
may be substituted in the proceeding;
(6) any amendment to the company agreement provided by
the plan of merger becomes effective;
(7) any amendment to the certificate of registered
series of a surviving registered series that is contained in the
certificate of merger, and any certificate of amendment attached to
the certificate of merger that contains amendments to the
certificate of registered series of a surviving registered series,
becomes effective;
(8) each new registered series whose certificate of
registered series is included in the plan of merger and filed with
the certificate of merger, on meeting any additional requirements,
if any, of this subchapter for the series' formation, is formed as a
registered series under this subchapter as provided by the plan of
merger; and
(9) the membership interests of each merging series
that is a party to the merger and that are to be converted or
exchanged, wholly or partly, into membership interests,
obligations, rights to purchase securities, or other securities of
one or more of the surviving or new series, into cash or other
property, including membership interests, obligations, rights to
purchase securities, or other securities of any organization, or
into any combination of these, or that are to be canceled or remain
outstanding, are converted, exchanged, canceled, or remain
outstanding as provided in the plan of merger, and the former
members who held membership interests of each merging series that
is a party to the merger are entitled only to the rights provided by
the plan of merger.
(b) If the plan of merger does not provide for the
allocation and vesting of the right, title, and interest in any
particular real estate or other property or for the allocation of
any liability or obligation of any party to the merger, the
unallocated property is owned in undivided interest by, or the
liability or obligation is the joint and several liability and
obligation of, each of the surviving and new series, pro rata to the
total number of surviving and new series resulting from the merger.
(c) Unless otherwise agreed, a merger of a merging series of
a limited liability company, including a merging series which is
not a surviving or new series resulting from the merger:
(1) does not require such merging series to wind up its
affairs under Section 101.616 or pay its liabilities and distribute
its assets under Sections 11.053 and 101.617; and
(2) does not constitute an event requiring winding up
of the merging series.
Sec. 101.636. PROHIBITION ON MERGER PERMITTED. A company
agreement may provide that a protected series or registered series
company does not have the power to merge under Section 101.633.
SECTION 2. Section 1.201(b)(27), Business & Commerce Code,
is amended to read as follows:
(27) "Person" means an individual, corporation,
business trust, estate, trust, partnership, limited liability
company, association, joint venture, government, governmental
subdivision, agency, or instrumentality, public corporation, any
other legal or commercial entity, or a protected series or
registered [particular] series of a for-profit entity.
SECTION 3. Section 9.102(a)(71), Business & Commerce Code,
is amended to read as follows:
(71) "Registered organization" means an organization
formed or organized solely under the law of a single state or the
United States by the filing of a public organic record with, the
issuance of a public organic record by, or the enactment of
legislation by the state or the United States. The term includes a
business trust that is formed or organized under the law of a single
state if a statute of the state governing business trusts requires
that the business trust's organic record be filed with the state.
The term includes a series of a registered organization if the
series is formed or organized under the laws of a single state and
the statute of the state governing the series requires that the
public organic record of the series be filed with the state.
SECTION 4. Sections 71.002(2), (4), and (9), Business &
Commerce Code, are amended to read as follows:
(2) "Assumed name" means:
(A) for an individual, a name that does not
include the surname of the individual;
(B) for a partnership, a name that does not
include the surname or other legal name of each joint venturer or
general partner;
(C) for an individual or a partnership, a name,
including a surname, that suggests the existence of additional
owners by including words such as "Company," "& Company," "& Son,"
"& Sons," "& Associates," "Brothers," and similar words, but not
words that merely describe the business being conducted or the
professional service being rendered;
(D) for a limited partnership, a name other than
the name stated in its certificate of formation;
(E) for a company, a name used by the company;
(F) for a corporation, a name other than the name
stated in its certificate of formation or a comparable document;
(G) for a limited liability partnership, a name
other than the name stated in its application filed with the office
of the secretary of state or a comparable document; [and]
(H) for a limited liability company, a name other
than the name stated in its certificate of formation or a comparable
document, including the name of any protected series of the limited
liability company established by its company agreement; and
(I) for a registered series of a domestic limited
liability company, a name other than the name stated in its
certificate of registered series.
(4) "Company" means a real estate investment trust, a
joint-stock company, or any other business, professional, or other
association or legal entity that is not incorporated, other than a
partnership, limited partnership, limited liability company,
registered series of a limited liability company, limited liability
partnership, or foreign filing entity.
(9) "Person" includes an individual, partnership,
limited partnership, limited liability company, registered series
of a limited liability company, limited liability partnership,
company, corporation, or foreign filing entity.
SECTION 5. Section 71.003, Business & Commerce Code, is
amended by adding Subsection (b-1) to read as follows:
(b-1) This chapter does not require a registered series of a
limited liability company or its members to file a certificate to
conduct business or render a professional service in this state
under the name of the registered series as stated in the series'
certificate of registered series.
SECTION 6. Section 71.051, Business & Commerce Code, is
amended to read as follows:
Sec. 71.051. CERTIFICATE FOR CERTAIN UNINCORPORATED
PERSONS. A person must file a certificate under this subchapter if
the person regularly conducts business or renders a professional
service in this state under an assumed name other than as a
corporation, limited partnership, limited liability partnership,
limited liability company, protected series or registered series of
a limited liability company, or foreign filing entity.
SECTION 7. Section 71.101, Business & Commerce Code, is
amended to read as follows:
Sec. 71.101. CERTIFICATE FOR INCORPORATED BUSINESS OR
PROFESSION, LIMITED PARTNERSHIP, LIMITED LIABILITY PARTNERSHIP,
LIMITED LIABILITY COMPANY, REGISTERED SERIES, OR FOREIGN FILING
ENTITY. A corporation, limited partnership, limited liability
partnership, limited liability company, registered series of a
limited liability company, or foreign filing entity must file a
certificate under this subchapter if the registered series or
entity:
(1) regularly conducts business or renders
professional services in this state under an assumed name; or
(2) is required by law to use an assumed name in this
state to conduct business or render professional services.
SECTION 8. Section 71.102, Business & Commerce Code, is
amended to read as follows:
Sec. 71.102. CONTENTS OF CERTIFICATE. The certificate
must state:
(1) the assumed name under which the business is or is
to be conducted or the professional service is or is to be rendered;
(2) the registrant's name as stated in the
registrant's certificate of formation or application filed with the
office of the secretary of state or other comparable document,
except that:
(A) if the registrant is a limited liability
company that is filing under an assumed name used by a protected
series of the limited liability company, the certificate must state
the name of that protected series as stated in the company agreement
of the limited liability company and the name of the limited
liability company as stated in the company's certificate of
formation; or
(B) if the registrant is a registered series of a
limited liability company, the certificate must state the
registrant's name as stated in its certificate of registered series
and the name of the limited liability company as stated in the
company's certificate of formation;
(3) the state, country, or other jurisdiction under
the laws of which the registrant was formed, incorporated, or
organized;
(4) the period, not to exceed 10 years, during which
the registrant will use the assumed name;
(5) a statement specifying that the registrant is:
(A) a for-profit corporation, nonprofit
corporation, professional corporation, professional association,
or other type of corporation;
(B) a limited partnership, limited liability
partnership, [or] limited liability company, or registered series
of a limited liability company; or
(C) another type of incorporated business,
professional or other association, or legal entity, foreign or
domestic;
(6) the street or mailing address of the registrant's
principal office in this state or outside this state, as
applicable; and
(7) the county or counties in this state where the
registrant is or will be conducting business or rendering
professional services under the assumed name.
SECTION 9. Section 71.103(a), Business & Commerce Code, is
amended to read as follows:
(a) A corporation, limited partnership, limited liability
partnership, limited liability company, registered series of a
limited liability company, or foreign filing entity required to
file a certificate under Section 71.101 shall file the certificate
in the office of the secretary of state.
SECTION 10. Section 1.002, Business Organizations Code, is
amended by amending Subdivision (69-b) and adding Subdivisions
(77-a), (78-a), and (79-a) to read as follows:
(69-b) "Person" means an individual or a corporation,
partnership, limited liability company, business trust, trust,
association, or other organization, estate, government or
governmental subdivision or agency, or other legal entity, or a
protected series or registered series of a domestic limited
liability company or foreign entity.
(77-a) "Protected series" means a series of a domestic
limited liability company that is established as a protected series
in accordance with Section 101.602.
(78-a) "Registered series" means a series of a
domestic limited liability company that is formed as a registered
series in accordance with Section 101.602.
(79-a) "Series," with respect to a limited liability
company, means a designated series of members, managers, membership
interests, or assets that is a protected series or a registered
series, or that is neither a protected series nor a registered
series.
SECTION 11. Subchapter D, Chapter 4, Business Organizations
Code, is amended by adding Section 4.162 to read as follows:
Sec. 4.162. FILING FEES: REGISTERED SERIES OF LIMITED
LIABILITY COMPANY. (a) For a filing by or for a registered series
of a domestic limited liability company, the secretary of state
shall impose the following fees:
(1) for filing a certificate of registered series,
$300;
(2) for filing a certificate of amendment, $150; and
(3) for filing a certificate of termination, $40.
(b) For a filing by or for a registered series of a domestic
limited liability company when no other fee has been provided, the
secretary of state shall impose the same fee as the filing fee for a
similar instrument under Section 4.151.
SECTION 12. Section 5.001, Business Organizations Code, is
amended to read as follows:
Sec. 5.001. EFFECT ON RIGHTS UNDER OTHER LAW. (a) The
filing of a certificate of formation by a filing entity under this
code, an application for registration by a foreign filing entity
under this code, a certificate of registered series, or an
application for reservation or registration of a name under this
chapter does not authorize the use of a name in this state in
violation of a right of another under:
(1) the Trademark Act of 1946, as amended (15 U.S.C.
Section 1051 et seq.);
(2) Chapter 16 or 71, Business & Commerce Code; or
(3) common law.
(b) The secretary of state shall deliver a notice that
contains the substance of Subsection (a) to each of the following:
(1) a filing entity that files a certificate of
formation under this code;
(2) a foreign filing entity that registers under this
code;
(3) a person that reserves a name under Subchapter C;
[and]
(4) a person that registers a name under Subchapter D;
and
(5) a registered series of a domestic limited
liability company that files a certificate of registered series.
SECTION 13. Section 5.051, Business Organizations Code, is
amended to read as follows:
Sec. 5.051. ASSUMED NAME. A domestic entity, a protected
series or registered series of a domestic limited liability
company, or a foreign entity having authority to transact business
in this state may transact business under an assumed name by filing
an assumed name certificate in accordance with Chapter 71, Business &
Commerce Code. The requirements of this subchapter do not apply
to an assumed name set forth in an assumed name certificate filed
under that chapter.
SECTION 14. Section 5.052, Business Organizations Code, is
amended to read as follows:
Sec. 5.052. UNAUTHORIZED PURPOSE IN NAME PROHIBITED. (a) A
filing entity or a foreign filing entity may not have a name that
contains any word or phrase that indicates or implies that the
entity is engaged in a business that the entity is not authorized by
law to pursue.
(b) A registered series may not have a name that contains
any word or phrase that indicates or implies that the registered
series is engaged in a business that the registered series is not
authorized by law to pursue.
SECTION 15. Section 5.053(a), Business Organizations Code,
is amended to read as follows:
(a) The name of a filing entity or registered series of a
domestic limited liability company or the name under which a
foreign filing entity registers to transact business in this state
must be distinguishable in the records of the secretary of state
from:
(1) the name of another existing filing entity;
(2) the name of a foreign filing entity that is
registered under Chapter 9;
(3) the fictitious name under which a foreign filing
entity is registered to transact business in this state;
(4) a name that is reserved under Subchapter C; [or]
(5) a name that is registered under Subchapter D; or
(6) the name of another existing registered series of
a domestic limited liability company.
SECTION 16. Subchapter B, Chapter 5, Business Organizations
Code, is amended by adding Section 5.0561 to read as follows:
Sec. 5.0561. NAME OF REGISTERED SERIES OF LIMITED LIABILITY
COMPANY. The name of a registered series of a limited liability
company must contain:
(1) the phrase "registered series"; or
(2) the abbreviation "RS" or "R.S." of that phrase.
SECTION 17. Section 5.061, Business Organizations Code, is
amended to read as follows:
Sec. 5.061. NAME CONTAINING "LOTTO" OR "LOTTERY"
PROHIBITED. A filing entity, [or] a foreign filing entity, or a
registered series of a domestic limited liability company may not
have a name that contains the word "lotto" or "lottery."
SECTION 18. Section 5.062(a), Business Organizations Code,
is amended to read as follows:
(a) Subject to Subsection (b), a filing entity or a
registered series of a domestic limited liability company may not
have a name that:
(1) reasonably implies that the entity or registered
series is created by or for the benefit of war veterans or their
families; and
(2) contains the word or phrase, or any variation or
abbreviation of:
(A) "veteran";
(B) "legion";
(C) "foreign";
(D) "Spanish";
(E) "disabled";
(F) "war"; or
(G) "world war."
SECTION 19. Section 5.102(a), Business Organizations Code,
is amended to read as follows:
(a) The secretary of state may reserve a name under this
subchapter only if the name is distinguishable in the records of the
secretary of state from:
(1) the name of an existing filing entity;
(2) the name of a foreign filing entity that is
registered under Chapter 9;
(3) the fictitious name under which a foreign filing
entity is registered to transact business in this state;
(4) a name that is reserved under this subchapter;
[or]
(5) a name that is registered under Subchapter D; or
(6) the name of an existing registered series of a
domestic limited liability company.
SECTION 20. Section 5.153(a), Business Organizations Code,
is amended to read as follows:
(a) The secretary of state may register a name under this
subchapter only if the name is distinguishable in the records of the
secretary of state from:
(1) the name of an existing filing entity;
(2) the name of a foreign filing entity that is
registered under Chapter 9;
(3) the fictitious name under which a foreign filing
entity is registered to transact business in this state;
(4) a name that is reserved under Subchapter C; [or]
(5) a name that is registered under this subchapter;
or
(6) the name of an existing registered series of a
domestic limited liability company.
SECTION 21. Section 5.301, Business Organizations Code, is
amended to read as follows:
Sec. 5.301. APPLICABILITY OF SUBCHAPTER. (a) This
subchapter applies to service of process, notice, or demand on a
series of a domestic limited liability company or a series of a
foreign entity.
(b) For purposes of this subchapter, a reference to a
"series" is intended to be a reference to a protected series or
registered series of a domestic limited liability company or to a
series of a foreign entity that has the power to sue or be sued as a
separate series under the laws of the jurisdiction of formation of
the foreign entity.
SECTION 22. Section 11.206, Business Organizations Code, is
amended to read as follows:
Sec. 11.206. EFFECT OF REINSTATEMENT. (a) When the
reinstatement of a terminated entity takes effect:
(1) the existence of the terminated entity is
considered to have continued without interruption from the date of
termination; and
(2) the terminated entity may carry on its business as
if the termination of its existence had not occurred.
(b) The reinstatement of a terminated limited liability
company automatically reinstates any protected series or
registered series that terminated because of the termination of the
company.
SECTION 23. Section 101.0515, Business Organizations Code,
is amended to read as follows:
Sec. 101.0515. EXECUTION OF FILINGS. (a) Unless otherwise
provided by this title, a filing instrument of a limited liability
company must be signed by an authorized officer, manager, or member
of the limited liability company.
(b) Unless otherwise provided by this title, a filing
instrument of a registered series of a domestic limited liability
company must be signed by an authorized officer, manager, or member
of the registered series.
SECTION 24. Section 101.054(a), Business Organizations
Code, is amended to read as follows:
(a) Except as provided by this section, the following
provisions may not be waived or modified in the company agreement of
a limited liability company:
(1) this section;
(2) Section 101.101, 101.151, 101.206, 101.501, or
Subchapter M of Chapter 101, except that Sections 101.601(d),
101.610, 101.611, 101.613(a), 101.616(2)(A) through (D), 101.618,
or 101.619(b) may be waived or modified in the company agreement
[101.602(b), or 101.613];
(3) Chapter 1, if the provision is used to interpret a
provision or define a word or phrase contained in a section listed
in this subsection;
(4) Chapter 2, except that Section 2.104(c)(2),
2.104(c)(3), or 2.113 may be waived or modified in the company
agreement;
(5) Chapter 3, except that Subchapters C and E may be
waived or modified in the company agreement; or
(6) Chapter 4, 5, 10, 11, or 12, other than Section
11.056.
SECTION 25. Sections 101.611, 101.612, and 101.613,
Business Organizations Code, as amended by this Act, apply only to a
distribution made on or after the effective date of this Act. A
distribution made before the effective date of this Act is governed
by the law in effect on the date the distribution was made, and the
former law is continued in effect for that purpose.
SECTION 26. This Act takes effect June 1, 2022.