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November 1, 201917052300
2019 Texas Legislative Update on Amendments to Entity Laws
It has been highly anticipated that changes to Texas Business Entity Laws were to be adopted. In 2019, the Texas Legislature approved numerous amendments to the Texas Business Organization and the Texas Business and Commerce. The new pieces of legislation apply to: Limited Liability Companies, Partnerships, Non-profit Corporations and For-profit Corporations. This article provides a detailed explanation of all amendments that were established.
November 7, 2025Daryl B. Robertson
2025 Amendments to the Texas Business Organizations Code
This article primarily summarizes several pieces of legislation that were passed by the Texas Legislature in its 2025 Regular Session and that amend the Texas Business Organizations Code (the “TBOC”) There are many other bills that were passed affecting business law, so this article should not be viewed as containing a listing of all business- related bills. The article contains summaries only and should not be relied on as a complete description of any bill or portion thereof.
March 22, 202417052300
Shareholder Agreements: Drafting and Analysis
Under the Texas Business Organizations Code (the “TBOC”), there are three kinds of shareholders agreements for a Texas for-profit corporation. First, there are shareholders agreements between the corporation and one or more of the corporation’s shareholders or agreements between two or more shareholders that are not executed by all of the shareholders of the corporation. The TBOC has no specific provisions governing this first kind of shareholders agreements other than to state that the statutory provisions governing the other two kinds of shareholders agreementsdo not prohibit or impair such agreements. Second, there are written shareholders agreements that are executed by all of the shareholders at the time of the agreement and made known to the corporation. Third, there are shareholders agreements that are contained in the certificate of formation or bylaws if approved by all of the shareholders at the time of the agreement. The latter two forms of shareholder agreements are authorized and governed by Subchapter C of Chapter 21 of the TBOC. These latter agreements may be amended only by all of the shareholders at the time of the amendment, unless the agreement provides otherwise.4 This article refers to the latter kinds of shareholders agreements as “statutory shareholders agreements”.
May 21, 2016Adrienne Randle Bond
Texas Law on Dissolution of Entities
In the current market conditions of the energy markets that are significant contributors to the economy of this state, the next few years will have to necessarily focus on “downside” issues of entity formation – namely insolvency and dissolution. This paper will focus on the statutory and case law in Texas concerning the dissolution of entities, in particular the “filing entities,” corporations, LLCs and limited partnerships. I will start with the statutory rules and procedures, to review the rules and procedures for the process, along with a discussion of what is “not there” in the statute (especially in comparison to other states), and follow with the glosses to the statutory rules that have been added by case law. At the end, I hope you will have an excellent technical grasp of the process of dissolving an entity.
March 7, 2014Jennifer T. Wisinski
Shareholder Agreements: Tag Alongs, Drag Alongs and More
Clients that are starting a new privately-held business often carefully consider the form of entity they will use, the capital structure and the tax implications. However, clients may be reluctant to spend time and money on agreements that will govern the potential termination of their business relationship. At the time of formation, the owners are excited about doing business together and may not want to discuss sensitive topics such as whether an owner will be kicked out of the business if the owner becomes disabled and what price will the owner receive for his or her equity interest. On the other hand, clients that have been through the cycle of business ownership before may focus intently on the terms of any shareholders agreement because they have experienced the difficulties of exiting a business relationship.
May 26, 2012Byron F. Egan
Choice of Entity and Acquisition Structure Decision Tree
These are the presentation slides.
May 28, 2011Byron F. Egan
Choice of Entity and Acquisition Structure Decision Tree
These are the presentation slides.
May 22, 2009Adrienne Randle Bond
Duties, Exculpation From Duties and Indemnification of Governing Persons in Limited Liability Companies
Indemnification provisions under the limited liability company statutes, including the Texas Business Organizations Code (the “TBOC”), are likely to be under significant judicial scrutiny in the next few years, as the economic downturn causes claims and controversies against members and managers to arise. This article will focus on best practices to protect persons serving as members, managers and officers of an LLC, with an analysis of statutory foundations, current and evolving case law and suggested drafting solutions. As we all understand the basics of corporate law, which serves as the foundation of the TBOC statutory indemnification provisions, indemnification only is available if the accused is able to establish that there was no “misconduct.” Stated in the converse, indemnification payments, if successful, will only consist of advancement of defense costs. Once this fundamental premise is clear, indemnification rests on two topics: (A) definition of, and appropriate exculpation for, the duties applicable to the proposed indemnities, and (B) terms and conditions of advancement of expenses. Indemnification insurance also needs to be a part of the indemnification process. An explanation of terms is also in order. Under the TBOC, the generic term for a person operating in a fiduciary duty capacity is “governing person.” The term “governing person” includes directors, members of a member managed LLC and managers of a manager managed LLC. The main provision on exculpation and indemnity are in Section 7 and 8 of the “HUB” of the TBOC, and are drafted in terms of “governing persons,” and I will use the LLC specific terms of members and managers, and include a discussion of officers because of the specific statutory structure in place for LLCs. A cautionary note on ethics is also in order at the beginning of this analysis. Who you are representing as you are exculpating is quite important. This is an area that ALWAYS has a conflict of interest because you are considering the relationship of the agent to the principal, and is a question that is usually resolved in the formation stage, where there is usually only one lawyer. As a result, it is an area where you should take time to explain to the client, whoever that client is, the nature of fiduciary duties, their exculpation and indemnification, because they cannot begin to waive any conflicts until they have had a complete disclosure, which I believe requires the client to actually understand what they are waiving. I personally find this quite difficult to do, but I soldier on.