Texas Business Organizations Code Chapter 101 – Limited Liability Companies

Ask a business law question, get an answer ASAP!
Thousands of highly rated, verified business lawyers.
Click here to chat with a lawyer about your rights.

Terms Used In Texas Business Organizations Code Chapter 101 - Limited Liability Companies

• Accident and health insurance : means contracts that incorporate morbidity risk and provide protection against economic loss resulting from accident, sickness, or medical conditions and as may be specified in the valuation manual. See Texas Insurance Code 425.052
• Advice and consent : Under the Constitution, presidential nominations for executive and judicial posts take effect only when confirmed by the Senate, and international treaties become effective only when the Senate approves them by a two-thirds vote.
• Affidavit : A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
• Affidavit : means a statement in writing of a fact or facts signed by the party making it, sworn to before an officer authorized to administer oaths, and officially certified to by the officer under his seal of office. See Texas Government Code 312.011
• Amendment : A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
• Annual percentage rate : The cost of credit at a yearly rate. It is calculated in a standard way, taking the average compound interest rate over the term of the loan so borrowers can compare loans. Lenders are required by law to disclose a card account's APR. Source: FDIC
• Annuity : A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
• Answer : The formal written statement by a defendant responding to a civil complaint and setting forth the grounds for defense.
• Appointed actuary : means a qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required by § 425. See Texas Insurance Code 425.052
• Appraisal : A determination of property value.
• Assets : (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
• Associate : when used to indicate a relationship with a person, means:
  (A) a domestic or foreign entity or organization for which the person:
  (i) is an officer or governing person; or
  (ii) beneficially owns, directly or indirectly, either individually or through an affiliate, 10 percent or more of a class of voting ownership interests or similar securities of the entity or organization;
  (B) a trust or estate in which the person has a substantial beneficial interest or for which the person serves as trustee or in a similar fiduciary capacity;
  (C) the person's spouse or a relative of the person related by consanguinity or affinity who resides with the person; or
  (D) a governing person or an affiliate or officer of the person. See Texas Business Organizations Code 1.002
• Association : means an entity governed as an association under Title 6 or 7. See Texas Business Organizations Code 1.002
• Attachment : A procedure by which a person's property is seized to pay judgments levied by the court.
• Attorney-in-fact : A person who, acting as an agent, is given written authorization by another person to transact business for him (her) out of court.
• Beneficiary : A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
• Business : means a trade, occupation, profession, or other commercial activity. See Texas Business Organizations Code 1.002
• Certificate of formation : means :
  (A) the document required to be filed with the filing officer under Chapter 3 to form a filing entity; and
  (B) if appropriate, a restated certificate of formation and all amendments of an original or restated certificate of formation. See Texas Business Organizations Code 1.002
• Chambers : A judge's office.
• Charity : An agency, institution, or organization in existence and operating for the benefit of an indefinite number of persons and conducted for educational, religious, scientific, medical, or other beneficent purposes.
• Child : includes an adopted child, regardless of whether the adoption occurred through:
  (1) an existing or former statutory procedure; or
  (2) an equitable adoption or acts of estoppel. See Texas Estates Code 22.004
• Common law : The legal system that originated in England and is now in use in the United States. It is based on judicial decisions rather than legislative action.
• Company : means an entity that:
  (A) has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and has at least one such policy in force or on claim; or
  (B) has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in this state. See Texas Insurance Code 425.052
• Concurrent resolution : A legislative measure, designated "S. Con. Res." and numbered consecutively upon introduction, generally employed to address the sentiments of both chambers, to deal with issues or matters affecting both houses, such as a concurrent budget resolution, or to create a temporary joint committee. Concurrent resolutions are not submitted to the President/Governor and thus do not have the force of law.
• Continuance : Putting off of a hearing ot trial until a later time.
• Contribution : means a tangible or intangible benefit that a person transfers to an entity in consideration for an ownership interest in the entity or otherwise in the person's capacity as an owner or a member. See Texas Business Organizations Code 1.002
• Conversion : means :
  (A) the continuance of a domestic entity as a non-code organization of any type;
  (B) the continuance of a non-code organization as a domestic entity of any type;
  (C) the continuance of a domestic entity of one type as a domestic entity of another type;
  (D) the continuance of a domestic entity of one type as a foreign entity of the same type that may be treated as a domestication, continuance, or transfer transaction under the laws of the jurisdiction of formation of the foreign entity; or
  (E) the continuance of a foreign entity of one type as a domestic entity of the same type that may be treated as a domestication, continuance, or transfer transaction under the laws of the jurisdiction of formation of the foreign entity. See Texas Business Organizations Code 1.002
• Converted entity : means an organization resulting from a conversion. See Texas Business Organizations Code 1.002
• Converting entity : means an organization as the organization existed before the organization's conversion. See Texas Business Organizations Code 1.002
• Counterclaim : A claim that a defendant makes against a plaintiff.
• Court : means and includes:
  (1) a county court in the exercise of its probate jurisdiction;
  (2) a court created by statute and authorized to exercise original probate jurisdiction; and
  (3) a district court exercising original probate jurisdiction in a contested matter. See Texas Estates Code 22.007
• Damages : Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
• Decedent : A deceased person.
• Deed : The legal instrument used to transfer title in real property from one person to another.
• Department : means the Department of Agriculture. See Texas Agriculture Code 1.003
• Dependent : A person dependent for support upon another.
• Domestic : means , with respect to an entity, that the entity is formed under this code or the entity's internal affairs are governed by this code. See Texas Business Organizations Code 1.002
• Donor : The person who makes a gift.
• Effects : includes all personal property and all interest in that property. See Texas Government Code 312.011
• Electronic funds transfer : The transfer of money between accounts by consumer electronic systems-such as automated teller machines (ATMs) and electronic payment of bills-rather than by check or cash. (Wire transfers, checks, drafts, and paper instruments do not fall into this category.) Source: OCC
• Embezzlement : In most states, embezzlement is defined as theft/larceny of assets (money or property) by a person in a position of trust or responsibility over those assets. Embezzlement typically occurs in the employment and corporate settings. Source: OCC
• Entitlement : A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
• Entity : means a domestic entity or foreign entity. See Texas Business Organizations Code 1.002
• Escrow : Money given to a third party to be held for payment until certain conditions are met.
• Estate : means a decedent's property, as that property:
  (1) exists originally and as the property changes in form by sale, reinvestment, or otherwise;
  (2) is augmented by any accretions and other additions to the property, including any property to be distributed to the decedent's representative by the trustee of a trust that terminates on the decedent's death, and substitutions for the property; and
  (3) is diminished by any decreases in or distributions from the property. See Texas Estates Code 22.012
• Fair market value : The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
• Federal Deposit Insurance Corporation : A government corporation that insures the deposits of all national and state banks that are members of the Federal Reserve System. Source: OCC
• Federal Reserve System : The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States. Source: OCC
• Fee simple : Absolute title to property with no limitations or restrictions regarding the person who may inherit it.
• Fiduciary : A trustee, executor, or administrator.
• Filing entity : means a domestic entity that is a corporation, limited partnership, limited liability company, professional association, cooperative, or real estate investment trust. See Texas Business Organizations Code 1.002
• Filing instrument : means an instrument, document, consent, or statement that is required or authorized by this code to be filed by or for an entity with the filing officer in accordance with Chapter 4. See Texas Business Organizations Code 1.002
• Fiscal year : The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
• Foreclosure : A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
• Foreign : means , with respect to an entity, that the entity is formed under, and the entity's internal affairs are governed by, the laws of a jurisdiction other than this state. See Texas Business Organizations Code 1.002
• Forgery : The fraudulent signing or alteration of another's name to an instrument such as a deed, mortgage, or check. The intent of the forgery is to deceive or defraud. Source: OCC
• Fraud : Intentional deception resulting in injury to another.
• Fundamental business transaction : means a merger, interest exchange, conversion, or sale of all or substantially all of an entity's assets. See Texas Business Organizations Code 1.002
• Garnishment : Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
• Germane : On the subject of the pending bill or other business; a strict standard of relevance.
• Gift : A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
• Governing authority : means a person or group of persons who are entitled to manage and direct the affairs of an entity under this code and the governing documents of the entity, except that if the governing documents of the entity or this code divide the authority to manage and direct the affairs of the entity among different persons or groups of persons according to different matters, "governing authority" means the person or group of persons entitled to manage and direct the affairs of the entity with respect to a matter under the governing documents of the entity or this code. See Texas Business Organizations Code 1.002
• Governing documents : means :
  (A) in the case of a domestic entity:
  (i) the certificate of formation for a domestic filing entity or the document or agreement under which a domestic nonfiling entity is formed; and
  (ii) the other documents or agreements adopted by the entity under this code to govern the formation or the internal affairs of the entity; or
  (B) in the case of a foreign entity, the instruments, documents, or agreements adopted under the law of its jurisdiction of formation to govern the formation or the internal affairs of the entity. See Texas Business Organizations Code 1.002
• Governing person : means a person serving as part of the governing authority of an entity. See Texas Business Organizations Code 1.002
• Grantor : The person who establishes a trust and places property into it.
• Guarantor : A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
• Heir : means a person who is entitled under the statutes of descent and distribution to a part of the estate of a decedent who dies intestate. See Texas Estates Code 22.015
• in writing : includes any representation of words, letters, or figures, whether by writing, printing, or other means. See Texas Government Code 312.011
• Indemnification : In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
• Individual : means a natural person. See Texas Business Organizations Code 1.002
• Injunction : An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
• Intangible property : Property that has no intrinsic value, but is merely the evidence of value such as stock certificates, bonds, and promissory notes.
• Interest rate : The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
• Intestate : Dying without leaving a will.
• Joint tenancy : A form of property ownership in which two or more parties hold an undivided interest in the same property that was conveyed under the same instrument at the same time. A joint tenant can sell his (her) interest but not dispose of it by will. Upon the death of a joint tenant, his (her) undivided interest is distributed among the surviving joint tenants.
• Jurisdiction of formation : means :
  (A) in the case of a domestic filing entity, this state;
  (B) in the case of a foreign entity for which a certificate of formation or similar organizational instrument is filed in connection with its formation, the jurisdiction in which the entity's certificate of formation or similar organizational instrument is filed; or
  (C) in the case of a domestic nonfiling entity or a foreign entity for which a certificate of formation or similar organizational instrument is not filed in connection with its formation:
  (i) the jurisdiction the laws of which are chosen in the entity's governing documents to govern its internal affairs if that jurisdiction bears a reasonable relation to the owners or members or to the entity's business and affairs under the principles of this state that otherwise would apply to a contract among the owners or members; or
  (ii) if Subparagraph (i) does not apply, the jurisdiction in which the entity has its chief executive office. See Texas Business Organizations Code 1.002
• Law : means , unless the context requires otherwise, both statutory and common law. See Texas Business Organizations Code 1.002
• Lawsuit : A legal action started by a plaintiff against a defendant based on a complaint that the defendant failed to perform a legal duty, resulting in harm to the plaintiff.
• Lease : A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
• Legislative session : That part of a chamber's daily session in which it considers legislative business (bills, resolutions, and actions related thereto).
• Liabilities : The aggregate of all debts and other legal obligations of a particular person or legal entity.
• Lien : A claim against real or personal property in satisfaction of a debt.
• Life insurance : means contracts that incorporate mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual. See Texas Insurance Code 425.052
• Limited liability company : means an entity governed as a limited liability company under Title 3 or 7. See Texas Business Organizations Code 1.002
• Litigation : A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
• Manager : means a person designated as a manager of a limited liability company that is not managed by members of the company. See Texas Business Organizations Code 1.002
• Managerial official : means an officer or a governing person. See Texas Business Organizations Code 1.002
• Member : means :
  (A) in the case of a limited liability company, a person who has become, and has not ceased to be, a member in the limited liability company as provided by its governing documents or this code;
  (B) in the case of a nonprofit corporation, a person who has membership rights in the nonprofit corporation under its governing documents;
  (C) in the case of a cooperative association, a member of a nonshare or share association;
  (D) in the case of a nonprofit association, a person who has membership rights in the nonprofit association under its governing documents; or
  (E) in the case of a professional association, a person who has membership rights in the professional association under its governing documents. See Texas Business Organizations Code 1.002
• Membership interest : means a member's interest in an entity. See Texas Business Organizations Code 1.002
• Merger : means :
  (A) the division of a domestic entity into two or more new domestic entities or other organizations or into a surviving domestic entity and one or more new domestic or foreign entities or non-code organizations; or
  (B) the combination of one or more domestic entities with one or more domestic entities or non-code organizations resulting in:
  (i) one or more surviving domestic entities or non-code organizations;
  (ii) the creation of one or more new domestic entities or non-code organizations; or
  (iii) one or more surviving domestic entities or non-code organizations and the creation of one or more new domestic entities or non-code organizations. See Texas Business Organizations Code 1.002
• Minor : means a person younger than 18 years of age who:
  (1) has never been married; and
  (2) has not had the disabilities of minority removed for general purposes. See Texas Estates Code 22.022
• Month : means a calendar month. See Texas Government Code 312.011
• Mortgage : The written agreement pledging property to a creditor as collateral for a loan.
• Mortgage loan : A loan made by a lender to a borrower for the financing of real property. Source: OCC
• Mortgagee : The person to whom property is mortgaged and who has loaned the money.
• most recent federal census : means the United States decennial census immediately preceding the action in question. See Texas Government Code 312.011
• National Bank : A bank that is subject to the supervision of the Comptroller of the Currency. The Office of the Comptroller of the Currency is a bureau of the U.S. Treasury Department. A national bank can be recognized because it must have "national" or "national association" in its name. Source: OCC
• National securities exchange : means an exchange registered as a national securities exchange under Section 6, Securities Exchange Act of 1934 (15 U. See Texas Business Organizations Code 1.002
• Oath : A promise to tell the truth.
• Oath : includes affirmation. See Texas Government Code 311.005
• Officer : means an individual elected, appointed, or designated as an officer of an entity by the entity's governing authority or under the entity's governing documents. See Texas Business Organizations Code 1.002
• Organization : means a corporation, limited or general partnership, limited liability company, business trust, real estate investment trust, joint venture, joint stock company, cooperative, association, bank, insurance company, credit union, savings and loan association, or other organization, regardless of whether the organization is for-profit, nonprofit, domestic, or foreign. See Texas Business Organizations Code 1.002
• Oversight : Committee review of the activities of a Federal agency or program.
• Partner : means a limited partner or general partner. See Texas Business Organizations Code 1.002
• Party to the merger : means a domestic entity or non-code organization that under a plan of merger is divided or combined by a merger. See Texas Business Organizations Code 1.002
• Person : includes a natural person and a corporation. See Texas Estates Code 22.027
• Person : means an individual or a corporation, partnership, limited liability company, business trust, trust, association, or other organization, estate, government or governmental subdivision or agency, or other legal entity, or a protected series or registered series of a domestic limited liability company or foreign entity. See Texas Business Organizations Code 1.002
• Plaintiff : The person who files the complaint in a civil lawsuit.
• Plan of conversion : means a document that conforms with the requirements of § 10. See Texas Business Organizations Code 1.002
• Plan of merger : means a document that conforms with the requirements of Sections Texas Business Organizations Code 1.002
• Pleadings : Written statements of the parties in a civil case of their positions. In the federal courts, the principal pleadings are the complaint and the answer.
• Policyholder behavior : means any action a policyholder, a contract holder, or any other person with the right to elect options, such as a certificate holder, may take under a policy or contract subject to this subchapter, including lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization, or benefit elections prescribed by the policy or contract but excluding events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract. See Texas Insurance Code 425.052
• Power of attorney : A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
• Precedent : A court decision in an earlier case with facts and law similar to a dispute currently before a court. Precedent will ordinarily govern the decision of a later similar case, unless a party can show that it was wrongly decided or that it differed in some significant way.
• Presiding officer : A majority-party Senator who presides over the Senate and is charged with maintaining order and decorum, recognizing Members to speak, and interpreting the Senate's rules, practices and precedents.
• Principle-based valuation : means the valuation described by § 425. See Texas Insurance Code 425.052
• Property : includes tangible and intangible property and an interest in that property. See Texas Business Organizations Code 1.002
• Prosecute : To charge someone with a crime. A prosecutor tries a criminal case on behalf of the government.
• Protected series : means a series of a domestic limited liability company that is established as a protected series in accordance with § 101. See Texas Business Organizations Code 1.002
• Qualified actuary : means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American Academy of Actuaries' qualification standards for actuaries signing such statements and who meets the requirements specified in the valuation manual. See Texas Insurance Code 425.052
• Quorum : The number of legislators that must be present to do business.
• Real property : Land, and all immovable fixtures erected on, growing on, or affixed to the land.
• Recourse : An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
• Registered series : means a series of a domestic limited liability company that is formed as a registered series in accordance with § 101. See Texas Business Organizations Code 1.002
• Remainder : An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
• Reserves : means reserve liabilities. See Texas Insurance Code 425.052
• Restitution : The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
• Secretary : means the:
  (A) individual designated as secretary of an entity under the entity's governing documents; or
  (B) officer or committee of persons authorized to perform the functions of secretary of an entity without regard to the designated name of the officer or committee. See Texas Business Organizations Code 1.002
• Settlement : Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
• Share : means a unit into which the ownership interest in a for-profit corporation, professional corporation, real estate investment trust, or professional association is divided, regardless of whether the share is certificated or uncertificated. See Texas Business Organizations Code 1.002
• Statute of limitations : A law that sets the time within which parties must take action to enforce their rights.
• Subpoena : A command to a witness to appear and give testimony.
• Subsidiary : means an organization for which another organization, either directly or indirectly through or with one or more of its other subsidiaries:
  (A) owns at least 50 percent of the outstanding ownership or membership interests of the organization; or
  (B) possesses at least 50 percent of the voting power of the owners or members of the organization. See Texas Business Organizations Code 1.002
• Succeeding : means immediately following. See Texas Government Code 312.011
• Swear : includes affirm. See Texas Government Code 311.005
• Tail risk : means a risk that occurs either where the frequency of low probability events is higher than expected under a normal probability distribution or where there are observed events of very significant size or magnitude. See Texas Insurance Code 425.052
• Temporary restraining order : Prohibits a person from an action that is likely to cause irreparable harm. This differs from an injunction in that it may be granted immediately, without notice to the opposing party, and without a hearing. It is intended to last only until a hearing can be held.
• Testator : A male person who leaves a will at death.
• Tort : A civil wrong or breach of a duty to another person, as outlined by law. A very common tort is negligent operation of a motor vehicle that results in property damage and personal injury in an automobile accident.
• Transcript : A written, word-for-word record of what was said, either in a proceeding such as a trial or during some other conversation, as in a transcript of a hearing or oral deposition.
• Trust account : A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
• Usury : Charging an illegally high interest rate on a loan. Source: OCC
• Valuation manual : means the manual of valuation instructions adopted by the commissioner by rule. See Texas Insurance Code 425.052
• Venue : The geographical location in which a case is tried.
• Verdict : The decision of a petit jury or a judge.
• Week : means seven consecutive days. See Texas Government Code 311.005
• Writ : A formal written command, issued from the court, requiring the performance of a specific act.
• written : means an expression of words, letters, characters, numbers, symbols, figures, or other textual information that is inscribed on a tangible medium or that is stored in an electronic or other medium that is retrievable in a perceivable form. See Texas Business Organizations Code 1.002