Texas Lawmakers Enact Substantive Changes to State’s Business Laws

The 2021 Texas legislative session concluded with more than 100 newly enacted or amended sections to the state’s business entity laws, affecting such areas as:

  • Certificates of formation
  • Choice of forum provisions
  • Consent to action
  • Distributions—Determination of solvency
  • Emergencies
  • Foreign entities
  • Indemnification
  • Limited Liability Companies—Governing authority
  • Limited Liability Companies—Registered series
  • Limited partnerships
  • Names of entities
  • Shareholder meetings
  • Veteran-owned businesses
  • Virtual currency
  • Winding up & Termination

The changes are captured in the 2021 Edition of Texas Laws Governing Business Entities Annotated, CSC’s comprehensive collection of Texas business organization statutes and case law that allows practitioners to conduct research more effectively, complete transactions more efficiently and advise clients with confidence.

The 2021 Edition includes a Table of Sections Affected listing all legislative changes, as well as a legislative analysis that provides an overview of changes and additions to the law. There’s also an up-to-date Texas Fee Schedule showing required fees for business filings with the Secretary of State.

More than 100 new case notes have been added to this edition, as well as six full-text Texas cases covering recent legal developments regarding service of process, alter ego doctrine, minority shareholder rights, share redemption, and dissolution.

New cases, listed in the book’s Table of New Annotations, provide business attorneys advising Texas entities with insight regarding how courts interpret the state’s business laws. New case notes are marked with a gray bar for fast identification.

Also included in this new edition is Special Commentary from noted Texas attorney Byron Egan that offers a detailed analysis of the Texas Supreme Court’s Chalker Energy Partners III, LLC v. Le Norman Operating LLC decision earlier this year. “This decision offers an important lesson on how powerful contractual protections in the State of Texas are, and it reaffirms the persistent and strong public policy in this state of freedom of contract,” Egan writes. “Parties to a potential deal that initially agree to a ‘no obligation’ provision similar to the one at issue here can rest easier, knowing that any communication and negotiation between them will not be construed as an enforceable contract prior to a formally written and finalized instrument, delivered and executed by the parties.”

Readers have online access to more than 70 recently updated business entity forms for incorporation/formation, qualification, mergers, dissolution, and name reservation for all Texas entity types via the LexisNexis Bookstore download center. A listing of forms and contact information for Texas’s Division of Revenue, Business Services, can be found in the book’s appendix.

The 2021 Edition of Texas Laws Governing Business Entities Annotated is available as a softbound book or ebook, compatible with dedicated e-reader devices, computers, tablets and smartphones that use e-reader software or applications. It is also available on the LexisNexis Digital Library.

Another essential resource for Texas business law

EGAN ON ENTITIES: Corporations, Partnerships and Limited Liability Companies in Texas is a comprehensive treatise that combines scholarly analysis and practical guidance on business entity law to provide attorneys, C-suite executives, students and other business and legal professionals with a resource for understanding business entities in Texas, whether they are formed there, in Delaware, or in another jurisdiction.

Author Byron Egan, a partner in the Dallas offices of Jackson Walker, is one of the industry’s leading authorities on choosing and leveraging entities to do business. He’s been listed in “The Best Lawyers in America under Corporate, M&A or Securities Law” for over 20 years, and is the only attorney to win the Burton Award for distinguished legal writing four times.

Now in its Third Edition, the treatise provides hands-on guidance for dealing with the formation, governance, sale, and termination of entities. Egan also incorporates in-depth analysis of adjudicated cases and legal literature to further explain which entity form is best for a particular situation.

“A business today can be organized as a corporation, partnership (general, limited and limited liability) or limited liability company (‘LLC’),” the author explains in the book’s preface. “Each of these forms of business entity has its own characteristics which affect those who own the entity and those who deal with it. Those characteristics determine how the respective entities are formed, governed, financed and sold. In the current economic environment owners and governing persons of entities must focus on merger and acquisition (‘M&A’) transactions by which they can exit the entities they have developed, and others may seek to entice or force them to do so. Transactions involving those who manage or control entities, including M&A transactions, particularly implicate their common law fiduciary duties.”

Important updates in the Third Edition

The Third Edition of Egan represents a comprehensive updating and expansion of prior editions. The legislatures of Texas and Delaware amended their business entity statutes subsequent to the Second Edition, which led to sections in the Third Edition summarizing the statutory changes, several of which were subtle but yet significant. Numerous affected sections of the book were revised and expanded to discuss the amended statutes.

The Third Edition also discusses many significant recent judicial decisions affecting business entities by courts in both Texas and Delaware. The tax appendices were updated to reflect recent amendments to the Internal Revenue Code of 1986, as amended, and the regulations of the Internal Revenue Service thereunder, which in turn necessitated changes in the matrix of considerations in choosing the form of entity to use for a business.

To learn more about the 2021 Edition of Texas Laws Governing Business Entities Annotated or the third edition of Egan on Entities, call 1.800.533.1637 or visit us online at www.lexisnexis.com/csc.

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