HBA-MPM S.B. 1320 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1320 By: Staples Business & Industry 4/17/2001 Engrossed BACKGROUND AND PURPOSE Currently, there are errors in certain statutory cross references and a lack of standardization of the filing procedures in the Texas Non-Profit Corporation Act, the Texas Professional Corporation Act, the Texas Limited Liability Company Act, the Texas Revised Limited Partnership Act, and the Texas Revised Partnership Act. Senate Bill 1320 makes corrections to statutory cross references in these Acts, modifies the contents of articles of merger, and adds an additional time period to specify when an event of withdrawal of a partner occurs. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS Senate Bill 1320 amends law relating to filings made with the secretary of state (secretary) by business organizations. The bill amends the Texas Limited Liability Company Act to authorize a person who has reserved a specified company name to terminate the reservation during the period for which the name is reserved by filing an application of cancellation with the secretary and paying an applicable fee (SECTION 1). The bill authorizes a foreign limited liability company whose certificate of authority has been revoked by the secretary to be reinstated by the secretary at any time within a period of 36 rather than 24 months (SECTION 5). The bill provides that the articles of merger must include either the plan of merger or a statement certifying: _the name and state of incorporation or organization of each domestic or foreign limited liability company or other applicable entity; _that a plan of merger has been approved; _such amendments or changes in the articles of organization of each domestic surviving limited liability company; _that the articles of organization of each new domestic limited liability company to be created pursuant to the terms of the plan of merger are being filed with the secretary; _that an executed plan of merger is on file at the principal place of business of each surviving or new domestic or foreign limited liability company or other entity; and _that a copy of the plan of merger will be furnished by each limited liability company or other entity to any member of each domestic limited liability company that is a party to or created by the plan of merger, and in certain circumstances, to any creditor or obligee (SECTION 6). S.B. 1320 amends the Texas Non-Profit Corporation Act to authorize a nonprofit organization dissolved by the secretary and the certificate of authority of a foreign corporation revoked by the secretary to be reinstated within 36 rather than 12 months (SECTIONS 9 and 10). The bill amends the Texas Revised Partnership Act to add another time period when an event of withdrawal of a partner occurs. The bill provides that an event of withdrawal of a partner occurs on a conversion of the partnership if the partner did not consent to the conversion and failed to notify the partnership in writing of the partner's desire not to withdraw within 60 days of the effective date of conversion or the date the partner receives actual notice of the conversion, whichever date is later. The bill specifies that a withdrawal of a partner under these circumstances is effective immediately before the effective date of the conversion and is not considered a wrongful withdrawal (SECTION 13). The bill repeals a provision of the Texas Professional Corporation Act that authorizes the holders of a professional corporation to vote to dissolve the corporation (SECTION 16). EFFECTIVE DATE September 1, 2001.