HB4716 - 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.

  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.