Hopper’s bill on business filings and attorney general probes

The text as introduced · 528 words

89R5005 SRA-F

By: Hopper
H.B. No. 4716

A BILL TO BE ENTITLED

AN ACT

relating to the authority of filing and foreign filing entities to

transact business in this state and the authority of the attorney

general to investigate those entities.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 11.301(a), Business Organizations Code,

is amended to read as follows:

(a) A court may enter a decree requiring winding up of a

filing entity's business and termination of the filing entity's

existence if, as the result of an action brought under Section

11.303, the court finds that one or more of the following problems

exist:

(1) the filing entity or its organizers did not comply

with a condition precedent to its formation;

(2) the certificate of formation of the filing entity

or any amendment to the certificate of formation was fraudulently

filed;

(3) a misrepresentation of a material matter has been

made in an application, report, affidavit, or other document

submitted by the filing entity under this code;

(4) the filing entity has continued to transact

business beyond the scope of the purpose of the filing entity as

expressed in its certificate of formation; or

(5) public interest requires winding up and

termination of the filing entity because:

(A) the filing entity has been :

(i) convicted of a felony or a high

managerial agent of the filing entity has been convicted of a felony

committed in the conduct of the filing entity's affairs; or

(ii) in an action brought by the attorney

general in a district court in this state, proved by a preponderance

of the evidence to be civilly liable for conduct that constitutes a

felony or a high managerial agent of the filing entity has been

proved by a preponderance of the evidence to be civilly liable for

conduct that constitutes a felony committed in the conduct of the

filing entity's affairs;

(B) the filing entity or high managerial agent

has engaged in a persistent course of the [ felonious ] conduct; and

(C) termination is necessary to prevent future

[ felonious ] conduct of the same character.

SECTION 2. Section 12.151, Business Organizations Code, is

amended to read as follows:

Sec. 12.151. AUTHORITY OF ATTORNEY GENERAL TO EXAMINE OR

INVESTIGATE CERTAIN ENTITIES [ BOOKS AND RECORDS ]. (a) Each filing

entity and foreign filing entity shall permit the attorney general

to :

(1) inspect, examine, and make copies, as the attorney

general considers necessary in the performance of a power or duty of

the attorney general, of any record of the entity , including the

entity's [ . A record of the entity includes ] minutes and a book,

account, letter, memorandum, document, check, voucher, telegram,

constitution, and bylaw of the entity; and

(2) on receipt of a notice received under Section

11.302, interview witnesses and gather evidence necessary to

investigate the notice .

(b) An entity may file a suit for injunctive relief or a

declaratory judgment to contest an investigative action brought by

the attorney general under Subsection (a)(2).

SECTION 3. Section 11.301(b), Business Organizations Code,

is repealed.

SECTION 4. This Act takes effect September 1, 2025.