Texas Business Organizations Code
§ 101.463 — CLOSELY HELD LIMITED LIABILITY COMPANY
BO § 101.463Title 3. LIMITED LIABILITY COMPANIES · Ch. 101. LIMITED LIABILITY COMPANIES · Art. J. DERIVATIVE PROCEEDINGS
Statute text
View on source(a)In this section, "closely held limited liability company" means a limited liability company that has:
(1)fewer than 35 members; and
(2)no membership interests listed on a national securities exchange or regularly quoted in an over-the-counter market by one or more members of a national securities association.
(b)Sections 101.452-101.460 do not apply to a derivative proceeding by a member of a closely held limited liability company against a present or former governing person, member, or officer of the limited liability company. In the event the member also asserts a claim in the derivative proceeding against a person who is not a present or former governing person, member, or officer, this subsection applies only to a claim in the derivative proceeding against a present or former governing person, member, or officer.
(c)If Sections 101.452-101.460 do not apply because of Subsection (b) and if justice requires:
(1)a derivative proceeding brought by a member of a closely held limited liability company may be treated by a court as a direct action brought by the member for the member's own benefit; and
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Legislative history
Acts 2007, 80th Leg., R.S., Ch. 688 (H.B. 1737), Sec. 100, eff. September 1, 2007. Acts 2019, 86th Leg., R.S., Ch. 899 (H.B. 3603), Sec. 24, eff. September 1, 2019. Acts 2025, 89th Leg., R.S., Ch. 199 (S.B. 2411), Sec. 50, eff. September 1, 2025.