H.B. No. 4862 proposes significant amendments to the Texas Business Organizations Code, focusing on clarifying the jurisdiction of business courts and the governance of domestic entities. The bill establishes that references to district courts also apply to business courts with the necessary authority under Chapter 25A of the Government Code. It emphasizes that the laws governing the formation and internal affairs of domestic entities cannot be overridden by external laws or judicial decisions from other states, although managerial officials may consider such external practices without breaching Texas law. The bill also introduces the term "managerial official" in place of "governing person," limiting their liability for acts or omissions in their official capacity, except in specific circumstances.

Additionally, the bill outlines procedures for ratifying defective corporate acts and clarifies the requirements for signing certificates related to limited partnerships and cooperative associations. It mandates that certain documents must be signed by at least one general partner and any new general partners, while withdrawing general partners are not required to sign. The bill enhances reporting requirements for cooperative associations, requiring annual reports to include detailed information about officers and directors. It also specifies that the amendments will only apply to derivative proceedings initiated after the effective date of the Act, set for September 1, 2025. Overall, the bill aims to streamline business operations, enhance corporate governance, and clarify legal responsibilities within the Texas business framework.

Statutes affected:
Introduced: Business Organizations Code 2.115, Business Organizations Code 3.007, Business Organizations Code 3.015, Business Organizations Code 3.060, Business Organizations Code 3.061, Business Organizations Code 3.0611, Business Organizations Code 3.062, Business Organizations Code 4.152, Business Organizations Code 4.153, Business Organizations Code 4.162, Business Organizations Code 4.151, Business Organizations Code 6.202, Business Organizations Code 7.001, Business Organizations Code 10.002, Business Organizations Code 10.004, Business Organizations Code 10.006, Business Organizations Code 10.052, Business Organizations Code 10.053, Business Organizations Code 10.104, Business Organizations Code 21.053, Business Organizations Code 21.160, Business Organizations Code 21.168, Business Organizations Code 21.218, Business Organizations Code 21.402, Business Organizations Code 21.404, Business Organizations Code 21.416, Business Organizations Code 21.551, Business Organizations Code 21.554, Business Organizations Code 21.561, Business Organizations Code 21.562, Business Organizations Code 21.563, Business Organizations Code 21.901, Business Organizations Code 21.902, Business Organizations Code 21.908, Business Organizations Code 21.909, Business Organizations Code 21.910, Business Organizations Code 21.913, Business Organizations Code 21.915, Business Organizations Code 21.917, Business Organizations Code 21.911, Business Organizations Code 22.218, Business Organizations Code 22.231, Business Organizations Code 22.501, Business Organizations Code 22.502, Business Organizations Code 22.508, Business Organizations Code 22.509, Business Organizations Code 22.513, Business Organizations Code 22.515, Subchapter C, Chapter , Business Organizations Code 22.510, Business Organizations Code 101.109, Business Organizations Code 101.463, Business Organizations Code 153.413, Business Organizations Code 251.352, Business Organizations Code 252.017, Business Organizations Code 153.502 (Business Organizations Code 21, Business Organizations Code 252, Business Organizations Code 4, Business Organizations Code 6, Business Organizations Code 22, Business Organizations Code 153, Business Organizations Code 3, Business Organizations Code 251, Subchapter C, Chapter , Business Organizations Code 22, Business Organizations Code 101, Business Organizations Code 7, Business Organizations Code 10, Business Organizations Code 2)