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Relating to derivative proceedings on behalf of for-profit corporations, limited liability companies, and limited partnerships.
No significant fiscal impact to the state is anticipated.
HB 3603 would make various changes to harmonize provisions of the Business Organizations Code relating to derivative proceedings involving a for-profit corporation, a limited liability company, and a limited partnership. A derivative proceeding occurs when a shareholder brings a lawsuit on behalf of the business entity.
This bill would revise provisions, for each respective business entity, related to: a shareholder's standing to bring a derivative suit if a corporation is the converted entity and the suit is based on an act that occurred before the date of the conversion; the termination of a required waiting period between the filing of a written demand with the corporation and the institution of a derivative proceeding; the scope of discovery; and a determination made by independent and disinterested directors of how to proceed on applicable allegations, among other things.
Texas Action is neutral on HB 3603 as it does not appear to have a connection to our liberty principles.