HBA-TBM C.S.S.B. 1323 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.S.B. 1323
By: Sibley
Business & Industry
4/27/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, Texas law prohibits foreign corporations and certain other
entities from conducting any affairs in this state which similarly
organized entities in Texas are not permitted to conduct.  However, recent
changes to Texas law may inadvertently allow some of these foreign entities
to transact business within Texas that is not consistent with Texas law.
C.S.S.B. 1323 requires the registration of foreign limited liability
partnerships and foreign general liability partnerships consistent with
foreign limited partnerships, and imposes fees for each year or part of a
year during which the foreign entity transacts business in Texas without
being registered.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

C.S.S.B. 1323 amends the Texas Revised Limited Partnership Act, the Texas
Revised Partnership Act, and the Texas Non-Profit Corporation Act relating
to the recognition of certain foreign partnerships, associations, and other
entities.  The bill provides that the failure of a foreign general
partnership to register in Texas does not impair the validity of any
contract or act of the foreign limited partnership, the right of any other
party to the contract to maintain any action, suit, or proceeding on the
contract, or defense by the foreign limited partnership of any action,
suit, or proceeding in any Texas court.  The bill reduces the amount a
foreign limited partnership is required to pay to the secretary of state
for transacting business in Texas without first having registered from the
registration fee plus $750 to the registration fee plus $500 for each year
or part of a year it transacted business without being registered.  The
bill requires a foreign limited liability partnership transacting business
in Texas without being registered in Texas to pay to the secretary of state
an amount equal to the total amounts owing from a derivative action plus
$500 for each year or part of a year during which the partnership
transacted business in Texas without being registered. The bill prohibits a
foreign corporation from being entitled to procure a certificate of
authority if members of the foreign corporation would be ineligible to
organize a corporation under the laws of this state or if the foreign
corporation is to conduct any affairs which are against the public policy
of this state.  

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect on the 91st day after adjournment. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.S.B. 1323 differs from the original by removing the prohibition against
a legal right or obligation between parties entered into in another state
or under another state's laws that violates the laws or public policy of
this state.