The bill amends the Business Organizations Code to improve governance and internal management for domestic entities in Texas. It introduces a new definition for "national securities exchange" and allows managerial officials to consider laws and practices from other states when exercising their powers. The bill also permits governing documents to mandate that internal entity claims be brought exclusively in Texas courts and allows waivers of the right to a jury trial for such claims. Additionally, it clarifies shareholders' rights to examine corporate records, specifying that certain electronic communications are excluded unless related to corporate actions. Provisions for the formation of independent director committees to review transactions involving controlling shareholders are also included, along with protections for directors and officers of corporations with listed shares on national securities exchanges.

Further amendments establish presumptions of good faith and informed decision-making for directors and officers of corporations and limited liability companies (LLCs), stating that claims against them cannot proceed unless the claimant can prove a breach involving fraud or serious misconduct. The bill modifies definitions of "shareholder" and "member" to include those acting in concert for derivative proceedings and sets ownership thresholds for initiating such actions. It also clarifies access to records for members and partners in limited liability companies and partnerships, stipulating that certain disclosures do not constitute substantial benefits. Overall, the bill aims to streamline corporate governance, enhance protections for directors and officers, and clarify the legal framework surrounding derivative actions and member rights.

Statutes affected:
Introduced: Business Organizations Code 2.115, Business Organizations Code 4.051, Business Organizations Code 21.218, Business Organizations Code 21.416, Business Organizations Code 21.418, Business Organizations Code 21.551, Business Organizations Code 21.552, Business Organizations Code 21.554, Business Organizations Code 21.561, Business Organizations Code 21.562 (Business Organizations Code 4, Business Organizations Code 21, Business Organizations Code 2)
House Committee Report: Business Organizations Code 2.115, Business Organizations Code 21.218, Business Organizations Code 21.416, Business Organizations Code 21.418, Business Organizations Code 21.551, Business Organizations Code 21.552, Business Organizations Code 21.554, Business Organizations Code 21.561, Business Organizations Code 21.562, Business Organizations Code 101.401, Business Organizations Code 101.451, Business Organizations Code 101.452, Business Organizations Code 101.461, Business Organizations Code 101.502, Business Organizations Code 152.002, Business Organizations Code 153.401, Business Organizations Code 153.402, Business Organizations Code 153.411, Business Organizations Code 153.552 (Business Organizations Code 4, Business Organizations Code 21, Business Organizations Code 153, Business Organizations Code 101, Business Organizations Code 2, Business Organizations Code 152)